As filed with the Securities and Exchange Commission on January 19, 2017
Registration No. 333-215427
SECURITIES AND EXCHANGE COMMISSION ON AUGUST 18, 1995
REGISTRATION NO. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,
Washington, D.C. 20549
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FORM
Amendment No. 1 to
Form S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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PACIFIC GAS AND ELECTRIC COMPANY PG&E CAPITAL I
(EXACT NAME OF REGISTRANT AS PG&E CAPITAL II
SPECIFIED IN CHARTER) PG&E CAPITAL III
PG&E CAPITAL IV
(EXACT NAME OF REGISTRANTS AS
SPECIFIED IN TRUST AGREEMENTS)
CALIFORNIA DELAWARE
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)
94-0742640 (TO BE APPLIED FOR)
(I.R.S. EMPLOYER IDENTIFICATION NO.)
77 BEALE STREET
P. O. BOX 770000
SAN FRANCISCO, CALIFORNIA 94177
(415) 973-7000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANTS' PRINCIPAL EXECUTIVE OFFICES)
GARY P. ENCINAS, ESQ.
77 BEALE STREET
P. O. BOX 770000
SAN FRANCISCO, CALIFORNIA 94177
(415) 973-2784
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: After
Pacific Gas and Electric Company
(Exact Name of Registrant as Specified in Its Charter)
California (State or Other Jurisdiction of Incorporation or Organization) | 77 Beale Street P.O. Box 770000 San Francisco, CA 94177 (415) 973-7000 | 94-0742640 (I.R.S. Employer Identification Number) |
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant’s Principal Executive Offices)
Hyun Park Senior Vice President and General Counsel PG&E Corporation 77 Beale Street P.O. Box 770000 San Francisco, CA 94177 (415) 973-7000 (Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service) | Please send copies of all communications to: Brett Cooper, Esq. Orrick, Herrington & Sutcliffe LLP The Orrick Building 405 Howard Street San Francisco, CA 94105 (415) 773-5700 |
Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this Registration Statement becomes effective, as determined by market conditions
and other factors.
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Statement.
If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [_]
box: ☐
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, please check the following box. [X]
box: ☑
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act Registration Statementregistration statement number of the earlier effective registration statement for the same offering. [_]
☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_]
☐
If delivery ofthis Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the prospectus is expected to be madeCommission pursuant to Rule 434,
please462(e) under the Securities Act, check the following box. [_]
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☐
If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ☐
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company (as defined in Exchange Act Rule 12b-2).
| Large accelerated filer ☐ | Accelerated filer ☐ | Non-accelerated filer ☑ (Do not check if a smaller reporting company) | Smaller reporting company ☐ |
CALCULATION OF REGISTRATION FEE
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Title of Each Class of Securities to be Registered | Amount to be Registered | Proposed Maximum Offering Price per Unit(1) | Proposed Maximum Aggregate Offering Price(2) | Amount of Registration Fee(3) | ||||
Debt Securities | $2,500,000,000 | — | $2,500,000,000 | $289,750(4) | ||||
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| (1) | Omitted pursuant to Rule 457(o) under the Securities Act of 1933, as amended. |
| (2) | Estimated solely for the purpose of calculating the registration fee. The aggregate initial public offering price of all debt securities will not exceed $2,500,000,000. Exclusive of accrued interest. |
| (3) | Calculated in accordance with Rule 457(o) under the Securities Act of 1933, as amended. |
| (4) | Previously paid. |
The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
The information in this prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
PROSPECTUS
Subject to completion, dated January 19, 2017
Pacific Gas and Electric Company
$2,500,000,000
Senior Notes
We may offer and sell from time to time senior notes in one or more offerings. This prospectus provides you with a general description of the senior notes that may be offered.
Each time we offer and sell senior notes, we will provide a prospectus supplement that contains specific information about the offering and the terms of the offered senior notes. The prospectus supplement also may add, update or change information contained in this prospectus. You should carefully read this prospectus and any applicable prospectus supplement for the specific offering before you invest in any of the senior notes. This prospectus may not be used to sell senior notes unless accompanied by a prospectus supplement.
The senior notes may be sold to or through underwriters, dealers or agents or directly to other purchasers. A prospectus supplement will set forth the names of any underwriters, dealers or agents involved in the sale of the senior notes, the aggregate principal amount of senior notes to be purchased by them and the compensation they will receive.
See “Risk Factors” on page 1 for information on certain risks related to the purchase of our securities.
None of the Securities and Exchange Commission, any state securities commission or any other regulatory body has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
, 2017
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This prospectus is part of a presently indeterminate numberregistration statement that we filed with the Securities and Exchange Commission, or the SEC, using a shelf registration process. Under this shelf registration process, we may from time to time offer and sell senior notes in one or more offerings up to a total dollar amount of Cumulative Quarterly Income Preferred Securities$2,500,000,000 as described in this prospectus.
This prospectus provides you with only a general description of PG&E Capital I, II,
III and IV with an aggregate initial public offering pricethe senior notes that we may offer. This prospectus does not to exceed
$335,000,000 and related Guarantees and Deferrable Interest Subordinated
Debenturescontain all of Pacific Gas and Electric Company for which no separate
consideration will be received.
(2) Estimated solely for the purpose of determininginformation set forth in the registration fee.
(3) Pursuantstatement of which this prospectus is a part, as permitted by the rules and regulations of the SEC. For additional information regarding us and the offered senior notes, please refer to Rule 457(n) and (o), the registration feestatement of which this prospectus is calculateda part. Each time we sell senior notes, we will provide a prospectus supplement that contains specific information about the offering and the terms of the offered senior notes. The prospectus supplement also may add, delete, update or change information contained in this prospectus. You should rely only on the basisinformation in the applicable prospectus supplement if this prospectus and the applicable prospectus supplement are inconsistent. Before purchasing any senior notes, you should carefully read both this prospectus and the applicable prospectus supplement, together with the additional information described under the section of this prospectus titled “Where You Can Find More Information.” In particular, you should carefully consider the risks and uncertainties described under the section titled “Risk Factors” or otherwise included in any applicable prospectus supplement or incorporated by reference in this prospectus before you decide whether to purchase the senior notes. These risks and uncertainties, together with those not known to us or those that we may deem immaterial, could impair our business and ultimately affect our ability to make payments on the senior notes.
You should rely only on the information contained or incorporated by reference in this prospectus and in any applicable prospectus supplement. We have not authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. Neither we nor any underwriter, dealer or agent will make an offer to sell the senior notes in any jurisdiction where the offer or sale is not permitted. You should assume that the information in this prospectus and any applicable prospectus supplement is accurate only as of the proposed maximum offering pricedates on their covers and that any information incorporated by reference is accurate only as of the Cumulative Quarterly
Income Preferred Securities.
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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+ INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+ 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 +
+ BECOMES EFFECTIVE. NEITHER THIS PROSPECTUS SUPPLEMENT NOR THE PROSPECTUS TO +
+ WHICH IT RELATES SHALL CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN +
+ OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN +
+ WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO +
+ REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. +
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SUBJECT TO COMPLETION, DATED , 1995
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED , 1995
PREFERRED SECURITIES
PG&E CAPITAL I
% CUMULATIVE QUARTERLY INCOME PREFERRED SECURITIES (QUIPS /SM/)*,
SERIES A
(LIQUIDATION PREFERENCE $25 PER PREFERRED SECURITY)
GUARANTEED TO THE EXTENT THE SERIES A ISSUER HAS FUNDS AS SET FORTH HEREIN BY
date of the document incorporated by reference, unless we indicate otherwise. Our business, financial condition, results of operations and prospects may have changed since those dates.
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PACIFIC GAS AND ELECTRIC COMPANY
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The % Cumulative Quarterly Income Preferred Securities, Series A (the
"Series A Preferred Securities"), offered hereby represent preferred undivided
beneficial interests in the assets of PG&E Capital I,
We are a statutory business
trust formed under the laws of the State of Delaware (the "Series A Issuer").
PG&E will be the owner of the beneficial interests represented by Common
Securities of the Series A Issuer. The First National Bank of Chicago is the
Property Trustee of the Series A Issuer. The Series A Issuer exists for the
sole purpose of issuing its trust interests and investing the proceeds thereof
in % Deferrable Interest Subordinated Debentures, Series A, Due 2025 (the
"Series A Debentures") to be issued by PG&E. The preferred interests
represented by the Series A Preferred Securities will have a preference under
certain circumstances with respect to cash distributions and amounts payable on
liquidation, redemption or otherwise over the trust interests represented by
the Common Securities of the Series A Issuer. See "Description of the Preferred
Securities--Subordination of Common Securities" in the accompanying Prospectus.
Holders of the Series A Preferred Securities will be entitled to receive
cumulative cash Distributions accruing from the date of original issuance and
payable quarterly in arrears on March 31, June 30, September 30 and December 31
of each year, commencing , 1995, at the rate of % per annum, payable from
amounts received by the Series A Issuer as interest on the Series A Debentures.
So long as an Event of Default under the Indenture has not occurred and is
continuing, PG&E has the right to defer payments of interest on the Series A
Debentures by extending the interest payment period thereon at any time for up
to 20 consecutive
(Continued on next page)
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SEE "RISK FACTORS" AT PAGE S-4 HEREOF FOR CERTAIN INFORMATION RELEVANT TO AN
INVESTMENT IN THE SERIES A PREFERRED SECURITIES, INCLUDING THE PERIOD AND
CIRCUMSTANCES DURING WHICH PAYMENT OF DISTRIBUTIONS ON THE SERIES A PREFERRED
SECURITIES AND SERIES A DEBENTURES MAY BE DEFERRED AND THE RELATED FEDERAL
INCOME TAX CONSEQUENCES.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS
SUPPLEMENT OR THE PROSPECTUS TO WHICH IT RELATES.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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We were incorporated in California in 1905. ItsOur principal executive office isoffices are located at 77 Beale Street, P.O. Box 770000, San Francisco, California 94177, and itsour telephone number at that location is(415) 973-7000.
COVERAGE RATIOS
When used in this prospectus, the terms “we,” “our,” “ours” and “us” refer to Pacific Gas and Electric Company, and the term “Corp” refers to our parent, PG&E Corporation, unless the context indicates that the references are to PG&E Corporation and its consolidated subsidiaries.
Investing in our securities involves risk. Please see risk factors described in our Annual Report onForm 10-K and other reports filed with the SEC, which are all incorporated by reference in this prospectus. Before making an investment decision, you should carefully consider these risks as well as other information contained or incorporated by reference in this prospectus or the applicable supplement to this prospectus. The risks and uncertainties described are not the only ones facing us. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations, financial results and the value of our securities.
This prospectus, the documents incorporated by reference in this prospectus and any applicable prospectus supplement contain forward-looking statements that are necessarily subject to various risks and uncertainties. These statements reflect management’s judgment and opinions which are based on current estimates, expectations and projections about future events, and assumptions regarding these events and management’s knowledge of facts as of the date of this prospectus. These forward-looking statements relate to, among other matters, estimated losses, including penalties and fines, associated with various investigations and proceedings; forecasts of pipeline related expenses that we will not recover through rates; forecasts of capital expenditures; estimates and assumptions used in critical accounting policies, including those related to environmental assets and liabilities, environmental remediation, litigation, third-party claims, and other liabilities; and the level of future equity or debt issuances. These statements are also identified by words such as “assume,” “expect,” “intend,” “forecast,” “plan,” “project,” “believe,” “estimate,” “predict,” “anticipate,” “may,” “should,” “would,” “could,” “potential” and similar expressions. We are not able to predict all the factors that may affect future results. Some of the factors that could cause future results to differ materially from those expressed or implied by the forward-looking statements, or from historical results, include, but are not limited to:
the timing and outcomes of the 2017 general rate case and the transmission owner rate cases currently before the California Public Utilities Commission (“CPUC”), and other ratemaking and regulatory proceedings;
the timing and outcomes of the debarment proceeding and potential remedial and other measures that may be imposed on us as a result of the debarment proceeding and the jury’s verdict in the federal criminal trial (including a potential appointment of one or more independent third-party monitor(s)), the Safety and Enforcement Division’s (“SED”) unresolved enforcement matters relating to our compliance with natural gas-related laws and regulations, and other investigations that have been or may be commenced relating to our compliance with natural gas-related laws and regulations, including the U.S. Attorney’s Office investigation in connection with the natural gas explosion that occurred in
Carmel, California on March 3, 2014 and the U.S. Attorney’s Office in San Francisco investigation in connection with matters relating to the federal criminal trial, and the ultimate amount of fines, penalties, and remedial costs that we may incur in connection with the outcomes; |
the timing and outcomes of the CPUC’s investigation of communications between us and the CPUC that may have violated the CPUC’s rules regarding ex parte communications or are otherwise alleged to be improper, and of the U.S. Attorney’s Office in San Francisco and the California Attorney General’s office investigations in connection with communications between our personnel and CPUC officials, whether additional criminal or regulatory investigations or enforcement actions are commenced with respect to allegedly improper communications, and the extent to which such matters negatively affect the final decisions to be issued in our ratemaking proceedings;
the timing and outcomes of the Butte fire litigation, and whether our insurance is sufficient to cover our liability resulting therefrom or whether insurance is otherwise available; and whether additional investigations and proceedings in connection with the Butte fire will be opened;
whether Corp and we are able to repair the harm to our reputations caused by the jury’s verdict in the federal criminal trial and our possible conviction, the state and federal investigations of natural gas incidents, matters relating to the criminal federal trial, improper communications between the CPUC and us, and our ongoing work to remove encroachments from transmission pipeline rights-of-way;
whether we can control our costs within the authorized levels of spending, our ability to achieve sustainable efficiencies in our cost structure, the extent to which we incur unrecoverable costs that are higher than the forecasts of such costs, and changes in cost forecasts or the scope and timing of planned work resulting from changes in customer demand for electricity and natural gas or other reasons;
the amount and timing of additional common stock and debt issuances by Corp to fund equity contributions to us as we incur charges and costs, including fines, that we cannot recover through rates;
the outcome of the CPUC’s investigation into our safety culture, and future legislative or regulatory actions that may be taken to require us to separate our electric and natural gas businesses, restructure into separate entities, undertake some other corporate restructuring, or implement corporate governance changes;
the outcomes of the SED’s investigations of potential violations identified though audits, investigations, or self-reports, including in connection with our September 2016 self-report related to atmospheric corrosion inspections;
the outcome of future investigations or other enforcement proceedings that may be commenced relating to our compliance with laws, rules, regulations, or orders applicable to our operations, including the construction, expansion or replacement of our electric and gas facilities; inspection and maintenance practices, customer billing and privacy, and physical and cyber security; environmental laws and regulations;
the impact of environmental remediation laws, regulations, and orders; the ultimate amount of costs incurred to discharge our known and unknown remediation obligations; and the extent to which we are able to recover environmental costs in rates or from other sources;
the ultimate amount of unrecoverable environmental costs we incur associated with our natural gas compressor station site located near Hinkley, California;
the impact of new legislation or Nuclear Regulatory Commission (“NRC”) regulations, recommendations, policies, decisions, or orders relating to the nuclear industry, including operations, seismic design, security, safety, relicensing, the storage of spent nuclear fuel, decommissioning, cooling water intake, or other issues; the impact of actions taken by state agencies that may affect our
ability to continue operating Diablo Canyon; whether the CPUC approves the joint proposal that will phase out our Diablo Canyon nuclear units at the expiration of their licenses in 2024 and 2025; whether we obtain the approvals required to withdraw our NRC application to renew the two Diablo Canyon operating licenses; whether the State Lands Commission could be required to perform an environmental review of the new lands lease as a result of the World Business Academy assertion that the State Lands Commission committed legal error when it determined that the short term lease extension for an existing facility was exempt from review under the California Environmental Quality Act; and whether we will be able to successfully implement our retention and retraining and development programs for Diablo Canyon employees, and whether these programs will be recovered in rates; |
whether we are successful in ensuring physical security of our critical assets and whether our information technology, operating systems and networks, including the advanced metering system infrastructure, customer billing, financial, records management, and other systems, can continue to function accurately while meeting regulatory requirements; whether we and our third party vendors and contractors (who host, maintain, modify and update some of our systems) are able to protect our operating systems and networks from damage, disruption, or failure caused by cyber-attacks, computer viruses, or other hazards; whether our security measures are sufficient to protect against unauthorized or inadvertent disclosure of information contained in such systems and networks, including confidential proprietary information and the personal information of customers; and whether we can continue to rely on third-party vendors and contractors that maintain and support some of our information technology and operating systems;
the impact of droughts or other weather-related conditions or events, wildfires (such as the Butte fire), climate change, natural disasters, acts of terrorism, war, vandalism (including cyber-attacks), and other events, that can cause unplanned outages, reduce generating output, disrupt our service to customers, or damage or disrupt the facilities, operations, or information technology and systems owned by us, our customers, or third parties on which we rely; whether we incur liability to third parties for property damage or personal injury caused by such events; whether we are subject to civil, criminal, or regulatory penalties in connection with such events; and whether our insurance coverage is available for these types of claims and sufficient to cover our liability;
how the CPUC and the California Air Resources Board implement state environmental laws relating to greenhouse gas, renewable energy targets, energy efficiency standards, distributed energy resources, electric vehicles, and similar matters, including whether we are able to continue recovering associated compliance costs, such as the cost of emission allowances and offsets under cap-and-trade regulations; and whether we are able to timely recover our associated investment costs;
whether our climate change adaptation strategies are successful;
the impact that reductions in customer demand for electricity and natural gas have on our ability to make and recover our investments through rates and earn our authorized return on equity, and whether we are successful in addressing the impact of growing distributed and renewable generation resources and changing customer demand for natural gas and electric services;
the supply and price of electricity, natural gas, and nuclear fuel; the extent to which we can manage and respond to the volatility of energy commodity prices; our ability and the ability of our counterparties to post or return collateral in connection with price risk management activities; and whether we are able to recover timely our electric generation and energy commodity costs through rates, including our renewable energy procurement costs;
the amount and timing of charges reflecting probable liabilities for third-party claims; the extent to which costs incurred in connection with third-party claims or litigation can be recovered through insurance, rates, or from other third parties; and whether we can continue to obtain adequate insurance
coverage for future losses or claims, especially following a major event that causes widespread third-party losses; |
our ability to access capital markets and other sources of financing in a timely manner on acceptable terms;
changes in credit ratings which could result in increased borrowing costs especially if we were to lose our investment grade credit ratings;
the impact of federal or state laws or regulations, or their interpretation, on energy policy and the regulation of utilities and their holding companies;
the outcome of federal or state tax audits and the impact of any changes in federal or state tax laws, policies, regulations, or their interpretation; and
the impact of changes in GAAP, standards, rules, or policies, including those related to regulatory accounting, and the impact of changes in their interpretation or application.
For more information about the more significant risks that could affect the outcome of these forward-looking statements and our future financial condition and results of operations, you should read the sections of the documents incorporated herein by reference titled “Risk Factors” as well as the important factors that may be set forth under the heading “Risk Factors” in the applicable supplement to this prospectus.
You should read this prospectus, any applicable prospectus supplements, the documents that we incorporate by reference into this prospectus, the documents that we have included as exhibits to the registration statement of which this prospectus is a part and the documents that we refer to under the section of this prospectus titled “Where You Can Find More Information” completely and with the understanding that our actual future results could be materially different from what we expect when making the forward-looking statement. We qualify all our forward-looking statements by these cautionary statements. These forward-looking statements speak only as of the date of this prospectus, the date of the document incorporated by reference or the date of any applicable prospectus supplement. Except as required by applicable laws or regulations, we do not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the unauditedour historical ratios of earnings to fixed charges of PG&E and its subsidiaries for each of the years 1990 through 1994
and for the six months ended June 30, 1995.
| Nine Months Ended September 30, 2016 | Year Ended December 31, | |||||||||||||||||||||
| 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Ratio of earnings to fixed charges | 1.57x | 1.67x | 2.55x | 2.23x | 2.24x | 2.51x | ||||||||||||||||
For the purpose of computing PG&E and its subsidiaries'the ratios of earnings to fixed charges, "earnings"“earnings” represent net income adjusted for the minority
interest in lossesincome or loss from equity investees of less than 100% owned affiliates, PG&E and its
subsidiaries' equity in undistributed income or losslosses of less than 50% owned affiliates, income taxes and fixed charges (excluding capitalized interest). "Fixed charges"“Fixed charges” include interest on long-term debt and short-term borrowings (including a representative portion of rental expense), amortization of bond premium, discount and expense, interest on capital leases and allowance for funds used during construction related to the pretaxcost of debt and earnings required to cover the preferred stock dividend requirements of
majority owned subsidiaries.
The following table sets forth the unaudited ratios of earnings to combined
fixedrequirements. Fixed charges and preferred stock dividends for each of the years 1990 through
1994 and the six months ended June 30, 1995.
Each prospectus supplement will describe the uses of the proceeds from the saleissuance of the Series A Preferred Securitiessenior notes offered by that prospectus supplement.
DESCRIPTION OF THE SENIOR NOTES
This prospectus describes certain general terms of the senior notes that we may sell from time to time under this prospectus. We will describe the specific terms of each series of senior notes we offer in a prospectus supplement. The senior notes will be used byissued under an indenture dated as of April 22, 2005 (which supplemented, amended and restated the Series A Issueroriginal indenture dated as of March 11, 2004 as thereafter supplemented) and one or more supplemental indentures that we will enter into with The Bank of New York Mellon Trust Company, N.A. (formerly known as The Bank of New York Trust Company, N.A. and successor to purchase Series A Debentures. The net proceeds
of the sale of the Series A Debentures by PG&E will become part of the
treasury funds of PG&E and will be applied to capital expenditures and to the
redemption, repurchase, repayment or retirement of outstanding indebtedness or
preferred stock.
S-7
CERTAIN TERMS OF THE SERIES A PREFERRED SECURITIES
GENERAL
The following summary of certain terms andBNY Western Trust Company), as trustee. We have summarized selected provisions of the Series A
Preferred Securities supplementsindenture and the descriptionsenior notes below. The information we are providing you in this prospectus concerning the senior notes and the indenture is only a summary of the termsinformation provided in those documents, and provisions
of the Preferred Securities set forth in the accompanying Prospectus under the
heading "Description of the Preferred Securities," to which description
referencesummary is hereby made. This summary of certain terms and provisions of the
Series A Preferred Securities does not purport to be complete and is subject
to, and qualified in its entirety by reference to the Trust Agreement. The
formprovisions of the Trust Agreement has been filedindenture, including the forms of senior notes attached thereto. You should consult the senior notes themselves and the indenture for more complete information on the senior notes as they, and not this prospectus or any prospectus supplement, govern your rights as a holder. The indenture is included as an exhibit to the Registration
Statementregistration statement of which this Prospectus Supplement and accompanying Prospectusprospectus is a part. DISTRIBUTIONS
The Series A Preferred Securities represent undivided beneficial interests
inindenture has been qualified under the assetsTrust Indenture Act of 1939, as amended, or the Trust Indenture Act, and the terms of the Series A Issuer,senior notes will include those made part of the indenture by the Trust Indenture Act.
In this section, references to “we,” “our,” “ours” and “us” refer only to Pacific Gas and Electric Company and not to any of its direct or indirect subsidiaries or affiliates except as a practical matter the
Distributions on each Series A Preferred Securityexpressly provided.
General
The senior notes are our unsecured general obligations and will rank equally in right of payment to all our other senior and unsubordinated debt. The senior notes will be payable atentitled to the annual rate of %benefit of the stated liquidation preference of $25, payable
quarterly in arrears on March 31, June 30, September 30indenture equally and December 31 of
each year. Distributions in arrears afterratably with all other senior notes issued under the quarterly payment date therefor
will accumulate additional Distributions thereon (toindenture.
The indenture does not limit the extent permitted by
law) compounded quarterly at the rate per annum of % thereof. The term
"Distributions" as used herein shall include any such additional
Distributions. Distributions will accrue from , 1995, the date of original
issuance. The first Distribution payment date for the Series A Preferred
Securities will be , 1995, and such Distribution will be cumulative from
the date of original issuance. The amount of Distributions payable for any
period will be computed ondebt we may issue under it or the basisamount of a 360-day year of twelve 30-day
months.
So long as an Event of Default under the Indenture has not occurred and is
continuing, PG&E has the right at any time anddebt we or our subsidiaries may otherwise incur. We may issue senior notes from time to time under the indenture in one or more series by entering into supplemental indentures or by resolution of our board of directors.
Provisions of a Particular Series
The prospectus supplement applicable to extend each series of senior notes will specify, among other things:
the interest payment periodtitle of the senior notes;
any limit on the Series A Debentures, for not more than 20
consecutive quarters, provided that any such Extension Period shall not extend
beyondaggregate principal amount of the senior notes;
the date or dates on which the principal of the senior notes is payable, including the maturity date, or redemption datethe method or means by which those dates will be determined, and our right, if any, to extend those dates and the duration of any extension;
the interest rate or rates of the Series A Debentures. As a
consequence, quarterly Distributionssenior notes, if any, which may be fixed or variable, or the method or means by which the interest rate or rates will be determined, and our ability to extend any interest payment periods and the duration of any extension;
the date or dates from which any interest will accrue, the dates on which we will pay interest on the Series A Preferred Securities
wouldsenior notes and the regular record date, if any, for determining who is entitled to the interest payable on any interest payment date;
any periods or periods within which, or date or dates on which, the price or prices at which and the terms and conditions on which the senior notes may be deferred by the Series A Issuer during redeemed, in whole or in part, at our option;
any Extension Period (but
would continueobligation of ours to accumulate additional Distributions thereon as set forth
above). In the event that PG&E exercises this right, PG&E will not, and will
not permit any subsidiary of PG&E to, declare or pay any dividend or
distribution on, or redeem, purchase acquire, or makerepay the senior notes pursuant to any sinking fund or other mandatory redemption provisions or at the option of the holder and the terms and conditions upon which the senior notes will be so redeemed, purchased or repaid;
the denominations in which we will authorize the senior notes to be issued, if other than $1,000 or integral multiples of $1,000;
whether we will offer the senior notes in the form of global securities and, if so, the name of the depositary for any global securities;
if the amount payable in respect of principal of or any premium or interest on any senior notes may be determined with reference to an index or other fact or event ascertainable outside the indenture, the manner in which such amount will be determined;
covenants for the benefit of the holders of that series;
the currency or currencies in which the principal, premium, if any, and interest on the senior notes will be payable if other than U.S. dollars and the method for determining the equivalent amount in U.S. dollars;
if the principal of the senior notes is payable from time to time without presentation or surrender, any method or manner of calculating the principal amount that is outstanding at any time for purposes of the indenture; and
any other terms of the senior notes.
We may sell senior notes at par or at a liquidationdiscount below their stated principal amount or guarantee payment (otherat a premium. We will describe in a prospectus supplement material U.S. federal income tax considerations, if any, and any other special considerations for any senior notes we sell that are denominated in a currency other than payments under a Guarantee)U.S. dollars.
Payment
Except as may be provided with respect to a series, interest, if any, shares of PG&E's capital stock or any security of PG&E (including other
Debentures) ranking pari passu with or junior inon the senior notes payable on each interest payment date will be paid to the Series A
Debentures, except (i)person in each case with securities junior in interest towhose name that senior note is registered as of the Series A Debentures or (ii)close of business on the regular record date for payments made on any series of Debentures upon
the stated maturity of such Debentures. As a result, this covenant requires
that an interest payment on one series of Debentures may be extended only if
the interest periods on all series of Debentures are likewise extended. Prior
to the termination of any such extended interest payment period, PG&E may
further extend the interest payment period, provided that such Extension
Period together with all such previous and further extensions thereof may not
exceed 20 consecutive quarters or extend beyonddate. However, interest payable at maturity will be paid to the maturity or redemption
date ofperson to whom the Series A Debentures. Upon the termination of any extension period
andprincipal is paid. If there has been a default in the payment of all amounts then due, PG&Einterest on any senior notes, the defaulted interest may select a new extended
interest payment period, subjectbe paid to the above requirements. See "United States
Taxation--Potential Extension of Interest Payment Period and Original Issue
Discount" and "Certain Termsholders of the Series A Debentures--Option to Extend
Interest Payment Period."
PG&E has no current intentionsenior notes as of exercising its right to defer payments of
interest by extendinga date between 10 and 30 days before the interest payment period on the Series A Debentures.
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REDEMPTION
Upon thedate we propose for payment of defaulted interest or in any other manner not inconsistent with the Series A Debentures, whether at maturityrequirements of any securities exchange on which those senior notes may be listed, if the trustee finds it practicable.
Redemption
Any terms for the optional or upon
earliermandatory redemption as provided in the Indenture, the proceeds from such
paymentof a series of senior notes will be appliedset forth in a prospectus supplement for the offered series. Unless otherwise indicated in a prospectus supplement, senior notes will be redeemable by the Property Trustee to redeem a Like Amount (as
defined below) of the Common Securities of the Series A Issuer and the Series
A Preferred Securities,us only upon notice by mail not less than 30 nor more than 60 days' notice,
atdays before the date fixed for redemption and, if less than all the senior notes of a Redemption Price equalseries are to be redeemed, the aggregate liquidation preference plus
accumulatedparticular senior notes to be redeemed will be selected by the method provided for that particular series, or in the absence of any such provision, by such method of random selection as the registrar deems fair and unpaid Distributions to the Redemption Date. See "Certain
Terms of the Series A Debentures--Redemption."
PG&E hasappropriate.
We have reserved the right to redeemprovide conditional redemption notices for redemptions at our option or for redemptions that are contingent upon the Series A Debentures (a) onoccurrence or after ,
2000, in wholenonoccurrence of an event or in part, or (b) at any time, in whole but not in part, on
occurrence of a Tax Event or an Investment Company Event (each as defined
below, a "Special Event"), subjectcondition that cannot be ascertained prior to the conditions described under "Certain
Terms of the Series A Debentures--Redemption."
SPECIAL EVENT REDEMPTION OR DISTRIBUTION
If a Special Event shall occur and be continuing with respecttime we are required to the Series
A Issuer or the Series A Preferred Securities, PG&E has the right to (i)
redeem the Series A Debentures in whole (but not in part) and therefore cause
a mandatory redemption of the Series A Preferred Securities in whole (but not
in part) at the Redemption Price within 90 days following the occurrence of
such Special Event, or (ii) terminate the Series A Issuer and cause the Series
A Debentures to be distributed to thenotify holders of the Seriesredemption. A Preferred
Securities in liquidationconditional notice may state that if we have not deposited redemption funds with the trustee or a paying agent on or before the redemption date or we have directed the trustee or paying agent not to apply money deposited with it for redemption of the Series A Issuer. If at any time the Series A
Issuer is not orsenior notes, we will not be taxed asrequired to redeem the senior notes on the redemption date.
Restrictions on Liens and Sale and Leaseback Transactions
The indenture does not permit us or any of our significant subsidiaries (as defined below) to, (i) issue, incur, assume or permit to exist any debt (as defined below) secured by a grantor trust but a Tax Event haslien (as defined below) on any of our principal property (as defined below) or any of our significant subsidiaries’ principal property, whether that principal property was owned when the original indenture was executed (March 11, 2004) or thereafter acquired, unless we provide that the senior notes will be equally and ratably secured with the secured debt or (ii) incur or permit to exist any attributable debt (as defined below) in respect of principal property; provided, however, that the foregoing restriction will not occurred, the Depositor has the right to terminate the Series A Issuer and
cause the Series A Debentures to be distributedapply to the holdersfollowing:
to the extent we or a significant subsidiary consolidates with, or merges with or into, another entity, liens on the property of the Series A
Preferred Securitiesentity securing debt in liquidationexistence on the date of the Series A Issuer. Under current
United States federal income tax lawconsolidation or merger, provided that the debt and interpretation and assuming the
Series A Trust is treated as a grantor trust, such a distribution shouldliens were not be a taxable event to holderscreated or incurred in anticipation of the Series A Preferred Securities. Should
there beconsolidation or merger and that the liens do not extend to or cover any of our or a changesignificant subsidiary’s principal property;
liens on property acquired after March 11, 2004 and existing at the time of acquisition, as long as the lien was not created or incurred in law,anticipation thereof and does not extend to or cover any other principal property;
liens of any kind, including purchase money liens, conditional sales agreements or title retention agreements and similar agreements, upon any property acquired, constructed, developed or improved by us or a changesignificant subsidiary (whether alone or in legal interpretation, a Special Eventassociation with others) which do not exceed the cost or other circumstances, however, the termination could be a taxable event to
holdersvalue of the Series A Preferred Securities. See "United States Taxation--
Receiptproperty acquired, constructed, developed or improved and which are created prior to, at the time of, Series A Debentures Upon Liquidationor within 12 months after the acquisition (or in the case of property constructed, developed or improved, within 12 months after the completion of the Series A Issuer." If
PG&E does not elect either option (i)construction, development or (ii) above,improvement and commencement of full commercial operation of the Series A Preferred
Securities will remain outstanding.
"Tax Event" means that PG&E shall have received an opinion of counsel (which
may be counselproperty, whichever is later) to PG&Esecure or an affiliate but not an employee thereof and which
must be acceptable toprovide for the Property Trustee) experienced in such matters to the
effect that, as a resultpayment of any amendmentpart of the purchase price or cost thereof; provided that the liens do not extend to any principal property other than the property so acquired, constructed, developed or change (including any
announced prospective change)improved;
liens in the laws (or any regulations thereunder)favor of the United States, any state or any foreign country or any department, agency or instrumentality or any political subdivision or taxing authority thereof or
therein affecting taxation, or as a result of any official administrative
pronouncement or judicial decision interpreting or applying such laws or
regulations, which amendment or change is effective or such pronouncement or
decision is announced on or after the date of original issuance of the Series
A Preferred Securities, there is more than an insubstantial risk that (i)foregoing to secure payments pursuant to any contract or statute or to secure any indebtedness incurred for the Series A Issuer is,purpose of financing all or will be, subject to United States federal income tax
with respect to interest received on the Series A Debentures, (ii) interest
payable by PG&E on the Series A Debentures is not, or will not be, deductible
for United States federal income tax purposes or (iii) the Series A Issuer is,
or will be, subject to more than a de minimis amount of other taxes, duties,
assessments or other governmental charges.
"Investment Company Event" means the occurrence of a change in law or
regulation or a change in interpretation or application of law or regulation
by any legislative body, court, governmental agency or regulatory authority (a
"Change in 1940 Act Law") to the effect that the Series A Issuer is or will be
considered an "investment company" that is required to be registered under the
Investment Company Act of 1940, as amended, which Change in 1940 Act Law
becomes effective on or after the date of original issuancepart of the Series A
Preferred Securities.
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"Like Amount" means (i) with respect to a redemptionpurchase price or cost of constructing or improving the Series A
Preferred Securities and the Common Securities of the Series A Issuer
(together, the "Series A Trust Securities"), Series A Trust Securities having
an aggregate liquidation amount equal to the principal amount of Series A
Debentures to be contemporaneously redeemed in accordance with the Indenture
and the proceeds of which will be used to pay the Redemption Price of such
Series A Trust Securities and (ii) with respect to a distribution to holders
of Series A Trust Securities of Series A Debentures in connection with a
termination or liquidation of the Series A Issuer, Series A Debentures having
a principal amount equal to the aggregate liquidation amount of the Series A
Trust Securities in exchange for which such Series A Debentures are
distributed.
LIQUIDATION VALUE
The amount payable on the Series A Preferred Securities in the event of any
liquidation of the Series A Issuer is $25 per Series A Preferred Security plus
accumulated and unpaid Distributions, unless, in connection with such
liquidation, the Series A Debentures are distributed to the holders of the
Series A Preferred Securities.
CERTAIN TERMS OF THE SERIES A DEBENTURES
GENERAL
The following summary of certain terms and provisions of the Series A
Debentures supplements the description of the terms and provisions of the
Debentures set forth in the accompanying Prospectus under the heading
"Description of the Debentures," to which description reference is hereby
made. The summary of certain terms and provisions of the Series A Debentures
set forth below does not purport to be complete and is subject to, and
qualified in its entirety by reference to, the Indenture. The Indenture has
been filed as an exhibit to the Registration Statement of which this
Prospectus Supplement and accompanying Prospectus is a part.
Concurrently with the issuance of the Series A Preferred Securities, the
Series A Issuer will invest the proceeds thereof and the consideration paid by
PG&E for the Common Securities in the corresponding series of Series A
Debentures issued by PG&E to the Series A Issuer. The Series A Debentures will
bear Interest at the annual rate of % of the principal amount thereof,
payable quarterly in arrears on March 31, June 30, September 30 and December
31 of each year. Interest which is accrued and unpaid after the quarterly
payment date therefor will bear the additional interest on the amount thereof
(to the extent permitted by law) at the rate per annum of % thereof,
compounded quarterly. The term "Interest" as used herein shall include
quarterly interest payments, interest on quarterly interest payments in
arrears and Additional Interest (as defined below), as applicable. The Series
A Debentures' other Interest payment provisions correspond to the Distribution
provisions of the Series A Preferred Securities.
The Series A Debentures will be issued as a series of Debentures under the
Indenture. The Series A Debentures will mature on , 2025. The Series A
Debentures will be unsecured and will rank junior and be subordinate in right
of payment to all Senior Indebtedness of PG&E. See "Description of the
Debentures--Subordination" in the accompanying Prospectus.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
PG&E has the right at any time and from time to time, so long as an Event of
Default under the Indenture has not occurred and is continuing, to extend the
interest payment period for the Series A Debentures for up to 20 consecutive
quarters; provided that no Extension Period shall extend beyond the stated
maturity date or date of redemption of the Series A Debentures. At the end of
the Extension Period, PG&E is obligated to pay all interest then accrued and
unpaid (together with interest thereon
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to the extent permitted by applicable law). During any Extension Period, PG&E
will not, and will not permit any subsidiary of PG&E to, declare or pay any
dividend or distribution on, or redeem, purchase, acquire, or make a
liquidation or guarantee payment (other than payments under a Guarantee) with
respect to, any shares of PG&E's capital stock or any security of PG&E
(including other Debentures) ranking pari passu with or junior in interest to
the Debentures, except (i) in each case with securities junior in interest to
the Debentures or (ii) for payments made on any series of Debentures upon the
stated maturity of such Debentures. As a result, this covenant requires that
an interest payment on one series of Debentures may be extended only if the
interest periods on all series of Debentures are likewise extended. Prior to
the termination of any Extension Period, PG&E may further extend the interest
payment period, provided that such Extension Period, together with all such
previous and further extensions thereof, may not exceed 20 consecutive
quarters or extend beyond the maturity or redemption date of the Series A
Debentures. Upon the termination of any Extension Period and the payment of
all amounts then due, PG&E may select a new Extension Periodproperty subject to the above requirements. So long aslien, including liens related to governmental obligations the Property Trustee shall be the sole holder
of the Series A Debentures, PG&E is required to give the Property Trustee and
the Debenture Trustee notice of its selection of such Extension Period one
Business Day prior to the date the Property Trustee or PG&E is required to
give notice to any national securities exchangeinterest on which any of the Series A
Preferred Securities are listed or other applicable self-regulatory
organization or to holders of the Series A Preferred Securities of the record
date, but in any event not less than one Business Day prior to such record
date. The Property Trustee will be required to give such notice of PG&E's
selection of such Extension Period to the holders of the Series A Preferred
Securities affected thereby.
ADDITIONAL INTEREST
If the Series A Issuer would be required to pay any taxes, duties,
assessments or other governmental charges of whatever nature (other than
withholding taxes) imposed by the United States, or any other taxing
authority, PG&E also will pay as additional interest on the Series A
Debentures ("Additional Interest") such amounts as shall be required so that
the net amounts received and retained by the Series A Issuer after paying any
such taxes, duties, assessments or governmental charges will be not less than
the amounts the Series A Issuer would have received had no such taxes, duties,
assessments or governmental charges been imposed.
REDEMPTION
The Series A Debentures are redeemable prior to maturity at the option of
PG&E (i) at any time on or after , 2000, in whole or in part, and (ii) if a
Special Event occurs and is continuing, in whole (but not in part), in any
case at a Redemption Price equal to 100% of the principal amount thereof plus
accrued Interest to the redemption date. The Series A Debentures will be
subject to optional redemption in whole (but not in part) upon the termination
and liquidation of the Series A Issuer pursuant to an order for the
dissolution, termination or liquidation of the Series A Issuer entered by a
court of competent jurisdiction. For so long as the Series A Trust is the
holder of all Series A Debentures outstanding, the proceeds of any redemption
described in this section shall be used by the Series A Trust to redeem the
Series A Preferred Securities in accordance with their terms. PG&E shall not
redeem the Series A Debentures in part unless all accrued and unpaid interest
(including any Additional Interest) has been paid in full on all Series A
Debentures outstanding for all quarterly interest periods on or prior to the
Redemption Date.
DISTRIBUTIONS OF SERIES A DEBENTURES
Under certain circumstances involving the termination of the Series A
Issuer, Series A Debentures may be distributed to the holders of the Series A
Preferred Securities in liquidation of the Series A Issuer after satisfaction
of liabilities to creditors of the Series A Issuer as provided by applicable
law. If
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distributed to holders of Series A Preferred Securities in liquidation, the
Series A Debentures will initially be issued in the form of one or more global
securities and The Depository Trust Company ("DTC"), or any successor
depositary for the Series A Preferred Securities, will act as depositary for
the Series A Debentures. It is anticipated that the depositary arrangements
for the Series A Debentures would be substantially identical to those in
effect for the Series A Preferred Securities. Neither PG&E, The First National
Bank of Chicago, as Debenture Trustee, any paying agent nor any other agent of
PG&E or the Debenture Trustee will have any responsibility or liability for
any aspect of the records relating to or payments made on account of
beneficial ownership interests in a global security for such Series A
Debentures or for maintaining, supervising or reviewing any records relating
to such beneficial ownership interests. For a description of DTC and the terms
of the depositary arrangements relating to payments, transfers, voting rights,
redemption and other notices and other matters, see "Description of the
Preferred Securities--Book-Entry-Only Issuance--The Depository Trust Company"
in the accompanying Prospectus.
A global security shall be exchangeable for Series A Debentures registered
in the names of persons other than DTC or its nominee only if (i) DTC notifies
PG&E that it is unwilling or unable to continue as a depository for such
global security and no successor depository shall have been appointed, or if
at any time DTC ceases to be a clearing agency registeredtax-exempt under the Exchange
Act at a time when DTC is required to be so registered to act as such
depository, (ii) PG&E in its sole discretion determines that such global
security shall be so exchangeable, or (iii) there shall have occurred and be
continuing an Event of Default with respect to such global security. Any
global security that is exchangeable pursuant to the preceding sentence shall
be exchangeable for definitive certificates registered in such names as DTC
shall direct. It is expected that such instructions will be based upon
directions received by DTC from its Participants with respect to ownership of
beneficial interests in such global security. In the event that Series A
Debentures are issued in definitive form, such Series A Debentures will be in
denominations of $25 and integral multiples thereof and may be transferred or
exchanged at the offices described below.
Payments on Series A Debentures represented by a global security will be
made to DTC, as the depositary for the Series A Debentures. In the event
Series A Debentures are issued in definitive form, principal and interest will
be payable, the transfer of the Series A Debentures will be registrable, and
Series A Debentures will be exchangeable for Series A Debentures of other
denominations of a like aggregate principal amount, at the corporate office of
the Debenture Trustee in Chicago, Illinois, or at the offices of any paying
agent or transfer agent appointed by PG&E, provided that payment of interest
may be made at the option of PG&E by check mailed to the address of the
persons entitled thereto or by wire transfer. In addition, if the Series A
Debentures are issued in certificated form, the record dates for payment of
interest will be the 15th day preceding the end of each quarter. For a
description of DTC and the terms of the depositary arrangements relating to
payments, transfers, voting rights, redemptions and other notices and other
matters, see "Description of the Preferred Securities--Book-Entry-Only
Issuance--The Depository Trust Company" in the accompanying Prospectus.
If the Series A Debentures are distributed to the holders of Series A
Preferred Securities upon the liquidation of the Series A Issuer, PG&E will
use its best efforts to list the Series A Debentures on such stock exchanges,
if any, as the Series A Preferred Securities are then listed.
UNITED STATES TAXATION
GENERAL
This section is a summary of certain United States federal income tax
considerations that may be relevant to prospective purchasers of Series A
Preferred Securities and represents the opinion of Ballard Spahr Andrews &
Ingersoll, special tax counsel to PG&E and the Series A Issuer, insofar as it
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relates to matters of law and legal conclusions. This section is based upon
current provisionsSection 103 of the Internal Revenue Code of 1986, as amended, (the
"Code")or the Code, or any successor section of the Code;
liens in favor of us, one or more of our significant subsidiaries, one or more of our wholly owned subsidiaries or any of the foregoing combination; and
replacements, extensions or renewals (or successive replacements, extensions or renewals), existing and proposed regulations thereunder and current
administrative rulings and court decisions, allin whole or in part, of which are subjectany lien or of any agreement referred to change. Subsequent changes may cause tax consequences to vary substantiallyin the bullet points above or replacements, extensions or renewals of the debt secured thereby (to the extent that the amount of the debt secured by the lien is not increased from the consequences described below. Unless otherwise stated, this summary
deals onlyamount originally so secured, plus any premium, interest, fee or expenses payable in connection with Series A Preferred Securities held as capital assets and does
not deal with special classes of holders, such as dealers in securitiesany replacements, refundings, refinancings, remarketings, extensions or currencies, life insurance companies, persons holding Series A Preferred
Securities as a hedge againstrenewals); provided that replacement, extension or which are hedged against currency risksrenewal is limited to all or as a part of the same property (plus improvements thereon or additions or accessions thereto) that secured the lien replaced, extended or renewed.
Notwithstanding the restriction described above, we or any significant subsidiary may, (i) issue, incur or assume debt secured by a straddle,lien not described in the immediately preceding six bullet points on any principal property owned at March 11, 2004 or persons whose functional currency is not the United
States dollar.
POTENTIAL INVESTORS ARE ADVISED TO CONSULT THEIR TAX ADVISORS AS TO THE
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE PURCHASE OF SERIES A
PREFERRED SECURITIES PURSUANT TO THE OFFER AND OF THE OWNERSHIP AND
DISPOSITION OF SERIES A PREFERRED SECURITIES IN LIGHT OF THEIR PARTICULAR
CIRCUMSTANCES, AS WELL AS THE EFFECT OF ANY STATE, LOCAL OR OTHER LAWS.
While PG&E believes, based upon the advice of its counsel,thereafter acquired without providing that the Series A
Debentures willoutstanding senior notes be treatedequally and ratably secured with that debt and (ii) issue or permit to exist attributable debt in respect of principal property, in either case, so long as indebtednessthe aggregate amount of that secured debt and attributable debt, together with
the aggregate amount of all other debt secured by liens on principal property not described in the immediately preceding six bullet points then outstanding and all other attributable debt in respect of principal property, does not exceed 10% of our net tangible assets, as determined by us as of a month end not more than 90 days prior to the closing or consummation of the proposed transaction.
For these purposes:
“attributable debt” in respect of a sale and leaseback transaction means, at the time of determination, the present value of the obligation of the lessee for United States federal income
tax purposes, holdersnet rental payments during the remaining term of Series A Preferred Securities should note that the Internal Revenue Service (the "IRS")lease included in the sale and leaseback transaction, including any period for which the lease has been extended or may, attempt to treat the Series A
Debentures as equity rather than indebtedness for tax purposes. If the IRS
were successful in such attempt, the Series A Debentures would be subject to
redemption at the option of PG&E as described under "Certain Terms of the Series A Debentures--Redemption."
INCOME FROM SERIES A PREFERRED SECURITIES
In connection with the issuance of the Series A Debentures, Ballard Spahr
Andrews & Ingersoll will render its opinionlessor, be extended. The present value shall be calculated using a discount rate equal to the effect that, under then
current law and assuming full compliancerate of interest implicit in the transaction, determined in accordance with generally accepted accounting principals, or GAAP.
“capital lease obligation” means, at the terms of the Trust
Agreement, the Series A Issuer will be classified as a grantor trust and not
as an association taxable as a corporation.
As a consequence, each holder of Series A Preferred Securities will be
considered the owner of a pro rata portion of the Series A Debentures held by
the Series A Issuer. As a further consequence, each holder of Series A
Preferred Securities will be required to include in gross income his or her
pro rata share of the income accrued on the Series A Debentures held by the
Series A Issuer. Such income should not exceed Distributions received by the
holders of Series A Preferred Securities on the Series A Preferred Securities
except in limited circumstances described under "Certain Terms of the Series A
Preferred Securities--Distributions." No portion of such income will be
eligible for the dividends received deduction.
POTENTIAL EXTENSION OF INTEREST PAYMENT PERIOD AND ORIGINAL ISSUE DISCOUNT
Under the Indenture, PG&E has the option to extend from time to time the
interest payment period on the Series A Debentures to a period not exceeding
20 consecutive quarters but not beyond the maturity date of the Series A
Debentures. PG&E's option to extend the interest payment period will cause the
Series A Debenturesany determination is to be treated as issued with "original issue discount" for
United States federal income tax purposes. Accordingly, a holder of Series A
Preferred Securities will accrue interest income (i.e., original issue
discount) under a constant yield basis over the term of the Series A
Debentures (including any Extension Period), regardless of the receipt of cash
with respect to the period to which such income is attributable.
As a result, holders of Series A Preferred Securities during an Extension
Period will include interest in gross income in advance of the receipts of
cash, and any holders of Series A Preferred Securities who dispose of Series A
Preferred Securities prior to the record date for the payment of Distributions
following such extension period will include interest in gross income, but
will not receive any cash related thereto. The tax basis of a Series A
Preferred Security will be increased bymade, the amount of any
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original issue discount that is included in income without a receipt of cash,
and will be decreased when and if such cash is subsequently received by the holder of the Series A Preferred Security.
DISPOSITION OF THE SERIES A PREFERRED SECURITIES
Gain or loss will be recognized on a sale, including a redemption for cash,
of Series A Preferred Securities in an amount equal to the difference between
the amount realized and the tax basis of a holder of Series A Preferred
Securities in his or her pro rata share of Series A Debentures represented by
such Series A Preferred Securities. Gain or loss recognized by a holder of
Series A Preferred Securities on the sale or exchange of Series A Preferred
Securities held for more than one year generally will be taxable as long-term
capital gain or loss.
UNITED STATES ALIEN HOLDERS
For purposes of this discussion, a "United States Alien Holder" is any
holder or beneficial owner who or which is (i) a nonresident alien individual
or (ii) a foreign corporation, partnership, estate or trust, in either case
not subject to United States federal income tax on a net income basisliability in respect of a Series A Preferred Security.
Under present United States federal income tax law, subjectcapital lease that would at that time be required to the
discussion belowbe capitalized on a balance sheet in accordance with GAAP.
“debt” means any debt of ours for money borrowed and guarantees by us of debt for money borrowed but in each case excluding liabilities in respect to backup withholding:
(i) Paymentsof capital lease obligations or swap agreements.
“debt” of a significant subsidiary means any debt of such significant subsidiary for money borrowed and guarantees by the Series A Issuersignificant subsidiary of debt for money borrowed but in each case excluding liabilities in respect of capital lease obligations or swap agreements.
“excepted property” means any right, title or interest of us or any of its paying agentsour significant subsidiaries in, to or under any
United States Alien Holder will not be subject to United States withholding
tax provided that (a) the beneficial owner of the Series A Preferred
Security does not actuallyfollowing property, whether owned at March 11, 2004 or constructively own 10%thereafter acquired:
all money, investment property and deposit accounts (as those terms are defined in the California Commercial Code as in effect on March 11, 2004), and all cash on hand or more of the total
combined voting power of all classes of stock of PG&E, (b) the beneficial
owner of the Series A Preferred Securities is not a controlled foreign
corporation that is related to PG&E through stock ownership, and (c) either
(1) the beneficial owner of the Series A Preferred Securities certifies to
the Issuer or its agent, under penalties of perjury, that it is a United
States Alien Holder and provides its name and address or (2) the holder of
the Series A Preferred Securities is a securities clearing organization,
bankon deposit in banks or other financial institutioninstitutions, shares of stock, interests in general or limited partnerships or limited liability companies, bonds, notes, other evidences of indebtedness and other securities, of whatever kind and nature;
all accounts, chattel paper, commercial tort claims, documents, general intangibles, instruments, letter-of-credit rights and letters of credit (as those terms are defined in the California Commercial Code as in effect on March 11, 2004), with certain exclusions such as licenses and permits to use the real property of others, and all contracts, leases (other than the lease of certain real property at our Diablo Canyon power plant), operating agreements and other agreements of whatever kind and nature; and all contract rights, bills and notes;
all revenues, income and earnings, all accounts receivable, rights to payment and unbilled revenues, and all rents, tolls, issues, product and profits, claims, credits, demands and judgments, including any rights in or to rates, revenue components, charges, tariffs, or amounts arising therefrom, or in any amounts that holds customers' securitiesare accrued and recorded in a regulatory account for collection by us or any significant subsidiary;
all governmental and other licenses, permits, franchises, consents and allowances including all emission allowances (or similar rights) created under any similar existing or future law relating to abatement or control of pollution of the atmosphere, water or soil, other than all licenses and permits to use the real property of others, franchises to use public roads, streets and other public properties, rights of way and other rights, or interests relating to the occupancy or use of real property;
all patents, patent licenses and other patent rights, patent applications, trade names, trademarks, copyrights and other intellectual property, including computer software and software licenses;
all claims, credits, choses in action, and other intangible property;
all automobiles, buses, trucks, truck cranes, tractors, trailers, motor vehicles and similar vehicles and movable equipment; all rolling stock, rail cars and other railroad equipment; all vessels, boats, barges and other marine equipment; all airplanes, helicopters, aircraft engines and other flight equipment; and all parts, accessories and supplies used in connection with any of the foregoing;
all goods, stock in trade, wares, merchandise and inventory held for the purpose of sale or lease in the ordinary course of its tradebusiness; all materials, supplies, inventory and other items of personal property that are consumable (otherwise than by ordinary wear and tear) in their use in the operation of the principal property; all fuel, whether or business (a "financial institution"),not that fuel is in a form consumable in the operation of the principal property, including separate components of any fuel in the forms in which those components exist at any time before, during or after the period of the use thereof as fuel; all hand and such holder certifies toother portable tools and equipment; and all furniture and furnishings;
all personal property the Series A Issuerperfection of a security interest in which is not governed by the California Commercial Code;
all oil, gas and other minerals (as those terms are defined in the California Commercial Code as in effect on March 11, 2004) and all coal, ore, gas, oil and other minerals and all timber, and all rights and interests in any of the foregoing, whether or its agent under penalties
of perjury that such statement hasnot the minerals or timber have been receivedmined or extracted or otherwise separated from the beneficial ownerland; and all electric energy and capacity, gas (natural or artificial), steam, water and other products generated, produced, manufactured, purchased or otherwise acquired by itus or byany significant subsidiary;
all property which is the subject of a financial institution between itlease agreement other than a lease agreement that results from a sale and leaseback transaction designating us or any significant subsidiary as lessee and all our, or a significant subsidiary’s right, title and interest in and to that property and in, to and under that lease agreement, whether or not that lease agreement is intended as security (other than certain real property leased at our Diablo Canyon power plant and the beneficial ownerrelated lease agreement);
real, personal and furnishesmixed properties of an acquiring or acquired entity unless otherwise made a part of principal property; and
all proceeds (as that term is defined in the payor with a copy thereof;California Commercial Code as in effect on March 11, 2004) of the property listed in the preceding bullet points.
“lien” means any mortgage, deed of trust, pledge, security interest, encumbrance, easement, lease, reservation, restriction, servitude, charge or similar right and (ii) a United States Alien Holderany other lien of any kind, including, without limitation, any conditional sale or other title retention agreement, any lease of a Series A Preferred Security will
not be subject to United States federal incomesimilar nature, and any defect, irregularity, exception or withholding tax onlimitation in record title or, when the context so requires, any gain realized on the salelien, claim or exchange of a Series A Preferred Security
unless such person is present in the United States for 183 days or more in
the taxable year of sale and such person has a "tax home" in the United
States or certain other requirements are met.
BACKUP WITHHOLDING AND INFORMATION REPORTING
In general, information reporting requirements will apply to payments to
noncorporate United States holders of the proceeds of the sale of the Series A
Preferred Securities within the United States and "backup withholding" at a
rate of 31% will apply to such payments if the seller fails to provide a
correct taxpayer identification number.
Payments of the proceedsinterest arising from the sale by a United States Alien Holder of
Series A Preferred Securities made to or through a foreign office of a broker
will not be subject to information reporting or backup withholding, except
that, if the broker is a United States person, a controlled foreign
corporation for United States tax purposes or a foreign person 50% or more of
whose gross income is effectively connected with a United States trade or
business for a specified three-year period, information reporting may apply to
such payment. Payments of the proceeds from the sale of Series A Preferred
Securities to or through the United States office of a broker is subject to
information reporting and
S-14
backup withholding unless the holder or beneficial owner certifies as to its
non-United States status or otherwise establishes an exemption from
information reporting and backup withholding.
RECEIPT OF SERIES A DEBENTURES UPON LIQUIDATION OF THE SERIES A ISSUER
Under certain circumstancesanything described in "Certain Termsthis bullet point.
“net tangible assets” means the total amount of the Series A
Preferred Securities--Redemption," PG&E may cause the Series A Issuer to be
terminated and cause the Series A Debentures to be distributed to the holders
of Series A Preferred Securities in liquidation of such holders' interests in
the Series A Issuer. Under current United States federal income tax law and
interpretation and assuming the Series A Trust is treated asour assets determined on a grantor trust,
such a distribution should not be treated as a taxable event to holders of the
Series A Preferred Securities. Such a tax-free transaction would result in the
holder of Series A Preferred Securities receiving an aggregate taxconsolidated basis in accordance with GAAP, less (i) the Series A Debentures equal to such holder's aggregate tax basissum of our consolidated current liabilities determined in the
holder's Series A Preferred Securities. A holder's holding period for such
Series A Debentures would include the period for which the Series A Preferred
Securities were held by such holder.
POTENTIAL EXTENSION OF INTEREST PAYMENT PERIOD
In the event that the interest payment period on the Series A Debentures is
extended (as provided under "Certain Terms of the Series A Preferred
Securities--Distributions"), the Series A Issuer will continue to accrue
income, generally equal toaccordance with GAAP and (ii) the amount of the interest payment due at the endour consolidated assets classified as intangible assets determined in accordance with GAAP, including, but not limited to, such items as goodwill, trademarks, trade names, patents, and unamortized debt discount and expense and regulatory assets carried as an asset on our consolidated balance sheet.
“principal property” means any property of the Extension Period, over the length of the extended interest payment
period.
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement, PG&E and
the Series A Issuer have agreed that the Series A Issuer will sell to each of
the Underwriters named below, for whom and are acting as
Representatives, and each of the Underwriters has severally agreed to purchase
from the Series A Issuer the respective number of Series A Preferred
Securities set forth opposite its name below:
“significant subsidiary” has the meaning specified inRule 1-02(w) of the Issuers or PG&E which are substantially
similar to the Preferred Securities, including a Guarantee, or any securities
convertible into or exchangeable for Preferred Securities, preferred stock or
such substantially similar securities of either an Issuer or PG&E, without the
prior written consent of the Representatives.
Prior to this offering, there has been no public offering or market for the
Series A Preferred Securities. Application has been made to list the Series A
Preferred Securities on the Exchange, subject to official notice of
issuance, under the symbol " ". In order to meet one of the requirements for
listing the Series A Preferred Securities on the Exchange, the
Underwriters will undertake to sell lots of 100 or more Series A Preferred
Securities to a minimum of 400 beneficial holders. If approved for listing,
trading of the Series A Preferred Securities on the Exchange is expected
to commence within a seven-day period after the initial delivery of the Series
A Preferred Securities. The Representatives have advised PG&E that they intend
to make a market in the Series A Preferred Securities prior to the
commencement of trading on the Exchange, but are not obligated to do so
and may discontinue any such market making at any time without notice.
PG&E and the Series A Issuer have agreed to indemnify the several
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933.
S-16
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+ INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+ 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 +
+ BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+ THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+ SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+ UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED , 1995
PG&E CAPITAL I
PG&E CAPITAL II
PG&E CAPITAL III
PG&E CAPITAL IV
CUMULATIVE QUARTERLY INCOME PREFERRED SECURITIES (QUIPS /SM/)*
GUARANTEED TO THE EXTENT SUCH ISSUER HAS FUNDS AS SET FORTH HEREIN BY
PACIFIC GAS AND ELECTRIC COMPANY
----------
PG&E Capital I, PG&E Capital II, PG&E Capital III and PG&E Capital IV, each a
statutory business trust formed under the laws of the State of Delaware (each,
the "Issuer," and collectively, the "Issuers") may severally offer, from time
to time, their respective cumulative quarterly income preferred securities (the
"Preferred Securities") representing preferred undivided beneficial interests
in the assets of each Issuer. Pacific Gas and Electric Company, a California
corporation ("PG&E"), will be the owner of beneficial interests represented by
common securities (the "Common Securities") of each Issuer. The First National
Bank of Chicago is the Property Trustee of each Issuer. The payment of periodic
cash distributions ("Distributions") with respect to the Preferred Securities
of each Issuer and payments on liquidation or redemption with respect to such
Preferred Securities, in each case out of funds held by such Issuer, are each
guaranteed by PG&E to the extent described herein (each, a "Guarantee"). The
obligations of PG&E under each Guarantee will be subordinate and junior in
right of payment to all liabilities of PG&E except any liabilities that may be
made pari passu or subordinate to the Guarantee expressly by their terms.
Concurrently with the issuance by each Issuer of its Preferred Securities, such
Issuer will invest the proceeds thereof in a corresponding series of PG&E's
deferrable interest subordinated debentures (the "Debentures") with terms
corresponding to that Issuer's Preferred Securities. The Debentures will be
unsecured and subordinate and junior in right of payment to Senior Indebtedness
(as defined herein) of PG&E. The Debentures will be the sole assets of each
Issuer and the interest on the Debentures will be the only revenue of each
Issuer. Upon the occurrence of certain events as may be described in the
accompanying Prospectus Supplement, PG&E may redeem the Debentures or may
terminate each Issuer and cause the Debentures to be distributed to the holders
of the Preferred Securities in liquidation of their interest in such Issuer.
See "Description of the Preferred Securities--Liquidation Distribution Upon
Termination".
The Preferred Securities may be offered in amounts, at prices and on terms to
be determined at the time of offering, provided, however, that the aggregate
initial public offering price of all Preferred Securities issued pursuant to
the Registration Statement of which this Prospectus forms a part shall not
exceed $335,000,000. Certain specific terms of a particular Issuer's Preferred
Securities in respect of which this Prospectus is being delivered will be set
forth in an accompanying Prospectus Supplement, including where applicable and
to the extent not set forth herein, the identity of that Issuer, the specific
title, the aggregate amount, the Distribution rate (or the method for
determining such rate), the stated liquidation preference, redemption
provisions, other rights, the initial public offering price, and any other
special terms, as well as any planned listing on a securities exchange, of such
Preferred Securities.
The Preferred Securities may be sold in a public offering to or through
underwriters or dealers designated from time to time. See "Plan of
Distribution". The names of any such underwriters or dealers involved in the
sale of the Preferred Securities of any particular Issuer in respect of which
this Prospectus is being delivered, the number of Preferred Securities to be
purchased by any such underwriters or dealers and any applicable commissions or
discounts will be set forth in the Prospectus Supplement. The net proceeds to
each Issuer will also be set forth in the Prospectus Supplement.
The Prospectus Supplement will also contain information concerning United
States federal income tax considerations applicable to the Preferred Securities
offered thereby.
----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------
*QUIPS is a service mark of Goldman, Sachs & Co.
The date of this Prospectus is , 1995.
AVAILABLE INFORMATION
Pacific Gas and Electric Company, a California corporation ("PG&E") is
subject to the informational requirements of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and, in accordance therewith, files
reports, proxy statements and other information with the Securities and
Exchange Commission (the "Commission"). Such reports, proxy statements and
other information can be inspected and copied at the public reference room of
the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C., and the
public reference facilities in the Commission's Regional Offices located at
Seven World Trade Center, 7th Floor, New York, New York and Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois. Copies of such
material can be obtained at prescribed rates by writing to the Securities and
Exchange Commission, Public Reference Section, Washington, D.C. 20549. Such
material can also be inspected at the New York, American and Pacific Stock
Exchanges.
PG&E and each of PG&E Capital I, PG&E Capital II, PG&E Capital III and PG&E
Capital IV, each a statutory business trust formed under the laws of the State
of Delaware, have filed with the Commission a Registration Statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement")Regulation S-X under the Securities Act of 1933, as amended, (the
"Act"). This Prospectus does not contain all ofor the information set forth in
the Registration Statement as certain parts are omitted in accordance with the
rules and regulations of the Commission. For further information, reference is
hereby made to the Registration Statement.
No separate financial statements of any Issuer have been included herein.
PG&E and the Issuers do not considerSecurities Act; provided that, such financial statements would be
material to holders of Preferred Securities offered hereby because each Issuer
is a newly formed special purpose entity, has no operating history or
independent operations and is not engaged in, and does not propose to engage
in, any activity other than as set forth below. See "The Issuers."
----------------
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by PG&E with the Commission are incorporated
by reference in this Prospectus:
1. PG&E's annual report on Form 10-K for the year ended December 31,
1994.
2. PG&E's quarterly reports on Form 10-Q for the quarters ended March 31,
1995 and June 30, 1995.
3. PG&E's current reports on Form 8-K dated January 4, 1995, January 19,
1995, February 21, 1995, March 2, 1995, April 20, 1995, May 17, 1995, May
23, 1995, May 26, 1995, July 14, 1995, July 20, 1995 and August 17, 1995.
All other documents filed by PG&E pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and the
accompanying Prospectus Supplement and prior to the termination of the
offering of the Preferred Securities shall be deemed to be incorporated by
reference in this Prospectus and the accompanying Prospectus Supplement, and
to be a part hereof from the respective dates of the filing of such documents.
Any statement contained herein or in a document all or a portion of which is
incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Prospectus and the
accompanying Prospectus Supplement to the extent that a statement contained
herein or in any other subsequently filed document which also is or is deemed
to be incorporated by reference herein modifies or supersedes such statement.
Any such statement so modified or supersededsignificant subsidiary shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus or the
accompanying Prospectus Supplement.
2
PG&E hereby undertakes to provide without charge to each person, includinginclude any beneficial owner, to whom a copy of this Prospectus has been delivered, on
the written or oral request of any such person, a copy of any or all the
documents referred to above which have been or may be incorporated in this
Prospectus by reference, other than exhibits to such documents which are not
specifically incorporated by reference in the information that this Prospectus
incorporates. Requests should be directed to Leslie Guliasi, Transfer Agent,
Shareholder Services, Pacific Gas and Electric Company, 77 Beale Street, Room
2600, P.O. Box 770000, San Francisco, California 94177 (Telephone: 1-800-367-
7731).
THE ISSUERS
Each of PG&E Capital I, PG&E Capital II, PG&E Capital III and PG&E Capital
IV is a statutory business trust formed under Delaware law pursuant to (i) a
trust agreement executed by PG&E, as sponsor for the Issuer, and the Issuer
Trustees (as defined herein) of such Issuer and (ii) the filing of a
certificate of trust with the Delaware Secretary of State. Each trust
agreement will be amended and restated in its entirety (each, as so amended
and restated, the "Trust Agreement") substantially in the form filed as an
exhibit to the Registration Statement of which this Prospectus forms a part.
Each Trust Agreement will be qualified as an indenture under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"). Each Issuer
exists for the exclusive purposes of (i) issuing and selling its Preferred
Securities and Common Securities, (ii) using the proceeds from the sale of
such Preferred Securities and Common Securities to acquire a corresponding
series of Debentures issued by PG&E and (iii) engaging in those activities
necessary, convenient or incidental thereto. All of the Common Securities will
be owned by PG&E. The Common Securities will rank pari passu, and payments
will be made thereon pro rata, with the Preferred Securities, except that upon
the occurrence and continuance of a Debenture Event of Default (as defined
herein) under the Trust Agreement, the rights of the holders of the Common
Securities to payment in respect of Distributions and payments upon
liquidation, redemptioncorporation or other acquisition of Common Securities will be
subordinated to the rights of the holders of the Preferred Securities. PG&E
will acquire Common Securities in an aggregate liquidation amount equal to 3%
of the total capital of each Issuer. Each Issuer has a term of approximately
36 years, but may terminate earlier as provided in the applicable Trust
Agreement. Each Issuer's business and affairs is conducted by its trustees,
each appointed by PG&E as holder of the Common Securities: The First National
Bank of Chicago (the "Property Trustee"), a Delaware Trustee and three
individual trustees (the "Administrative Trustees") who are employees or
officers of or affiliated with PG&E (collectively, the "Issuer Trustees"). The
holder of the Common Securities, or the holders of a majority in liquidation
preference of the Preferred Securities if a Debenture Event of Default has
occurred and is continuing, will be entitled to appoint, remove or replace the
Property Trustee and the Delaware Trustee. In no event will the holders of the
Series A Preferred Securities have the right to vote to appoint, remove or
replace the Administrative Trustees, which voting rights are vested
exclusively in the holder of the Common Securities. The duties and obligations
of each of the Issuer Trustees are governed by the applicable Trust Agreement.
PG&E will payentity substantially all fees and expenses related to the Issuers and the offering of
the Preferred Securities and will pay, directly or indirectly, all ongoing
costs, expenses and liabilities of the Issuers. The principal place of
business of each Issuer is c/o Pacific Gas and Electric Company, 77 Beale
Street, P. O. Box 770000, San Francisco, California 94177, and its telephone
number is (415) 973-7000.
PACIFIC GAS AND ELECTRIC COMPANY
Pacific Gas and Electric Company is an operating public utility engaged
principally in the business of supplying electric and natural gas service
throughout most of northern and central California. PG&E was incorporated in
California in 1905. Its principal executive office is located at 77 Beale
Street, P.O. Box 770000, San Francisco, California 94177, and its telephone
number is (415) 973-7000.
3
DESCRIPTION OF THE PREFERRED SECURITIES
Pursuant to the terms of each Trust Agreement, the Issuer Trustees will
issue the Preferred Securities and the Common Securities (together, the "Trust
Securities"). The Preferred Securities of a particular issue will represent
preferred undivided beneficial interests in the assets of the related Issuer
and the holders thereof will be entitled to a preference in certain
circumstances with respect to Distributions and amounts payable on redemption
or liquidation over the Common Securities of such Issuer, as well as other
benefits as described in the corresponding Trust Agreement. This summary of
certain provisions of each Trust Agreement does not purport to be complete and
is subject to, and is qualified in its entirety by reference to, all the
provisions of each Trust Agreement, including the definitions therein of
certain terms, and the Trust Indenture Act. The form of the Trust Agreement
has been filed as an exhibit to the Registration Statement of which this
Prospectus forms a part. Each of the Issuers is a legally separate entity and
the assets of one are not available to satisfy the obligations ofexcepted property.
“swap agreement” means any of the
others.
GENERAL
The Preferred Securities of an Issuer will rank pari passu, and payments
will be made thereon pro rata, with the Common Securities of that Issuer
except as described under "--Subordination of Common Securities." The
Debentures will be owned by the Property Trustee and will be held in trust for
the benefit of the holders of the related Trust Securities. Each Guarantee
Agreement executed by PG&E for the benefit of the holders of each Issuer's
Preferred Securities (each, the "Guarantee") is a full and unconditional
guarantee on a subordinated basis with respect to the related Preferred
Securities but does not guarantee payment of Distributions or amounts payable
on redemption or liquidation of such Preferred Securities when the related
Issuer does not have funds on hand available to make such payments. See
"Description of the Guarantee."
DISTRIBUTIONS
Each Issuer's Preferred Securities represent undivided beneficial interests
in the assets of such Issuer, and as a practical matter the Distributions on
each Preferred Security will be payable at a rate specified in the Prospectus
Supplement for such Preferred Securities. The amount of Distributions payable
for any period will be computed on the basis of a 360-day year of twelve 30-
day months.
Distributions on the Preferred Securities will be cumulative, will accrue
from the date of original issuance and will be payable quarterly in arrears,
on March 31, June 30, September 30 and December 31 of each year (except as
otherwise described below). In the event that any date on which Distributions
are otherwise payable on the Preferred Securities is not a Business Day,
payment of the Distribution payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other
payment in respect to any such delay) except that, if such Business Day is in
the next succeeding calendar year, payment of such Distribution shall be made
on the immediately preceding Business Day, in each case with the same force
and effect as if made on such date (each date on which Distributions are
otherwise payable in accordance with the foregoing, a "Distribution Date"). A
"Business Day" shall mean any day other than a Saturday or a Sunday or a day
on which banking institutions in The City of New York are authorized or
required by law or executive order to remain closed or a day on which the
corporate trust office of the Property Trustee is closed for business.
PG&E has the right under the Indenture to extend the interest payment period
from time to time on each series of the Debentures, with the consequence that
quarterly Distributions on the corresponding Preferred Securities would be
deferred.
It is anticipated that the income of each Issuer available for distribution
to its holders of Preferred Securities will be limited to payments under the
corresponding series of Debentures in which the Issuer
4
will invest the proceeds from the issuance and sale of its Preferred
Securities and its Common Securities. See "Description of the Debentures." If
PG&E does not make interest payments on such Debentures, the Property Trustee
will not have funds available to pay Distributions on the corresponding
Preferred Securities.
Distributions on the Preferred Securities will be payable to the holders
thereof as they appear on the register of such Issuer on the relevant record
dates, which, as long as the Preferred Securities remain in book-entry-only
form, will be one Business Day prior to the relevant Distribution Date.
Subject to any applicable laws and regulations and the provisions of the
applicable Trust Agreement, each such payment will be made as described under
"--Book-Entry-Only Issuance--The Depository Trust Company." In the event any
Preferred Securities are not in book-entry-only form, the relevant record date
for such Preferred Securities shall be the date 15 days prior to the relevant
Distribution Date.
REDEMPTION
Upon the repayment of any series of Debentures, whether at maturity or upon
earlier redemption as provided in the Indenture, the proceeds from such
repayment will be applied by the Property Trustee to redeem the corresponding
Trust Securities, upon not less than 30 nor more than 60 days' notice, at the
redemption price (the "Redemption Price") including all accrued and unpaid
Distributions to the redemption date (the "Redemption Date"). The redemption
terms of a particular series of Debentures and the related Preferred
Securities will be set forth in the accompanying Prospectus Supplement.
REDEMPTION PROCEDURES
Preferred Securities redeemed on each Redemption Date shall be redeemed at
the Redemption Price with the proceeds from the contemporaneous redemption of
the corresponding series of Debentures. Redemptions of the Preferred
Securities shall be made and the Redemption Price shall be payable on each
Redemption Date only to the extent that the Issuer has funds on hand available
for the payment of such Redemption Price. See also "--Subordination of Common
Securities."
If an Issuer gives a notice of redemption in respect of its Preferred
Securities, then, by 12:00 noon, New York City time, on the Redemption Date,
to the extent funds are available, the Property Trustee will deposit
irrevocably with The Depository Trust Company ("DTC") funds sufficient to pay
the applicable Redemption Price and will give DTC irrevocable instructions and
authority to pay the Redemption Price to the holders of such Preferred
Securities. See "--Book Entry-Only Issuance--The Depository Trust Company." If
such Preferred Securities are no longer in book-entry-only form, the Issuer,
to the extent funds are available, will irrevocably deposit with the paying
agent for such Preferred Securities funds sufficient to pay the applicable
Redemption Price and will give such paying agent irrevocable instructions and
authority to pay the Redemption Price to the holders thereof upon surrender of
their certificates evidencing such Preferred Securities. Notwithstanding the
foregoing, Distributions payable on or prior to the Redemption Date for any
Preferred Securities called for redemption shall be payable to the holders of
such Preferred Securities on the relevant record dates for the related
Distribution Dates. If notice of redemption shall have been given and funds
deposited as required, then upon the date of such deposit, all rights of the
holders of such Preferred Securities so called for redemption will cease,
except the right of the holders of such Preferred Securities to receive the
Redemption Price, but without interest on such Redemption Price, and such
Preferred Securities will cease to be outstanding. In the event that any date
fixed for redemption of Preferred Securities is not a Business Day, then
payment of the Redemption Price payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day falls
in the next calendar year, such
5
payment will be made on the immediately preceding Business Day. In the event
that payment of the Redemption Price in respect of Preferred Securities called
for redemption is improperly withheld or refused and not paid either by the
Issuer or by PG&E pursuant to the Guarantee as described under "Description of
the Guarantee," Distributions on such Preferred Securities will continue to
accrue at the then applicable rate, from the original Redemption Date to the
date of payment, in which case the actual payment date will be considered the
date fixed for redemption for purposes of calculating the Redemption Price.
Subject to applicable law, PG&E or its subsidiaries may at any time and from
time to time purchase outstanding Preferred Securities by tender, in the open
market or by private agreement.
Payment of the Redemption Price on the Preferred Securities and any
distribution of Debentures to holders of Preferred Securities shall be made to
the applicable recordholders thereof as they appear on the register for such
Preferred Securities on the relevant record date, which shall be one Business
Day prior to the relevant Redemption Date or liquidation date, as applicable;
provided, however, that in the event that any Preferred Securities are not in
book-entry-only form, the relevant record date for such Preferred Securities
shall be the date 15 days prior to the Redemption Date or liquidation date, as
applicable.
If less than all the securities issued by an Issuer are to be redeemed on a
Redemption Date, then the aggregate liquidation preference of such securities
to be redeemed shall be allocated 3% to its Common Securities and 97% to its
Preferred Securities. The particular Preferred Securities to be redeemed shall
be selected not more than 60 days prior to the Redemption Date by the Property
Trustee from the outstanding Preferred Securities not previously called for
redemption, by such method as the Property Trustee shall deem fair and
appropriate and which may provide for the selection for redemption of portions
(equal to $25 or integral multiples thereof) of the liquidation preference of
Preferred Securities of a denomination larger than $25. The Property Trustee
shall promptly notify the security registrar in writing of the Preferred
Securities selected for redemption and, in the case of any Preferred
Securities selected for partial redemption, the liquidation preference thereof
to be redeemed. For all purposes of each Trust Agreement, unless the context
otherwise requires, all provisions relating to the redemption of Preferred
Securities shall relate, in the case of any Preferred Securities redeemed or
to be redeemed only in part, to the portion of the aggregate liquidation
preference of Preferred Securities which has been or is to be redeemed.
SUBORDINATION OF COMMON SECURITIES
Payment of Distributions on, and the Redemption Price of, each Issuer's
Trust Securities, as applicable, shall be made pro rata based on the
liquidation preference of such Trust Securities; provided, however, that if on
any Distribution Date or Redemption Date a Debenture Event of Default (as
defined below, see "--Events of Default; Notice") under the applicable Trust
Agreement shall have occurred and be continuing, no payment of any
Distribution on, or Redemption Price of, any of the Issuer's Common
Securities, and no other payment on account of the redemption, liquidation or
other acquisition of such Common Securities, shall be made unless payment in
full in cash of all accumulated and unpaid Distributions on all of the
Issuer's outstanding Preferred Securities for all Distribution periods
terminating on or prior thereto, or in the case of payment of the Redemption
Price the full amount of such Redemption Price on all of the Issuer's
outstanding Preferred Securities, shall have been made or provided for, and
all funds available to the Property Trustee shall first be applied to the
payment in full in cash of all Distributions on, or Redemption Price of, the
Issuer's Preferred Securities then due and payable.
In the case of any Event of Default under any Trust Agreement resulting from
an event of default under the Indenture (a "Debenture Event of Default"), the
holder of such Issuer's Common Securities will be deemed to have waived any
right to act with respect to such Event of Default under such Trust
6
Agreement until the effect of all such Events of Default with respect to such
Preferred Securities have been cured, waived or otherwise eliminated. Until
any such Events of Default under the applicable Trust Agreement with respect
to the Preferred Securities have been so cured, waived or otherwise
eliminated, the Property Trustee shall act solely on behalf of the holders of
such Preferred Securities and not on behalf of the holder of the Issuer's
Common Securities, and only the holders of such Preferred Securities will have
the right to direct the Property Trustee to act on their behalf.
LIQUIDATION DISTRIBUTION UPON TERMINATION
Pursuant to each Trust Agreement, each Issuer shall be terminated by PG&E on
the first to occur of: (i) December 31, 2031, the expiration of the term of
such Issuer; (ii) the bankruptcy, dissolution or liquidation of PG&E; (iii)
the distribution of a Like Amount of the corresponding series of Debentures to
the holders of its Preferred Securities and Common Securities following the
occurrence of a Special Event or in the event the Issuer is not or will not be
taxed as a grantor trust but a Tax Event has not occurred; (iv) the redemption
of all of the Issuer's Preferred Securities; and (v) an order for the
termination of the Issuer shall have been entered by a court of competent
jurisdiction.
If an early termination occurs as described in clause (ii), (iii) or (v)
above, the Issuer shall be liquidated by the Issuer Trustees as expeditiously
as the Issuer Trustees determine to be possible by distributing, after
satisfaction of liabilities to creditors of such Issuer as provided by
applicable law, to the holders of such Preferred Securities and Common
Securities a Like Amount of the corresponding series of Debentures, unless
such distribution is determined by the Property Trustee not to be practical,
in which event such holders will be entitled to receive out of the assets of
the Issuer available for distribution to holders, after satisfaction of
liabilities to creditors of such Issuer as provided by applicable law, an
amount equal to, in the case of holders of Preferred Securities, the aggregate
of the stated liquidation preference of $25 per Preferred Security plus
accrued and unpaid Distributions thereon to the date of payment (such amount
being the "Liquidation Distribution"). If such Liquidation Distribution can be
paid only in part because such Issuer has insufficient assets available to pay
in full the aggregate Liquidation Distribution, then the amounts payable
directly by such Issuer on its Preferred Securities shall be paid on a pro
rata basis. The holder(s) of such Issuer's Common Securities will be entitled
to receive distributions upon any such liquidation pro rata with the holders
of its Preferred Securities, except that if a Debenture Event of Default has
occurred and is continuing, the Preferred Securities shall have a priority
over the Common Securities. A supplemental Indenture may provide that if an
early termination occurs as described in clause (v) above, the related series
of Debentures may be subject to optional redemption in whole (but not in
part).
EVENTS OF DEFAULT; NOTICE
Any one of the following events constitutes an "Event of Default" under each
Trust Agreement with respect to the Preferred Securities issued thereunder
(whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(i) the occurrence of an "Event of Default" as defined the Indenture (see
"Description of the Debentures--Events of Default"); or
(ii) default by the Property Trustee in the payment of any Distribution
when it becomes due and payable, and continuation of such default for a
period of 30 days; or
(iii) default by the Property Trustee in the payment of any Redemption
Price of any Preferred Security or Common Security when it becomes due and
payable; or
(iv) default in the performance, or breach, in any material respect, of
any covenant or warranty of the Issuer Trustees in such Trust Agreement
(other than a covenant or warranty a default in the performance of which or
the breach of which is dealt with in clause (ii) or (iii) above), and
continuation of such default or breach for a period of 60 days after there
has been given, by registered or certified mail, to the defaulting Issuer
Trustee or Trustees by the holders of at least 10% in aggregate liquidation
preference of the outstanding Preferred Securities of the applicable
7
Issuer, 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
such Trust Agreement; or
(v) the occurrence of certain events of bankruptcy or insolvency with
respect to the Property Trustee and the failure by PG&E to appoint a
successor Property Trustee within 60 days thereof.
Within five Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit
notice of such Event of Default to the holders of such Issuer's Preferred
Securities, the Administrative Trustees and PG&E, as Depositor, unless such
default shall have been cured or waived. PG&E, as Depositor, and the
Administrative Trustees are required to file annually with the Property
Trustee a certificate as to whether or not they are in compliance with all the
conditions and covenants applicable to them under the Trust Agreement.
If a Debenture Event of Default has occurred and is continuing, the
Preferred Securities shall have a preference over the Common Securities upon
termination of each Issuer as described above. See "--Liquidation Distribution
Upon Termination."
REMOVAL OF ISSUER TRUSTEES
Unless an Event of Default shall have occurred and be continuing, any Issuer
Trustee may be removed at any time by the holder of the Common Securities. If
a Debenture Event of Default has occurred and is continuing, the Property
Trustee and the Delaware Trustee may be removed at such time by the holders of
a majority in liquidation preference of the outstanding Preferred Securities.
In no event will the holders of the Preferred Securities have the right to
vote to appoint, remove or replace the Administrative Trustees, which voting
rights are vested exclusively in the holder of the Common Securities. No
resignation or removal of an Issuer Trustee and no appointment of a successor
trustee shall be effective until the acceptance of appointment by the
successor trustee in accordance with the provisions of the Trust Agreement.
CO-TRUSTEES AND SEPARATE PROPERTY TRUSTEE
Unless an Event of Default under a Trust Agreement shall have occurred and
be continuing, at any time or times, for the purpose of meeting the legal
requirements of the Trust Indenture Act or of any jurisdiction in which any
part of the Trust Property (as defined in each Trust Agreement) may at the
time be located, the holder of the applicable Common Securities and the
Administrative Trustees shall have power to appoint one or more persons either
to act as co-trustee, jointly with the Property Trustee, of all or any part of
such Trust Property, or to act as separate trustee of any such property, in
either case with such powers as may be provided in the instrument of
appointment, and to vest in such person or persons in such capacity any
property, title, right or power deemed necessary or desirable, subject to the
provisions of the Trust Agreement. In case a Debenture Event of Default under
the Indenture has occurred and is continuing, the Property Trustee alone shall
have power to make such appointment.
MERGER OR CONSOLIDATION OF ISSUER TRUSTEES
Any corporation into which the Property Trustee, the Delaware Trustee or any
Administrative Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which such Trustee shall be a party, or any corporation
succeeding to all or substantially all the corporate trust business of such
Trustee, shall be the successor of such Trustee under the Trust Agreements,
provided such corporation shall be otherwise qualified and eligible.
VOTING RIGHTS; AMENDMENT OF TRUST AGREEMENT
Except as provided below and under "Description of the Guarantee--Amendments
and Assignment" and as otherwise required by law and each Trust Agreement, the
holders of the Preferred Securities will have no voting rights.
8
A Trust Agreement may be amended from time to time by the Depositor and the
Issuer Trustees, without the consent of the holders of the Preferred
Securities, (i) to cure ambiguities or (ii) to ensure that the Issuer will be
classified for federal income tax purposes as a grantor trust, provided that
any such amendment shall not adversely affect in any material respect the
interests of any holder of Preferred Securities. A Trust Agreement may be
amended by the Depositor and the Issuer Trustees in any other respect (except
to change the amount or timing of any Distribution) with the consent of the
holders of a majority in liquidation preference of Preferred Securities and
upon receipt of an opinion of counsel to the effect that such amendment will
not affect the Issuer's status as a grantor trust for federal income tax
purposes or its exemption from regulation as an investment company under the
Investment Company Act of 1940, as amended.
So long as any Debentures are held by the Property Trustee, the Issuer
Trustees shall not (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee, or executing any
trust or power conferred on the Property Trustee with respect to such
Debentures, (ii) waive any past default that is waiveable under Section 513 of
the Indenture, (iii) exercise any right to rescind or annul a declaration that
the principal of all the Debentures shall be due and payable or (iv) consent
to any amendment, modification or termination of the Indenture or the
Debentures, where such consent shall be required, without, in each case,
obtaining the prior approval of the holders of a majority in aggregate
liquidation preference of all outstanding Preferred Securities; provided,
however, that where a consent under the Indenture would require the consent of
each holder of Debentures affected thereby, no such consent shall be given by
the Property Trustee without the prior consent of each holder of the
corresponding Preferred Securities. The Issuer Trustees shall not revoke any
action previously authorized or approved by a vote of the Preferred Securities
except by subsequent vote of the holders of the Preferred Securities. The
Property Trustee shall notify all holders of the Preferred Securities of any
notice of default with respect to the Debentures. In addition to obtaining the
foregoing approvals of the holders of the Preferred Securities, prior to
taking any of the foregoing actions, the Issuer Trustees shall obtain an
opinion of counsel experienced in such matters to the effect that the Issuer
will not be classified as a corporation or partnership for United States
federal income tax purposes on account of such action.
Any required approval of holders of Preferred Securities may be given at a
meeting of holders of Preferred Securities convened for such purpose or
pursuant to written consent. The Property Trustee will cause a notice of any
meeting at which holders of Preferred Securities are entitled to vote, or of
any matter upon which action by written consent of such holders is to be
taken, to be given to each holder of record of Preferred Securities in the
manner set forth in each Trust Agreement.
No vote or consent of the holders of Preferred Securities will be required
for each Issuer to redeem and cancel its Preferred Securities in accordance
with the applicable Trust Agreement.
Notwithstanding that holders of Preferred Securities are entitled to vote or
consent under any of the circumstances described above, any of the Preferred
Securities that are owned by PG&E, the Issuer Trustees or any affiliate of
PG&E or any Issuer Trustee, shall, for purposes of such vote or consent, be
treated as if they were not outstanding.
PAYMENT AND PAYING AGENCY
Payments in respect of the Preferred Securities shall be made to DTC, which
shall credit the relevant accounts at DTC on the applicable Distribution Dates
or, if any Issuer's Preferred Securities are not held by DTC, such payments
shall be made by check mailed to the address of the holder entitled thereto as
such address shall appear on the Register. The paying agent (the "Paying
Agent") shall initially be The First National Bank of Chicago and any co-
paying agent chosen by The First National Bank of Chicago, and acceptable to
the Property Trustee and PG&E. The First National Bank of Chicago shall be
permitted to resign as Paying Agent upon 30 days' written notice to the
Property
9
Trustee and PG&E, as Depositor. In the event that The First National Bank of
Chicago shall no longer be the Paying Agent, the Property Trustee shall
appoint a successor to act as Paying Agent (which shall be a bank or trust
company).
BOOK-ENTRY-ONLY ISSUANCE -- THE DEPOSITORY TRUST COMPANY
DTC will act as securities depositary for all of the Preferred Securities.
The Preferred Securities will be issued only as fully-registered securities
registered in the name of Cede & Co. (DTC's nominee). One or more fully-
registered global certificates will be issued for the Preferred Securities of
each Issuer, representing in the aggregate the total number of such Issuer's
Preferred Securities, and will be deposited with DTC.
DTC is a limited purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law,
a member of the 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. DTC
holds securities that its participants ("Participants") deposit with DTC. DTC
also facilitates the settlement among Participants of securities transactions,
such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in 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 ("Direct Participants"). DTC is
owned by a number of its Direct Participants and by the New York Stock
Exchange, Inc. (the "New York Stock Exchange"), the American Stock Exchange,
Inc. and the National Association of Securities Dealers, Inc. Access to the
DTC system is also available to others such as securities brokers and dealers,
banks and trust companies that clear through or maintain custodial
relationships with Direct Participants, either directly or indirectly
("Indirect Participants"). The rules applicable to DTC and its Participants
are on file with the Commission.
Purchases of Preferred Securities within the DTC system must be made by or
through Direct Participants, which will receive a credit for the Preferred
Securities on DTC's records. The ownership interest of each actual purchaser
of each Preferred Security ("Beneficial Owner") is in turn to be recorded on
the Direct and Indirect Participants' records. Beneficial Owners will not
receive written confirmation from DTC of their purchases, but Beneficial
Owners are expected to receive written confirmations providing details of the
transactions, as well as periodic statements of their holdings, from the
Direct or Indirect Participants through which the Beneficial Owners purchased
Preferred Securities. Transfers of ownership interests in the Preferred
Securities are to be accomplished by entries made on the books of Participants
acting on behalf of Beneficial Owners. Beneficial Owners will not receive
certificates representing their ownership interests in Preferred Securities,
except in the event that use of the book-entry system for the Preferred
Securities of such Issuer is discontinued.
DTC has no knowledge of the actual Beneficial Owners of the Preferred
Securities; DTC's records reflect only the identity of the Direct Participants
to whose accounts such Preferred Securities 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 DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed
by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. as the registered holder of
the Preferred Securities. If less than all of an Issuer's Preferred Securities
are being redeemed, DTC's practice is to determine by lot the amount of the
interest of each Direct Participant to be redeemed.
10
Although voting with respect to the Preferred Securities is limited to the
holders of record of the Preferred Securities, in those instances in which a
vote is required, neither DTC nor Cede & Co. will itself consent or vote with
respect to Preferred Securities. Under its usual procedures, DTC would mail an
omnibus proxy (the "Omnibus Proxy") to the Property Trustee as soon as
possible after the record date. The Omnibus Proxy assigns Cede & Co.'s
consenting or voting rights to those Direct Participants to whose accounts
such Preferred Securities are credited on the record date (identified in a
listing attached to the Omnibus Proxy).
Distribution payments on the Preferred Securities will be made by the
Property Trustee to DTC. DTC's practice is to credit Direct Participants'
accounts on the relevant payment date in accordance with their respective
holdings shown on DTC's records unless DTC has reason to believe that it will
not receive payments on such payment date. Payments by Participants to
Beneficial Owners will be governed by standing instructions and customary
practices and will be the responsibility of such Participant and not of DTC,
the Property Trustee, the Issuer thereof or PG&E, subject to any statutory or
regulatory requirements as may be in effect from time to time. Payment of
Distributions to DTC is the responsibility of the Property Trustee,
disbursement of such payments to Direct Participants is the responsibility of
DTC, and disbursements of such payments to the Beneficial Owners is the
responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as securities depositaryagreement with respect to any of the Preferred Securities at any time by giving reasonable
notice to the Property Trustee and PG&E. In the event that a successor
securities depositary is not obtained, definitive Preferred Security
certificates representing such Preferred Securities are required to be printed
and delivered. The Depositor, at itsswap, forward, future or derivative transaction or option may decide to discontinue use of
the system of book-entry transfers through DTC (or a successor depositary).
After a Debenture Event of Default, the holders of a majority in liquidation
preference of Preferred Securities may determine to discontinue the system of
book-entry transfers through DTC. In any such event, definitive certificates
for such Issuer's Preferred Securities will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Issuers and PG&E believe to be
accurate, but the Issuers and PG&E assume no responsibility for the accuracy
thereof. Neither the Issuers nor PG&E has any responsibility for the
performance by DTC or its Participants of their respective obligations as
described herein or under the rules and procedures governing their respective
operations.
REGISTRAR AND TRANSFER AGENT
The First National Bank of Chicago will initially act as registrar and
transfer agent for the Preferred Securities.
Registration of transfers of Preferred Securities will be effected without
charge by or on behalf of each Issuer, but upon payment of any tax or other
governmental charges that may be imposed in connection with any transfer or
exchange.
The Issuers will not be required to register or cause to be registered the
transfer of their Preferred Securities after such Preferred Securities have
been called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, other than during the occurrence and continuance of an
Event of Default, undertakes to perform only such duties as are specifically
set forth in the Trust Agreements and, after an Event of Default, must
exercise the same degree of care and skill as a prudent person would exercise
or use in the conduct of his or her own affairs. Subject to this provision,
the Property Trustee
11
is under no obligation to exercise any of the powers vested in it by the Trust
Agreement at the request of any holder of Preferred Securities unless it is
offered reasonable indemnity against the costs, expenses and liabilities that
might be incurred thereby. If no Debenture Event of Default has occurred and
is continuing and the Property Trustee is required to decide between
alternative causes of action, construe ambiguous provisions in a Trust
Agreement or is unsure of the application of any provision of a Trust
Agreement, and the matter is not one on which holders of Preferred Securities
are entitled under the Trust Agreement to vote, then the Property Trustee
shall take such action as is directed by PG&E as Depositor and if not so
directed, shall take such action as it deems advisable and in the best
interests of the holders of the Preferred Securities and the Common Securities
and will have no liability except for its own bad faith, negligence or willful
misconduct.
MISCELLANEOUS
The Administrative Trustees are authorized and directed to conduct the
affairs of and to operate the Issuers in such a way that no Issuer will be
deemed to be an "investment company" required to be registered under the
Investment Company Act of 1940 or taxed as a corporation for federal income
tax purposes and so that the Debentures will be treated as indebtedness of
PG&E for United States federal income tax purposes. In this connection, PG&E
and the Administrative Trustees are authorized to take any action, not
inconsistent with applicable law, the certificate of trust of each Issuer or
each Trust Agreement, that PG&E and the Administrative Trustees determine in
their discretion to be necessary or desirable for such purposes, as long as
such action does not materially adversely affect the interests of the holders
of the related Preferred Securities.
Holders of the Preferred Securities have no preemptive or similar rights.
No Issuer may borrow moneyagreement involving, or issue debt or mortgage or pledge any of its
assets.
DESCRIPTION OF THE GUARANTEE
Each Guarantee will be executed and delivered by PG&E concurrently with the
issuance by each Issuer of its Preferred Securities for the benefit of the
holders from time to time of such Preferred Securities. The First National
Bank of Chicago will act as indenture trustee ("Guarantee Trustee") under each
Guarantee for the purposes of compliance with the Trust Indenture Act. This
summary of certain provisions of the Guarantees does not purport to be
complete and is subject to, and qualified in its entiretysettled by reference to, all
of the provisions of each Guarantee Agreement, including the definitions
therein of certain terms, and the Trust Indenture Act. The form of the
Guarantee has been filed as an exhibit to the Registration Statement of which
this Prospectus forms a part. Reference in this summary to Preferred
Securities means that Issuer's Preferred Securities to which a Guarantee
relates. The Guarantee Trustee will hold each Guarantee for the benefit of the
holders of the related Issuer's Preferred Securities.
GENERAL
PG&E will irrevocably and unconditionally agree on a subordinated basis, to
the extent set forth in each Guarantee, to pay in full, to the holders of the
related Issuer's Preferred Securities, the Guarantee Payments (as defined
below) (except to the extent paid by or on behalf of such Issuer), as and when
due, regardless of any defense, right of set-off or counterclaim which such
Issuer may have or assert. The following payments, to the extent not paid by
an Issuer (the "Guarantee Payments"), will be subject to the applicable
Guarantee (without duplication): (i) any accumulated and unpaid Distributions
required to be paid on such Preferred Securities, to the extent that such
Issuer has funds on hand
12
available therefor, (ii) the Redemption Price with respect to any Preferred
Securities called for redemption to the extent that such Issuer has funds on
hand available therefor, or (iii) upon a voluntary or involuntary dissolution,
winding up or termination of such Issuer (unless the corresponding series of
Debentures are distributed to holders of such Preferred Securities), the
lesser of (a) the Liquidation Distribution and (b) the amount of assets of
such Issuer remaining available for distribution to holders of Preferred
Securities. PG&E's obligation to make a Guarantee Payment may be satisfied by
direct payment of the required amounts by PG&E to the holders of the
applicable Preferred Securities or by causing the Issuer to pay such amounts
to such holders. While the assets of PG&E will not be available for making
Distributions on any Preferred Securities, PG&E has undertaken under each
Trust Agreement to pay the expenses of the related Issuer. Accordingly, each
Guarantee, together with the related covenants contained in each Trust
Agreement and PG&E's obligations under the Indenture and the Debentures,
provide for PG&E's full and unconditional guarantee of the Preferred
Securities as set forth above.
STATUS OF THE GUARANTEE
Each Guarantee will constitute an unsecured obligation of PG&E and will rank
subordinate and junior in right of payment to all liabilities of PG&E except
those made pari passu or subordinate to such Guarantee expressly by their
terms. The Trust Agreements provide that each holder of Preferred Securities
by acceptance thereof agrees to the subordination provisions and other terms
of the related Guarantee.
Each Guarantee will rank pari passu with all other Guarantees issued by
PG&E. Each Guarantee will constitute a guarantee of payment and not of
collection (i.e., the guaranteed party may institute a legal proceeding
directly against the Guarantor to enforce its rights under the Guarantee
without first instituting a legal proceeding against any other person or
entity). Each Guarantee will be held for the benefit of the holders of the
related Preferred Securities. Each Guarantee will not be discharged except by
payment of the Guarantee Payments in full to the extent not paid by the Issuer
or upon distribution to the holders of the Preferred Securities of the
corresponding series of Debentures.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes which do not materially adversely affect
the rights of holders of the related Preferred Securities (in which case no
vote will be required), no Guarantee may be amended without the prior approval
of the holders of not less than a majority of the aggregate liquidation
preference of such outstanding Preferred Securities. The manner of obtaining
any such approval will be as set forth under "Description of the Preferred
Securities--Voting Rights; Amendment of Trust Agreement." All guarantees and
agreements contained in each Guarantee shall bind the successors, assigns,
receivers, trustees and representatives of PG&E and shall inure to the benefit
of the holders of the related Preferred Securities then outstanding.
EVENTS OF DEFAULT
An event of default under each Guarantee will occur upon the failure of PG&E
to perform any of its payment or other obligations thereunder. The holders of
not less than a majority in aggregate liquidation preference of the related
Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee in
respect of such Guarantee or to direct the exercise of any trust or power
conferred upon the Guarantee Trustee under such Guarantee.
If the Guarantee Trustee fails to enforce any Guarantee, any holder of the
related Preferred Securities may, after a period of 30 days has elapsed from
such holder's written request to the Guarantee Trustee to enforce such
Guarantee, institute a legal proceeding directly against PG&E to
13
enforce its rights under such Guarantee without first instituting a legal
proceeding against the Issuer, the Guarantee Trustee or any other person or
entity.
PG&E, as guarantor, is required to file annually with the Guarantee Trustee
a certificate as to whether or not PG&E is in compliance with all the
conditions and covenants applicable to it under the Guarantee.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, other than during the occurrence and continuance of a
default by PG&E in performance of any Guarantee, undertakes to perform only
such duties as are specifically set forth in each Guarantee and, after default
with respect to any Guarantee, must exercise the same degree of care and skill
as a prudent person would exercise or use in the conduct of his or her own
affairs. Subject to this provision, the Guarantee Trustee is under no
obligation to exercise any of the powers vested in it by any Guarantee at the
request of any holder of any Preferred Securities unless it is offered
reasonable indemnity against the costs, expenses and liabilities that might be
incurred thereby.
TERMINATION OF THE GUARANTEE
Each Guarantee will terminate and be of no further force and effect upon
full payment of the Redemption Price of the related Preferred Securities, upon
full payment of the amounts payable upon liquidation of the related Issuer or
upon distribution of Debentures to the holders of the related Preferred
Securities. Each Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any holder of the related
Preferred Securities must restore payment of any sums paid under such
Preferred Securities or such Guarantee.
GOVERNING LAW
Each Guarantee will be governed by and construed in accordance with the laws
of the State of California.
DESCRIPTION OF THE DEBENTURES
This summary of certain terms and provisions of the Debentures and the
Indenture does not purport to be complete and is subject to, and is qualified
in its entirety by reference to the Debentures and the Indenture, the forms of
which are filed as exhibits to the Registration Statement of which this
Prospectus forms a part.
GENERAL
Concurrently with the issuance of each Issuer's Preferred Securities, the
Issuer will invest the proceeds thereof and the consideration paid by PG&E for
the Common Securities in a corresponding series of Debentures issued by PG&E
to the Issuer. The Debentures will be unsecured subordinated obligations of
PG&E issued under the Indenture. Each series of Debentures will be in the
principal amount equal to the aggregate stated liquidation preference of the
related Preferred Securities plus PG&E's concurrent investment in the Common
Securities and will rank pari passu with all other series of Debentures. The
Indenture does not limit the aggregate principal amount of Debentures which
may be issued thereunder.
INTEREST
The Debentures will bear interest at the rate per annum specified in the
Prospectus Supplement. Such interest will be payable quarterly in arrears on
the dates in each year specified in the Prospectus
14
Supplement (each, an "Interest Payment Date") to the person in whose name each
Debenture is registered, subject to certain exceptions, at the close of
business on the Business Day next preceding such Interest Payment Date. It is
anticipated that the Debentures will be held in the name of the Property
Trustee in trust for the benefit of the holders of the Preferred Securities.
The amount of interest payable for any period will be computed on the basis
of a 360-day year of twelve 30-day months. In the event that any date on which
interest is payable on the Debentures is not a Business Day, then payment of
the interest payable on such date will be made on the next succeeding day
which is a Business Day (and without any interest or other payment in respect
of any such delay), except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on the date such payment was originally payable.
SUBORDINATION
The Indenture provides that all payments by PG&E in respect of the
Debentures shall be subordinate to the prior payment in full of all amounts
payable on Senior Indebtedness. The term "Senior Indebtedness" means (i) the
principal of and premium (if any) in respect of (A) indebtedness of PG&E for
money borrowed and (B) indebtedness evidenced by securities, debentures, bonds
or other similar instruments issued by PG&E; (ii) all capital lease
obligations of PG&E; (iii) all obligations of PG&E issued or assumed as the
deferred purchase price of property, all conditional sale obligations of PG&E
and all obligations of PG&E under any title retention agreement (but excluding
trade accounts payable arising in the ordinary course of business); (iv)
certain obligations of PG&E for the reimbursement of any obligor on any letter
of credit, banker's acceptance, security purchase facility, surety bond or
similar credit transaction entered into in the ordinary course of business of
PG&E; (v) all obligations of the type referred to in clauses (i) through (iv)
of other persons and all dividends of other persons (other than Preferred
Securities) for the payment of which, in either case, PG&E is responsible or
liable as obligor, guarantor or otherwise; and (vi) all obligations of the
type referred to in clauses (i) through (v) of other persons secured by any
lien on any property or asset of PG&E (whether or not such obligation is
assumed by PG&E), except for any such indebtedness that is by its terms
subordinated to or pari passu with the Debentures.
Upon any payment or distribution of assets or securities of PG&E upon any
dissolution, winding up, liquidation or reorganization of PG&E, whether
voluntary or involuntary, or in bankruptcy, insolvency, receivership or other
proceedings, all amounts due upon all Senior Indebtedness shall be paid in
full before the holders of the Debentures or the Property Trustee on behalf of
the holders shall be entitled to receive from PG&E any payment of principal
of, premium, if any, or interest on the Debentures or distributions of any
assets or securities.
No payment by or on behalf of PG&E of principal of, premium, if any, or
interest on the Debentures, whether pursuant to the terms of the Debentures or
upon acceleration or otherwise, shall be made if, at the time of such payment,
there exists a default in the payment of all or any portion of any Senior
Indebtedness or any other default pursuant to which the maturity of Senior
Indebtedness has been accelerated.
If the Debenture Trustee or the Property Trustee, as holder of the
Debentures shall have received any payment on account of the principal of,
premium, if any, or interest on the Debentures when such payment is prohibited
and before all amounts payable on Senior Indebtedness are paid in full, then
such payment shall be received and held in trust for the holders of Senior
Indebtedness and shall be paid over or delivered to the holders of the Senior
Indebtedness remaining unpaid to the extent necessary to pay such Senior
Indebtedness in full, provided that requisite notice has been given to PG&E.
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Nothing in the Indenture shall limit the right of the Debenture Trustee, the
Property Trustee or the holders of the Debentures to pursue any rights or
remedies under applicable law against PG&E; provided that all Senior
Indebtedness shall be paid before holders of the Debentures are entitled to
receive any payment from PG&E of principal of or interest on the Debentures.
Upon the payment in full of all Senior Indebtedness, the holders of the
Debentures shall be subrogated to the rights of the holders of such Senior
Indebtedness to receive payments or distributions of assets of PG&E made on
such Senior Indebtedness until the Debentures shall be paid in full.
The Indenture does not limit the aggregate amount of Senior Indebtedness
which PG&E may incur.
CERTAIN COVENANTS OF PG&E
PG&E will covenant, as to each series of Debentures, that it will not, and
will not permit any subsidiary of PG&E to, declare or pay any dividend or
distribution on, or redeem, purchase, acquire, or make a liquidation or
guarantee payment (other than payments under a Guarantee) with respect to, any
shares of PG&E's capital stock or any security of PG&E (including other
Debentures) ranking pari passu with or junior in interest to the Debentures,
except (i) in each case with securities junior in interest to the Debentures
or (ii) for payments made on any series of Debentures upon the stated maturity
of such Debentures, if at such time (i) there shall have occurred any event of
which PG&E has actual knowledge that (a) with the giving of notice or the
lapse of time, or both, would constitute an Event of Default with respect to
Debentures of such series and (b) in respect of which PG&E shall not have
taken reasonable steps to cure, (ii) PG&E shall be in default with respect to
its payment of any obligations under the Guarantee relating to the Preferred
Securities of the Trust to which Debentures of such series have been issued or
(iii) PG&E shall have given notice of its selection of an Extension Period as
provided in the Indenture with respect to Debentures of such series and such
Extension Period, or any extension thereof shall have commenced and be
continuing. PG&E will also covenant, as to each series of Debentures, (i) to
maintain directly or indirectly 100% ownership of the Common Securities of the
Issuer to which Debentures have been issued, provided that certain successors
which are permitted pursuant to the Indenture may succeed to PG&E's ownership
of the Common Securities, (ii) not to voluntarily terminate, wind-up or
liquidate any Issuer, except in (A) connection with the distribution of
Debentures to the holders of the Preferred Securities in liquidation of such
Issuer, (B) as permitted by the terms of the Debentures, or (C) in connection
with certain mergers, consolidations or amalgamations permitted by the related
Trust Agreement and (iii) to use its reasonable efforts, consistent with the
terms and provisions of the related Trust Agreement, to cause such Issuer to
remain a business trust and otherwise not to be classified as an association
taxable as a corporation for United States federal income tax purposes.
MODIFICATION OF THE INDENTURE
From time to time, PG&E and the Debenture Trustee may, without the consent
of the holders of any series of Debentures, amend, waive or supplement the
Indenture for specified purposes, including, among other things, curing
ambiguities, defects or inconsistencies, qualifying, or maintaining the
qualification of, the Indenture under the Trust Indenture Act, or making any
other change that does not affect the rights of any holder of Debentures in
any material respect. The Indenture contains provisions permitting PG&E and
the Debenture Trustee, with the consent of the holders of not less than a
majority in principal amount of each outstanding series of Debentures
affected, to modify the Indenture in a manner affecting the rights of the
holders of such series of the Debentures; provided that no such modification
may, without the consent of the holder of each outstanding Debenture so
affected, (i) change the stated maturity of any series of Debentures, or
reduce the principal amount thereof, or reduce the rate or extend the time of
payment of interest thereon, reduce any premium payable upon
16
redemption of the Debentures, or change any place of payment where, or the
coin or currency in which, any Debenture or any premium or interest is
payable, or impair the right to institute suit for the enforcement of any such
payment on or after the stated maturity or redemption date, or modify the
provisions of the Indenture with respect to the subordination of the
Debentures in a manner adverse to the holders of the Debentures, (ii) reduce
the percentage of principal amount of Debentures of any series, the holders of
which are required to consent to any such modification of the Indenture or
(iii) modify certain provisions of the Indenture relating to the waiver of
past defaults or compliance by PG&E with the covenants therein.
In addition, PG&E and the Debenture Trustee may execute, without the consent
of any holder of Debentures, any supplemental Indenture for the purpose of
creating any new series of Debentures.
EVENTS OF DEFAULT
The Indenture provides that any one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of the following described
events with respect to a serieseconomic, financial or pricing risk or value or any similar transaction or any combination of Debentures that has occurred and is
continuing constitutes an "Event of Default" with respect to such series of
Debentures:
(a) failure for 30 days to pay any interest on such series of the
Debentures, including any Additional Interest in respect thereof, when due
(subject to the deferral of any due date in the case of an Extension
Period);these transactions.
Consolidation, Merger, Conveyance or (b) failure to pay any principal on such series of Debentures when due
whether at maturity, upon redemption by declaration or otherwise; or
(c) failure to observe or perform in any material respect certain other
covenants contained in the Indenture for 90 days after written notice to
PG&E from the Debenture Trustee or the holders of at least 25% in principal
amount of such series of outstanding Debentures; or
(d) certain events in bankruptcy, insolvency or reorganization of PG&E.
The holders of a majority in outstanding principal amount of such series of
Debentures have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Debenture Trustee. The
Debenture Trustee or the holders of not less than 25% in aggregate outstanding
principal amount of such series of Debentures may declare the principal due
and payable immediately upon an Event of Default, and should the Debenture
Trustee or such holders of such Debentures fail to make such declaration the
holders of at least 25% in aggregate liquidation preference of Preferred
Securities shall have such right. The holders of a majority in aggregate
outstanding principal amount of such series of Debentures may annul such
declaration and waive the default if the default has been cured (or, in
certain circumstances, even if the default has not been cured) and a sum
sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration and any Additional Interest has been deposited
with the Debenture Trustee.
The holders of a majority in outstanding principal amount of the Debentures
affected thereby may, on behalf of the holders of all the Debentures, waive
any past default, except a default in the payment of principal or interest
(unless such default has been cured and a sum sufficient to pay all matured
installments of interest and principal due otherwise than by acceleration has
been deposited with the Debenture Trustee) or a default in respect of a
covenant or provision which under the Indenture cannot be modified or amended
without the consent of the holder of each outstanding Debenture. PG&E is
required to file annually with the Debenture Trustee a certificate as to
whether or not PG&E is in compliance with all the conditions and covenants
applicable to it under the Indenture.
In case an Event of Default shall occur and be continuing as to a series of
Debentures, the Property Trustee will have the right to declare the principal
of and the interest on such Debentures
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(including any Additional Interest) and any other amounts payable under the
Indenture to be forthwith due and payable and to enforce its other rights as a
creditor with respect to such Debentures.
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
The Indenture provides that PG&EOther Transfer
We may not consolidate with or merge with or into any other person (as defined below) or sell, convey, otherwise transfer or lease its properties and
assets as an entiretyall or substantially as an entiretyall of our principal property to any person unless
(i) unless:
the successor person formed by that consolidation or into which we are merged or the person which acquires by conveyance or other transfer, or which leases, all or substantially all of the principal property is a corporation, partnership, trustlimited liability company, association, company, joint stock company or other entitybusiness trust, organized and validly existing under the laws of the United States, or any state thereof or the District of Columbia,Columbia;
the person executes and expressly assumes bydelivers to the trustee a supplemental indenture allthat in the case of a consolidation, merger, conveyance or other transfer, or in the case of a lease if the term thereof extends beyond the last stated maturity of the obligationssenior notes then outstanding, contains an assumption by the successor person of PG&Ethe due and punctual payment of the principal of and premium, if any, and interest, if any, on all senior notes then outstanding and the performance and observance of every covenant and condition under the Debentures,indenture to be performed or observed by us;
in the Indenture andcase of a lease, the lease is made expressly subject to termination by us or by the trustee at any Guarantees, (ii) time during the continuance of an event of default under the indenture;
immediately after giving effect to suchthe transaction and treating any indebtedness whichthat becomes anour obligation of PG&E
or any subsidiary as a result of suchthe transaction as having been incurred by itus at the time of the transaction, no Eventdefault or event of Default, and no event which,
after notice or lapse of time or both, would become an Event of Default,default under the indenture shall have occurred and be continuing, (iii) such transaction doescontinuing; and
we have delivered to the trustee an officer’s certificate and an opinion of counsel, each stating that the merger, consolidation, conveyance, lease or transfer, as the case may be, fully complies with all provisions of the indenture; provided, however, that the delivery of the officer’s certificate and opinion of counsel shall not give risebe required with respect to any breachmerger, consolidation, conveyance, lease or violationtransfer between us and any of our wholly owned subsidiaries.
Notwithstanding the foregoing, we may merge or consolidate with or transfer all or substantially all of our assets to an affiliate that has no significant assets or liabilities and was formed solely for the purpose of changing our jurisdiction of organization or our form of organization or for the purpose of forming a holding company; provided that the amount of our indebtedness is not increased; and provided, further that the successor assumes all of our obligations under the indenture.
In the case of the conveyance or other transfer of all or substantially all of our principal property to any Trust Agreementperson as contemplated under the indenture, upon the satisfaction of all the conditions described above, we (as we would exist without giving effect to the transaction) would be released and discharged from all obligations and covenants under the indenture and under the senior notes then outstanding unless we elect to waive the release and discharge.
The meaning of the term “substantially all” has not been definitely established and is likely to be interpreted by reference to applicable state law if and at the time the issue arises and will depend on the facts and circumstances existing at the time.
For these purposes, “person” means any individual, corporation, partnership, limited liability company, association, company, joint stock company, limited liability partnership, joint venture, trust or unincorporated organization, or any Guaranteeother entity whether or not a legal entity, or any governmental authority.
Additional Covenants
We have agreed in the indenture, among other things:
to maintain a place of payment;
to maintain our corporate existence (subject to the provisions above relating to mergers and (iv)
certain other conditions are met.
SATISFACTION AND DISCHARGE
Underconsolidations); and
to deliver to the trustee an annual officer’s certificate with respect to our compliance with our obligations under the indenture.
Modification of the Indenture; Waiver
We and the trustee may, with the consent of the holders of not less than a majority in aggregate principal amount of the senior notes of each affected series then outstanding under the indenture, considered as one class, modify or amend the indenture, including the provisions relating to the rights of the holders of senior notes of the affected series. However, no modification or amendment may, without the consent of each holder of affected senior notes:
change the stated maturity (except as provided by the terms of a series of senior notes) of the Indenture, PG&E willprincipal of, or interest on, the senior note or reduce the principal amount or any premium payable on the senior note or reduce the interest rate of the senior note, or change the method of calculating the interest rate with respect to the senior note;
reduce the amount of principal of any discount senior note that would be dischargedpayable upon acceleration of the maturity of the senior note;
change the coin, currency or other property in which the senior note or interest or premium on the senior note is payable;
impair the right to institute suit for the enforcement of any payment on the senior note;
reduce the percentage in principal amount of outstanding senior notes the consent of whose holders is required for modification or amendment of the indenture or for waiver of compliance with certain provisions of the indenture or for waiver of defaults;
reduce the quorum or voting requirements applicable to holders of the senior notes; or
modify the provisions of the indenture with respect to modification and waiver, except as provided in the indenture.
We and the trustee may, without the consent of any holder of senior notes, modify and amend the indenture for certain purposes, including to:
add covenants or other provisions applicable to us and for the benefit of the holders of senior notes or one or more specified series thereof or to surrender any right or power conferred on us;
cure any ambiguity or to correct or supplement any provision of the indenture which may be defective or inconsistent with other provisions;
make any other additions to, deletions from any and all
obligations in respector changes to the provisions under the indenture so long as the additions, deletions or changes do not materially adversely affect the holders of any series of Debentures (exceptsenior notes in any material respect;
change or eliminate any provision of the indenture or add any new provision so long as the change, elimination or addition does not adversely affect the interests of holders of senior notes of any series in any material respect; and
change any place or places for payment or surrender of senior notes and where notices and demands to us may be served.
The holders of not less than a majority in aggregate principal amount of the senior notes of each affected series then outstanding under the indenture, voting as a single class, may waive compliance by us with our covenant in respect of our corporate existence and the covenants described under “Restrictions on Liens and Sale and Leaseback Transactions” and “Consolidation, Merger, Conveyance or Transfer” and with certain covenants and restrictions that may apply to a series of senior notes as provided in the indenture. The holders of not less than a majority in aggregate principal amount of the senior notes outstanding may, on behalf of the holders of all of the senior notes, waive any past default under the indenture and its consequences, except a default in the payment of the principal of or any premium or interest on any senior note and defaults in respect of a covenant or provision in the indenture which cannot be modified, amended or waived without the consent of each holder of affected senior notes.
In order to determine whether the holders of the requisite principal amount of the outstanding senior notes have taken an action under the indenture as of a specified date:
the principal amount of a discount senior note that will be deemed to be outstanding will be the amount of the principal that would be due and payable as of that date upon acceleration of the maturity to that date; and
senior notes owned by us or any other obligor upon the senior notes or any of our or their affiliates will be disregarded and deemed not to be outstanding.
Events of Default
An “event of default” means any of the following events which shall occur and be continuing:
failure to pay interest on a senior note within 30 days after the interest becomes due and payable;
failure to pay the principal of, or sinking fund payment or premium, if any, on, a senior note when due and payable;
failure to perform or breach of any other covenant or warranty applicable to us in the indenture continuing for 90 days after the trustee gives us, or the holders of at least 33% in aggregate principal amount of the senior notes then outstanding give us and the trustee, written notice specifying the default or breach and requiring us to remedy the default or breach, unless the trustee or the trustee and holders of a principal amount of senior notes not less than the principal amount of senior notes the holders of which gave that notice agree in writing to an extension of the period prior to its expiration;
certain events of bankruptcy, insolvency or reorganization; and
the occurrence of any event of default as defined in any mortgage, indenture or instrument under which there may be issued, or by which there may be secured or evidenced, any of our debt, whether the debt existed on March 23, 2004 (the date senior notes were first issued under the original indenture), or is thereafter created, if the event of default: (i) is caused by a failure to pay principal after final maturity of the debt after the expiration of the grace period provided in the debt (which we refer to as a “payment default”) or (ii) results in the acceleration of the debt prior to its express maturity, and, in each case, for
certain obligations to register the transfer or exchangeprincipal amount of such Debentures,
replace stolen, lost or mutilated Debentures and hold moneys for payment in
trust) if (subject to certain conditions) PG&E depositsthe debt, together with the Debenture
Trustee, in trust, (i) cash and/principal amount of any other debt under which there has been a payment default or (ii) United States Government Obligations
(as definedthe maturity of which has been so accelerated, aggregates $100 million or more.
The $100 million amount specified in the Indenture), which throughbullet point above shall be increased in any calendar year subsequent to 2004 by the same percentage increase in the urban CPI for the period commencing January 1, 2004
and ending on January 1 of the applicable calendar year. “Debt” for the purpose of the bullet point above means any debt of ours for money borrowed but, in each case, excluding liabilities in respect of capital lease obligations or swap agreements.
If the trustee deems it to be in the interest of the holders of the senior notes, it may withhold notice of default, except defaults in the payment of principal of or interest thereonor premium on or with respect to, any senior note.
If an event of default occurs and is continuing, the trustee or the holders of not less than 33% in aggregate principal amount of the senior notes outstanding, considered as one class, may declare all principal due and payable immediately by notice in writing to us (and to the trustee if given by holders); provided, however, that if an event of default occurs with respect to the specified events of bankruptcy, insolvency or reorganization, then the senior notes outstanding shall be due and payable immediately without further action by the trustee or holders. If, after such a declaration of acceleration, we pay or deposit with the trustee all overdue interest and principal and premium on senior notes that would have been due otherwise, plus any interest and other conditions specified in the indenture have been satisfied before a judgment or decree for payment has been obtained by the trustee as provided in the indenture, the event or events of default giving rise to the acceleration will be deemed to have been waived and the declaration of acceleration and its consequences will be deemed to have been rescinded and annulled.
No holder of senior notes will have any right to enforce any remedy under the indenture unless the holder has given the trustee written notice of a continuing event of default, the holders of at least 33% in aggregate principal amount of the senior notes outstanding have requested the trustee in writing to institute proceedings in respect of the event of default in its own name as trustee under the indenture and the holder or holders have offered the trustee reasonable indemnity against costs, expenses and liabilities with respect to the request, the trustee has failed to institute any proceeding within 60 days after receiving the notice from holders, and no direction inconsistent with the written request has been given to the trustee during the60-day period by holders of at least a majority in aggregate principal amount of senior notes then outstanding.
The trustee is not required to risk its funds or to incur financial liability if there is a reasonable ground for believing that repayment to it or adequate indemnity against risk or liability is not reasonably assured.
If an event of default has occurred and is continuing, holders of not less than a majority in principal amount of the senior notes then outstanding generally may direct the time, method and place of conducting any proceedings for any remedy available to the trustee, or exercising any trust or power conferred upon the trustee; provided the direction could not involve the trustee in personal liability where indemnity would not, in the trustee’s sole discretion, be adequate.
Satisfaction and Discharge
Any senior note, or any portion of the principal amount thereof, will be deemed to have been paid for purposes of the indenture, and our entire indebtedness in accordancerespect of the senior notes will be deemed to have been satisfied and discharged, if certain conditions are satisfied, including an irrevocable deposit with their terms will provide cashthe trustee or any paying agent (other than us) in trust of:
money in an amount sufficientwhich will be sufficient; or
in the case of a deposit made prior to pay allthe maturity of the senior notes or portions thereof, eligible obligations (as described below) which do not contain provisions permitting the redemption or other prepayment thereof at the option of the issuer thereof, the principal of and the interest on which when due, without any regard to reinvestment thereof, will provide monies which, together with the money, if any, deposited with or held by the trustee or the paying agent, will be sufficient; or
a combination of either of the two items described in the two preceding bullet points which will be sufficient;
to pay when due the principal of and premium, if any, and interest, if any, due and to become due on the senior notes or portions thereof.
This discharge of the senior notes through the deposit with the trustee of cash or eligible obligations generally will be treated as a taxable disposition for U.S. federal income tax purposes by the holders of those senior notes. Prospective investors in the senior notes should consult their own tax advisors as to the particular U.S. federal income tax consequences applicable to them in the event of such discharge.
For this purpose, “eligible obligations” for U.S. dollar-denominated senior notes, means securities that are direct obligations of, or obligations unconditionally guaranteed by, the United States, entitled to the benefit of the full faith and credit thereof, or depositary receipts issued by a bank as custodian with respect to these obligations or any specific interest or principal payments due in respect thereof held by the custodian for the account of the holder of a depositary receipt.
Transfer and Exchange
Senior notes of any series may be exchanged for other senior notes of the same series of Debentures on the dates such payments are due in accordance with the termsauthorized denominations and of such Debentures.
FORM, EXCHANGE, AND TRANSFER
The Debentures will be issuable only in registered form, without couponslike aggregate principal amount and only in denominations of $25 and integral multiples thereof.tenor. Subject to the terms of the Indenture, Debenturesindenture and the limitations applicable to global securities, senior notes may be presented for exchange or registration of transfer or exchange (duly endorsed or accompanied by
satisfactory instruments of transfer) at the office of the Security Registrar
or at the officeregistrar without service charge (unless otherwise indicated in a prospectus supplement), upon payment of any transfer agent designated by PG&E for such purpose. No
service charge will be made for anytaxes and other governmental charges imposed on registration of transfer or exchange of
Debentures, but PG&E may require payment of a sum sufficient to cover any tax
or other governmental charge payable in connection therewith.exchange. Such transfer or exchange will be effected upon the Security Registrartrustee, us or such transfer agent,the registrar, as the case may be, being satisfied with the documentsinstruments of transfer, title and
identitytransfer.
If we provide for any redemption of the person making the request. PG&E has appointed the Debenture
Trustee as the initial Security Registrar. PG&E may at any time designate
additional transfer agents or rescind the designationa series of any transfer agent or
approve a change in the office through which any transfer agent acts.
If the Debentures are to be redeemed in part, PG&Esenior notes, we will not be required to issue,execute, register the transfer of or exchange any Debentures during a period
beginning at the openingsenior note of businessthat series for 15 days before the day of mailing of a notice of redemption is mailed or register the transfer of or exchange any senior note selected for redemption.
Global Securities
Unless we indicate differently in a prospectus supplement, senior notes initially will be issued in book-entry form and represented by one or more global securities (collectively, the “global securities”), with an aggregate principal amount equal to that of the senior notes they represent. The global securities will be deposited with, or on behalf of, The Depository Trust Company, New York, New York, as depositary (“DTC”), and registered in the name of Cede & Co., the nominee of DTC. Unless and until it is exchanged for individual certificates evidencing securities under the limited circumstances described below, a global security may not be transferred except as a whole by the depositary to its nominee or by the nominee to the depositary, or by the depositary or its nominee to a successor depositary or to a nominee of the successor depositary.
DTC has advised us that it is:
a limited-purpose trust company organized under the New York Banking Law;
a “banking organization” within the meaning of the New York Banking Law;
a member of the 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 Securities Exchange Act of 1934.
DTC holds securities that its participants deposit with DTC. DTC also facilitates the settlement among its participants of securities transactions, including transfers and pledges, in deposited securities through electronic
computerized book-entry changes in participants’ accounts, which eliminates the need for physical movement of securities certificates. “Direct participants” in DTC include securities brokers and dealers, including underwriters, banks, trust companies, clearing corporations and other organizations. DTC is a wholly owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC National Securities Clearance Corporation, all of which are registered clearing agencies, DTC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others, referred to as “indirect participants,” that clear transactions through or maintain a custodial relationship with a direct participant either directly or indirectly. The rules applicable to DTC and its participants are on file with the SEC.
Purchases of securities within the DTC system must be made by or through direct participants, which will receive a credit for those securities on DTC’s records. The ownership interest of the actual purchaser of a security, which we sometimes refer to as a “beneficial owner,” is in turn recorded on the direct and indirect participants’ records. Beneficial owners of securities will not receive written confirmation from DTC of their purchases. However, beneficial owners are expected to receive written confirmations providing details of their transactions, as well as periodic statements of their holdings, from the direct or indirect participants through which they purchased securities. Transfers of ownership interests in global securities are to be accomplished by entries made on the books of participants acting on behalf of beneficial owners. Beneficial owners will not receive certificates representing their ownership interests in the global securities except under the limited circumstances described below.
To facilitate subsequent transfers, all global securities deposited by direct participants with DTC will be registered in the name of DTC’s partnership nominee, Cede & Co, or such Debentures thatother name as may be selectedrequested by an authorized representative of DTC. The deposit of securities with DTC and their registration in the name of Cede & Co. or such other nominee do not affect any change in beneficial ownership. DTC has no knowledge of the actual beneficial owners of the securities. DTC’s records reflect only the identity of the direct participants to whose accounts the securities are credited, which may or may not be the beneficial owners. The direct and indirect participants are responsible for redemptionkeeping account of their holdings on behalf of their customers.
Conveyance of notices and ending atother communications by DTC to direct participants, by direct participants to indirect participants and by direct participants and indirect participants to beneficial owners will be governed by arrangements among them, subject to any legal requirements in effect from time to time. Beneficial owners of securities may wish to take certain steps to augment the closetransmission to them of businessnotices of significant events with respect to the securities, such as redemptions, tenders, defaults, and proposed amendments to the security documents. For example, beneficial owners of securities may wish to ascertain that the nominee holding the securities for their benefit has agreed to obtain and transmit notices to beneficial owners. In the alternative, beneficial owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.
Redemption notices will be sent to DTC or its nominee. If less than all of the securities of a particular series are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each direct participant in such issue to be redeemed.
In any case where a vote may be required with respect to securities of a particular series, neither DTC nor Cede & Co. (nor any other DTC nominee) will give consents for or vote the global securities, unless authorized by a direct participant in accordance with DTC’s procedures. Under its usual procedures, DTC will mail an omnibus proxy to us as soon as possible after the record date. The omnibus proxy assigns the consenting or voting rights of Cede & Co. to those direct participants to whose accounts the securities of such series are credited on the day of such mailing,
exceptrecord date identified in a listing attached to the unredeemed portion of any such Debentures being redeemed in part.
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PAYMENT AND PAYING AGENTS
Payment ofomnibus proxy.
Principal and interest payments on a Debenture on any Interest Payment Datethe securities will be made to Cede & Co., as or such other nominee as may be requested by authorized representative of DTC. DTC’s practice is to credit direct participants’ accounts upon receipt of funds and corresponding detail information from us or the personpaying agent in whose name such Debenture (or one or more predecessor
securities) is registered at the close of businessaccordance with their respective holdings shown on the Regular Record Date
(as defined in the Indenture) for such interest.
Principal or any interest on the DebenturesDTC’s records. Payments by direct and indirect participants to beneficial owners will be payable atgoverned by standing instructions and customary practices, as is the officecase with securities held for the
account of such Paying Agentcustomers in bearer form or Paying Agents as PG&E may designate for such purposeregistered in “street name.” Those payments will be the responsibility of participants and not of DTC, the paying agent or us, subject to any legal requirements in effect from time to time, except that attime. Payment of principal and interest to Cede & Co. (or such other nominee as may otherwise be requested by an authorized representative of DTC) is our responsibility, disbursement of payments to direct participants is the optionresponsibility of PG&E, paymentDTC and disbursement of any interest may
be made by check mailedpayments to the addressbeneficial owners is the responsibility of direct and indirect participants.
Except under the personlimited circumstances described below, purchasers of securities will not be entitled theretoto have securities registered in their names and will not receive physical delivery of securities. Accordingly, each beneficial owner must rely on the procedures of DTC and its participants to exercise any rights under the securities and the applicable indenture.
The laws of some jurisdictions may require that some purchasers of securities take physical delivery of securities in definitive form. Those laws may impair the ability to transfer or pledge beneficial interests in securities.
DTC may discontinue providing its services as such
address appears in the Security Register or by wire transfer. The corporate
trust office of the Debenture Trustee in Chicago, Illinois is initially
designated as PG&E's sole Paying Agent for paymentssecurities depository with respect to the Debentures. PG&E maysecurities at any time designate additional Paying Agents or rescind
the designation of any Paying Agent or approve a changeby giving us reasonable notice. Under such circumstances, in the officeevent that a successor securities depository is not obtained, certificates representing the securities are required to be printed and delivered. Also, we may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository), in which event, certificates representing the securities will be printed and delivered to DTC.
We have obtained the information in this section and elsewhere in this prospectus concerning DTC and DTC’s book-entry system from sources that are believed to be reliable, but we take no responsibility for the accuracy of this information.
Resignation or Removal of Trustee
The trustee may resign at any Paying Agent acts.
GOVERNING LAW
The Indenturetime upon written notice to us and the Debentures willtrustee may be governedremoved at any time by written notice delivered to the trustee and construed in
accordance with the laws of the State of California.
INFORMATION CONCERNING THE DEBENTURE TRUSTEE
The Debenture Trustee shall haveus and be subject to all the duties and
responsibilities specified with respect to an indenture trustee under the
Trust Indenture Act. Subject to such provision, the Debenture Trustee is under
no obligation to exercise any of the powers vested in itsigned by the Indentureholders of at the request of any holder of Debentures, unless offered reasonable indemnity
by such holder against the costs, expenses and liabilities which might be
incurred thereby. The Debenture Trustee is not required to expend or risk its
own funds or otherwise incur personal financial liabilityleast a majority in the performance
of its duties if the Debenture Trustee reasonably believes that repayment or
adequate indemnity is not reasonably assured to it.
The First National Bank of Chicago has a course of regular dealings with
PG&E in the ordinary course of business and from time to time may also make
short-term loans and revolving credit and term loans to PG&E and its
affiliates. The First National Bank of Chicago also serves as trustee for a
PG&E subsidiary's senior and subordinated indentures.
RELATIONSHIP AMONG THE PREFERRED SECURITIES, THE DEBENTURES AND THE GUARANTEES
As long as payments of interest and other payments are made when due on each
series of Debentures, such payments will be sufficient to cover Distributions
and other payments due on the corresponding Preferred Securities, primarily
because (i) the aggregate principal amount of each seriesthe outstanding senior notes. No resignation or removal of Debenturesa trustee will be equal totake effect until a successor trustee accepts appointment. In addition, under certain circumstances, we may remove the sumtrustee. We must give notice of resignation and removal of the aggregate stated liquidation amounttrustee or the appointment of a successor trustee to all holders of senior notes as provided in the corresponding Preferred Securitiesindenture.
Trustees, Paying Agents and corresponding Common Securities; (ii)
the interest rate and interest and other payment dates on each series of
Debentures will match the Distribution rate and Distribution and other payment
datesRegistrars for the corresponding Preferred Securities; (iii) each Expense Agreement
entered into by PG&E pursuant to eachSenior Notes
The Bank of New York Mellon Trust Agreement provides that PG&E shall
pay for allCompany, N.A. acts as the trustee, paying agent and any costs, expenses and liabilities of such Issuer exceptregistrar under the Issuer's obligations to holders of its Preferred Securities under such
Preferred Securities; and (iv) each Trust Agreement further provides thatindenture. We may change either the Issuer will not engage in any activity that is not consistent with the limited
purposes of such Issuer.
Payments of Distributions and other amounts due on the Preferred Securities
(to the extent the Issuer has funds available for the payment of such
Distributions) are guaranteed by PG&E as and to
19
the extent set forth under "Description of the Guarantee." If and to the
extent that PG&E does not make payments on any series of Debentures, such
Issuer will not pay Distributionspaying agent or other amounts due on its Preferred
Securities.
If the Guarantee Trustee fails to enforce any Guarantee, a holder of any
related Preferred Security may, after a period of 30 days has elapsed from the
date of such holder's written request to the Guarantee Trustee to enforce such
Guarantee, institute a legal proceeding directly against PG&E to enforce its
rights under such Guaranteeregistrar without first instituting a legal proceeding
against the Guarantee Trustee, the Issuer or any other person or entity.
Each Issuer's Preferred Securities evidence the rights of the holders
thereof to the benefits of such Issuer, and each Issuer exists for the sole
purpose of issuing its Trust Securities and investing the proceeds thereof in
a corresponding series of Debentures. A principal difference between the
rights of a holder of a Preferred Security and a holder of a Debenture is that
a holder of a Debenture will accrue, and (subject to the permissible extension
of the interest period) is entitled to receive, interest on the principal
amount of Debentures held, while a holder of Preferred Securities is only
entitled to receive Distributions if and to the extent the Issuer has funds
available for the payment of such Distributions.
Upon any voluntary or involuntary termination, winding-up or liquidation of
any Issuer involving the liquidation of the corresponding series of
Debentures, the holders of Preferred Securities will be entitled to receive,
out of assets held by such Issuer, the Liquidation Distribution in cash. See
"Description of the Preferred Securities--Liquidation Distribution Upon
Termination." Upon any voluntary or involuntary liquidation or bankruptcy of
PG&E, the Property Trustee, as holder of the Debentures, would be a
subordinated creditor of PG&E, subordinated in right of payment to all Senior
Indebtedness, but entitled to receive payment in full of principal and
interest, before any stockholders of PG&E receive payments or distributions.
Since PG&E is the guarantor under each Guarantee and has agreed to pay for all
costs, expenses and liabilities of each Issuer (other than the Issuer's
obligationsprior notice to the holders of its Preferred Securities), the positionssenior notes, and we may act as paying agent. We and our affiliates maintain ordinary banking and trust relationships with a number of a
holderbanks and trust companies, including The Bank of such Preferred SecuritiesNew York Mellon Trust Company, N.A.
Governing Law
The indenture and a holder of such Debentures relative
to other creditors and to stockholders of PG&E in the event of liquidation or
bankruptcy of PG&E would be substantially the same.
A default or event of default under any Senior Indebtedness would not
constitute a default or Event of Default under the Debentures. However, in the
event of payment defaults under, or acceleration of, Senior Indebtedness, the
subordination provisions of the Debentures provide that no paymentssenior notes are governed by California law.
We may be
made in respect of the Debentures until such Senior Indebtedness has been paid
in full or any payment default thereunder has been cured or waived. Failure to
make required payments onsell any series of Debentures would constitute an Eventsenior notes being offered by this prospectus in one or more of Default under the Indenture.
PLAN OF DISTRIBUTION
The Preferred Securities may be sold in a public offeringfollowing ways from time to or throughtime:
to underwriters or dealers designated from timefor resale to time. Each Issuer may sell its
Preferred Securities as soon as practicable after effectivenessthe public or to institutional investors;
directly to institutional investors; or
through agents to the public or to institutional investors.
A prospectus supplement applicable to each series of senior notes will state the terms of the Registration Statementoffering of which the Prospectus is a part. Thesenior notes, including:
the name or names of any underwriters or dealers involvedagents;
the purchase price of the senior notes and the proceeds to be received by us from the sale;
any underwriting discounts or agency fees and other items constituting underwriters’ or agents’ compensation;
any initial public offering price;
any discounts or concessions allowed or reallowed or paid to dealers; and
any securities exchange or automated quotation system on which the senior notes may be listed.
If we use underwriters in the sale, of the Preferred Securities of
any particular Issuer in respect of which this Prospectus is delivered, the
number of Preferred Securities to be purchased by any such underwriters and
any applicable commissions or discountssenior notes will be set forthacquired by the underwriters for their own accounts and may be resold from time to time in the Prospectus
Supplement.
Underwriters may offer and sell Preferred Securities one or more transactions, including:
negotiated transactions;
at a fixed public offering price or prices, which may be changed, or from time to time changed;
at market prices prevailing at the time of sale, sale;
at prices related to suchbased on prevailing market pricesprices; or
at negotiated prices. In connection
Senior notes may be offered to the public either through underwriting syndicates represented by one or more managing underwriters or directly by one or more of those firms. The specific managing underwriter or underwriters, if any, will be named in the prospectus supplement relating to the particular senior notes together with the salemembers of Preferred Securities,
underwriters may be deemed to have received compensation from PG&E and/or the applicable Issuer
20
in the form of underwriting discounts or commissions and may also receive
commissions. Underwriters may sell Preferred Securities to or through dealers,
and such dealers may receive compensation in the form of discounts,
concessions or commissions from the underwriters.
Any underwriting compensation paid by PG&E and/or the applicable Issuer to
underwriters in connection with the offering of Preferred Securities, and any
discounts, concessions or commissions allowed by such underwriters to
participating dealers, will besyndicate, if any. Unless otherwise set forth in an applicable Prospectus
Supplement. Underwritersa prospectus supplement, the obligations of the underwriters to purchase the particular senior notes will be subject to certain conditions precedent and the underwriters will be obligated to purchase all of the senior notes being offered if any are purchased.
We may sell senior notes directly or through agents we designate from time to time. The prospectus supplement will set forth the name of any agent involved in the offer or sale of senior notes in respect of which such prospectus supplement is delivered and any commissions payable by us to such agent. Unless otherwise indicated in a prospectus supplement, any agent will be acting on a best efforts basis for the period of its appointment.
Any underwriters, dealers or agents participating in the distribution of Preferred Securitiessenior notes may be deemed to be underwriters as defined in the Securities Act, and any discounts andor commissions received by them and any profit realized by them on the sale or resale of such
Preferred Securitiessenior notes may be deemed to be underwriting discounts and commissions under the Securities Act. UnderwritersWe may agree with the underwriters, dealers and dealers may be entitled, under
agreement with PG&E and the applicable Issuer,agents to indemnificationindemnify them against and
contribution toward certain civil liabilities, including liabilities under the Securities Act andor to reimbursement by PG&E for certain expenses.
In connectioncontribute with the offering of the Preferred Securities of any Issuer,
such Issuer may grantrespect to payments which the underwriters, an option to purchase additional
Preferred Securities to cover over-allotments, if any, at the initial public
offering price (with an additional underwriting commission), asdealers or agents may be set
forthrequired to make in the accompanying Prospectus Supplement. If such Issuer grants any
over-allotment option, the termsrespect of such over-allotment optionthese liabilities.
Unless otherwise specified in a prospectus supplement, senior notes will not be set
forth in the Prospectus Supplement for such Preferred Securities.
Underwriters and dealers may engage in transactions with, or perform
services for, PG&E and/or the applicable Issuer and/or any of their affiliates
in the ordinary course of business.
Each Issuer's Preferred Securities will belisted on a new issue of securities and
will have no established trading market.exchange. Any underwriters to whom an Issuer's
Preferred Securitiessenior notes are sold by such Issuerus for public offering and sale may make a market in such Preferred Securities,the senior notes, but such underwriters will not be obligated to do so and may discontinue any market making at any time without notice. Such Preferred
To facilitate a senior notes offering, any underwriter may engage in over-allotment, short covering transactions and penalty bids or stabilizing transactions in accordance with Regulation M under the Securities Exchange Act of 1934.
Over-allotment involves sales in excess of the offering size, which creates a short position.
Stabilizing transactions permit bids to purchase the underlying senior notes so long as the stabilizing bids do not exceed a specified maximum.
Short covering positions involve purchases of senior notes in the open market after the distribution is completed to cover short positions.
Penalty bids permit the underwriters to reclaim a selling concession from a dealer when senior notes originally sold by the dealer are purchased in a covering transaction to cover short positions.
These activities may orcause the price of the senior notes to be higher than it otherwise would be. If commenced, these activities may not be listed on a national
securities exchange. No assurance can be given as todiscontinued by the liquidity of or the
existence of trading markets forunderwriters at any Preferred Securities.
time.
The consolidated balance sheet and statement of consolidated capitalization
of PG&E and subsidiaries as of December 31, 1993 and 1994,financial statements and the related statements of consolidated income, cash flows, common stock equity and
preferred stock,financial statement schedule, incorporated in this prospectus by reference from the Company’s Annual Report onForm 10-K, and the scheduleeffectiveness of consolidated segment information for each
of the three years in the period ended December 31, 1994,Pacific Gas and the related
supplemental schedule incorporated by reference in this Prospectus,Electric Company’s internal control over financial reporting have been audited by Arthur AndersenDeloitte & Touche LLP, an independent registered public accountants,accounting firm, as indicatedstated in their reports, with respect thereto which are incorporated herein by reference
hereinreference. Such financial statements and financial statement schedule have been so incorporated in reliance upon the authorityreports of saidsuch firm given upon their authority as experts in accounting and auditing in giving said reports.
auditing.
LEGAL MATTERS
Certain legal matters
The validity of the senior notes has been passed upon for us by Orrick, Herrington & Sutcliffe LLP. The validity of the senior notes will be passed upon for PG&Eany agents, dealers or underwriters by their counsel named in the applicable prospectus supplement.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, information statements and other information with the Issuers by Gary
P. Encinas, Esq.SEC under FileNo. 001-2348. These SEC filings are available to the public over the Internet at the SEC’s website at http://www.sec.gov. You may also read and copy any of these SEC filings at the SEC’s public reference room at 100 F Street, N.E., Chief Counsel, Corporate, of PG&E, by Richards, Layton &
Finger, special Delaware counsel to PG&E andWashington D.C. 20549. You may obtain information on the Issuers and by Ballard Spahr
Andrews & Ingersoll, Philadelphia, Pennsylvania, special tax counsel to PG&E.
The validityoperation of the Preferredpublic reference room by calling the SEC at 1-800-SEC-0330.
CERTAIN DOCUMENTS INCORPORATED BY REFERENCE
We have “incorporated by reference” into this prospectus certain information that we file with the SEC. This means that we can disclose important business, financial and other information in this prospectus by referring you to the documents containing this information.
We incorporate by reference the documents listed below and all future filings we make with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities willExchange Act of 1934 (other than information deemed to be passedfurnished and not filed) on or (1) after the date of the filing of the registration statement containing this prospectus and prior to the effectiveness of such registration statement and (2) after the date of this prospectus and prior to the termination of any offering of the senior notes made hereby:
our Annual Report onForm 10-K for the underwritersyear ended December 31, 2015;
our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2016, June 30, 2016 and September 30, 2016; and
our Current Reports on Form 8-K filed with the SEC on February 19, 2016, February 23, 2016, February 29, 2016 (excluding Item 7.01), March 1, 2016, March 4, 2016, March 22, 2016, April 12, 2016, May 2, 2016, May 9, 2016, May 23, 2016, May 24, 2016, May 25, 2016, June 2, 2016, June 21, 2016, June 27, 2016, July 6, 2016, August 1, 2016, August 2, 2016, August 3, 2016, August 4, 2016, August 10, 2016, August 19, 2016, August 19, 2016, August 31, 2016 (excluding Item 7.01 and Item 9.01), September 2, 2016 (excluding Item 7.01), September 21, 2016 (excluding Item 7.01), November 14, 2016 (excluding Item 7.01 and Item 9.01), November 18, 2016, November 22, 2016, December 1, 2016, December 2, 2016 (excluding Item 7.01), December 21, 2016 and January 11, 2017 (excluding Item 7.01).
The incorporation by Sullivan & Cromwell, Los Angeles, California, who may rely onreference of the opinionsfilings listed above does not extend to any such filings made by Corp and not us or to any information in any filings jointly made by Corp and us regarding Corp or its other subsidiaries, but not regarding us.
All information incorporated by reference is deemed to be part of Mr. Encinas and of Richards, Layton & Finger as to certain
matters of California and Delaware law, respectively. Mr. Encinas and his
associates in PG&E's Law Department who will participate in consideration of
legal matters relatingthis prospectus except to the Preferred Securities, togetherextent that the information is updated or superseded by information filed with membersthe SEC after the date the incorporated information was filed (including later-dated reports listed above) or by the information contained in this prospectus or the applicable prospectus supplement. Any information that we subsequently file with the SEC that is incorporated by reference, as described above, will automatically update and supersede as of their respective families, own in the aggregate approximately 1,700 sharesdate of PG&E's common stock.
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESEN-
TATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE PRO-
SPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND THE PRO-
SPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF ANY OFFER TO
BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS PROSPECTUS SUP-
PLEMENT AND THE PROSPECTUS OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER
TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION
IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPEC-
TUS NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS COR-
RECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF SUCH INFORMATION.
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TABLE OF CONTENTS
PAGE
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PROSPECTUS SUPPLEMENT
Prospectus Summary........................................................ S-3
Risk Factors.............................................................. S-4
PG&E Capital I............................................................ S-6
Pacific Gas and Electric Company.......................................... S-7
Coverage Ratios........................................................... S-7
Use of Proceeds........................................................... S-7
Certain Terms of the Series A Preferred Securities........................ S-8
Certain Terms of the Series A Debentures.................................. S-10
United States Taxation.................................................... S-12
Underwriting.............................................................. S-15
PROSPECTUS
Available Information..................................................... 2
Incorporation of Certain Documents by Reference........................... 2
The Issuers............................................................... 3
Pacific Gas and Electric Company.......................................... 3
Description of the Preferred Securities................................... 4
Description of the Guarantee.............................................. 12
Description of the Debentures............................................. 14
Relationship Among the Preferred Securities, the Debentures and the
Guarantees............................................................... 19
Plan of Distribution...................................................... 20
Experts................................................................... 21
Legal Matters............................................................. 21
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PREFERRED SECURITIES
such filing any previous information that had been part of this prospectus or the applicable prospectus supplement, or that had been incorporated herein by reference.
You may request a copy of these filings at no cost by writing or contacting us at the following address:
The Office of the Corporate Secretary
PG&E CAPITAL I
% CUMULATIVE QUARTERLY INCOME PREFERRED SECURITIES, SERIES A
GUARANTEED TO THE EXTENT THE SERIES A
ISSUER HAS FUNDS AS SET FORTH HEREIN BY
PACIFIC GAS AND ELECTRIC COMPANY
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PROSPECTUS SUPPLEMENT
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REPRESENTATIVES OF THE UNDERWRITERS
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77 Beale Street
P.O. Box 770000
San Francisco, CA 94177
Telephone: (415) 973-8200
Facsimile: (415) 973-8719
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.*
| Item 14. | Other Expenses of Issuance and |
The following table sets forth the estimated expenses, other than underwriting discounts and commissions, payable by Pacific Gas and Electric Company in connection with the sale of securities being registered.
Registration fee | $ | 289,750 | ||
Printing and engraving expenses | (1) | |||
Legal fees and expenses | (1) | |||
Accounting fees and expenses | (1) | |||
Trustee’s and authenticating agent’s fees and expenses | (1) | |||
Rating agencies’ fees | (1) | |||
Miscellaneous | (1) | |||
|
| |||
Total | $ | (1) | ||
|
|
| (1) | These fees are calculated based on the securities offered and |
| Item 15. | Indemnification of Directors and |
Section 317 of the California Corporations Code provides for indemnification of a corporation'scorporation’s directors and officers under certain circumstances. PG&E's
BoardOur articles of Directorsincorporation authorize us to provide indemnification of any person who is or was our director, officer, employee or other agent, or is or was serving at our request as a director, officer, employee or agent of another foreign or domestic corporation, partnership, joint venture, trust or other enterprise, or was a director, officer, employee or agent of a foreign or domestic corporation which was a predecessor corporation of us or of another enterprise at the request of the predecessor corporation, through our bylaws, resolutions of our board of directors, agreements with agents, vote of shareholders or disinterested directors, or otherwise, in excess of the indemnification otherwise permitted by Section 317 of the California Corporations Code, subject only to the applicable limits set forth in Section 204 of the California Corporations Code. Our articles of incorporation also eliminate the liability of our directors for monetary damages to the fullest extent permissible by California law. Our board of directors has adopted a resolution regarding PG&E'sour policy of indemnification and PG&E maintainswe maintain insurance which insures our directors and officers of PG&E against certain liabilities. Any agreement relating to the
issuance and sale of the Preferred Securities may provide for indemnification
of the directors and officers of PG&E against certain liabilities, including
liabilities under the Securities Act of 1933.
PG&E, as Depositor, has agreed to indemnify the Issuer Trustees for, and to
hold the Issuer Trustees harmless against, any loss, damage, claims,
liability, penalty or expense incurred without negligence or bad faith on the
part of any Issuer Trustee, arising out of or in connection with the
acceptance or administration of the Trust Agreement, including the costs and
expenses of any Issuer Trustee of defending itself against any claim or
liability in connection with the exercise and performance of any of its powers
or duties under the Trust Agreement.
ITEM 16. EXHIBITS
II-1
| Item 16. | Exhibits. |
| (a) | Exhibits. |
Number | Description | |
| 1.1 | Form of Underwriting Agreement | |
| 4.1 | Indenture dated as of April 22, 2005 between Pacific Gas and Electric Company and The Bank of New York Mellon Trust Company, N.A. (formerly known as The Bank of New York Trust Company, N.A.), as Trustee (incorporated by reference to the Registrant’sForm 10-Q Quarterly Report for | |
| 4.2 | First Supplemental Indenture dated as of March 13, 2007 relating to the issuance of $700,000,000 principal amount of 5.80% Senior Notes due March 1, 2037 (incorporated by reference to the Registrant’s Form 8-K dated March 14, 2007 (File No. 1-2348), Exhibit 4.1) | |
| 4.3 | Second Supplemental Indenture dated as of December 4, 2007 relating to the issuance of $500,000,000 principal amount of 5.625% Senior Notes due November 30, 2017 (incorporated by reference to the Registrant’s Form 8-K dated March 14, 2007 (File No. 1-2348), Exhibit 4.1) | |
| 4.4 | Third Supplemental Indenture dated as of March 3, 2008 relating to the issuance of 5.625% Senior Notes due November 30, 2017 and | |
| 4.5 | Fourth Supplemental Indenture dated as of October 21, 2008 relating to the issuance of $600,000,000 aggregate principal amount of 8.25% Senior Notes due October 15, 2018 (incorporated by reference to the Registrant’s Form 8-K dated October 21, 2008 (File No. 1-2348), Exhibit 4.1) | |
| 4.6 | Fifth Supplemental Indenture dated as of November 18, 2008 relating to the issuance of $400,000,000 aggregate principal amount of 6.25% Senior Notes due December 1, 2013 and $200 million principal amount of 8.25% Senior Notes due October 15, 2018 (incorporated by reference to the Registrant’s Form 8-K dated November 18, 2008 (File No. 1-2348), Exhibit 4.1) | |
| 4.7 | Sixth Supplemental Indenture, dated as of March 6, 2009 relating to the issuance of $550,000,000 aggregate principal amount of 6.25% Senior Notes due March 1, 2039 (incorporated by reference to the Registrant’s Form 8-K dated March 6, 2009 (File No. 1-2348), Exhibit 4.1) | |
| 4.8 | Seventh Supplemental Indenture dated as of June 11, 2009 between Pacific Gas and Electric Company and BNY Mellon Trust | |
| 4.9 | Eighth Supplemental Indenture dated as of November 18, 2009 relating to the issuance of $550,000,000 aggregate principal amount of 5.40% Senior Notes due January 15, 2040 (incorporated by reference to the Registrant’s Form 8-K dated November 18, 2009 (File No. 1-2348), Exhibit 4.1) | |
| 4.10 | Ninth Supplemental Indenture dated as of April 1, 2010 relating to the issuance of $250,000,000 aggregate principal amount of 5.80% Senior Notes due March 1, 2037 (incorporated by reference to the Registrant’s Form 8-K dated April 1, 2010 (File No. 1-2348), Exhibit 4.1) | |
| 4.11 | Tenth Supplemental Indenture dated as of September 15, 2010 relating to the issuance of $550,000,000 aggregate principal amount of 3.50% Senior Notes due October 1, 2020 (incorporated by reference to the Registrant’s Form 8-K dated September 15, 2010 (File No. 1-2348), Exhibit 4.1) | |
| 4.12 | Twelfth Supplemental Indenture dated as of November 18, 2010 relating to the issuance of $250,000,000 aggregate principal amount of 3.50% Senior Notes due October 1, 2020 and $250,000,000 aggregate principal amount of 5.40% Senior Notes due January 15, 2040 (incorporated by reference to the Registrant’s Form 8-K dated November 18, 2010 (File No. 1-2348), Exhibit 4.1) | |
II-2
Number | Description | |
| 4.13 | Thirteenth Supplemental Indenture dated as of May 13, 2011, relating to the issuance of $300,000,000 aggregate principal amount of 4.25% Senior Notes due May 15, 2021 (incorporated by reference to the Registrant’s Form 8-K dated May 13, 2011 (File No. 1-2348), Exhibit 4.1) | |
| 4.14 | Fourteenth Supplemental Indenture dated as of September 12, 2011 relating to the issuance of $250,000,000 aggregate principal amount of 3.25% Senior Notes due September 15, 2021 (incorporated by reference to the Registrant’s Form 8-K dated September 12, 2011 (File No. 1-2348), Exhibit 4.1) | |
| 4.15 | Sixteenth Supplemental Indenture dated as of December 1, 2011 relating to the issuance of $250,000,000 aggregate principal amount of 4.50% Senior Notes due December 15, 2041 (incorporated by reference to the Registrant’s Form 8-K dated December 1, 2011 (File No. 1-2348), Exhibit 4.1) | |
| 4.16 | Seventeenth Supplemental Indenture dated as of April 16, 2012 relating to the issuance of $400,000,000 aggregate principal amount of 4.45% Senior Notes due April 15, 2042 (incorporated by reference to the Registrant’s Form 8-K dated April 16, 2012 (File No. 1-2348), Exhibit 4.1) | |
| 4.17 | Eighteenth Supplemental Indenture dated as of August 16, 2012 relating to the issuance of $400,000,000 aggregate principal amount of 2.45% Senior Notes due August 15, 2022 and $350,000,000 aggregate principal amount of 3.75% Senior Notes due August 15, 2042 (incorporated by reference to the Registrant’s Form 8-K dated August 16, 2012 (File No. 1-2348), Exhibit 4.1) | |
| 4.18 | Nineteenth Supplemental Indenture dated as of June 14, 2013 relating to the issuance of $375,000,000 aggregate principal amount of 3.25% Senior Notes due June 15, 2023 and $375,000,000 aggregate principal amount of 4.60% Senior Notes due June 15, 2043 (incorporated by reference to the Registrant’s Form 8-K dated June 14, 2013 (File No. 1-2348), Exhibit 4.1) | |
| 4.19 | Twentieth Supplemental Indenture dated as of dated as of November 12, 2013 between Pacific Gas and Electric Company and BNY Mellon Trust | |
| 4.20 | Twenty-First Supplemental Indenture, dated as of | |
| 4.21 | Twenty-Third Supplemental Indenture, dated as of August 18, 2014, relating to the issuance of $350,000,000 aggregate principal amount 3.40% Senior Notes due August 15, 2024 and $225,000,000 aggregate principal amount of 4.75% Senior Notes due February 15, 2044 (incorporated by reference to the Registrant’s Form 8-K dated August 18, 2014 (File No. 1-2348), Exhibit 4.1) | |
| 4.22 | Twenty-Fourth Supplemental Indenture, dated as of November 6, 2014, relating to the issuance of $500,000,000 aggregate principal amount of 4.30% Senior Notes due March 15, 2045 (incorporated by reference to the Registrant’s Form 8-K dated November 6, 2014 (File No. 1-2348), Exhibit 4.1) | |
| 4.23 | Twenty-Fifth Supplemental Indenture, dated as of June 12, 2015, relating to the issuance of $400,000,000 aggregate principal amount of 3.50% Senior Notes due June 15, 2025 and $100,000,000 aggregate principal amount of 4.30% Senior Notes due March 15, 2045 (incorporated by reference to the Registrant’s Form 8-K filed on June 12, 2015 (File No. 1-2348), Exhibit 4.1) | |
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Number | Description | |
| 4.24 | Twenty-Sixth Supplemental Indenture, dated as of November 5, 2015, relating to the issuance of $200,000,000 aggregate principal amount of 3.50% Senior Notes due June 15, 2025 and $450,000,000 aggregate principal amount of 4.25% Senior Notes due March 15, 2046 (incorporated by reference to the Registrant’s Form 8-K filed on November 5, 2015 (File No. 1-2348), Exhibit 4.1) | |
| 4.25 | Twenty-Seventh Supplemental Indenture, dated as of March 1, 2016, relating to the issuance of $600,000,000 aggregate principal amount of 2.95% Senior Notes due March 1, 2026 (incorporated by reference to the Registrant’s Form 8-K filed on March 1, 2016 (File No. 1-2348), Exhibit 4.1) | |
| 4.26 | Twenty-Eighth Supplemental Indenture, dated as of December 1, 2016, relating to the issuances of $250,000,000 aggregate principal amount of Floating Rate Senior Notes due November 30, 2017 and $400,000,000 aggregate principal amount of 4.00% Senior Notes due December 1, 2046 (incorporated by reference to the Registrant’s Form 8-K filed on December 1, 2016 (FileNo. 1-2348), Exhibit 4.1) | |
| 4.27 | Form of | |
| 4.28 | Form of | |
| 5.1 | Opinion of | |
| 12.1 | Computation of | |
| 23.1 | Consent of | |
| 23.2 | Consent of | |
| 24.1 | Powers of | |
| 24.2 | Resolutions of the Board of Directors of Pacific Gas & | |
| 25.1 | Form T-1 Statement of Eligibility under | |
| * | To be subsequently filed or incorporated by reference. |
| † | Previously filed. |
| Item 17. | Undertakings. |
The Registrantsundersigned registrant hereby undertake undertakes:
(1) toTo file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i)
(a) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii)
(b) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; notwithstandingstatement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high andend of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the "Calculationmaximum aggregate offering price set forth in the “Calculation of Registration Fee"Fee” table in the effective registration statement; and (iii)
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(c) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;
provided, however, that paragraphs (1)(i)1(a), 1(b) and (1)(ii)1(c) do not apply if the information required to be included in a post-
effectivepost-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Securities and Exchange Commission by PG&Ethe 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; statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.
(2) thatThat, 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; and thereof.
(3) toTo 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. INCORPORATION BY REFERENCE
The Registrants hereby undertake
(4) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
(a) each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and
(b) each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by Section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.
(5) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i) any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii) any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
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(iii) the portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
(iv) any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
(6) That, for purposes of determining any liability under the Securities Act of 1933, each filing of PG&E'sthe registrant’s annual report pursuant to Section 13(a) or 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 19341934) 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 initialbona fideoffering thereof.
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C. INDEMNIFICATION
(7) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrants,registrant pursuant to the Registrants haveprovisions described under Item 15 above, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the 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 Registrantsregistrant of expenses incurred or paid by a director, officer or controlling person of the Registrantsregistrant 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 Registrantsregistrant will, unless in the opinion of theirits 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.
D. RULE 430A INFORMATION
The undersigned Registrants hereby undertake that:
(1) For purposes
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SIGNATURES
Pursuant to the requirements of determining any liability under the Securities Act of 1933, the information omitted fromRegistrant certifies that it has reasonable grounds to believe that it meets all of the form of prospectus filed as part ofrequirements for filing onForm S-3 and has duly caused this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filedRegistration Statement onForm S-3 to be signed on its behalf by the Registrants pursuantundersigned, thereunto duly authorized, in the City of San Francisco, State of California, on January 19, 2017.
| PACIFIC GAS AND ELECTRIC COMPANY | ||
| (REGISTRANT) | ||
| By | * NICKOLAS STAVROPOULOS | |
NICKOLAS STAVROPOULOS | ||
| President, Gas | ||
| By | * GEISHA J. WILLIAMS | |
GEISHA J. WILLIAMS | ||
President, Electric | ||
Pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be partrequirements of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating tothis Registration Statement has been signed by the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
E. EQUITY OFFERINGS OF NONREPORTING REGISTRANTS
Each Issuer hereby undertakes to provide to the underwriter at the closing
specifiedfollowing persons in the underwriting agreement certificates in such denominationscapacities and registered in such names as required byon the underwriter to permit prompt
delivery to each purchaser.
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SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANTS,
PACIFIC GAS AND ELECTRIC COMPANY, PG&E CAPITAL I, PG&E CAPITAL II, PG&E
CAPITAL III AND PG&E CAPITAL IV, CERTIFY THAT THEY HAVE REASONABLE GROUNDS TO
BELIEVE THEY MEET ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAVE DULY
CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON THEIR BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED IN THE CITY AND COUNTY OF SAN
FRANCISCO, STATE OF CALIFORNIA, ON THIS 18TH DAY OF AUGUST, 1995.
Pacific Gas and Electric Company
Gabriel Togneri
By: ______________________________________
PG&E Capital I
By: Pacific Gas and Electric Company, as
Sponsor
Gabriel Togneri
By: ______________________________________
PG&E Capital II
By: Pacific Gas and Electric Company, as
Sponsor
Gabriel Togneri
By: ______________________________________
PG&E Capital III
By: Pacific Gas and Electric Company, as
Sponsor
Gabriel Togneri
By: ______________________________________
PG&E Capital IV
By: Pacific Gas and Electric Company, as
Sponsor
Gabriel Togneri
By: ______________________________________
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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 DATE INDICATED.
dates indicated.
Signature | Title | Date | ||
* NICKOLAS STAVROPOULOS NICKOLAS STAVROPOULOS | President, Gas and Director (Principal Executive Officer) | January 19, 2017 | ||
* GEISHA J. WILLIAMS GEISHA J. WILLIAMS | President, Electric and Director (Principal Executive | January 19, 2017 | ||
* DAVID S. THOMASON DAVID S. THOMASON | Vice President, | January 19, 2017 | ||
* LEWIS CHEW LEWIS CHEW | Director | January 19, 2017 | ||
* ANTHONY F. EARLEY, JR. ANTHONY F. EARLEY, JR. | Director | January 19, 2017 | ||
* FRED J. FOWLER FRED J. FOWLER | Director | January 19, 2017 | ||
* MARYELLEN C. MARYELLEN C. HERRINGER | Director | January 19, 2017 | ||
* RICHARD C. KELLY RICHARD C. KELLY | Director | January 19, 2017 | ||
* ROGER H. KIMMEL ROGER H. KIMMEL | Director | January 19, 2017 | ||
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Signature | Title | Date | ||
* RICHARD A. MESERVE RICHARD A. MESERVE | Director | January 19, 2017 | ||
* ERIC D. ERIC D. | Director | January 19, 2017 | ||
* FORREST E. FORREST E. MILLER | Director | January 19, 2017 | ||
* ROSENDO G. PARRA ROSENDO G. PARRA | Director | January 19, 2017 | ||
* BARBARA L. RAMBO BARBARA L. RAMBO | Director | January 19, 2017 | ||
* ANNE SHEN SMITH ANNE SHEN SMITH | Director | January 19, 2017 | ||
* BARRY LAWSON WILLIAMS BARRY LAWSON WILLIAMS | Director | January 19, 2017 | ||
| *BY: | /s/ HYUN PARK Hyun Park Attorney-in-fact |
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EXHIBIT INDEX
Number | Description | |
| 1.1 | Form of Underwriting Agreement | |
| 4.1 | Indenture dated as of April 22, 2005 between Pacific Gas and Electric Company and The Bank of New York Mellon Trust Company, N.A. (formerly known as The Bank of New York Trust Company, N.A.), as Trustee (incorporated by reference to Exhibit 4.1 to the Registrant’sForm 10-Q Quarterly Report for | |
| 4.2 | First Supplemental Indenture dated as of March 13, 2007 relating to the issuance of $700,000,000 principal amount of 5.80% Senior Notes due March 1, 2037 (incorporated by reference to the Registrant’s Form 8-K dated March 14, 2007 (File No. 1-2348), Exhibit 4.1) | |
| 4.3 | Second Supplemental Indenture dated as of December 4, 2007 relating to the issuance of $500,000,000 principal amount of 5.625% Senior Notes due November 30, 2017 (incorporated by reference to the Registrant’s Form 8-K dated March 14, 2007 (File No. 1-2348), Exhibit 4.1) | |
| 4.4 | Third Supplemental Indenture dated as of March 3, 2008 relating to the issuance of 5.625% Senior Notes due November 30, 2017 and | |
| 4.5 | Fourth Supplemental Indenture dated as of October 21, 2008 relating to the issuance of $600,000,000 aggregate principal amount of 8.25% Senior Notes due October 15, 2018 (incorporated by reference to the Registrant’s Form 8-K dated October 21, 2008 (File No. 1-2348), Exhibit 4.1) | |
| 4.6 | Fifth Supplemental Indenture dated as of November 18, 2008 relating to the issuance of $400,000,000 aggregate principal amount of 6.25% Senior Notes due December 1, 2013 and $200 million principal amount of 8.25% Senior Notes due October 15, 2018 (incorporated by reference to the Registrant’s Form 8-K dated November 18, 2008 (File No. 1-2348), Exhibit 4.1) | |
| 4.7 | Sixth Supplemental Indenture, dated as of March 6, 2009 relating to the issuance of $550,000,000 aggregate principal amount of 6.25% Senior Notes due March 1, 2039 (incorporated by reference to the Registrant’s Form 8-K dated March 6, 2009 (File No. 1-2348), Exhibit 4.1) | |
| 4.8 | Seventh Supplemental Indenture dated as of June 11, 2009 between Pacific Gas and Electric Company and BNY Mellon Trust | |
| 4.9 | Eighth Supplemental Indenture dated as of November 18, 2009 relating to the issuance of $550,000,000 aggregate principal amount of 5.40% Senior Notes due January 15, 2040 (incorporated by reference to the Registrant’s Form 8-K dated November 18, 2009 (File No. 1-2348), Exhibit 4.1) | |
| 4.10 | Ninth Supplemental Indenture dated as of April 1, 2010 relating to the issuance of $250,000,000 aggregate principal amount of 5.80% Senior Notes due March 1, 2037 (incorporated by reference to the Registrant’s Form 8-K dated April 1, 2010 (File No. 1-2348), Exhibit 4.1) | |
| 4.11 | Tenth Supplemental Indenture dated as of September 15, 2010 relating to the issuance of $550,000,000 aggregate principal amount of 3.50% Senior Notes due October 1, 2020 (incorporated by reference to the Registrant’s Form 8-K dated September 15, 2010 (File No. 1-2348), Exhibit 4.1) | |
| 4.12 | Twelfth Supplemental Indenture dated as of November 18, 2010 relating to the issuance of $250,000,000 aggregate principal amount of 3.50% Senior Notes due October 1, 2020 and $250,000,000 aggregate principal amount of 5.40% Senior Notes due January 15, 2040 (incorporated by reference to the Registrant’s Form 8-K dated November 18, 2010 (File No. 1-2348), Exhibit 4.1) | |
| 4.13 | Thirteenth Supplemental Indenture dated as of May 13, 2011, relating to the issuance of $300,000,000 aggregate principal amount of 4.25% Senior Notes due May 15, 2021 (incorporated by reference to the Registrant’s Form 8-K dated May 13, 2011 (File No. 1-2348), Exhibit 4.1) | |
Number | Description | |
| 4.14 | Fourteenth Supplemental Indenture dated as of September 12, 2011 relating to the issuance of $250,000,000 aggregate principal amount of 3.25% Senior Notes due September 15, 2021 (incorporated by reference to the Registrant’s Form 8-K dated September 12, 2011 (File No. 1-2348), Exhibit 4.1) | |
| 4.15 | Sixteenth Supplemental Indenture dated as of December 1, 2011 relating to the issuance of $250,000,000 aggregate principal amount of 4.50% Senior Notes due December 15, 2041 (incorporated by reference to the Registrant’s Form 8-K dated December 1, 2011 (File No. 1-2348), Exhibit 4.1) | |
| 4.16 | Seventeenth Supplemental Indenture dated as of April 16, 2012 relating to the issuance of $400,000,000 aggregate principal amount of 4.45% Senior Notes due April 15, 2042 (incorporated by reference to the Registrant’s Form 8-K dated April 16, 2012 (File No. 1-2348), Exhibit 4.1) | |
| 4.17 | Eighteenth Supplemental Indenture dated as of August 16, 2012 relating to the issuance of $400,000,000 aggregate principal amount of 2.45% Senior Notes due August 15, 2022 and $350,000,000 aggregate principal amount of 3.75% Senior Notes due August 15, 2042 (incorporated by reference to the Registrant’s Form 8-K dated August 16, 2012 (File No. 1-2348), Exhibit 4.1) | |
| 4.18 | Nineteenth Supplemental Indenture dated as of June 14, 2013 relating to the issuance of $375,000,000 aggregate principal amount of 3.25% Senior Notes due June 15, 2023 and $375,000,000 aggregate principal amount of 4.60% Senior Notes due June 15, 2043 (incorporated by reference to the Registrant’s Form 8-K dated June 14, 2013 (File No. 1-2348), Exhibit 4.1) | |
| 4.19 | Twentieth Supplemental Indenture dated as of dated as of November 12, 2013 between Pacific Gas and Electric Company and BNY Mellon Trust | |
| 4.20 | Twenty-First Supplemental Indenture, dated as of | |
| 4.21 | Twenty-Third Supplemental Indenture, dated as of August 18, 2014, relating to the issuance of $350,000,000 aggregate principal amount 3.40% Senior Notes due August 15, 2024 and $225,000,000 aggregate principal amount of 4.75% Senior Notes due February 15, 2044 (incorporated by reference to the Registrant’s Form 8-K dated August 18, 2014 (File No. 1-2348), Exhibit 4.1) | |
| 4.22 | Twenty-Fourth Supplemental Indenture, dated as of November 6, 2014, relating to the issuance of $500,000,000 aggregate principal amount of 4.30% Senior Notes due March 15, 2045 (incorporated by reference to the Registrant’s Form 8-K dated November 6, 2014 (File No. 1-2348), Exhibit 4.1) | |
| 4.23 | Twenty-Fifth Supplemental Indenture, dated as of June 12, 2015, relating to the issuance of $400,000,000 aggregate principal amount of 3.50% Senior Notes due June 15, 2025 and $100,000,000 aggregate principal amount of 4.30% Senior Notes due March 15, 2045 (incorporated by reference to the Registrant’s Form 8-K filed on June 12, 2015 (File No. 1-2348), Exhibit 4.1) | |
| 4.24 | Twenty-Sixth Supplemental Indenture, dated as of November 5, 2015, relating to the issuance of $200,000,000 aggregate principal amount of 3.50% Senior Notes due June 15, 2025 and $450,000,000 aggregate principal amount of 4.25% Senior Notes due March 15, 2046 (incorporated by reference to the Registrant’s Form 8-K filed on November 5, 2015 (File No. 1-2348), Exhibit 4.1) | |
| 4.25 | Twenty-Seventh Supplemental Indenture, dated as of March 1, 2016, relating to the issuance of $600,000,000 aggregate principal amount of 2.95% Senior Notes due March 1, 2026 (incorporated by reference to the Registrant’s Form 8-K filed on March 1, 2016 (File No. 1-2348), Exhibit 4.1) | |
Number | Description | |
| 4.26 | Twenty-Eighth Supplemental Indenture, dated as of December 1, 2016, relating to the issuances of $250,000,000 aggregate principal amount of Floating Rate Senior Notes due November 30, 2017 and $400,000,000 aggregate principal amount of 4.00% Senior Notes due December 1, 2046 (incorporated by reference to the Registrant’s Form 8-K filed on December 1, 2016 (File No. 1-2348), Exhibit 4.1) | |
| 4.27 | Form of | |
| 4.28 | Form of | |
| 5.1 | Opinion of | |
| 12.1 | Computation of | |
| 23.1 | Consent of | |
| 23.2 | Consent of | |
| 24.1 | Powers of | |
| 24.2 | Resolutions of the Board of Directors of Pacific Gas and | |
| 25.1 | Form T-1 Statement of Eligibility under | |