As filed with the Securities and Exchange Commission on May 25,August 5, 1994
Registration No. ==============================================================================33-
===========================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.DC 20549
-------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------------
PECO Energy Company PECO Energy Capital, L.P.
(Exact name of registrant (Exact name of registrant as specified
as specified in charter) in Limited Partnership Agreement)ENERGY COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Pennsylvania Delaware
(State or other jurisdiction of incorporation or organization)
23-0970240
51-0355322(STATE OR OTHER JURISDICTION (I.R.S. Employer Identification No.EMPLOYER IDENTIFICATION NO.)
P.O. Box 8699 1013 Centre Road
2301 Market Street Suite 350F
Philadelphia, PA 19101 Wilmington, DE 19805
(215) 841-4000 (302) 998-0592
(Address, including zip code, and telephone number, including area
code, of registrants' principal executive offices)
M. W. Rimerman M. W. Rimerman
Vice President-Finance and Treasurer Director
P.O. Box 8699OF INCORPORATION)
P.O. Box 8699
2301 Market Street, Philadelphia, PA 19101
(215) 841-4000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA
CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
M. W. RIMERMAN
Vice President and Treasurer
P.O. Box 8699
2301 Market Street, Philadelphia, PA 19101
Philadelphia, PA 19101
(215) 841-4000
(215) 841-4000
(Name, address, including zip code, and telephone number, including
area code, of agents for service)(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF AGENT FOR SERVICE)
with copies to:
JamesJAMES W. Durham, Esq.DURHAM, ESQ.
Senior Vice President and General Counsel
P.O. Box 8699
2301 Market Street, Philadelphia, PA 19101
RobertROBERT C. Gerlach, Esq. RobertGERLACH, ESQ. ROBERT M. Jones, Jr.JONES, JR., Esq.ESQ.
Ballard Spahr Andrews & Ingersoll Drinker Biddle & Reath
1735 Market Street 1100 Philadelphia National Bank Bldg.Building
Philadelphia, PA 19103-7599 Philadelphia, PA 19107
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: AfterFrom
time to time after the Registration Statement becomes effective, as
determined by market conditions and other factors.
-------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. / /
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection
with dividend or interest reinvestment plans, please check the following
box. / X /
-------------------------
CALCULATION OF REGISTRATION FEE
===========================================================================================================================================================
PROPOSED
MAXIMUM PROPOSED
TITLE OF OFFERINGEACH MAXIMUM EACH CLASS OF PRICE AGGREGATEMAXIMUM AMOUNT OF
CLASS OF SECURITIES AMOUNT TO BE PER UNIT OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED (1) (2)(3)PER UNIT OFFERING PRICE (2)(3) FEE
(4)
------------------- -------------- -------- ------------ ------------
- - - - ------------------------------------------------------------------------------
PECO Energy Capital, L.P.
Cumulative Monthly
Income Preferred
Securities ............
- - - - ------------------------------------------------------------------------------
PECO Energy Company
Guarantees with respect
to PECO Energy Capital,
L.P. Preferred
Securities ............
- - - - ------------------------------------------------------------------------------
PECO Energy Company
Subordinated Debentures
- - - - ------------------------------------------------------------------------------
Total ................... $350,000,000-----------------------------------------------------------------------------
Collateralized
Medium-Term Notes,
Series B ......... $250,000,000 100% $350,000,000 $120,689.65* $250,000,000* $86,207
==============================================================================
(1) There are being registered hereunder a presently indeterminate number
of Preferred Securities of PECO Energy Capital, L.P. with an aggregate
initial offering price not to exceed $350,000,000 and related
Guarantees and Subordinated Debentures of PECO Energy Company for which
no separate consideration will be received.
(2) Estimated*Estimated solely for the purpose of determiningcalculating the registrationfiling fee.
(3) Exclusive of accrued interest and dividends, if any.
(4) Pursuant to Rule 457(n) and (o), the registration fee is calculated on
the basis of the proposed maximum offering price of the Preferred
Securities.
-------------------------
THE REGISTRANTSREGISTRANT HEREBY AMENDAMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE
REGISTRANTSREGISTRANT 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.
==============================================================================
SUBJECT TO COMPLETION, DATED MAY , 1994
PROSPECTUS SUPPLEMENT TOPRELIMINARY PROSPECTUS DATED ,AUGUST 5, 1994
PREFERRED SECURITIES
PECO ENERGY CAPITAL
% CUMULATIVE MONTHLY INCOME PREFERRED SECURITIES (MIPS*), SERIES A
(LIQUIDATION PREFERENCE $25 PER PREFERRED SECURITY) GUARANTEED TO THE
EXTENT SET FORTH HEREIN BY$250,000,000
PECO ENERGY COMPANY
---------------
The % Cumulative Monthly Income Preferred Securities, Series A (the
"Series A Preferred Securities"), representing the limited partner
interests offered hereby, are being issued by PECO Energy Capital, L.P., a
limited partnership formed under the laws of the State of Delaware ("PECO
Energy Capital"). The general partner of PECO Energy Capital is PECO
Energy Capital Corp. (the "General Partner"), which is a wholly owned
subsidiary ofCOLLATERALIZED MEDIUM-TERM NOTES, SERIES B
DUE FROM 9 MONTHS TO 30 YEARS FROM DATE OF ISSUE
----------
PECO Energy Company ("PECO Energy"). PECO Energy Capital
exists for the sole purpose of issuing partner interests and lending the
proceeds thereof to PECO Energy. The limited partner interests represented
by the Series A Preferred Securities will have a preference with respect to
cash distributions and amounts payable on liquidation over the General
Partner's interest in PECO Energy Capital.
Holders of the Series A Preferred Securities will be entitled to
receive cumulative preferential cash distributions("Dividends"), at an
annual rate of % of the stated liquidation preference of $25 per Series A
Preferred Security, accruing from the date of original issuance and payable
monthly in arrears on the last day of each calendar month of each year,
commencing _______, 1994. The payment of Dividends and payments in
liquidation or redemption with respect to the Series A Preferred
Securities, in each case out of funds legally available therefor held by
PECO Energy Capital, are guaranteed by PECO Energy to the extent described
herein and in the accompanying Prospectus. See "Description of the
Guarantee" in the accompanying Prospectus. If PECO Energy fails to make
interest payments on its __% Subordinated Debentures, Series A purchased by
PECO Energy Capital with the proceeds of the Series A Preferred Securities,
PECO Energy Capital will not have sufficient funds to pay Dividends on the
Series A Preferred Securities. The Guarantee does not cover payment of
Dividends when PECO Energy Capital does not have sufficient funds to pay
such Dividends. In such event, the remedy of a holder of Series A
Preferred Securities is to enforce the rights of PECO Energy Capital under
the Series A Subordinated Debentures. See "Certain Terms of the Series A
Subordinated Debentures" herein and "Description of the Subordinated
Debentures" in the accompanying Prospectus.
The Series A Preferred Securities are subject to optional redemption in
whole or in part,(Company) may from time to time on or after June 30, 1999, at $25 peroffer its
Collateralized Medium-Term Notes, Series A Preferred Security plus accumulated and unpaid DividendsB (Series B Notes), in an
aggregate principal amount of up to the
date fixed for redemption (the "Redemption Price"), and$250,000,000. The Series B Notes will
be redeemedoffered at such pricematurities, which may vary from the proceeds9 months to 30 years from
their dates of any redemption or payment at maturity of
the Series A Subordinated Debentures. See "Certain Terms of the Series A
Preferred Securities_Optional Redemption"issuance, and "_Mandatory Redemption." In
addition, the Series A Preferred Securities willmay be subject to redemption uponat the occurrence of certain events described under "Certain Termsoption of
the Company. Each Series A Preferred Securities_Optional Redemption" and "_Special Event
Redemptions" herein.
InB Note will bear interest at a fixed rate as set
forth in the eventpricing supplement (Pricing Supplement) to this Prospectus
applicable to such Series B Note. See "DESCRIPTION OF SERIES B NOTES AND
NOTE INDENTURE." The Series B Notes will be secured by a series of the
liquidationCompany's First and Refunding Mortgage Bonds to be issued and pledged to
First Fidelity Bank, National Association (successor to Fidelity Bank,
National Association), acting as trustee under the Collateralized Note
Indenture. See "DESCRIPTION OF SERIES B FIRST MORTGAGE BONDS AND
MORTGAGE."
The issue price, interest rate, maturity date, and optional redemption
provisions of PECO Energy Capital, holderseach Series B Note will be established at the time of
issuance of such Note and set forth in the Pricing Supplement. The Series
B Notes will be issued in book-entry form or, in certain circumstances,
fully registered certificated form. Beneficial interests in Series B Notes
in book-entry form will be shown on, and transfers thereof will be effected
only through, records maintained by The Depository Trust Company, as
Depositary, and its participants. See "DESCRIPTION OF SERIES B NOTES AND
NOTE INDENTURE--BOOK-ENTRY NOTES."
The authorized denominations of Series A Preferred SecuritiesB Notes will be entitled to receive for$1,000 and any
integral multiple of thereof.
Interest on each Series A
Preferred Security,B Note will accrue at a liquidation preference of $25 plus accumulated and
unpaid Dividends to thefixed rate from its
date of payment. See "Description of the Preferred
Securities -- Liquidation Distribution" in the accompanying Prospectus.
See "Certain Investment Considerations" for certain information
relevant to an investment in the Series A Preferred Securities, including
circumstances under which payment of Dividendsissuance and will be payable semiannually on the Series A Preferred
Securities may be deferred.
Application has been made to list the Series A Preferred Securities on
the New York Stock Exchange.
---------------------each January 1 and
July 1 and at maturity or upon earlier redemption.
----------
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 PRICING
SUPPLEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
INITIAL PUBLIC UNDERWRITINGPRICE TO AGENTS' PROCEEDS TO PECO
OFFERING PRICE COMMISSION(1) ENERGY CAPITAL(2)THE
PUBLIC (1) COMMISSIONS (2) COMPANY (2) (3)
-------------- ------------- ------------------------------ --------------- ---------------
Per Series A
Preferred Security ....Note ....... 100%
Total ..........$250,000,000 $ (2) $
Total ...................$ (2) $
- - -
- ----------
(1) PECO Energy CapitalThe Series B Notes will be sold at 100% of their principal amount
except as may be provided in a Pricing Supplement hereto.
(2) The Company will pay a commission to
each as an Agent
(collectively, the Agents), in the form of a discount, ranging from . %
to . %, depending upon the maturity of the Series B Note sold through
such Agent (or sold to such Agent as principal at negotiated discounts, for
resale to investors and PECO Energy haveother purchasers). The Company has agreed to
indemnify the
several Underwriterseach Agent against certain civil liabilities, including
liabilities under the Securities Act of 1933, as amended.
See "Underwriting."
(2) As(3) Before deducting other expenses payable by the proceedsCompany, estimated
to be $376,000, including reimbursement of certain of the saleAgents' expenses.
----------
Offers to purchase the Series B Notes are being solicited, on a
reasonable efforts basis, from time to time by the Agents on behalf of the
Company. The Series B Notes may be sold to the Agents on their own behalf
at negotiated discounts. The Company reserves the right to sell the Series
B Notes directly on its own behalf. The Company also reserves the right to
withdraw, cancel or modify the offering contemplated hereby without notice.
No termination date for the offering of the Series A Preferred Securities
will be loaned to PECO Energy, underB Notes has been
established. The Company or the Underwriting Agreement PECO Energy
has agreed to pay to the Underwriters $ per Series A Preferred
Security (or $ in the aggregate); provided that such compensation
will be $ per Series A Preferred Security sold to certain
institutions. Therefore, to the extent that Series A Preferred Securities
are sold to such institutions, the actual amount of Underwriters'
compensation will be less than the amount specified above. See
"Underwriting."
(3) Expenses of the offering, excluding underwriting commissions which
are payable by PECO Energy, are estimated to be $ .
--------------------
The Series A Preferred Securities offered hereby are offered severally
by the Underwriters, as specified herein, subject to receipt and acceptance
by them and subject to their right toAgents may reject any order inas a whole or
in part. It is expected that delivery of the Series A Preferred Securities will be
made only in book-entry form through the facilities of The Depository Trust
Company on or about , 1994.
- - - - ---------------
*An application has been filed by Goldman, Sachs & Co. with the United
States Patent and Trademark Office for the registration of the MIPS
servicemark.
GOLDMAN, SACHS & CO.
SMITH BARNEY SHEARSON INC.
DEAN WITTER REYNOLDS INC.
A. G. EDWARDS & SONS, INC.
KIDDER, PEABODY & CO.
INCORPORATED
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES
INCORPORATED
---------------See "PLAN OF DISTRIBUTION."
----------
The date of this Prospectus Supplement is , 1994.1994
Information contained herein is subject to completion or amendment. A
registration statementRegistration 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 statementRegistration Statement
becomes effective. This prospectus supplementProspectus 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 stateState in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws
of any such state.State.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERSDISTRIBUTION OF THE SERIES B NOTES, THE AGENTS
MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZEIN THE SERIES B NOTES WITH A VIEW TO
STABILIZING OR MAINTAINMAINTAINING THE MARKET PRICE OF THE SERIES A PREFERRED SECURITIESB NOTES AT A LEVEL ABOVE THATLEVELS
OTHER THAN THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON THE NEW
YORK STOCK EXCHANGE, IN THEANY OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH
STABILIZING,OTHERWISE
AND, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
S-2
STATEMENT OF AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (Exchange Act) and, in accordance
therewith, files reports, proxy and information statements and other
information with the Securities and Exchange Commission (SEC). Such
reports, proxy and other information filed by the Company may be inspected
and copied at the public reference facilities maintained by the SEC at 450
Fifth Street, N.W., Washington, DC 20549, and at certain of its regional
offices at 500 West Madison Street, Chicago, IL 60661-2511 and 7 World
Trade Center, New York, NY 10048. Copies of such material may also be
obtained from the Public Reference Section of the SEC at 450 Fifth Street,
N.W., Washington, DC 20549 at prescribed rates. Securities of the Company
are listed on the New York and Philadelphia Stock Exchanges, where reports,
proxy material and other information concerning the Company may be
inspected.
----------
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following information supplements and should be read in conjunctiondocuments filed (File No. 1-1401) with the information contained in the accompanying Prospectus. EachSEC pursuant
to Section 13 of the capitalized terms used in this Prospectus Supplement hasExchange Act by the meaning set
forth in this Prospectus SupplementCompany are incorporated herein by
reference:
1. the Company's Annual Report on Form 10-K for the year ended December
31, 1993;
2. the Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1994; and
3. the Company's Current Reports on Form 8-K dated March 18, 1994,
April 14, 1994, May 25,1994, June 16, 1994 and July 27, 1994.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination of
the offering of the securities offered hereby shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of
filing of such documents. Any statement contained herein or in the accompanying Prospectus.
CERTAIN INVESTMENT CONSIDERATIONS
Prospective purchasersa document
all or a portion of the Series A Preferred Securities should
carefully review the information contained elsewhere inwhich is incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes
of this Prospectus
Supplement and in the accompanying Prospectus and should particularly
consider the following matters:
SUBORDINATE OBLIGATIONS UNDER THE GUARANTEE AND THE SERIES A
SUBORDINATED DEBENTURES
PECO Energy's obligations under the Guarantee are subordinate and
junior in right of payment to all general liabilities of PECO Energy and
its obligations under the Series A Subordinated Debentures are subordinate
and junior in right of payment to all Senior Indebtedness (as defined in
the accompanying Prospectus) of PECO Energy. At March 31, 1994, the Senior
Indebtedness of PECO Energy aggregated $5,402,096,000. There are no terms
in the Series A Preferred Securities, the Series A Subordinated Debentures
or the Guarantee that limit PECO Energy's ability to incur additional
indebtedness, including indebtedness that ranks senior to the Series A
Subordinated Debentures and the Guarantee. The Guarantee guarantees
payment to the holders of the Series A Preferred Securities of accumulated
and unpaid monthly dividends, amounts payable on redemption, and amounts
payable on liquidation of PECO Energy Capital, in each case, however, only to the extent that PECO Energy Capital has funds on hand legally available
therefor and payment thereof does not otherwise violate applicable law. If
PECO Energy werea statement contained herein or in
any other subsequently filed document which also is or is deemed to default in its obligation to pay interestbe
incorporated by reference herein modifies or amounts
payable on redemptionsupersedes such statement.
Any such statement so modified or maturity of the % Subordinated Debentures,
Series A (the "Series A Subordinated Debentures") PECO Energy
Capital would lack legally available funds for the payment of
dividends or amounts payable on redemption of the Series A Preferred
Securities, and in such event holders of the Series A Preferred Securities
wouldsuperseded shall not be abledeemed, except as
so modified or superseded, to rely upon the Guarantee for paymentconstitute a part of such amounts.
Instead, holders of the Seriesthis Prospectus.
THE COMPANY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO EACH PERSON,
INCLUDING ANY BENEFICIAL OWNER, TO WHOM A Preferred Securities would be required to
seek enforcement of PECO Energy Capital's rights against PECO Energy
pursuant to the terms of the Indenture. See "Description of the Guarantee
- - - - -- Status of the Guarantee" and "Description of the Subordinated Debentures
- - - - -- Subordination" in the accompanying Prospectus.
OPTIONPROSPECTUS IS DELIVERED, UPON
WRITTEN OR ORAL REQUEST OF SUCH PERSON, A COPY OF ANY OR ALL THE DOCUMENTS
DESCRIBED ABOVE UNDER "INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE,"
OTHER THAN EXHIBITS TO EXTEND INTEREST PAYMENT PERIOD
PECO Energy has the right under the Indenture to extend interest
payment periods on the Series A Subordinated Debentures to up to 60
consecutive months, and, as a consequence, monthly Dividends on the Series
A Preferred Securities can be deferred by PECO Energy Capital during any
such extended interest payment period. Dividends in arrears after the
monthly payment date therefor will accumulate additional distributions
thereon at the rate per annum of % thereof. The term "Dividends" as used
herein includes, as applicable, monthly distributions, distributions on
monthly distributions in arrears and Additional Amounts (as defined below).
In the event PECO Energy exercises its right to extend the interest payment
periods on the Series A Subordinated Debentures, PECO Energy may not
declare dividends on any shares of its capital stock during such extension
period. PECO Energy Capital and PECO Energy currently believe that the
extension of an interest payment period is unlikely. See "Description of
the Subordinated Debentures -- Option to Extend Interest Payment Period" in
the accompanying Prospectus.
Should an extended interest payment period occur, PECO Energy Capital
will continue to accrue income for United States federal income tax
purposes which will be allocated, but not distributed, to owners of the
Series A Preferred Securities. As a result, the owner will include such
interest in gross income for United States federal income tax purposes in
advance of the receipt of cash, and will not receive the cash related to
such income if the owner disposes of the Series A Preferred Securities
prior to the record date for payment of Dividends. See "United States
Taxation -- Potential Extension of Interest Payment Period."SUCH DOCUMENTS. SUCH REQUESTS SHOULD BE DIRECTED TO
PECO ENERGY CAPITAL
PECO Energy Capital is a limited partnership formed under the laws of
the State of Delaware. All of its general partner interests are owned by
the General Partner, which is a wholly owned special purpose subsidiary of
PECO Energy. As a limited partnership, all of the business and affairs of
PECO Energy Capital will be managed by the General Partner. PECO Energy
Capital has been created solely for the purpose of issuing partner
interests, including the Preferred Securities, and lending the proceeds
thereof to PECO Energy. Such
S-3
loans will be evidenced by the Subordinated Debentures issued by PECO
Energy under an Indenture dated as of , 1994 (the "Indenture") between
PECO Energy and Meridian TrustCOMPANY, FINANCIAL DIVISION, S21-1, P.O. BOX 8699,
PHILADELPHIA, PA 19101, (215) 841-5741.
THE COMPANY
The Company as trustee (the "Trustee"), including
the Series A Subordinated Debentures to be issued concurrently with the
issuance of the Series A Preferred Securities. The Subordinated Debentures
will be the only assets of PECO Energy Capital and the only revenues of
PECO Energy Capital will be the interest on the Subordinated Debentures.
PECO ENERGY
PECO Energy,was incorporated in Pennsylvania in 1929 and is an
operating utility which provides electric and gas service to the public in
southeastern Pennsylvania. Two subsidiaries own, and a third subsidiary
operates, the Conowingo Hydro-Electric Project ("Conowingo Project"), and
one distribution subsidiary provides electric service to the public in
certain areas of northeastern Maryland adjacent to the Conowingo Project.
PECO Energy and its subsidiaries had 9,391 employees at December 31, 1993.
The total area served by PECO Energythe Company and its
subsidiaries covers 2,475 square miles. Electric service is supplied in an
area of 2,340 square miles with a population of about 3,700,000, including
1,600,000 in the City of Philadelphia. Approximately 95% of the electric
service area and 64% of retail kilowatthour sales are in the suburbs around
Philadelphia and in northeastern Maryland, and 5% of the service area and
36% of such sales are in the City of Philadelphia. In 1993, approximately
60% of PECO Energy'sthe Company's electric output was generated from nuclear sources.
PECO Energy estimatesThe Company esti-
2
mates for 1994 that 59% of its electric output will comebe generated from
nuclear sources. Natural gas service is supplied in a 1,475-square-mile
area of southeastern Pennsylvania adjacent to Philadelphia with a
population of 1,900,000. PECO
Energy and its subsidiaries hold franchises to the extent necessary to
operate in the areas served.
CERTAIN TERMS OF THE SERIES A PREFERRED SECURITIES
DIVIDENDS
The Series A Preferred Securities will be entitled to Dividends out of
funds on hand legally available therefor held by PECO Energy Capital at the
annual rate of % of the stated liquidation preference of $25, payable
monthly in arrears on the last day of each calendar month. The General
Partner may make distributions on the general partner interests of PECO
Energy Capital only after payment in full of all Dividends accrued on the
Series A Preferred Securities and any other outstanding Preferred
Securities of PECO Energy Capital. The first Dividend payment date for the
Series A Preferred Securities will be , 1994, and such Dividends will
be cumulative from the date of original issue.
The Series A Preferred Securities will rank pari passu with all other
series of Preferred Securities which may be issued by PECO Energy Capital.
No other series of Preferred Securities have been issued by PECO Energy
Capital.
PECO Energy has the right under the Indenture to extend the interest
payment period from time to time on the Series A Subordinated Debentures to
a period not exceeding 60 consecutive months; provided that such extended
interest period shall not extend beyond the stated maturity date or
redemption date of the Series A Subordinated Debentures. As a consequence,
monthly Dividends on the Series A Preferred Securities would be deferred
(but would continue to accumulate with Dividends thereon) by PECO Energy
Capital during any such extended interest payment period. In the event
that PECO Energy exercises its right to extend the interest payment period
on the Series A Subordinated Debentures, PECO Energy may not declare or pay
dividends on, or redeem, purchase or acquire, any of its capital stock
during the extension period. PECO Energy Capital and PECO Energy currently
believe that the extension of an interest payment period is unlikely.
Prior to the termination of any such extension period, PECO Energy may
further extend the interest payment period, provided that such extension
period together with all such previous and further extensions thereof may
not exceed 60 consecutive months. Upon the termination of any extension
period and the payment of all amounts then due on the Series A Subordinated
Debentures, PECO Energy may elect to extend the interest payment period
again, subject to the above requirements. See "Description of the
Subordinated Debentures -- Option to Extend Interest Payment Period" in the
accompanying Prospectus. Payments received by PECO Energy Capital with
respect to the Series A Subordinated Debentures and other series of PECO
Energy's Subordinated Debentures will not be segregated by PECO Energy
Capital for the benefit of the holders of the Series A Preferred Securities
or holders of any other particular series of Preferred Securities.
S-4
OPTIONAL REDEMPTION
The Series A Preferred Securities are subject to redemption, at the
option of the General Partner, in whole or in part, from time to time, on or
after , 1999, at $25 per Series A Preferred Security, plus accumulated
and unpaid Dividends, if any, to the date fixed for redemption (the
"Redemption Price").
If at any time after the issuance of the Series A Preferred Securities,
PECO Energy Capital is or would be required to pay Additional Amounts as
described below or PECO Energy is or would be required to pay Additional
Interest on the Series A Subordinated Debentures, as described under
"Description of the Subordinated Debentures -- Additional Interest" in the
accompanying Prospectus, then the Series A Preferred Securities will be
subject to redemption, at the option of the General Partner, in whole or,
if such requirement relates only to certain of the Series A Preferred
Securities, in part as to that portion of the Series A Preferred Securities
subject to such requirement, in each case at any time thereafter at the
Redemption Price.
MANDATORY REDEMPTION
If at any time PECO Energy redeems the Series A Subordinated Debentures
or pays the Series A Subordinated Debentures at maturity as described under
"Description of the Subordinated Debentures" in the accompanying
Prospectus, the Series A Preferred Securities will be subject to mandatory
redemption at the Redemption Price.
The Series A Preferred Securities will not be entitled to any sinking
fund.
SPECIAL EVENT REDEMPTIONS
If a Tax Event (as defined below) shall occur and be continuing, the
Series A Preferred Securities will be subject to redemption, at the option
of the General Partner, in whole or in part at the Redemption Price within
90 days following the occurrence of such Tax Event. "Tax Event" means that
PECO Energy Capital shall have received an opinion of counsel (which may be
regular counsel to PECO Energy or an affiliate but not an employee thereof)
experienced in such matters to the effect that, as a result of any
amendment to, or change (including any announced prospective change) in,
the laws (or any regulations thereunder) of the United States 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 interpretation or pronouncement is
announced on or after the date of issuance of the Series A Preferred
Securities, there is more than an insubstantial risk that (i) PECO Energy
Capital is subject to United States federal income tax with respect to
interest received on the Series A Subordinated Debentures, (ii) interest
payable by PECO Energy on the Series A Subordinated Debentures will not be
deductible for United States federal income tax purposes or the
Partnership will otherwise not be taxed as a partnership or (iii) PECO
Energy Capital is subject to more than a de minimis amount of other taxes,
duties or other governmental charges.
If an Investment Company Act Event (as defined below) shall occur and
be continuing, the Series A Preferred Securities will be subject to
mandatory redemption in whole at the Redemption Price within 90 days
following the occurrence of such Investment Company Act Event. "Investment
Company Act Event" means the occurrence of a change in law or regulation or
a change in official interpretation of law or regulation by any legislative
body, court, governmental agency or regulatory authority (a "Change in 1940
Act Law") to the effect that PECO Energy Capital is or will be considered
an "investment company" which is required to be registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), which Change
in 1940 Act Law becomes effective on or after the date of issuance of the
Series A Preferred Securities; provided, that no Investment Company Act
Event shall be deemed to have occurred if PECO Energy Capital has received
an opinion of counsel (which may be regular counsel to PECO Energy or any
affiliate but not an employee thereof) experienced in such matters, to the
effect that PECO Energy Capital and/or PECO Energy has taken reasonable
measures, in its discretion, to avoid such Change in 1940 Act Law so that
notwithstanding such Change in 1940 Act Law, PECO Energy Capital is not
required to be registered as an "investment company" within the meaning of
the 1940 Act.
ADDITIONAL AMOUNTS
If, as a result of (i) the Series A Subordinated Debentures not being
treated as indebtedness for United
S-5
States federal income tax purposes or (ii) PECO Energy Capital not
being treated as a partnership for United States federal income tax
purposes, PECO Energy Capital is required to withhold or deduct from
payments on the Series A Preferred Securities for or on account of any
present or future taxes imposed by the United States which would not
otherwise be required to be withheld or deducted, PECO Energy Capital will
pay such additional amounts as may be necessary in order that the net
amounts received by the holders of the Series A Preferred Securities after
such withholding or deduction will equal the amounts which would have been
received in respect of such Series A Preferred Securities in the absence of
such withholding or deduction ("Additional Amounts"), except that no such
Additional Amounts will be payable to a holder of Series A Preferred
Securities (or a third party on such holder's behalf) with respect to
Series A Preferred Securities if:
(a) such holder is liable for such taxes by reason of such holder
having a connection with the United States, other than being a holder
of Series A Preferred Securities; or
(b) PECO Energy Capital has notified such holder of the obligation
to withhold or deduct taxes and requested but not received from such
holder a valid declaration of non-residence, a valid taxpayer
identification number or other claim for exemption in such form or
content as may be required by the United States Internal Revenue
Service (the "IRS") and such withholding or deduction would not have
been required had such declaration, taxpayer identification number or
claim been received.
LIQUIDATION VALUE
The amount per share payable on the Series A Preferred Securities in
the event of any voluntary or involuntary liquidation of PECO Energy
Capital is $25 plus accumulated and unpaid Dividends.
CERTAIN TERMS OF THE SERIES A SUBORDINATED DEBENTURES
In exchange for, and to evidence the loan of, the proceeds of the sale
of the Series A Preferred Securities and the General Partner's related
investment in PECO Energy Capital, PECO Energy will issue the Series A
Subordinated Debentures to PECO Energy Capital in the principal amount of
$ and with interest payment and redemption and maturity provisions which
correspond to the distribution and redemption provisions of the Series A
Preferred Securities. In addition, the Series A Subordinated Debentures
will be subject to mandatory redemption upon the dissolution of PECO Energy
Capital. The Series A Subordinated Debentures will mature on , 2043.
The Series A Subordinated Debentures will rank junior and be
subordinate in right of payment to all Senior Indebtedness of PECO Energy.
See "Description of the Subordinated Debentures -- Subordination" in the
accompanying Prospectus.
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, counsel to PECO Energy and PECO Energy Capital, insofar as it
relates to matters of law and legal conclusions. This section is based
upon current provisions of the Internal Revenue Code of 1986, as amended
(the "Code"), existing and proposed regulations thereunder and current
administrative rulings and court decisions, all of which are subject to
change. Subsequent changes may cause tax consequences to vary
substantially from the consequences described below.
No attempt has been made in the following discussion to comment on all
United States federal income tax matters affecting purchasers of Series A
Preferred Securities. Moreover, the discussion focuses on holders of
Series A Preferred Securities who are individual citizens or residents of
the United States who are owners of Series A Preferred Securities for
United States federal tax purposes and has only limited application to
corporations, estates, trusts or non-resident aliens. Accordingly, each
prospective purchaser of Series A Preferred Securities should consult, and
should depend on, his or her own tax adviser in analyzing the federal,
state, local and foreign tax consequences of the purchase, ownership or
disposition of Series A Preferred Securities.
In April 1994, the IRS issued certain notices generally addressing the
characteristics which distinguish debt from equity for various purposes
under United States federal income tax laws. In these notices, the IRS
S-6
indicated that transactions involving securities that, like the Series
A Preferred Securities, have both debt and equity characteristics would be
reviewed with scrutiny to determine how they would be treated for tax
purposes. Based upon the advice of its tax counsel, PECO Energy believes
that interest on the Series A Subordinated Debentures will be deductible
under the tests referred to in these notices. If, however, the IRS should
subsequently issue a further official pronouncement, or should there be a
judicial decision, pursuant to which interest on the Series A Subordinated
Debentures would not be deductible, the Series A Preferred Securities would
be subject to redemption at the option of PECO Energy Capital, as described
herein.
INCOME FROM SERIES A PREFERRED SECURITIES
In the opinion of Ballard Spahr Andrews & Ingersoll, PECO Energy
Capital will be treated as a partnership for United States federal income
tax purposes. Accordingly, each owner of Series A Preferred Securities
will be required to include in gross income such owner's distributive share
of the net income of PECO Energy Capital. Such income should not exceed
distributions received on such Series A Preferred Securities, except in
limited circumstances as described below under "Potential Extension of
Interest Payment Period." No portion of such income will be eligible for
the dividends received deduction.
DISPOSITION OF 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 the owner of the Series A
Preferred Security for the Series A Preferred Securities sold. Gain or
loss recognized by an owner of the Series A Preferred Security on the sale
or exchange of a Series A Preferred Security held for more than one year
will generally be taxable as long-term capital gain or loss except that
ordinary income may be recognized to the extent of such owner's pro rata
share of accrued but unallocated income of PECO Energy Capital.
PECO ENERGY CAPITAL INFORMATION RETURNS AND AUDIT PROCEDURES
The General Partner will furnish each owner of a Series A Preferred
Security with a schedule K-1 each year setting forth such owner's allocable
share of income for the prior calendar year. The General Partner is
required to furnish such schedules as soon as practicable following the end
of the year, but in any event prior to March 31.
Any person who holds Series A Preferred Securities as a nominee for
another person is required to furnish to PECO Energy Capital (a) the name,
address and taxpayer identification number of the beneficial owner and the
nominee; (b) information as to whether the beneficial owner is (i) a person
that is not a United States person, (ii) a foreign government, an
international organization or any wholly owned agency or instrumentality of
either of the foregoing, or (iii) a tax-exempt entity; (c) the amount and
description of Series A Preferred Securities held, acquired or transferred
for the beneficial owner; and (d) certain information including the dates
of acquisitions and transfers, means of acquisitions and transfers, and
acquisition cost for purchases, as well as the amount of net proceeds from
sales. Brokers and financial institutions are required to furnish
additional information, including whether they are United States persons,
and certain information on Series A Preferred Securities they acquire, hold
or transfer for their own accounts. A penalty of $50 per failure (up to a
maximum of $100,000 per calendar year) is imposed by the Code for failure
to report such information to PECO Energy Capital. The nominee is required
to supply the beneficial owners of the Series A Preferred Securities with
the information furnished to PECO Energy Capital.
POTENTIAL EXTENSION OF INTEREST PAYMENT PERIOD
Under the terms of the Indenture, PECO Energy will be permitted to
extend the interest payment period on the Series A Subordinated Debentures
up to 60 consecutive months. In the event that PECO Energy exercises this
right, PECO Energy may not declare dividends on any of its capital stock
during such extended interest period. PECO Energy Capital and PECO Energy
currently believe that the extension of an interest payment period is
unlikely. In the event that the interest payment period is extended, PECO
Energy Capital will continue to accrue income, generally equal to the
amount of the interest payment due at the end of the extended interest
payment period, over the length of the extended interest payment period.
Accrued income will be allocated, but not distributed, to holders of
record on the Business Day preceding
S-7
the last day of each calendar month. As a result, owners of Series A
Preferred Securities during an extended interest payment period will be
required to include interest in gross income in advance of the receipt of
cash, and any such persons who dispose of Series A Preferred Securities
prior to the record date for the payment of Dividends following such
extended interest payment 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 by the amount of any interest that is
included in income without a receipt of cash, and will be decreased again
when and if such cash is subsequently received from PECO Energy Capital.
The subsequent receipt of such cash will not be included in gross income.
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 or estate or trust,
in either case not subject to United States federal income tax on a net
income basis in respect of a Series A Preferred Security.
Under present United States federal income tax law, subject to the
discussion below with respect to backup withholding, and assuming
satisfaction by PECO Energy Capital of its withholding tax obligations, if
any:
(i) Payments by PECO Energy Capital or any of its paying agents to
any United States Alien Holder will not be subject to United States
federal withholding tax provided that (a) the beneficial owner of the
Series A Preferred Security does not actually or constructively own 10%
or more of the total combined voting power of all classes of stock of
PECO Energy, (b) the beneficial owner of the Series A Preferred
Security is not a controlled foreign corporation that is related to
PECO Energy through stock ownership, and (c) either (A) the beneficial
owner of the Series A Preferred Security certifies to PECO Energy
Capital or its agent, under penalties of perjury, that it is a United
States Alien Holder and provides its name and address or (B) the holder
of the Series A Preferred Security is a securities clearing
organization, bank or other financial institution that holds customers'
securities in the ordinary course of its trade or business (a
"financial institution"), and such holder certifies to PECO Energy
Capital or its agent under penalties of perjury that such statement has
been received from the beneficial owner by it or by a financial
institution between it and the beneficial owner and furnishes the payor
with a copy thereof; and
(ii) a United States Alien Holder of a Series A Preferred Security
will generally not be subject to United States federal income or
withholding tax on any gain realized on the sale 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 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 proceeds 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 payments. 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 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.
S-8
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement among
PECO Energy Capital, PECO Energy and the underwriters named below (the
"Underwriters"), for whom Goldman, Sachs & Co., Smith Barney Shearson Inc.,
Dean Witter Reynolds Inc., A. G. Edwards & Sons, Inc., Kidder, Peabody &
Co. Incorporated, PaineWebber Incorporated and Prudential Securities
Incorporated are acting as Representatives, PECO En ergy Capital has agreed
to sell to each of the Underwriters and each of the Underwriters has
severally agreed to purchase from PECO Energy Capital the respective number
of Series A Preferred Securities set forth opposite its name below:
NUMBER OF SERIES A
UNDERWRITER PREFERRED SECURITIES
--------------- ------------------------
Goldman, Sachs & Co.
Smith Barney Shearson Inc.
Dean Witter Reynolds Inc.
A. G. Edwards & Sons, Inc.
Kidder, Peabody & Co. Incorporated
PaineWebber Incorporated
Prudential Securities Incorporated
----------
Total
==========
Under the terms and conditions of the Underwriting Agreement, the
Underwriters are committed to take and pay for all such Series A Preferred
Securities offered hereby, if any are taken.
The Underwriters propose to offer the Series A Preferred Securities in
part directly to the public at the initial public offering price set forth
on the cover page of this Prospectus Supplement, and in part to certain
securities dealers at such price less a concession of $ per Series A
Preferred Security. The Underwriters may allow, and such dealers may
reallow, a concession not in excess of $ per Series A Preferred Security
to certain brokers and dealers. After the Series A Preferred Securities are
released for sale to the public, the offering price and other selling terms
may from time to time be varied by the Representatives.
In view of the fact that the proceeds from the sale of the Series A
Preferred Securities will be loaned to PECO Energy under the Underwriting
Agreement, PECO Energy has agreed to pay to the Underwriters $ per
Series A Preferred Security ($ per Series A Preferred Security sold to
certain institutions) for the accounts of the several Underwriters.
Prior to this offering, there has been no public market for the Series
A Preferred Securities. In order to meet one of the requirements for
listing the Series A Preferred Securities on the New York Stock Exchange,
the Underwriters have undertaken to sell the Series A Preferred Securities
to a minimum of 400 beneficial holders.
PECO Energy and PECO Energy Capital have agreed to indemnify the
several Underwriters against certain liabilities, including liabilities
under the Securities Act of 1933, as amended.
PECO Energy and PECO Energy Capital have agreed, during the period
beginning on the date of the Underwriting Agreement and continuing to and
including the earlier of (i) the date, after the closing date, on which the
distribution of the Series A Preferred Securities ceases, as determined by
Goldman, Sachs & Co., or (ii) 30 days after the closing date, not to offer,
sell, contract to sell, or otherwise dispose of any Series A Preferred
Securities, any limited partner interests of PECO Energy Capital, or any
preferred stock or any other securities of PECO Energy Capital or PECO
Energy which are substantially similar to the Series A Preferred
Securities, including the related Guarantee, or any securities convertible
into or exchangeable for Series A Preferred Securities, limited partner
interests, preferred stock or other substantially similar securities of
either PECO Energy Capital or PECO Energy, without the prior written
consent of Goldman, Sachs & Co.
S-9
SUBJECT TO COMPLETION, DATED , 1994
PROSPECTUS
PECO ENERGY CAPITAL
CUMULATIVE MONTHLY INCOME PREFERRED SECURITIES (MIPS*)
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
PECO ENERGY COMPANY
---------------
PECO Energy Capital, L.P. ("PECO Energy Capital"), a Delaware special
purpose limited partnership in which a subsidiary of PECO Energy Company
("PECO Energy") is the general partner, may offer from time to time, in one
or more series, its monthly income preferred securities representing
limited partner interests ("Preferred Securities"). The payment of
periodic cash distributions ("Dividends") with respect to the Preferred
Securities of each series and payments on liquidation or redemption with
respect to such Preferred Securities, in each case out of funds on hand
legally available therefor held by PECO Energy Capital, are guaranteed by
PECO Energy to the extent described herein (the "Guarantee"). The
obligations of PECO Energy under the Guarantee will be subordinate and
junior in right of payment to all general liabilities of PECO Energy.
Concurrently with the issuance of each series of Preferred Securities, PECO
Energy Capital will loan the proceeds thereof to PECO Energy and to
evidence such loan PECO Energy will issue and deliver to PECO Energy
Capital a series of PECO Energy's subordinated debentures (the
"Subordinated Debentures") with terms corresponding to that series of
Preferred Securities. The Subordinated Debentures will be unsecured and
subordinate and junior in right of payment to Senior Indebtedness (as
defined herein) of PECO Energy. The Subordinated Debentures will be the
sole asset of PECO Energy Capital and the interest on the Subordinated
Debentures will be the only revenue of PECO Energy Capital.
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
under the Registration Statement of which this Prospectus forms a part
shall not exceed $350,000,000. Certain specific terms of the particular
series of Preferred Securities in respect of which this Prospectus is being
delivered will be set forth in an accompanying Prospectus Supplement (the
"Prospectus Supplement"), including where applicable and to the extent not
set forth herein, the specific title, the aggregate amount, Dividend rate
(or the method for determining the 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
of the Preferred Securities on a securities exchange.
The Preferred Securities may be sold for 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 the particular series 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 PECO Energy Capital will also be set forth
in the Prospectus Supplement.
The Prospectus Supplement will contain information concerning United
States federal income tax considerations, if applicable, and the Preferred
Securities offered.
- - - - ---------------
*An application has been filed by Goldman, Sachs & Co. with the United
States Patent and Trademark Office for the registration of the MIPS
servicemark.
---------------
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.
---------------
The date of this Prospectus is , 1994.
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 supplement 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.
STATEMENT OF AVAILABLE INFORMATION
PECO Energy is subject to the information requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy and information statements and
other information with the Securities and Exchange Commission (the "SEC").
Such reports, proxy and other information filed by PECO Energy may be
inspected and copied at the public reference facilities maintained by the
SEC at 450 Fifth Street, N.W., Washington, D.C. 20549, and at certain of
its regional offices at Suite 1400, 500 West Madison Street, Chicago, IL
60661-2511 and Suite 1300, 7 World Trade Center, New York, NY 10048.
Copies of such material may also be obtained from the Public Reference
Section of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates. Securities of PECO Energy are listed on the New York and
Philadelphia Stock Exchanges, where reports, proxy material and other
information concerning PECO Energy may be inspected.
No separate financial statements of PECO Energy Capital have been
included herein. PECO Energy and PECO Energy Capital do not consider that
such financial statements would be material to holders of Preferred
Securities offered hereby because PECO Energy Capital is a newly formed
special purpose entity, has no operating history and no independent
operations and is not engaged in, and does not propose to engage in, any
activity other than as set forth below. See "PECO Energy Capital."
---------------
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the SEC pursuant to Section 13 of
the Exchange Act by PECO Energy (File No. 1-1401) are incorporated herein
by reference:
1. PECO Energy's Annual Report on Form 10-K for the year ended December
31, 1993;
2. PECO Energy's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1994; and
3. PECO Energy's Current Reports on Form 8-K dated March 18, 1994 and
April 14, 1994.
Each document filed subsequent to the date of this Prospectus pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act and prior to the
termination of the offering shall be deemed to be incorporated by reference
in this Prospectus and shall be a part hereof from the date of filing of
such document. 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 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 or in a Prospectus Supplement modifies or supersedes
such statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
PECO ENERGY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO EACH PERSON,
INCLUDING ANY BENEFICIAL OWNER, TO WHOM A PROSPECTUS IS DELIVERED, UPON
WRITTEN OR ORAL REQUEST OF SUCH PERSON, A COPY OF ANY OR ALL DOCUMENTS
DESCRIBED ABOVE UNDER "INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE,"
OTHER THAN EXHIBITS TO SUCH DOCUMENTS. SUCH REQUESTS SHOULD BE DIRECTED TO
PECO ENERGY COMPANY, FINANCIAL DIVISION, S21-1, P.O. BOX 8699,
PHILADELPHIA, PA 19101, (215) 841-5741.
PECO ENERGY CAPITAL
PECO Energy Capital is a limited partnership formed under the laws of
the State of Delaware. All of its general partner interests are owned by
PECO Energy Capital Corp., a Delaware corporation (the "General Partner"),
which is a wholly owned subsidiary of PECO Energy. As a limited
partnership, all of the business and affairs of PECO Energy Capital will be
managed by the General Partner. PECO Energy Capital has been created
solely for the purpose of issuing partner interests, including the
Preferred Securities, and lending the proceeds thereof to PECO Energy.
Such loans will be evidenced by the Subordinated Debentures issued by PECO
Energy under an Indenture dated as of , 1994 (the "Indenture")
between PECO Energy and Meridian Trust Company, as trustee (the "Trustee").
The Subordinated Debentures will be the only assets of PECO Energy Capital
and the only revenues of PECO Energy Capital will be the interest on the
Subordinated
2
Debentures. The General Partner will pay all of PECO Energy Capital's
operating expenses and will have general liability for all of PECO Energy
Capital's obligations.
PECO Energy Capital has been advised by its special Delaware counsel
that, assuming a holder of Preferred Securities acts in conformity with the
Amended and Restated Limited Partnership Agreement of PECO Energy Capital
(the "Limited Partnership Agreement"), such holder (other than the General
Partner) will not be liable for the debts, obligations and liabilities of
PECO Energy Capital, whether arising in contract, tort or otherwise, solely
by reason of being a limited partner of PECO Energy Capital, subject to the
obligation of a limited partner to repay any funds wrongfully distributed
to it.
The place of business of PECO Energy Capital is the principal executive
offices of the General Partner at 1013 Centre Road, Suite 350F, Wilmington,
DE 19805 and its telephone number is (302) 998-0592.
PECO ENERGY
PECO Energy, incorporated in Pennsylvania in 1929, is an operating
utility which provides electric and gas service to the public in
southeastern Pennsylvania. Two subsidiaries own, and a third subsidiary
operates, the Conowingo Hydro-Electric Project ("Conowingo Project"), and
one distribution subsidiary provides electric service to the public in
certain areas of northeastern Maryland adjacent to the Conowingo Project.
PECO Energy and its subsidiaries had 9,391 employees at December 31, 1993.
The total area served by PECO Energy and its subsidiaries covers 2,475
square miles. Electric service is supplied in an area of 2,340 square
miles with a population of about 3,700,000, including 1,600,000 in the City
of Philadelphia. Approximately 95% of the electric service area and 64% of
retail kilowatthour sales are in the suburbs around Philadelphia and in
northeastern Maryland, and 5% of the service area and 36% of such sales are
in the City of Philadelphia. In 1993, approximately 60% of PECO Energy's
electric output was generated from nuclear sources. PECO Energy estimates
for 1994 that 59% of its electric output will come from nuclear sources.
Natural gas service is supplied in a 1,475-square-mile area of southeastern
Pennsylvania adjacent to Philadelphia with a population of 1,900,000. PECO
Energy and its subsidiaries hold franchises
to the extent necessary to operate in the areas served.
The principal executive offices of PECO Energythe Company are located at 2301
Market Street, Philadelphia, PA 19103.Pennsylvania. Its mailing address is P.O.
Box 8699, Philadelphia, PA 19101, and its telephone number is (215)
841-4000.
COVERAGE RATIOS
PECO Energy's Ratio of Earnings to Fixed Charges for each of the
periods indicated was as follows:
YEARS ENDED DECEMBER 31, 3 MONTHS ENDED MARCH 31,
------------------------------------ ------------------------
1989 1990 1991 1992 1993 1993 1994
---- ---- ---- ---- ---- ---- ----
2.08 1.31* 2.55 2.43 3.15 3.16 3.58
The Ratio of Earnings to Fixed Charges represents, on a pre-tax basis,
the number of times earnings cover fixed charges. Earnings consist of net
income to which has been added fixed charges and taxes based on income of
PECO Energy. Fixed charges consist of interest on funded indebtedness,
other interest, amortization of net gain on reacquired debt and net
discount on debt and the interest portion of all rentals charged to income.
PECO Energy's Ratio of Earnings to Combined Fixed Charges and Preferred
Stock Dividends for each of the periods indicated was as follows:
YEARS ENDED DECEMBER 31, 3 MONTHS ENDED MARCH 31,
------------------------------------ ------------------------
1989 1990 1991 1992 1993 1993 1994
---- ---- ---- ---- ---- ---- ----
1.77 1.04* 2.14 2.06 2.67 2.75 3.05
- - - - ---------------
*Reflects the one-time, after-tax charge against income of approximately
$250 million associated with various disallowances made by the
Pennsylvania Public Utility Commission in the Limerick Unit No. 2 rate
order and the one-time, after-tax charge against income of
approximately $150 million associated with PECO Energy's 1990 early
retirement plan.
3
The Ratio of Earnings to Combined Fixed Charges and Preferred Stock
Dividends represents, on a pre-tax basis, the number of times earnings
cover fixed charges and preferred stock dividends. Earnings consist of net
income to which has been added fixed charges and taxes based on income of
PECO Energy. Combined fixed charges and preferred stock dividends consist
of interest on funded indebtedness, other interest, amortization of net
gain on reacquired debt and net discount on debt, preferred stock dividends
(increased to reflect the pre-tax earnings required to cover such dividend
requirements) and the interest portion of all rentals charged to income.
USE OF PROCEEDS
The net proceeds to be received by PECO Energy Capital from the salesales of the Preferred Securities offered herebySeries B Notes will be loaned to PECO Energy andused for the
reduction of the outstanding amount of certain series of the Company's
previously issued, long-term debt or preferred stock and/or for general
corporate purposes.
DESCRIPTION OF SERIES B NOTES AND NOTE INDENTURE
The Series B Notes will be appliedissued under a Collateralized Note Indenture
dated as of October 1, 1989, as previously amended, and as
supplemented by PECO Energya Second Supplemental Indenture dated as of July 1, 1994
(Note Indenture), between the Company and First Fidelity Bank, National
Association, as trustee (in such capacity, the Note Trustee). Copies of
the Note Indenture and the form of Second Supplemental Indenture are on
file with the SEC as exhibits to the redemptionRegistration Statement covering the
Series B Notes or payment at maturityas exhibits to other documents. The statements under
this caption are brief summaries of outstanding securities.
DESCRIPTION OF THE PREFERRED SECURITIES
The following is a summary of certain terms and provisions of the Preferred SecuritiesNote
Indenture and the Limited Partnership Agreement. The summary is
subject to, andare qualified in itstheir entirety by reference to the
Limited
Partnership Agreement andprovisions of the Delaware Revised Uniform Limited Partnership
Act. The Limited Partnership Agreement is filed as an exhibitNote Indenture. Each section reference under this
caption refers to the Registration Statement of which this Prospectus forms a part.
GENERAL
Under the Limited Partnership Agreement, PECO Energy Capital is
authorized to issue two classes of partner interests, the Preferred
Securities representing limited partner interests, including the Preferred
Securities offered hereby, and general partner interests. All of the
general partner interests of PECO Energy Capital are owned by the General
Partner, which is a wholly owned subsidiary of PECO Energy. All of the
Preferred Securities will be of equal rank in participationcorresponding provision in the profits
and assets and income of PECO Energy Capital.Note Indenture.
GENERAL
The Limited Partnership
Agreement authorizes the General PartnerSeries B Notes may be sold from time to establish series of Preferred
Securities having such designations, rights, privileges, restrictions and
other terms and provisions as the General Partner may determine. Dividends
on all series of Preferred Securities must be paidtime in full before the
General Partner may participatean aggregate
principal amount not to exceed $250,000,000. Each Series B Note will bear
interest at a fixed rate (not to exceed 10%) to maturity specified in the
profits or assets of PECO Energy
Capital.
DIVIDENDS
Dividendsapplicable Pricing Supplement. The Series B Notes will mature on each series of Preferred Securities will be cumulative,
will accrueany
Business Day from 9 months to 30 years from the date of issue, but not
later than July 1, 2025, as selected by the purchaser and agreed to by the
Company. Prior to maturity, Series B Notes may be subject to optional
redemption by the Company at the price or prices set forth in the
applicable Pricing Supplement. The Series B Notes will not be subject to
any sinking fund or mandatory redemption.
The applicable Pricing Supplement relating to each sale of Series B
Notes will describe the following terms of such Series B Notes: (1) the
price (expressed as a percentage of the aggregate principal amount thereof)
at which the Series B Notes will be sold; (2) the date on which the Series
B Notes will mature; (3) the rate at which the Series B Notes will bear
interest and the date from which any such interest will accrue; and (4) the
date, if any, after which, and the price at which, the Series B Notes may
be redeemed, in whole or in part, at the option of the Company.
The Series B Notes will be authenticated and delivered upon receipt by
the Note Trustee from the Company of a request for authentication, an
officers' certificate stating that no Event of Default under the Note
Indenture has occurred and is continuing and that conditions precedent for
issuance have been met, an opinion of counsel and the Series B First
Mortgage Bonds, as defined below.
The Company presently anticipates that the Series B Notes will be
issued in book-entry form (Book-Entry Notes) through The Depository Trust
Company (DTC) or other depositary selected by the Company (Depositary), see
"Book-Entry Notes" below. However, the Company reserves the right to issue
the Series B Notes in fully registered certificated form. If the Series B
Notes are issued in fully registered certificated form or in book-entry
form through a Depositary other than DTC, the applicable Pricing Supplement
will contain information with respect thereto.
The authorized denominations of the Series B Notes will be $1,000 and
any integral multiple thereof. The Series B Notes will be exchangeable for
other Series B Notes of like tenor and aggregate principal amount,
3
without payment of any charge other than a sum sufficient to reimburse
the Company for any tax or other governmental charge incident to the
exchange. Transfers and exchanges of Series B Notes in certificated form
may be made at the principal corporate trust offices of First Fidelity
Bank, National Association, Philadelphia, Pennsylvania. The Company will
not be required to: (i) register the transfer of or exchange such Series B
Notes during a period beginning at the opening of business 15 days before
any selection of Series B Notes to be redeemed and ending at the close of
business on the day of mailing of the relevant notice of redemption; or
(ii) register the transfer of or exchange any Series B Note, or portion
thereof, called for redemption, except the unredeemed portion of any Series
B Note being redeemed in part (Section 2.07 of Article II).
Additional Notes, unlimited as to principal amount, may be issued from
time to time in one or more series under the Note Indenture (Section 2.03
of Article II). Such additional Notes may not be issued unless the Note
Trustee receives mortgage bonds of the Company equal to the aggregate
principal amount of the additional Notes to be issued and meeting the debt
service requirements of such additional Notes (Section 3.01 of Article
III). All Notes from time to time outstanding under the Note Indenture,
including the Series B Notes, will be equally secured thereunder and are
hereinafter referred to as Notes.
In order to secure its obligations under the Note Indenture, the
Company is required to deliver to the Note Trustee the Company's First and
Refunding Mortgage Bonds corresponding to the Notes then being issued.
Concurrently with each issuance of Series B Notes, the Company will deliver
to the Note Trustee a like principal amount of its First and Refunding
Mortgage Bonds, Medium-Term Note Series B (Series B First Mortgage Bonds).
The Series B First Mortgage Bonds will contain provisions for the payment
of principal or redemption price and interest corresponding to the
principal or redemption price and interest payments on the Series B Notes.
For a description of the security for the Series B Notes, see "Security:
Pledge of First Mortgage Bonds" below and "DESCRIPTION OF SERIES B FIRST
MORTGAGE BONDS AND MORTGAGE."
PAYMENT OF PRINCIPAL AND INTEREST
Each Series B Note will bear interest from its date of issue at the
rate per annum stated on the face thereof until the principal amount
thereof is paid or made available for payment. Interest on each Series B
Note will be payable monthly in
arrearssemiannually on each January 1 and July 1 (each, an
Interest Payment Date) and at maturity or upon earlier redemption;
provided, however, that the first payment of interest on any Series B Note
with a date of issue between a record date and an Interest Payment Date
will be made on the lastnext succeeding Interest Payment Date. The record date
with respect to any Interest Payment Date will be the fifteenth day of eachthe
calendar month preceding such Interest Payment Date. Each payment of
each year, except as
otherwise described below. The Dividends payable on a seriesinterest in respect of Preferred
Securities offered herebyan Interest Payment Date will be specified in a Prospectus Supplement
related thereto. The amount of Dividends payable for any periodinclude interest
accrued to but excluding such Interest Payment Date. Interest will be
computed on the basis of a 360-day year of twelve 30-day months (Section
2.02 of Article II).
Interest payable and a 360-day year and,punctually paid or duly provided for on any
period shorter than a full monthly distribution period,Interest Payment Date will be computedpaid to the person in whose name a Series B
Note is registered at the close of business on the basis of the actual number of days elapsed inrecord date for such period.
PECO Energy has the right under the Indenture to extend the interest
payment period from time to time on the Subordinated Debentures to a period
not exceeding 60 consecutive months; provided that such extended interest
period shall not extend beyond the stated maturity date or redemption date
of any series of Subordinated Debentures (an "Extension Period"). As a
consequence, monthly Dividends on the Preferred Securities would be
deferred by PECO Energy Capital during any Extension Period. Dividends in
arrears after the monthly payment date therefor will accumulate additional
distributions thereon at the rate per annum of % thereof. The term
"Dividends" as used herein includes, as applicable, monthly distributions,
distributions on monthly distributions in arrears and Additional Amounts
(as defined below). In the event that PECO Energy exercises this right,
neither PECO Energy nor any majority-owned subsidiary of PECO Energy may
declare or pay dividends on or redeem, purchase or acquire, any of its
capital stock (other than dividends by a wholly owned subsidiary) during
any Extension Period. Prior to the termination of any such Extension
Period, PECO Energy may further extend the interest payment period,
provided that such Extension Period together with all such previous and
further extensions thereof may not exceed 60 consecutive months. Upon the
termination of any Extension Period and the payment of all amounts then
due, PECO Energy may elect to extend the interest payment period again,
subject to the above requirements. See "Description of the Subordinated
Debentures -- Option to Extend
Interest Payment Period."
4
Dividends on the Preferred Securities must be paid by PECO Energy
Capital in any calendar yearDate; provided, however, that interest payable at maturity
or portion thereof to the extent PECO Energy
Capital has funds on hand legally available therefor. It is anticipated
that PECO Energy Capital's earnings will be limited to interest payments on
the Subordinated Debentures issued by PECO Energy to PECO Energy Capital.
See "Description of the Subordinated Debentures."
Dividends on the Preferred Securitiesupon earlier redemption will be payable to the holders
thereof as they appear on the booksperson to whom principal
shall be payable (Sections 2.09 and records2.10 of PECO Energy Capital on
the relevant record dates, which will be one Business Day priorArticle II).
Any payment required to the
relevant payment dates. Subject to any applicable laws and regulations and
the provisions of the Limited Partnership Agreement, each such payment will be made as described under "Book-Entry-Only Issuance -- The Depository Trust
Company" below. In the eventin respect of a Series B Note on a date
that any date on which Dividends are payable
on the Preferred Securities is not a Business Day, then payment of the
Dividend payablebusiness day need not be made on such date, willbut may be made
on the next succeeding business 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 such date. A "Business Day"date, and no additional interest shall mean any day other thanaccrue as a day on which
banking institutions in The City of New York or Delaware are authorized or
required by law to close.
CERTAIN RESTRICTIONS ON PECO ENERGY CAPITAL
If dividends have not been paid in full on any series of Preferred
Securities, PECO Energy Capital shall not:
(i) pay any Dividends on any other series of Preferred Securities,
unless the amount of any Dividends paid on any Preferred Securities is
paid on all Preferred Securities then outstanding on a pro rata basis
in proportion to the full Dividends to which each series of Preferred
Securities would be entitled if paid in full;
(ii) pay any distribution on the general partner interests; or
(iii) redeem, purchase or otherwise acquire any Preferred
Securities or the general partner interests;
until, in each case, such time as all accumulated and unpaid Dividends
on all series of Preferred Securities shall have been paid in full for all
prior distribution periods. As of the date of this Prospectus, there are
no Preferred Securities outstanding.
REDEMPTION PROVISIONS
The redemption provisions with respect to each series of the Preferred
Securities offered hereby will be set forth in the Prospectus Supplement
related thereto.
PECO Energy Capital may not redeem any Preferred Securities unless all
accumulated and unpaid Dividends have been paid on all Preferred Securities
for all monthly distribution periods terminating on or prior to the date of
redemption. If a partial redemption would result in a delisting of
such series of Preferred Securities from any national securities exchangedelayed payment.
Both principal and interest payable at maturity or on
which such series of Preferred Securities is then listed, PECO Energy
Capital may only redeem such series of Preferred Securities in whole.
Notice of any redemption of the
Preferred SecuritiesSeries B Notes will be given not
less than 30 days nor more than 60 days priorpayable at the principal corporate trust office of
First Fidelity Bank, National Association, Philadelphia, Pennsylvania.
Interest payable on any Interest Payment Date will be paid by check mailed
to the redemption date to the
record owners thereof. So long as The Depository Trust Company ("DTC") or
its nominee is the sole record holder of the Preferred Securities of any
series, any failure on the part of DTC or a participant in the book entry
system to notify a beneficial owner of such Preferred Securities of such
redemption shall not affect the validity of the redemption. See
"Book-Entry-Only Issuance -- The Depository Trust Company" below. If notice
of redemption shall have been given and payment shall have been made by
PECO Energy Capital to DTC, then, upon the date of such payment all rights
of beneficial owners of the Preferred Securities so called for redemption
will cease. 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 succeeding
calendar year, such payment will be made on the immediately preceding
Business Day (in each case with the same force and effect as if made on
such day).
5
Subject to applicable law and except as provided under "Description of
the Subordinated Debentures-Certain Covenants of PECO Energy," PECO Energy
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.
LIQUIDATION DISTRIBUTION
In the event of any voluntary or involuntary dissolution and winding up
of PECO Energy Capital, theregistered holders of the Preferred SecuritiesSeries B Notes at the time
outstandingtheir registered
addresses (Section 2.09 of Article II). Holders of greater than $10
million of Series B Notes will be entitled to receive outinterest payments by wire
transfer.
BOOK-ENTRY NOTES
Series B Notes may be issued in whole or in part in book-entry form
only through DTC or such other Depositary as is specified in the Pricing
Supplement. In order to facilitate the issuance of Book-Entry Notes, a
single certificated Series B Note (Global Note) registered in the name of
the assetsDepositary or its nominee and
4
representing Book-Entry Notes having the same date of PECO Energy
Capital after satisfaction of liabilities to creditors as required by
Delaware lawissue, maturity
date, redemption provisions and before any distribution of assets is made to holders of
its general partner interests, the aggregateinterest rate will be deposited with or on
behalf of the stated liquidation
preference and all accumulated and unpaid Dividends toDepositary (Section 2.12 of Article II). Upon the datedeposit
of payment
(the "Liquidation Distribution"). All assets of PECO Energy Capital
remaining after paymenta Global Note with or on behalf of the Liquidation DistributionDepositary, the Depositary will
be distributed
tocredit the General Partner.
If, uponaccounts of persons held with it with the respective principal
amounts of the Book-Entry Notes represented by such liquidation, the Liquidation Distribution can be paid
only in part because PECO Energy Capital has insufficient assets available
to pay in full the aggregate Liquidation Distribution on all Preferred
Securities, then theGlobal Note. Such
amounts payable on each series of Preferred Securities shall be paid on a pro rata basis, in proportion to the full Liquidation
Distribution to which each series of Preferred Securities would be
entitled.
Pursuant to the Limited Partnership Agreement, PECO Energy Capital
shall be dissolved and its affairs shall be wound up upon the occurrence of
any of the following events: (i) upon the expiration of the term of PECO
Energy Capital, which is 99 years, (ii) upon the retirement, resignation,
expulsion, bankruptcy or dissolution of the General Partner or the
occurrence of any other event that under applicable law causes PECO Energy
Capital Corp. to cease to be the General Partner, except for a transfer to
a permitted successor of the General Partner as set forth in the Limited
Partnership Agreement, (iii) the entry of a decree of judicial dissolution,
or (iv) the written consent of the General Partner and all of the holders
of the Preferred Securities. Upon such dissolution, PECO Energy is
required to redeem the Subordinated Debentures to fund the Liquidation
Distribution.
MERGER, CONSOLIDATION, ETC. OF PECO ENERGY CAPITAL
PECO Energy Capital may not consolidate, amalgamate, merge with or
into, or be replaced by, or convey, transfer or lease its properties and
assets substantially as an entirety to any corporation or other entity,
except with the approval of the General Partner and the holders of 66-2/3%
in aggregate stated liquidation preference of the outstanding Preferred
Securities or as otherwise described below. The General Partner may,
without the consent of the holders of the Preferred Securities, cause PECO
Energy Capital to consolidate, amalgamate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to, a corporation, a limited liability company
or a limited partnership, a trust or other entity organized as such under
the laws of any state of the United States of America or the District of
Columbia, provided that (i) such successor entity either (x) expressly
assumes all of the obligations of PECO Energy Capital under the Preferred
Securities or (y) substitutes for the Preferred Securities other securities
having substantially the same terms as the Preferred Securities (the
"Successor Securities") so long as the Successor Securities rank, as
regards participation in the profits and assets of the successor entity, at
least as high as the Preferred Securities rank, as regards participation in
the profits and assets of PECO Energy Capital, (ii) PECO Energy confirms
its obligations under the Guarantee with regard to the Successors
Securities, if any, (iii) such consolidation, amalgamation, merger,
replacement, conveyance, transfer or lease does not cause any series of
Preferred Securities or Successor Securities to be delisted by any national
securities exchange on which such series of Preferred Securities is then
listed, (iv) such consolidation, amalgamation, merger, replacement,
conveyance, transfer or lease does not cause the Preferred Securities or
Successor Securities to be downgraded by any "nationally recognized
statistical rating organization," as that term is defineddesignated by the SEC for
purposes of Rule 436(g)(2) under the Securities Act of 1933, (v) such
consolidation, amalgamation, merger, replacement, conveyance, transfer or
lease does not adversely affect the powers, preferences and other special
rights of holders of Preferred Securities or Successor Securities in any
material respect, (vi) such successor entity has a purpose substantially
identical to that of PECO Energy Capital, (vii) prior to such
consolidation, amalgamation, merger, replacement, conveyance, transfer or
lease, PECO Energy has received an opinion of counsel (which may be regular
tax or other counsel to PECO Energy or an affiliate, but not an employee
thereof) to the
6
effect that (w) holders of outstanding Preferred Securities will not
recognize any gain or loss for United States federal income tax purposes as
a result of the consolidation, amalgamation, merger, replacement,
conveyance, transfer or lease, (x) such successor entity will be treated as
a partnership for United States federal income tax purposes, (y) following
such consolidation, amalgamation, merger, replacement, conveyance, transfer
or lease, PECO Energy and such successor entity will be in compliance with
the Investment Company Act of 1940 (the "1940 Act") without registering
thereunder as an investment company, and (z) such consolidation,
amalgamation, merger, replacement, conveyance, transfer or lease will not
adversely affect the limited liability of holders of Preferred Securities
or Successor Securities.
VOTING RIGHTS
Except as provided below and under "Description of the
Guarantee -- Amendments" and "Merger, Consolidation, etc. of PECO Energy
Capital", and as otherwise required by law and the Limited Partnership
Agreement, the holders of the Preferred Securities will have no voting
rights.
If (i) PECO Energy Capital fails to pay Dividends in full on the
Preferred Securities for 18 consecutive monthly distribution periods, (ii)
an Event of Default (as defined in the Indenture) occurs and is continuing,
or (iii) PECO Energy is in default on any of its payment obligations under
the Guarantee, then the holders of the Preferred Securities, acting as a
single class, will be entitled by a vote of the majority of the aggregate
stated liquidation preference of the outstanding Preferred Securities to
appoint a special representative (the "Special Representative") to enforce
PECO Energy Capital's rights against PECO Energy under the Subordinated
Debentures and the Indenture and the obligations undertaken by PECO Energy
under the Guarantee, including, after failure to pay Dividends for 60
consecutive monthly distribution periods on the Preferred Securities, the
payment of Dividends on the Preferred Securities. The Special
Representative shall not be admitted as a partner of PECO Energy Capital or
otherwise be deemed a partner of PECO Energy Capital and shall have no
liability for the debts, obligations or liabilities of PECO Energy Capital.
For purposes of determining whether PECO Energy Capital has failed to
pay Dividends in full for 18 consecutive monthly distribution periods,
Dividends shall be deemed to remain in arrears, notwithstanding any
payments in respect thereof, until full cumulative Dividends on all
Preferred Securities have been or contemporaneously are paidAgents with respect to all monthly distribution periods terminatingsuch Book-Entry
Notes.
Ownership of beneficial interests in a Global Note will be limited to
persons who have accounts with the Depositary for such Global Note or its
nominee (participants) or persons that may hold interests through
participants. Ownership of beneficial interests in such Global Note by
participants will be shown on, and the transfer of that ownership will be
effected only through, records maintained by the Depositary or priorits nominee
(with respect to interests of participants) for such Global Note and on the
records of participants (with respect to interests of persons other than
participants).
Payment of principal of and any premium and interest on Book-Entry
Notes will be made to the date of
payment of such full cumulative Dividends. Subject to the requirements of
applicable law, not later than 30 days after such right to appoint the
Special Representative, the General Partner will convene a general meeting
for the above purpose. If the General Partner fails to convene such
meeting within such 30-day period, the holders of 10% of the aggregate
stated liquidation preference of the Preferred Securities will be entitled
to convene such meeting. The provisions of the Limited Partnership
Agreement relating to the convening and conduct of the general meetings of
security holders will apply with respect to any such meeting. Any Special
Representative so appointed shall vacate office immediately if PECO Energy
Capital (or PECO Energy pursuant to the Guarantee) shall have paid in full
all accumulated and unpaid Dividends on the Preferred SecuritiesDepositary or such
default or breach,its nominee, as the case may be, shall have been cured.
Notwithstandingas
the appointment of any such Special Representative, PECO
Energy retains all rights under the Indenture, including the right to
extend the interest payment period as provided under "Descriptionregistered owner of the Subordinated Debentures -- Option to Extend Interest Payment Period."
IfGlobal Note representing the Book-Entry Notes.
None of the Company, the Note Trustee or any proposed amendment toagent of the Limited Partnership Agreement provides
for,Company or the
General Partner otherwise proposes to effect,Mortgage Trustee will have any action which
would materially adversely affect the powers, preferencesresponsibility or special rights
attached toliability for any series of Preferred Securities, whether by way of amendment
to the Limited Partnership Agreement or otherwise, then the holders of such
series of Preferred Securities will be entitled to vote on such amendment
or actionaspect
of the General Partner (but notDepositary's records relating to or payments made on account of
beneficial ownership interests in a Global Note representing any other amendmentBook-Entry
Notes or action)
and, in the case of an amendmentfor maintaining, supervising or action which would equally adversely
affect the rights or preferences of any other Preferred Securities, such
Preferred Securities shall vote together as a class on such amendment or
action of the General Partner (but not on any other amendment or action),
and such amendment or action shall not be effective except with the
approval of the holders of not less than 66-2/3% of the aggregate stated
liquidation preference of such series of Preferred Securities. Except in
certain circumstances described under "Liquidation Distribution," PECO
Energy Capital will be dissolved and wound up only with the consent of the
holders of all Preferred Securities then outstanding.
7
The powers, preferences or special rights attached to any Preferred
Securities will be deemed not to be adversely affected by the creation or
issue of, and no vote will be required for the creation or issue of, any
additional series of Preferred Securities or additional general partner
interests. Holders of Preferred Securities have no preemptive rights.
So long as any Subordinated Debentures are held by PECO Energy Capital,
the General Partner, unless so directed by the Special Representative,
shall not (i) direct the time, method and place of conducting any
proceeding for any remedy available to the holders of the Subordinated
Debentures or the Trustee under the Indenture, or executing any trust or
power conferred on the Trustee, (ii) waive any past default which is
available under the Indenture, (iii) exercise any right to rescind or annul
a declaration that the principal of all the Subordinated Debentures shall
be due and payable or (iv) consent to any amendment, modification or
termination of the Indenture, where such consent shall be required,
without, in each case, obtaining the prior approval of the holders of at
least 66-2/3% in aggregate stated liquidation preference of all series of
Preferred Securities affected thereby, acting as a single class; provided,
however, that where a consent under the Indenture would require the consent
of each holder affected thereby, no such consent shall be given by the
General Partner without the prior consent of each holder of all series of
Preferred Securities affected thereby. The General Partner shall not
revoke any action previously authorized or approved by a vote of any series
of Preferred Securities. The General Partner shall notify all holders of
the Preferred Securities of any notice of default received from the Trustee
with respect to the Subordinated Debentures.
Any required approval of holders of Preferred Securities may be given
at a separate meeting of such holders convened for such purposes, at a
meeting of all partners of PECO Energy Capital or pursuant to written
consent. PECO Energy Capital will cause a notice of any meeting at which
holders of any series 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 mailed to each holder of record of such series of Preferred
Securities. Each such notice will include a statement setting forth (i)
the date of such meeting or the date by which such action is to be taken,
(ii) a description of any resolution proposed for adoption at such meeting
on which such holders are entitled to vote or of such matter upon which
written consent is sought, and (iii) instructions for the delivery of
proxies or consents.
No vote or consent of the holders of the Preferred Securities will be
required for PECO Energy Capital to redeem and cancel Preferred Securities
in accordance with the Limited Partnership Agreement.
Notwithstanding that holders of Preferred Securities are entitled to
vote or consent underreviewing any of the circumstances described above,Depositary's
records relating to such beneficial ownership interests.
The Company has been advised by DTC that upon receipt of any payment of
principal of or any premium or interest on any Global Note, DTC will
immediately credit, on its book-entry registration and transfer system, the
accounts of participants with payments in amounts proportionate to their
respective beneficial interests in the principal amount of such Global Note
as shown on the records of DTC. Payments by participants to owners of
beneficial interests in a Global Note held through such participants will
be governed by standing instructions and customary practices, as is now the
case with securities held for customer accounts registered in "street
name," and will be the sole responsibility of such participants.
A Global Note representing Book-Entry Notes is exchangeable for
definitive Series B Notes in registered form, bearing interest at the same
rate, having the same date of issuance, maturity date and redemption
provisions, if any, and of differing denominations aggregating a like
amount, only if (i) the Depositary notifies the Company that it is
unwilling or unable to continue as Depositary for such Global Note or if at
any time the Depositary ceases to be a clearing agency registered or in
good standing under the Exchange Act or (ii) the Company in its sole
discretion determines that such Global Notes shall be exchangeable for
definitive Series B Notes in registered form. Upon such exchange, the
definitive Series B Notes will be registered in the names of the Preferred Securities that are ownedowners of
the beneficial interests in such Global Note as provided by PECO Energy or any entity owned more
than 50%the
Depositary's relevant participants (as identified by PECO Energy, either directly or indirectly, shallthe Depositary holding
such Global Note).
Except as provided above, owners of beneficial interests in a Global
Note will not be entitled to vote or consentreceive physical delivery of Series B Notes in
definitive form and shall,will not be considered the holders thereof for any
purpose under the purposesNote Indenture. Accordingly, each person owning a
beneficial interest in a Global Note must rely on the procedures of the
Depositary and, if such person is not a participant, on the procedures of
the participant through which such person owns its interest, to exercise
any rights of a Series B Noteholder under the Note Indenture. The laws of
some jurisdictions require that certain purchasers of securities take
physical delivery of such votesecurities in definitive form. Such limits and
such laws may impair the ability to transfer beneficial interests in a
Global Note.
The Note Indenture provides that the Depositary may grant proxies and
otherwise authorize participants to give or take any request, demand,
authorization, direction, notice, consent, be treated as if they were not outstanding.waiver or other action which a
Series B Noteholder is entitled to give or take under the Note Indenture.
The holders of the Preferred Securities will have no rights to remove
or replace the General Partner.
BOOK-ENTRY-ONLY ISSUANCE -- THE DEPOSITORY TRUST COMPANY
The Depository Trust Company will act as securities depository for the
Preferred Securities offered hereby. Each series of Preferred Securities
offered hereby will be issued only as fully registered securities
registeredunderstands that under existing industry practices, in the
nameevent that the Company requests any action of Cede & Co. (DTC's nominee). OneSeries B Noteholders or more fully
registered global Preferred Security certificates will be issued,
representingthat
an owner of a beneficial interest in such a Global Note desires to give or
take any action which a Series B Noteholder is entitled to give or take
under the aggregateNote Indenture, the total numberDepositary would authorize the participants
holding the relevant beneficial interests to give or take such action, and
such participants would authorize beneficial owners owning through such
participants to give or take such action or would otherwise act upon the
instructions of Preferred Securities of
each series,beneficial owners owning through them.
5
DTC has advised the Company and will be deposited with DTC.the Agents as follows: DTC is a
limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaninglaws of the State of 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 holdswas created to hold securities thatof its participants ("Participants") deposit with DTC. DTC also facilitatesand
to facilitate the clearance and settlement
among Participants of securities transactions such as transfers and
pledges,among
its participants in depositedsuch securities through electronic computerized book-entry changes
in Participants' accounts of the participants, thereby eliminating the need for physical
movement of securities certificates. Direct ParticipantsDTC's participants include securities
brokers and dealers (including the Agents), banks, trust companies,
clearing corporations, and certain other organizations, ("Direct Participants"). DTC
is owned by a numbersome of its Direct Participants and by the
8
New York Stock Exchange, Inc., the American Stock Exchange, Inc., and
the National Association of Securities Dealers, Inc.whom
(and/or their representatives) own DTC. Access to the DTCDTC's book-entry system
is also available to others, such as securitiesbanks, brokers, and dealers
banks and trust
companies that clear through or maintain a custodial relationship with a
Direct Participant,participant, either directly or indirectly
("Indirect Participants").indirectly.
REDEMPTION, REPURCHASE AND REFUND
The rulesPricing Supplement relating to each sale of Series B Notes will
indicate whether such Series B Notes will be redeemable by the Company
prior to maturity and, if redeemable, the redemption periods and the
redemption prices applicable thereto and any limitations relating to
DTC and its
Participants are on fileredemptions with the SEC.
Purchasesproceeds from borrowed funds having a lower cost of Preferred Securities under the DTC system must be made by
or through Direct Participants, which will receive a credit for the
Preferred Securities on DTC's records.money
than such Series B Notes. 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 OwnersSeries B Notes 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 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
statutorysinking fund or regulatory
requirements asmandatory redemption. The Company may beredeem any of the
Series B Notes which are redeemable, either in effectwhole or from time to time.
Redemption notices shall be sent to Cede & Co. Iftime
in part, upon not less than all30 nor more than 45 days' notice by first class
mail to the registered holders of the Series B Notes to be redeemed at
their registered addresses (Section 4.05 of Article IV).
The Company may at any time purchase Series B Notes at any price in the
open market or otherwise. The Series B Notes so purchased by the Company
will be surrendered to the Note Trustee for cancellation.
SECURITY: PLEDGE OF MORTGAGE BONDS
Concurrently with each issuance of Series B Notes, the Company will
deliver to the Note Trustee a series of Preferred Securities are being redeemed, DTC's practice is to
determine by lot thelike principal amount of its Series B First
Mortgage Bonds. The Series B First Mortgage Bonds will be issued under the
Company's First and Refunding Mortgage dated May 1, 1923, as amended and
supplemented, including the Ninety-sixth Supplemental Indenture dated as of
July 1, 1994 relating to the Series B First Mortgage Bonds (herein
sometimes referred to as the Mortgage). First Fidelity Bank, National
Association, is Trustee under the Mortgage (in such capacity, the Mortgage
Trustee). The Series B First Mortgage Bonds will bear interest at times
and in amounts sufficient to provide for the payment of each Direct Participantinterest on the
Series B Notes and will be redeemed at times and in such seriesamounts that correspond
to the required payments of principal of the Series B Notes. The Company
will deposit in trust with the Note Trustee amounts sufficient to provide
for the payment of any premium on any optional redemption of the Series B
Notes by the Company. Payments on the Series B Notes will satisfy payment
obligations on the Series B First Mortgage Bonds relating thereto (Section
6.04 of Article VI). The Series B First Mortgage Bonds will be redeemed.
Although votingsecured by
a first mortgage lien on certain property owned by the Company and will
rank on a parity with all other mortgage bonds of the Company. At July 1,
1994, the Company had outstanding $4,236,705,000 aggregate principal amount
of mortgage bonds. See "DESCRIPTION OF SERIES B FIRST MORTGAGE BONDS AND
MORTGAGE."
The Company covenants and agrees under the Note Indenture that upon the
required payment of principal becoming due and payable with respect to the Preferred Securities is limited,any
Series B Notes, it will redeem Series B First Mortgage Bonds in those cases where a vote is required, neither DTC nor Cede & Co. will
consent or vote with respect to Preferred Securities. Under its usual
procedure, DTC would mail an
Omnibus Proxy to PECO Energy Capital 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
the Preferred Securities are credited on the record date (identified in a
listing attached to the Omnibus Proxy)aggregate principal amount of such Series B Notes becoming due and payable
(Section 5.04 of Article V).
Payments on the Preferred Securities will be made to DTC. DTC's
practice is to credit Direct Participants' accounts on the relevant payment
dateUntil satisfied 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 customer practices and will be the
responsibility of such Participant and not of DTC, PECO Energy Capital, the
General Partnerterms or PECO Energy, 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 PECO Energy Capital,
disbursement of such payments to Direct Participants is the responsibility
of DTC, and disbursement of such paymentsreleased pursuant to
the Beneficial Owners isNote Indenture, the responsibility of Direct and Indirect Participants.
The informationNote Trustee will hold all mortgage bonds delivered
to it in this section concerning DTC and DTC's book-entry
system has been obtained from sources that PECO Energy and PECO Energy
Capital believe to be reliable, but neither PECO Energy nor PECO Energy
Capital takes responsibilitytrust for the accuracy thereof.
DTC may discontinue providing its services as securities depository
with respect to any series of the Preferred Securities at any time by
giving reasonable notice to PECO Energy Capital. Under such circumstances,
in the event that a successor securities depository is not obtained,
Preferred Security certificates are required to be printed and delivered.
Additionally, the General Partner may decide to discontinue use of the
system of book-entry transfers through DTC (or a successor depository),
including for the purpose of effectuating a partial redemption of a series
of Preferred Securities in which only the Preferred Securities of certain
holders will be redeemed.
9
In the event that the book entry only system is discontinued, the
General Partner will appoint a registrar, transfer agent and paying agent
for the Preferred Securities. Registration of transfers of Preferred
Securities will be effected without charge by or on behalf of PECO Energy
Capital, but upon payment of any tax or other governmental charges which
may be imposed in relation to it. PECO Energy Capital will not be required
to register or cause to be registered the transfer of Preferred Securities
after such Preferred Securities have been called for redemption.
MISCELLANEOUS
The General Partner is authorized and directed to use its best efforts
to manage the affairs of PECO Energy Capital in such a way that PECO Energy
Capital would not be deemed to be an "investment company" required to be
registered under the 1940 Act or taxed as a corporation for United States
federal income tax purposes and so that the Subordinated Debentures will be
treated as indebtedness of PECO Energy for federal income tax purposes. In
this connection, the General Partner is authorized to take any action not
inconsistent with applicable law, the Certificate of Limited Partnership of
PECO Energy Capital or the Limited Partnership Agreement, and that does not
materially adversely affect the interests of holders of Preferred
Securities, that the General Partner determines in its discretion to be
necessary or desirable for such purposes.
PECO Energy Capital may not borrow money or issue debt or mortgage or
pledge any of its assets.
DESCRIPTION OF THE GUARANTEE
The following is a summary of certain provisions of the Guarantee which
will be executed and delivered by PECO Energy concurrently with the
issuance of each series of Preferred Securities offered hereby for the
benefit of the holders from time to time of that series of the Preferred
Securities. The summary is subject to, and qualified by reference to the
Payment and Guarantee Agreement, which is filed as an exhibit to the
Registration Statement of which this Prospectus forms a part. Reference in
the summary to Preferred Securities means the series of the Preferred
Securities to which a Guarantee relates.
GENERAL
PECO Energy will irrevocably and unconditionally agree, to the extent
set forth herein, to pay in full, to the holders of the Preferred
Securities,Notes. Subject to certain minor
exceptions, the Guarantee Payments (as defined below) (except toNote Trustee shall not sell, assign or transfer such
mortgage bonds, and the extentNote Trustee shall at all times maintain physical
possession of each of such mortgage bonds until paid by PECO Energy Capital), asor otherwise satisfied
and when due, regardless of any defense,
right of set-off or counterclaim which PECO Energy Capital may have or
assert. The following payments, todischarged in accordance with the extent not paid by PECO Energy
Capital (the "Guarantee Payments"), will be subject to the Guarantee
(without duplication): (i) any accumulated and unpaid Dividends on the
Preferred Securities to the extent that PECO Energy Capital has funds on
hand legally available therefor, (ii) the redemption price with respect to
any Preferred Securities called for redemption to the extent that PECO
Energy Capital has funds on hand legally available therefor, (iii) upon a
liquidation of PECO Energy Capital, the lesser of (a) the Liquidation
Distribution and (b) the amount of assets of PECO Energy Capital legally
available for distribution to holders of Preferred Securities and (iv) any
additional amounts payable with respect to a particular series of Preferred
Securities. PECO Energy's obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by PECO Energy to the
holders of Preferred Securities or by causing PECO Energy Capital to pay
such amounts to such holders.
STATUS OF THE GUARANTEE
The Guarantee will constitute an unsecured obligation of PECO Energy
and will rank subordinate and junior in right of payment to all general
liabilities of PECO Energy. The Limited Partnership Agreement provides
that each holder of Preferred Securities by acceptance thereof agrees to
the subordination provisions and other terms of the Guarantee.Indenture (Section 5.01
of Article V).
6
SECURITY: VOTING OF MORTGAGE BONDS
The Guarantee will constitute a guaranteeNote Trustee, as the holder of payment and not of
collection. The Guarantee will be held for the benefitmortgage bonds, may attend meetings
of the holders of the Preferred Securities.mortgage bonds outstanding under the Mortgage and
either at such meeting or otherwise vote the mortgage bonds held by it in
connection with any proposed amendment, change, modification, waiver or
consent (hereinafter collectively referred to as an "amendment") to or in
respect of the Mortgage or the mortgage bonds held by it. The Note Trustee
may agree to any such amendment, without the consent of the Noteholders,
where such amendment does not adversely affect the Noteholders. In the
eventcase of proposed amendments which would adversely affect the Noteholders,
the Note Trustee shall not consent without notice to the Noteholders and
approval by the Noteholders as follows:
(a) If the proposed amendment affects no mortgage bonds
outstanding under the Mortgage other than the mortgage bonds held by
the Note Trustee under the Note Indenture, the Note Trustee may consent
thereto only with the approval of the appointmentholders of at least 66-2/3% in
principal amount of the outstanding Notes which would be affected by
the proposed action.
(b) If the proposed amendment affects mortgage bonds outstanding
under the Mortgage other than or in addition to the mortgage bonds held
by the Note Trustee under the Note Indenture, the Note Trustee shall
establish a Special
Representative,procedure for the Special Representative may enforceNoteholders to direct how they wish the
Guarantee.Note Trustee to vote on the proposed action. If no Special Representative has been appointedthe holders of at
least 33-1/3% in principal amount of the outstanding Notes respond in
accordance with such procedure, the Note Trustee shall vote all of such
mortgage bonds proportionately in accordance with the directions
received from the responding Noteholders; provided that if the holders
of at least 66-2/3% in principal amount of the outstanding Notes
respond with the same direction, the Note Trustee shall vote all of
such mortgage bonds in accordance with such direction. If the holders
of less than 33-1/3% in principal amount of the outstanding Notes
respond in accordance with such procedure, the Note Trustee shall vote
an equivalent portion (in principal amount) of the mortgage bonds held
by the Note Trustee under the Note Indenture in accordance with the
directions so received and shall not vote the remaining such mortgage
bonds.
Notwithstanding the foregoing, the Note Trustee shall not, without the
unanimous consent of the outstanding Noteholders, consent to enforceany such
amendment which would (i) decrease the Guarantee,amounts payable on the General Partner hasmortgage
bonds held by the right to enforceNote Trustee under the GuaranteeNote Indenture, (ii) change the
principal or interest payment dates on behalfor the redemption provisions of such
mortgage bonds, or (iii) require unanimous consent of the holders of the
Preferred Securities. The holdersmortgage bonds outstanding under the Mortgage (Section 5.06 of not less than 10% in
aggregate stated liquidation preferenceArticle V).
EVENTS OF DEFAULT
Any one of the Preferred Securities have
the right to direct the time, method and place of conducting any
10
proceeding to enforce the Guarantee, including the giving of directions
to the General Partner or the Special Representative, as the case may be.
If the General Partner or the Special Representative fails to enforce the
Guarantee as above provided, any holder of Preferred Securities may
institute a legal proceeding directly against PECO Energy to enforce its
rights under the Guarantee without first instituting a legal proceeding
against PECO Energy Capital or any other person or entity. The Guaranteefollowing events will not be discharged except by payment of the Guarantee Payments in full
to the extent not paid by PECO Energy Capital.
CERTAIN COVENANTS OF PECO ENERGY
Under the Guarantee, PECO Energy will covenant that, so long as any
Preferred Securities remain outstanding, neither PECO Energy nor any
majority-owned subsidiary of PECO Energy shall declare or pay any dividend
on, or redeem, purchase, acquire or make a liquidation payment with respect
to, any of its capital stock (other than dividends by a wholly owned
subsidiary) if at such time PECO Energy shall be in default with respect to
its payment obligations under the Guarantee or there shall have occurred
any event that, with giving of notice or the lapse of time or both, would constitute an Event of Default
under the Indenture.
AMENDMENTS
ExceptNote Indenture: (a) failure to pay any interest on any Note when
due, continued for 60 days; (b) failure to pay principal of (or premium, if
any, on) any Note when due; or (c) if outstanding mortgage bonds shall have
been declared due and payable prior to their stated maturities (Section
7.01 of Article VII). See "DESCRIPTION OF SERIES B FIRST MORTGAGE BONDS
AND MORTGAGE--RIGHTS OF BONDHOLDERS UPON DEFAULT."
If an Event of Default other than an Event of Default described under
(c) above occurs and is continuing, the Note Trustee or the holders of 25%
in principal amount of all Notes then outstanding may, declare the
principal of all Notes to be immediately due and payable. If an Event of
Default described under (c) above occurs, the principal of all Notes then
outstanding shall become due and payable immediately; provided, however,
that a waiver of default and rescission of the declaration of acceleration
of the mortgage bonds pursuant to the provisions of the Mortgage shall also
constitute a waiver of the Event of Default described under (c) above and
its consequences (Section 7.02 of Article VII).
Upon the issuance of additional Notes, the Company is required to file
with the Note Trustee documents and reports with respect to any changes which do not materially adversely
affect the rightsabsence of
holders of Preferred Securities (in which case no vote
will be required), the Guaranteedefault.
7
MODIFICATION OF NOTE INDENTURE
The Note Indenture may be changed only withamended or supplemented from time to time for
various purposes, including the prior
approvalissuance of additional series of Notes, to
provide for the acceptance of a successor trustee or co-trustee and to
modify, eliminate or add provisions to the extent necessary or helpful to
qualify the Note Indenture under the Trust Indenture Act of 1939 without
the consent of Noteholders (Section 11.01 of Article XI). With the consent
of the holders of not less than 66-2/3% of the aggregate stated
liquidation preferencea majority in principal amount of the
outstanding Preferred Securities. The manner
of obtainingNotes affected, the Company and the Note Trustee are empowered
to change the Note Indenture in any way; provided, however, that no such
approval of holderssupplemental indenture shall, without the consent of the Preferred Securities will
be as set forth under "Description of the Preferred Securities -- Voting
Rights."
MERGER OF PECO ENERGY
So long as any Preferred Securities remain outstanding, PECO Energy
will maintain its corporate existence; provided that PECO Energy may
consolidate with or merge with or into any other person or sell, convey,
transfer or lease its properties and assets substantially as an entirety to
any person if the successor person shall be organized and existing under
the laws of the United States or any state thereof or the District of
Columbia and shall expressly assume the obligations of PECO Energy under
the Guarantee.
TERMINATION OF THE GUARANTEE
The Guarantee will terminate and be of no further force and effect upon
full payment of the redemption price of the Preferred Securities or upon
full payment of the amounts payable upon liquidation of PECO Energy
Capital. The Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any holder of Preferred
Securities must restore payment of any sums paid undereach
outstanding Note affected thereby, (a) reduce the Preferred
Securitiesamount or the Guarantee.
DESCRIPTION OF THE SUBORDINATED DEBENTURES
The following is a summary of certain terms and provisions of the
Subordinated Debentures and the Indenture. The summary is subject to, and
is qualified by reference to the Indenture, which is filed as an exhibit to
the Registration Statement of which this Prospectus forms a part.
GENERAL
Concurrently with the issuance of each series of the Preferred
Securities, PECO Energy Capital will loan the proceeds thereof and the
General Partner's concurrent investment in PECO Energy Capital to PECO
Energy. The loan will be evidenced by a separate series of Subordinated
Debentures issued by PECO Energy to PECO Energy Capital. The Subordinated
Debentures will be unsecured subordinated obligations of PECO Energy issued
under the Indenture. Each series of Subordinated Debentures will be in the
principal amount equal to the aggregate stated liquidation preference of
the related series of Preferred Securities plus the General Partner's
concurrent investment in PECO Energy Capital, will bear interest at a rate
equal to the Dividend rate on such series of Preferred Securities payable
on the Dividend dates, will have maturity and redemption provisions
corresponding to the redemption provisions of such series of Preferred
Securities and will be subject to mandatory redemption upon the dissolution
and winding up of PECO Energy Capital.
11
OPTION TO EXTEND INTEREST PAYMENT PERIOD
Under the Indenture, PECO Energy shall have the right at any time so
long as PECO Energy is not in default in the payment of interest on any
series of Subordinated Debentures, to extend the interest payment period
for all Subordinated Debentures for up to 60 consecutive months; provided
that no Extension Period shall extend beyond the stated maturity date or
date of mandatory redemption of any series of Subordinated Debentures. At
the end of the Extension Period, PECO Energy shall pay all interest then
accrued and unpaid (together with interest thereon compounded daily to the
extent permitted by applicable law). During any such Extension Period,
neither PECO Energy nor any majority-owned subsidiary of PECO Energy shall
declare or pay any dividend on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock (other than
dividends by wholly owned subsidiaries). Prior to the termination of any
such Extension Period, PECO Energy may further extend the interest payment
period, provided that such Extension Period together with all such further
extensions thereof may not exceed 60 consecutive months. Upon the
termination of any Extension Period and the payment of all amounts then
due
PECO Energy may select a new Extension Period subject to the above
requirements. PECO Energy shall give PECO Energy Capital notice of its
selection of such extended interest payment period one Business Day prior
to the earlier of (i) the date the Dividends on the Preferred Securities
are payable or (ii) the date PECO Energy Capital is required to give notice
to any national securities exchange on which any series of the Preferred
Securities is listed or other applicable self-regulatory organization or to
holders of the Preferred Securities of the record date or the date such
Dividend is payable, but in any event not less than two Business Days prior
to such record date. PECO Energy shall cause PECO Energy Capital to give
such notice of PECO Energy's selection of such extended interest payment
period to the holders of the Preferred Securities.
ADDITIONAL INTEREST
If any time PECO Energy Capital shall be required to pay any Additional
Amounts in respect of the Preferred Securities pursuant to the terms
thereof, then PECO Energy will pay as interest ("Additional Interest") an
amount equal to such Additional Amounts on the Subordinated Debentures. In
addition, if PECO Energy Capital would be required to pay any taxes,
duties, assessments or governmental charges of whatever nature (other than
withholding taxes) imposed by the United States, or any other taxing
authority, then, in any such case, PECO Energy also will pay as Additional
Interest such amounts as shall be required so that the net amounts received
and retained by PECO Energy Capital after paying any such taxes, duties,
assessments or governmental charges will not be less than the amounts PECO
Energy Capital would have received had no such taxes, duties, assessments
or governmental charges been imposed.
SUBORDINATION
The Indenture provides that all payments by PECO Energy in respect of
the Subordinated Debentures shall be subordinated to the prior payment in
full of all amounts payable on Senior Indebtedness. The term "Senior
Indebtedness" means (i) the principal of and premium in respect of (A)
indebtedness of PECO Energy for money borrowed and (B) indebtedness
evidenced by securities, debentures, bonds or other similar instruments
issued by PECO Energy; (ii) all capital lease obligations of PECO Energy;
(iii) all obligations of PECO Energy issued or assumed as the deferred
purchase price of property, all conditional sale obligations of PECO Energy
and all obligations of PECO Energy under any title retention agreement (but
excluding trade accounts payable arising in the ordinary course of
business); (iv) certain obligations of PECO Energy for the reimbursement of
any obligor on any letter of credit, banker's acceptance, security purchase
facility or similar credit transaction entered into in the ordinary course
of business of PECO Energy; (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, PECO Energy 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 PECO Energy (whether or not such obligation is assumed by PECO Energy),
except for any such indebtedness that is by its terms subordinated to or
pari passu with the Subordinated Debentures.
12
Upon any payment or distribution of assets or securities of PECO
Energy, upon any dissolution or winding up or total or partial liquidation
or reorganization of PECO Energy, whether voluntary or involuntary, or in
bankruptcy, insolvency, receivership or other proceedings, all amounts
payable on Senior Indebtedness (including any interest accruing on such
Senior Indebtedness subsequent to the commencement of a bankruptcy,
insolvency or similar proceeding) shall first be paid in full before PECO
Energy Capital or any Special Representative appointed by the holders of
the Preferred Securities shall be entitled to receive from PECO Energy any
payment of principaldates of or interest on or any other amounts in respect of
the Subordinated Debentures.
No direct or indirect payment by or on behalf of PECO Energy of
principal of or interest on the Subordinated Debentures, whether pursuant
to the terms of the Subordinated Debentures or upon acceleration or
otherwise, shall be made if, at the time of such payment, there exists (i)
a default in the payment of all or any portion of any Senior Indebtedness
or (ii) any other default pursuant to which the maturity of Senior
Indebtedness has been accelerated and, in either case, requisite notice has
been given to PECO Energy and the Trustee and such default shall not have
been cured or waived by or on behalf of the holders of such Senior
Indebtedness.
If the Trustee, PECO Energy Capital, as holder of the Subordinated
Debentures or any Special Representative appointed by the holders of the
Preferred Securities, shall have received any payment on account of the principal of or interest on the Subordinated DebenturesNotes, (b) reduce the
percentage of Noteholders required to effect changes in the Note Indenture,
(c) change any obligation of the Company to maintain an office or agency
for the payment of the Notes or (d) modify or waive certain provisions of
the Note Indenture, except to increase the percentage of Noteholders
necessary for such action (Section 11.02 of Article XI).
SATISFACTION AND DISCHARGE OF NOTE INDENTURE
The Note Indenture shall cease to be of further effect (except as to
any surviving rights of registration of transfer or exchange of Notes
expressly provided for), and the Note Trustee shall execute instruments
acknowledging satisfaction and discharge of the Note Indenture, and shall
deliver to the Company all mortgage bonds then held by the Note Trustee
upon satisfaction of the following conditions: (1) when either (A) all
Notes authenticated and delivered have been delivered to the Note Registrar
for cancellation; or (B) all such Notes not delivered to the Note Registrar
for cancellation (i) have become due and payable, or (ii) will become due
and payable at their stated maturity within one year, or (iii) are to be
called for redemption within one year under arrangements satisfactory to
the Note Trustee, and the Company, in the case of (i), (ii) or (iii) above,
has deposited or caused to be deposited with the Note Trustee in trust an
amount sufficient to pay and discharge the entire indebtedness on such
Notes not delivered to the Note Registrar for cancellation; (2) when the
Company has paid or caused to be paid all other sums payable under the Note
Indenture; and (3) when the Company has delivered to the Note Trustee an
officers' certificate and an opinion of counsel, each stating that all
conditions precedent relating to the satisfaction and discharge of the Note
Indenture have been complied with (Section 12.01 of Article XII).
NOTE TRUSTEE
First Fidelity Bank, National Association, is the Note Trustee under
the Note Indenture. First Fidelity Bank, National Association, also serves
as Mortgage Trustee under the Mortgage. See "DESCRIPTION OF SERIES B FIRST
MORTGAGE BONDS AND MORTGAGE--Mortgage Trustee."
DESCRIPTION OF SERIES B FIRST MORTGAGE BONDS AND MORTGAGE
The Series B First Mortgage Bonds will be issued under the Company's
Mortgage dated May 1, 1923, as amended and supplemented, including the
Ninety-sixth Supplemental Indenture dated as of July 1, 1994 relating to
the Series B First Mortgage Bonds. The Series B First Mortgage Bonds will
be delivered to the Note Trustee on each date that Series B Notes are
issued in an amount equal to such Series B Notes. Copies of the First and
Refunding Mortgage, the supplemental indentures thereto that amend the
Mortgage or that relate to mortgage bonds which are currently outstanding,
including the Ninety-sixth Supplemental Indenture dated as of July 1, 1994,
are on file with the SEC as exhibits to the Registration Statement covering
the Series B Notes or as exhibits to other documents.
The following description of the Series B First Mortgage Bonds and
brief summaries of certain Mortgage provisions are qualified in their
entirety by the provisions of the Mortgage. Each section reference under
this caption refers to the corresponding provision in the Mortgage.
The Series B First Mortgage Bonds will have a stated interest rate of
10% per annum, with interest payable on the Interest Payment Dates for the
Series B Notes; will mature on July 1, 2025, the maximum maturity of the
Series B Notes; and will be redeemed by the Company in amounts and at times
corresponding to the maturities of the Series B Notes. The Company will be
entitled to a credit against the Series B First Mortgage
8
Bonds to the extent it makes payments directly on the Series B Notes
and to the extent that interest due on the Series B First Mortgage Bonds
exceeds interest due on the Series B Notes. At the time any Series B Notes
cease to be outstanding under the Note Indenture, the Note Trustee will
surrender to the Mortgage Trustee an equal aggregate principal amount of
Series B First Mortgage Bonds.
SECURITY
The Series B First Mortgage Bonds will be secured equally with all
other mortgage bonds outstanding or hereafter issued under the Mortgage by
the lien of the Mortgage which, subject to minor exceptions and certain
excepted encumbrances as defined in the Mortgage and to the Mortgage
Trustee's prior lien for compensation and expenses, constitutes a first
lien on all the Company's properties (including its undivided fractional
interests in certain properties), consisting principally of electric
generating stations, electric transmission and distribution lines and
substations, gas production plants, gas distribution facilities and general
office and service buildings, other than property which has been released
from the lien of the Mortgage in accordance with the terms thereof.
Under the Atomic Energy Act, neither the Mortgage Trustee nor any other
transferee of the Company's property may operate a nuclear generating
station without authorization from the NRC.
The Company has pledged with the Mortgage Trustee, as additional
security for the Series B First Mortgage Bonds and all other mortgage bonds
now outstanding or hereafter issued under the Mortgage, all of the common
stock of PECO Energy Power Company (a subsidiary of the Company). The
Company reserves broad rights with respect thereto and also the right to
sell or dispose of said common stock so long as the Company shall not be in
default under the terms of the Mortgage.
No securities may be issued by the Company which will rank ahead of the
mortgage bonds as to security. The Company may acquire property subject to
prior liens, but, if such property is made the basis for the issuance of
additional bonds under the Mortgage, all additional mortgage bonds issued
under the prior lien after acquisition of the property by the Company must
be pledged under the Mortgage (Sections 5, 6 and 7 of Article V).
AUTHENTICATION AND DELIVERY OF ADDITIONAL BONDS
The Mortgage permits the issuance from time to time of additional
mortgage bonds thereunder without limit as to aggregate amount, upon the
terms and conditions provided in Article II thereof, which are summarized
briefly below:
Such additional mortgage bonds may be in principal amount equal to:
(1) the principal amount of underlying mortgage bonds secured by
prior lien upon property acquired by the Company after March 1, 1937
and deposited with the Mortgage Trustee under the Mortgage (paragraph
(a) of Section 3 of Article II);
(2) the principal amount of any such underlying mortgage bonds,
redeemed or retired, or for the payment, redemption or retirement of
which funds have been deposited in trust (paragraph (b) of Section 3 of
Article II);
(3) the principal amount of mortgage bonds authenticated under the
Mortgage on or after March 1, 1937 which have been delivered to the
Mortgage Trustee (paragraph (c) of Section 3 of Article II);
(4) the principal amount of mortgage bonds issued under the
Mortgage on or after March 1, 1937, which are being refunded or
redeemed, if funds for said refunding or redemption have been deposited
with the Mortgage Trustee (paragraph (d) of Section 3 of Article II);
(5) an amount not exceeding 60% of the actual cost or the fair
value, whichever is prohibitedless, of the net amount of permanent additions to
the property subject to the lien of the Mortgage, made or acquired
after November 30, 1941, and of additional plants or property acquired
by the Company after November 30, 1941, and to be used in connection
with its electric or gas business as part of one connected system and
located in Pennsylvania or within 150 miles of Philadelphia (paragraph
(e) of Section 3 of Article II; Sections 15 and 16 of Article II); and
9
(6) the amount of cash deposited with the Mortgage Trustee, which
cash shall not at any time exceed $3,000,000 or 10% of the aggregate
principal amount of bonds then outstanding under the Mortgage,
whichever is greater, and which cash may subsequently be withdrawn to
the extent of 60% of capital expenditures, as described in Item 5 above
(paragraph (f) of Section 3 of Article II).
No additional bonds may be issued under the Mortgage as outlined in
Items (5) and (6) and, in certain cases, Item (3) hereinabove, unless the
net earnings of the Company (as defined in Section 4 of Article II), after
deductions for amounts set aside for renewal and replacement or
depreciation reserves and before provision for income taxes, for 12
consecutive calendar months within the 15 calendar months immediately
preceding the application for such mortgage bonds shall have been equal to
at least twice the annual interest charges on all amounts payablebonds outstanding under
the Mortgage (including those then applied for) and any other mortgage
bonds secured by a lien on Senior Indebtednessproperty of the Company. For purposes of this
test, the Company has not included in earnings Allowance for Funds Used
During Construction which is included in net income in the Company's
consolidated financial statements in accordance with the prescribed system
of accounts. The coverages under the earnings test of the Mortgage and the
ratios of earnings to fixed charges are paidor will be included under "Part I,
Item 1. Business--Capital Requirements and Financing Activities" of the
Company's Annual Report to the SEC on Form 10-K and under "Part I.
Financial Information, Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations" of the Company's Quarterly
Reports to the SEC on Form 10-Q described above under "Incorporation of
Certain Documents By Reference." At December 31, 1993, the Company had at
least $918 million of available property additions (the most restrictive
issuance test of the Mortgage at December 31, 1993) against which $551
million of mortgage bonds could have been issued. In addition, at December
31, 1993, the Company was entitled to issue approximately $3.2 billion of
mortgage bonds without regard to the earnings and property additions tests
against previously retired mortgage bonds. The Series B First Mortgage
Bonds will be issued against previously retired mortgage bonds (see Item
(3) above).
RELEASE AND SUBSTITUTION OF PROPERTY
The Company, while no event of default exists, may obtain the release
from the lien of the Mortgage of property subject thereto only upon the
deposit or pledge with the Mortgage Trustee of cash or purchase money
obligations, or in full, thencertain instances upon the substitution of other
property of equivalent value (Sections 1, 2 and 3 of Article VI). The
Mortgage also contains certain requirements relating to the withdrawal or
application of proceeds of released property and other funds held by the
Mortgage Trustee (Section 4 of Article VI).
CORPORATE EXISTENCE
The Company may consolidate or merge with or into or convey, transfer
or lease all of the mortgaged property as an entirety or substantially as
an entirety to any corporation lawfully entitled to acquire or lease and
operate the property, provided that such payment shall be received and heldconsolidation, merger, conveyance,
transfer or lease in trust forno respect impairs the holderslien of Senior Indebtedness and shall be paid overthe Mortgage or delivered first toany
rights or powers of the Mortgage Trustee or the holders of the Senior Indebtedness remaining unpaidoutstanding
mortgage bonds and provided that such successor corporation executes and
causes to be recorded an indenture which assumes all of the terms,
covenants and conditions of the Mortgage and any supplement thereto
(Sections 1 and 2 of Article VII).
DEFAULTS
Events of default are defined in the Mortgage as (a) default for 60
days in the payment of interest on bonds or sinking fund deposits under the
Mortgage, (b) default in the payment of principal of bonds under the
Mortgage, (c) default in the performance of any other covenant in the
Mortgage continuing for a period of 60 days after written notice from the
Mortgage Trustee, and (d) certain events of bankruptcy, insolvency or
reorganization, but in the case of reorganization only so long as the
Company's First and Refunding Mortgage Bonds, 13.05% Series due 1994 are
outstanding (Section 2 of Article VIII).
Upon the authentication and delivery of additional mortgage bonds, and
the release of cash or property, the Company is required to file with the
Mortgage Trustee documents and reports with respect to the extent
necessary to pay such Senior Indebtednessabsence of
default.
10
RIGHTS OF BONDHOLDERS UPON DEFAULT
The holders of a majority in full.
Nothing inprincipal amount of all the Indenture shall limitoutstanding
mortgage bonds may, upon the rightoccurrence of PECO Energy Capital
oran event of default, require the
Special Representative to take any actionMortgage Trustee to accelerate the maturity of the Subordinated Debentures ormortgage bonds (Section
2 of Article VIII) and to pursueenforce the lien of the Mortgage (Section 5 of
Article VIII). Any such acceleration of the maturity of the mortgage bonds
may, prior to any rights or remedies against
PECO Energy; provided that all Senior Indebtedness shall first be paid
before PECO Energy Capital is entitled to receive any payment from PECO
Energy of principal of or interest onsale under the Subordinated Debentures.
UponMortgage, and upon the payment in fullremedying of all
Senior Indebtedness, PECO Energy
Capital (and any Special Representative appointeddefaults, be annulled by such holders) shall be
subrogatedthe holders of at least a majority of the
outstanding mortgage bonds (Section 22 of Article VIII). The Mortgage
permits the Mortgage Trustee to require indemnity before proceeding to
enforce the rightslien of the Mortgage (Sections 5 and 7 of Article VIII).
AMENDMENTS
The Company and the Trustee may amend the Mortgage without the consent
of the holders of such Senior Indebtednessmortgage bonds: (1) to receive paymentssubject additional property to the
lien to the Mortgage; (2) to define the covenants and provisions permitted
under or dividends of assets of PECO Energy made on such Senior
Indebtedness until all accrued interest on and principalnot inconsistent with the Mortgage; (3) to add to the limitations
of the Subordinated Debentures shallauthorized amount, date of maturity, method, conditions and purposes
of issue of any bonds issued under the Mortgage; (4) to evidence the
succession of another corporation to the Company and the assumption by a
successor corporation of the covenants and obligations of the Company under
the Mortgage; (5) to make such provision in regard to matters or questions
arising under the Mortgage as may be paid in full.
The Indenture doesnecessary or desirable and not
limit the aggregate amount of Senior
Indebtedness which PECO Energy may issue.
CERTAIN COVENANTS OF PECO ENERGY
PECO Energy will covenant that it and any majority-owned subsidiary
will not declare or pay any dividend on, or redeem, purchase, acquire or
make a liquidation payment with respect to, any of its capital stock (other
than dividends by wholly owned subsidiaries) (i) during an Extension
Period, (ii) if there shall have occurred any event that,inconsistent with the givingMortgage (Section 1 of notice orArticle XI).
In addition, when the lapse of time or both, would constitute an Event of
Default under the Indenture or (iii) if PECO Energy shall be in default
with respect to its payment obligations under the Guarantee. PECO Energy
will also covenant (i) to maintain direct or indirect 100% ownershipCompany's First and Refunding Mortgage Bonds of
the General Partner and will cause6-1/8% Series due 1997 no longer remain outstanding, the General Partner to maintain 100%
ownership of the general partner interests of PECO Energy Capital, (ii) to
cause at least 10% of the total value of PECO Energy Capital and at least
3% of all interests in the capital, income, gain, loss, deduction and
credit of PECO Energy Capital to be represented by general partner
interests, (iii) to timely cause the General Partner to perform all of its
duties as general partner of PECO Energy Capital (including the duty to pay
Dividends on the Preferred Securities), and (iv) to use its reasonable
efforts to cause PECO Energy Capital to remain a limited partnership and
otherwise continue to be treated as a partnership for United States federal
income tax purposes.
PECO Energy Capital may not waive compliance or waive any default in
compliance by PECO Energy with any covenant or other term in the Indenture
without the approval of the Special Representative or without the direction
of the holders of 66-2/3% of the aggregate stated liquidation preference of
the Preferred Securities.
13
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting PECO EnergyCompany and
the Trustee withmay amend the consent of the Special RepresentativeMortgage or PECO Energy
Capital at the direction of the holders of not less than 66-2/3% of the
aggregated stated liquidation preference of the Preferred Securities
related to the Subordinated Debentures which are affected by the
modification, to modify the Indenture or any supplemental indenture or the rights of the holders of
the Subordinated Debentures issued undermortgage bonds with the Indenture;written consent of the holders of at least
66-2/3% of the principal amount of the mortgage bonds then outstanding;
provided, that no such modification may, (a)amendment shall, without the written consent of the
holder of each outstanding mortgage bond affected thereby: (1) change the
stateddate of maturity date of the principal of, or any installment of principal of or
interest if any, on,
any Subordinated Debenture, (b)mortgage bond, or reduce the principal amount of any mortgage bond or
the interest thereon or any premium payable on the redemption thereof, or
ratechange any place of interest, if any, on, any Subordinated
Debenture, (c) reduce the amount of principal of an original issue discount
Subordinated Debenture payable upon acceleration of the maturity thereof,
(d) change the placepayment where, or currency of payment of principal of, or premiumin which, any mortgage bond
or interest if any, on, any Subordinated Debenturethereon is payable, or (e) impair the right to institute suit for
the enforcement of any such payment on or with respect to any
Subordinated Debenture, or changeafter the amendment provisionsdate of maturity
thereof; (2) reduce the Indenture.
EVENTS OF DEFAULT
The following are Events of Default under the Indenture: (i) default
for 10 days in payment of any interest (including Additional Interest) on
the Subordinated Debentures (other than the payment of interest during an
Extension Period); (ii) default in payment of principal of (or premium, if
any, on) the Subordinated Debentures; (iii) default for 60 days after
notice in the performance of any other covenant in the Indenture or (iv)
certain events of bankruptcy, insolvency or reorganization of PECO Energy.
In case an Event of Default under the Indenture shall occur and be
continuing other than an Event of Default relating to bankruptcy of PECO
Energy, in which case principal and interest on all of the Subordinated
Debentures shall become immediately due and payable, the Trustee or the
Special Representative may declare the principal of all the Subordinated
Debentures to be due and payable. Under certain circumstances, any
declaration of acceleration with respect to Subordinated Debentures may be
rescinded and past defaults (except, unless theretofore cured, a default in
the payment of principal of or interest on the Subordinated Debentures) may
be waived only by the Special Representative or by PECO Energy Capital at
the direction of the holders of 66-2/3% in aggregate stated liquidation
preference of Preferred Securities.
PECO Energy is required to furnish to the Trustee annually a statement
as to the performance by PECO Energy of its obligations under the Indenture
and as to any default in such performance.
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
The Indenture provides that PECO Energy may not consolidate with or
merge with or into any other person or sell, convey, transfer or lease its
properties and assets substantially as an entirety to any person, unless
(i) the successor person shall be organized and existing under the laws of
the United States or any state thereof or the District of Columbia, and
shall expressly assume by a supplemental indenture all of the obligations
of PECO Energy under the Subordinated Debentures and the Indenture and (ii)
immediately after giving effect to such transaction, no Event of Default,
and no event which, after notice or lapse of time or both, would become an
Event of Default, shall have happened and be continuing.
DEFEASANCE AND DISCHARGE
Under the terms of the Indenture, PECO Energy will be discharged from
any and all obligations in respect of the Subordinated Debentures of any
series if PECO Energy deposits with the Trustee, in trust, (i) money and/or
(ii) United States Government Securities (as defined in the Indenture),
which through the payment of interest thereon and principal thereof in
accordance with their terms will provide money in an amount sufficient to
pay all the principal of, and interest on, the Subordinated Debentures of
such series on the dates such payments are due in accordance with the terms
of such Subordinated Debentures.
14
INFORMATION CONCERNING THE TRUSTEE
Subject to the provisions of the Indenture relating to its duties, the
Trustee will be under no obligation to exercise any of its rights or powers
under the Indenture at the request, order or direction of any of the
holders thereunder, unless such holders shall have offered to the Trustee
reasonable indemnity. Subject to such provision for indemnification, the
holders of a majoritypercentage in principal amount of the Subordinated Debentures
then outstanding
thereunder ormortgage bonds, the Special Representative will have the
right to direct the time, method and placeconsent of conducting any proceedingwhose holders is required for any remedy available toamendment,
waiver of compliance with the Trustee thereunder, or exercising any trust or
power conferred on the Trustee.
The Indenture contains limitations on the rightprovisions of the Trustee, as a
creditorMortgage or certain
defaults and their consequences; (3) modify any of PECO Energy,the amendment provisions
or Section 22 of Article VIII (relating to obtain paymentwaiver of claims in certain cases,default), except to
increase any such percentage or to realize onprovide that certain property received in respectother provisions of
any such claim as
securitythe Mortgage cannot be modified or otherwise. In addition,waived without the Trustee may be deemed to have a
conflicting interestconsent of the holder
of each mortgage bond affected thereby (Sections 2 and may be required to resign as Trustee if at3 of Article XI).
MORTGAGE TRUSTEE
First Fidelity Bank, National Association, the time of default under the Indenture it is a creditor of PECO Energy.
An affiliate of Meridian Trust Company, theMortgage Trustee under
the Indenture, hasMortgage, is also registrar and disbursing agent for the Company's
mortgage bonds. First Fidelity Bank, National Association is the Note
Trustee and is also a depository of the Company, from time to time engaged in transactions with, or performed
servicesmakes
loans to the Company and is the trustee under an indenture securing pollution
control revenue bonds issued for PECO Energy and its affiliates in the ordinary course of
business.
Mr. Joseph F. Paquette, Jr. is Chairmanbenefit of the Board and a Director of
PECO Energy and a Director of Meridian Bancorp, Inc., the parent
corporation of the Trustee.
PLAN OF DISTRIBUTION
PECO Energy Capital may offer or sell Preferred Securities offered
hereby to one or more underwriters for public offering and saleCompany which are
secured by them.
PECO Energy Capital may sell Preferred Securities as soon as practicable
after effectiveness of the Registration Statement. Any such underwriter
involved in the offer and sale of the Preferred Securities will be named in
an applicable Prospectus Supplement.
Underwriters may offer and sell the Preferred Securities at a fixed
price or prices, which may be changed, or from time to time at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices. In connection with the sale of
Preferred Securities, underwriters may be deemed to have received
compensation from PECO Energy and/or PECO Energy Capital 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 PECO Energy and/or PECO Energy
Capital to underwriters in connection with the offering of Preferred
Securities, and any discounts, concessions or commissions allowed by
underwriters to participating dealers, will be set forth in an applicable
Prospectus Supplement. Underwriters and dealers participating in the
distribution of the Preferred Securities may be deemed to be underwriters,
and any discounts and commissions received by them and any profit realized
by them on resale of the Preferred Securities may be deemed to be
underwriting discounts and commissions,bonds now outstanding under the Securities Act.
Underwriters and dealers may be entitled, under agreement with PECO Energy
and PECO Energy Capital, to indemnification against and contribution toward
certain civil liabilities, including liabilities under the Securities Act,
and to reimbursement by PECO Energy for certain expenses.
Underwriters and dealers may engage in transactions with, or perform
services for, PECO Energy and/or PECO Energy Capital and/or any of their
affiliates in the ordinary course of business.
Each series of Preferred Securities will be a new issue of securities
and will have no established trading market. Any underwriters to whom
Preferred Securities are sold by PECO Energy Capital for public offering
and sale may make a market in such Preferred Securities, but such
underwriters will not be obligated to do so and may discontinue any market
making at any time without notice. The Preferred Securities may or may not
be listed on a national securities exchange. No assurance can be given as
to the liquidity of or the trading markets for any Preferred Securities.
15
LEGAL MATTERS
Certain matters of Delaware law relating to the validity of the
Preferred Securities, the validity of the Limited Partnership Agreement and
the formation of PECO Energy Capital are being passed upon by Richards,
Layton & Finger, P.A., special Delaware counsel to PECO Energy Capital.
The validity of the Guarantee and the Subordinated Debentures will be
passed upon on behalf of PECO Energy by Ballard Spahr Andrews & Ingersoll.
Certain legal matters will be passed upon on behalf of the Underwriters by
Drinker Biddle & Reath, counsel to the Underwriters. Ballard Spahr Andrews
& Ingersoll and Drinker Biddle & Reath will rely on Richards, Layton &
Finger, P.A. as to certain matters of Delaware law.Mortgage.
EXPERTS
The consolidated financial statements and schedules of PECO Energythe Company
incorporated by reference in this ProspectusRegistration Statement have been audited
by Coopers & Lybrand, L.L.P, independent accountants, for the periods
indicated in their report thereon which is included in the Annual Report on
Form 10-K for the year ended December 31, 1993. The consolidated financial
statements and schedules audited by Coopers & Lybrand have been
incorporated herein by reference in reliance on their report given on their
authority as experts in accounting and auditing.
1611
====================================== =======================================LEGAL MATTERS
Certain legal matters will be passed upon for the Company by Ballard
Spahr Andrews & Ingersoll, who will rely on Cahill, Wilinski & Cahill as to
certain matters of New Jersey law. Certain legal matters will be passed
upon for the Agents by Drinker Biddle & Reath.
The statements as to matters of law and legal conclusions under
"Description of Series B First Mortgage Bonds and Mortgage" have been
reviewed by Ballard Spahr Andrews & Ingersoll as to matters of Pennsylvania
and Maryland law and Cahill, Wilinski & Cahill as to matters of New Jersey
law, and such statements are included herein upon the authority of such
counsel.
PLAN OF DISTRIBUTION
The Series B Notes will be offered on a continual basis or from time to
time by the Company through the Agents. The Company will pay an Agent a
commission of . % to . % of the principal amount of Series B Notes sold
through such Agent, depending upon the maturity of such Series B Notes.
The Company may sell Series B Notes to any of the Agents acting as
principal, at a discount to be agreed upon at the time of sale, or a
purchasing Agent may receive from the Company a commission or discount
equivalent to that set forth on the cover page hereof in the case of any
such principal transaction in which no other discount is agreed to by the
Company and such purchasing Agent. Such Series B Notes may be resold at
prevailing market prices, or at prices related thereto, at the time of such
resale, as determined by the Agents. The Company reserves the right to
sell Series B Notes directly on its own behalf. No person has been authorizedcommission will be
payable on any Series B Notes sold directly by the Company.
In addition, the Agents may offer Series B Notes they have purchased as
principal to giveother dealers. The Agents may sell Series B Notes to any
informationdealer at a discount and, unless otherwise specified in the applicable
Pricing Supplement, such discount allowed to any dealer may include all or
part of the discount to be received from the Company. After the initial
public offering of Series B Notes to be resold to investors and other
purchasers on a fixed public offering price basis, the public offering
price, concession and discount may be changed.
The Company will agree to indemnify each Agent against certain civil
liabilities, including liabilities under the Securities Act of 1933 (Act)
or to contribute to payments such Agent may be required to make in respect
thereof. Each Agent may be deemed to be an "underwriter" within the
meaning of the Act with respect to Series B Notes sold through it. The
Company will agree to reimburse the Agents for certain expenses.
Series B Notes may also be sold at the price to the public set forth in
the Pricing Supplement relating thereto to dealers who may resell to
investors. Such dealers may be deemed to be "underwriters" within the
meaning of the Act.
The Company will have the right, in its sole discretion, to accept
offers to purchase Series B Notes and may reject any PREFERRED SECURITIES
representations other than those
containedproposal to purchase
Series B Notes in this Prospectus PECO ENERGY CAPITAL
Supplementwhole or in part. Each Agent will have the Prospectus and,
if given or made, such information
or representations must not be % CUMULATIVE
relied upon as having been MONTHLY INCOME PREFERRED
authorized. This Prospectus SECURITIES, SERIES A
Supplement and the Prospectus do
not constitute an offerright, in its
discretion reasonably exercised, to sell or
the solicitation ofreject any offer to GUARANTEED TO THE EXTENT SET FORTH
buypurchase Series B
Notes received by it in whole or in part.
The Series B Notes are a new issue of securities and will not have an
established trading market when issued. The Series B Notes will not be
listed on any securities other thanexchange. Each Agent may make a market in the
HEREIN BY
securities described in this
Prospectus SupplementSeries B Notes, but such Agent is not obligated to do so and the
Prospectus or an offer to sell or PECO ENERGY COMPANY
the solicitation of an offer to buy
such securities inmay
discontinue any circumstances in which such offer
or solicitation is unlawful.
Neither the delivery of this
Prospectus Supplement or the
Prospectus nor any sale made
hereunder or thereunder shall,
under any circumstances, create any
implication that the information
contained herein or therein is
correct as ofmarket-making at any time subsequentwithout notice. There can be no
assurance as to the dateexistence or liquidity of such information.
---------- ----------
TABLE OF CONTENTS PROSPECTUS SUPPLEMENT
PROSPECTUS SUPPLEMENT ----------
PAGE
----
Certain Investment
Considerations ............. S-3
PECO Energy Capital .......... S-3
PECO Energy .................. S-4
Certain Termsa secondary market for any
Series B Notes, or that all or any of the Series B Notes will be sold.
12
================================== ==================================
NO DEALER, SALESMAN OR ANY
OTHER PERSON HAS BEEN AUTHORIZED
TO GIVE ANY INFORMATION OR TO $250,000,000
MAKE ANY REPRESENTATIONS IN
CONNECTION WITH THIS OFFERING
OTHER THAN THOSE CONTAINED IN PECO
THIS PROSPECTUS, AND IF GIVEN OR ENERGY
MADE SUCH INFORMATION OR COMPANY
REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR BY COLLATERALIZED
ANY PURCHASER OR UNDERWRITER. MEDIUM-TERM NOTES, SERIES B
THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A
Preferred
Securities ................. S-4
Certain Terms of the
Series A Subordinated
Debentures ................. S-6
United States Taxation ....... S-6 GOLDMAN, SACHS & CO.
Underwriting ................. S-9
SMITH BARNEY SHEARSON INC.SOLICITATION OF AN OFFER TO BUY
ANY OF THE SECURITIES COVERED BY
THIS PROSPECTUS DEAN WITTER REYNOLDS INC.TO ANY PERSON IN PROSPECTUS
ANY JURISDICTION IN WHICH IT IS
UNLAWFUL TO MAKE SUCH AN OFFER
OR SOLICITATION. NEITHER
DELIVERY OF THIS PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL,
UNDER ANY CIRCUMSTANCES, CREATE
AN IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE FACTS
HEREIN SET FORTH SINCE THE DATE
HEREOF.
----------
CONTENTS
PAGE
----
Statement of Available
Information .............................. 2 A.G. EDWARDS & SONS, INC.
Incorporation of Certain
Documents by Reference .....Reference.... 2
KIDDER, PEABODY & CO.
PECO Energy Capital ..........The Company ................ 2 INCORPORATED
PECO Energy .................. 3
Coverage Ratios .............. 3 PAINEWEBBER INCORPORATED
Use of Proceeds ............. 4Proceeds............. 3
Description of the Preferred PRUDENTIAL SECURITIES
Securities ................. 4 INCORPORATEDSeries B
Notes and Note Indenture.. 3
Description of the Guarantee.. 10
Description of the REPRESENTATIVES OF THE UNDERWRITERS
Subordinated Debentures ....Series B
First Mortgage Bonds
and Mortgage.............. 8
Experts..................... 11
Legal Matters............... 12
Plan of Distribution ......... 15
Legal Matters ................ 16
Experts ...................... 16
====================================== =======================================Distribution........ 12
================================== ==================================
PART II
INFORMATIONII--INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.*DISTRIBUTION*
Filing fees - Securities and Exchange Commission ...... $120,690Fees .............................. $ 86,207
Legal Services ........................... 75,000
Accounting Services ...................... 25,000
Trustee's Charges, Including Counsel ..... 75,000
Printing and engraving ................................Engraving ................... 50,000
New York Stock Exchange listing fee ................... 75,000
Legal fees and Blue Sky fees and expenses ............. 200,000
Accounting fees ....................................... 50,000Rating Agencies Services ................. 40,000
Recording Indenture Trustee fees and expenses ................... 25,000
Rating agencies fees and expenses ..................... 125,000...................... 15,000
Miscellaneous ......................................... 10,310............................ 39,793
--------
Total ............................................. $656,000.................................... $376,000
========
*Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
PECO Energy'sOFFICERS
The Company's Bylaws provide that PECO Energythe Company is obligated to indemnify
directors and officers and other persons designated by the Board of
Directors against any liability including any damage, judgment, amount paid
in settlement, fine, penalty, cost or expense (including, without
limitation, attorneys' fees and disbursements) incurred in connection with
any proceeding. The Bylaws provide that no indemnification shall be made
where the act or failure to act giving rise to the claim for
indemnification is determined by arbitration or otherwise to have
constituted willful misconduct or recklessness or attributable to receipt
from PECO Energythe Company of a personal benefit to which the recipient is not
legally entitled.
Section 518 of the PennsylvaniaThe Business Corporation Law of 1988 provides that indemnification
pursuant to a bylaw may be granted for any action taken or any failure to
take any action, absent a court determination of willful misconduct or
recklessness, and may be made whether or not the corporation would have the
power to indemnify the person under any other provision of law.
Pursuant to the Pennsylvania Business Corporation Law of 1988, the Company's Bylaws
provide that directors generally will not be liable for monetary damages in
any action whether brought by shareholders directly or in the right of PECO Energythe
Company or by third parties unless they fail in the good faith performance
of their duties as fiduciaries (the standard of care established by the
Pennsylvania Business Corporation Law of 1988), and such failure constitutes
self-dealing, willful misconduct or recklessness.
Pursuant to the Limited Partnership Agreement, to the fullest extent
permitted by applicable law, PECO Energy Capital shall indemnify and hold
harmless the General Partner or any Special Representative, any affiliate
of the General Partner or any Special Representative or any officers,
directors, shareholders, partners, employees, representatives or agents of
the General Partner or any Special Representative, or any employee or agent
of PECO Energy Capital or its affiliates (each, an "Indemnified Person")
from and against any loss, damage or claim incurred by such Indemnified
Person by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of PECO Energy Capital and in a
manner reasonably believed to be within the scope of authority conferred on
such Indemnified Person by the Limited Partnership Agreement, except that
no Indemnified Person shall be entitled to be indemnified in respect of any
loss, damage or claim incurred by such Indemnified Person by reason of
gross negligence, willful misconduct or fraud with respect to such acts or
omissions; provided, however, that any such indemnity shall be provided out
of and to the extent of PECO Energy Capital's assets only, and no General
Partner or limited partner (collectively, "Partners"), any affiliate of a
Partner or any officers, directors, shareholders, partners, employees,
representatives or agents of a Partner or its respective affiliates, or any
employee or agent of PECO Energy Capital or its affiliates or any Special
Representative shall have any personal liability on account thereof. To
the fullest extent permitted by applicable law, expenses (including legal
fees) incurred by an Indemnified Person in defending any claim, demand,
action, suit or proceeding shall, from time to time, be advanced by PECO
Energy Capital
II-1
prior to the final disposition of such claim, demand, action, suit or
proceeding shall, from time to time, be advanced by PECO Energy Capital of
an undertaking by or on behalf of the Indemnified Person to repay such
amount if it shall be determined that the Indemnified Person is not
entitled to be indemnified.
The Underwriting Agreement provides for the UnderwritersAgents will also agree to indemnify the directors and officers of
PECO Energy and PECO Energy Capitalthe Company against certain liabilities as set forth in Section 87 of the
UnderwritingDistribution Agreement (see Exhibit 1-1)1).
PECO EnergyThe Company has purchased directors' and officers' liability insurance.
R-1
ITEM 16. EXHIBITS
Pursuant to Rule 411 of the Securities Act of 1933 (Act), certain of
the following listed exhibits are annexed as exhibits to previous SEC
filings by the Company and are incorporated by reference as Exhibits to
this Registration Statement.
EXHIBIT NUMBERSNUMBER DESCRIPTION
- - - - -------
1-1-------------- --------------------------------------------------------------
1 Form of UnderwritingDistribution Agreement.
4-1 Certificate3(i) Amended and Restated Articles of Limited PartnershipIncorporation of PECO
Energy Capital, L.P.
4-2Company (Filed with 1993 Form 10-K, file No.
1-1401, Exhibit 3-1).
3(ii) Bylaws of the Company, as adopted February 26, 1990 and
amended January 24, 1994 (Filed with 1993 Form 10-K,
file No. 1-1401, Exhibit 3-2).
4 Copy of First and Refunding Mortgage dated May 1, 1923
between The Counties Gas and Electric Company
(predecessor to the Company) and Fidelity Trust Company,
Trustee (First Fidelity Bank, National Association,
successor), securing First and Refunding Mortgage Bonds
(Filed with Registration No. 2-2881, effective March 10,
1937, Exhibit B-1), and indentures supplemental thereto
dated as follows:
4(b)-3 May 1, 1927 (Filed with Registration No. 2-2881,
effective March 10, 1937, Exhibit B-1(c)).
4(b)-7 March 1, 1937 (Filed with Registration No. 2-2881,
effective March 10, 1937, Exhibit B-1(g)).
4(b)-8 December 1, 1941 (Filed with Registration No.
2-4863, effective November 25, 1941, Exhibit
B-1(h)).
4(b)-9 November 1, 1944 (Filed with Registration No.
2-5472, effective October 19, 1944, Exhibit
B-1(i)).
4(b)-10 December 1, 1946 (Filed with Registration No.
2-6821, effective December 13, 1946, Exhibit
7-1(j)).
4(b)-16 September 1, 1957 (Filed with Registration No.
2-13562, effective September 10, 1957, Exhibit
2(b)-17).
4(b)-17 May 1, 1958 (Filed with Registration No. 2-14020,
effective April 23, 1958, Exhibit 2(b)-18).
4(b)-20 May 1, 1964 (Filed with Registration No. 2-25628,
effective November 16, 1966, Exhibit 4(b)-21).
4(b)-23 October 1, 1967 (Filed with Registration No.
2-28242, effective March 7, 1968, Exhibit
2(b)-23).
4(b)-24 March 1, 1968 (Filed with Registration No. 2-34051,
effective August 8, 1969, Exhibit 2(b)-24).
4(b)-29 December 15, 1970 (Filed with Registration No.
2-41081, effective July 26, 1971, Exhibit
2(b)-29).
4(b)-31 December 15, 1971 (Filed with Registration No.
2-44195, effective June 15, 1972, Exhibit
2(b)-31).
4(b)-33 January 15, 1973 (Filed with Registration No.
2-49842, effective January 10, 1974, Exhibit
2(b)-33).
4(b)-46 March 1, 1981 (Filed with Registration No. 2-72802,
effective July 7, 1981, Exhibit 4-46).
4(b)-47 March 1, 1981 (Filed with Registration No. 2-72802,
effective July 7, 1981, Exhibit 4-47).
4(b)-53 November 15, 1984 (Filed with 1984 Form 10-K, file
No. 1-1401, Exhibit 4-2(a)).
4(b)-54 December 1, 1984 (Filed with 1984 Form 10-K, file
No. 1-1401, Exhibit 4-2(b)).
4(b)-55 May 15, 1985 (Filed with 1985 Form 10-K, file No.
1-1401, Exhibit 4-2(a)).
4(b)-56 October 1, 1985 (Filed with 1985 Form 10-K, file
No. 1-1401, Exhibit 4-2(b)).
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EXHIBIT NUMBER DESCRIPTION
- -------------- --------------------------------------------------------------
4(b)-61 November 1, 1986 (Filed with 1986 Form 10-K, file
No. 1-1401, Exhibit 4-2(c)).
4(b)-63 July 15, 1987 (Filed with Form 8-K dated July 21,
1987, file No. 1-1401, Exhibit 4(c)-63).
4(b)-64 July 15, 1987 (Filed with Form 8-K dated July 21,
1987, file No. 1-1401, Exhibit 4(c)-64).
4(b)-65 August 1, 1987 (Filed with Registration No.
33-17438, effective September 28, 1987, Exhibit
4(c)-65).
4(b)-66 October 15, 1987 (Filed with Form 8-K dated October
7, 1987, file No. 1-1401, Exhibit 4(c)-66).
4(e)-67 October 15, 1987 (Filed with Form 8-K dated October
7, 1987, file No. 1-1401, Exhibit 4(c)-67).
4(b)-68 April 15, 1988 (Filed with Form 8-K dated April 11,
1988, file No. 1-1401, Exhibit 4(c)-68).
4(b)-69 April 15, 1988 (Filed with Form 8-K dated April 11,
1988, file No. 1-1401, Exhibit 4(c)-69).
4(b)-70 June 15, 1989 (Filed with Registration No.
33-31289, effective September 29, 1989, Exhibit
4(c)-70).
4(b)-71 October 1, 1989 (Filed with Form 8-K dated October
6, 1989, file No. 1-1401, Exhibit 4(b)-71).
4(b)-72 October 1, 1989 (Filed with Form 8-K dated October
6, 1989, file No. 1-1401, Exhibit 4(b)-72).
4(b)-73 October 1, 1989 (Filed with Form 8-K dated October
18, 1989, file No. 1-1401, Exhibit 4(b)-73).
4(b)-74 October 15, 1990 (Filed with 1990 Form 10-K, file
No. 1-1401, Exhibit 4(b)-74).
4(b)-75 October 15, 1990 (Filed with 1990 Form 10-K, file
No. 1-1401, Exhibit 4(b)-75).
4(b)-76 April 1, 1991 (Filed with 1991 Form 10-K, file No.
1-1401, Exhibit 4(b)-76).
4(b)-77 December 1, 1991 (Filed with 1991 Form 10-K, file
No. 1-1401, Exhibit 4(b)-77).
4(b)-78 January 15, 1992 (Filed with Form 8-K dated January
27, 1992, file No. 1-1401, Exhibit 4(b)-78).
4(b)-79 April 1, 1992 (Filed with March 31, 1992 Form 10-Q,
file No. 1-1401, Exhibit 4(b)-79).
4(b)-80 April 1, 1992 (Filed with March 31, 1992 Form 10-Q,
file No. 1-1401, Exhibit 4(b)-80).
4(b)-81 June 1, 1992 (Filed with June 30, 1992 Form 10-Q,
file No. 1-1401, Exhibit 4(b)-81).
4(b)-82 June 1, 1992 (Filed with June 30, 1992 Form 10-Q,
file No. 1-1401, Exhibit 4(b)-82).
4(b)-83 July 15, 1992 (Filed with June 30, 1992 Form 10-Q,
file No. 1-1401, Exhibit 4(b)-83).
4(b)-84 September 1, 1992 (Filed with 1992 Form 10-K, file
No. 1-1401, Exhibit 4(b)-84).
4(b)-85 September 1, 1992 (Filed with 1992 Form 10-K, file
No. 1-1401, Exhibit 4(b)-85).
4(b)-86 March 1, 1993 (Filed with 1992 Form 10-K, file No.
1-1401, Exhibit 4(b)-86).
4(b)-87 March 1, 1993 (Filed with 1992 Form 10-K, file No.
1-1401, Exhibit 4(b)-87).
4(b)-88 March 1, 1993 (Filed with March 31, 1993 Form 10-Q,
file No. 1-1401, Exhibit 4(b)-88).
4(b)-89 May 1, 1993 (Filed with March 31, 1993 Form 10-Q,
file No. 1-1401, Exhibit 4(b)-89).
4(b)-90 May 1, 1993 (Filed with March 31, 1993 Form 10-Q,
file No. 1-1401, Exhibit 4(b)-90).
4(b)-91 August 15, 1993 (Filed with Form 8-A dated August
19, 1993, Exhibit 4(b)-91).
4(b)-92 August 15, 1993 (Filed with Form 8-A dated August
19, 1993, Exhibit 4(b)-92).
4(b)-93 August 15, 1993 (Filed with Form 8-A dated August
19, 1993, Exhibit 4(b)-93).
4(b)-94 November 1, 1993 (Filed with Form 8-A dated October
27, 1993, Exhibit 4(b)-94).
4(b)-95 November 1, 1993 (Filed with Form 8-A dated October
27, 1993, Exhibit 4(b)-95).
R-3
EXHIBIT NUMBER DESCRIPTION
- -------------- --------------------------------------------------------------
4(b)-96 Form of Amended and Restated Limited Partnership AgreementNinety-sixth Supplemental Indenture.
4(f) Collateralized Note Indenture dated as of October 1, 1989
between Philadelphia Electric Company (now known as
PECO Energy Capital, L.P.
4-3Company) and Fidelity Bank, National
Association (First Fidelity Bank, National
Association, successor) (Filed with Form 8-K dated
October 18, 1989, file No. 1-1401, Exhibit 4(f)).
4(f)-1 First Supplemental Indenture dated as of July 1, 1994.
4(f)-2 Form of ActionSecond Supplemental Indenture dated as of General Partner creating Series A Preferred
Securities.
4-4 Form of Preferred Security Certificate (included in Exhibit 4-2 above).
4-5 Form of Subordinated Debenture Indenture.
4-6 Form of Subordinated Debenture (included in Exhibit 4-5 above).
4-7 Form of Payment and Guarantee Agreement.
5-1July 1,
1994.
5 Opinion of Ballard Spahr Andrews & Ingersoll relating to the
legality of the Subordinated Debentures and Guarantees, including
consent.
5-2 Opinion of Richards, Layton & Finger, P.A., relating to the
legality of the Preferred Securities, including consent.
8 Opinion of Ballard Spahr Andrews & Ingersoll as to tax matters.
12-1 Computations of PECO Energy'sCounsel.
12 Ratio of Earnings to Fixed Charges andfor the 12 months ended
December 31, 1993 (Filed with 1993 Form 10-K, file No.
1-1401, Exhibit 12-1).
Ratio of Earnings to Combined Fixed Charges and Preferred Stock
Dividend Requirements for the years ended December 31, 1989-1993
and for the three-months3 months ended
March 31, 1993 and1994 (Filed with March 31, 1994 (incorporated by reference to Exhibits 12-1 and 12-2, respectively, of
PECO Energy's 1993 Form 10-K, File10-Q,
file No. 1-1401, and PECO Energy's
Quarterly Reports on Form 10-Q for the quarters ended March 31,
1993 and March 31, 1994)Exhibit 12-2).
23-1 Consent of Independent Accountants.
23-2 Consent of Cahill, Wilinski & Cahill.
23-3 Consent of Ballard Spahr Andrews & Ingersoll (included in
Exhibit 5-1).
23-3 Consent of Richards, Layton & Finger, P.A. (included in Exhibit
5-2)5).
24 Powers of Attorney.
25 Form T-1 Statement of Eligibility under the Trust
Indenture Act of 1939 of
a Corporation designated to act as Trustee.1939.
ITEM 17. UNDERTAKINGS
A. TO UPDATE ANNUALLY
The RegistrantsCompany hereby undertakeundertakes:
(1) to file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;Act;
(ii) to reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the registration statement;
(iii) to II-2
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,Provided, however, that paragraphsParagraphs (1)(i) and (1)(ii) do not apply if
the registration statement is on Form S-3, and the information required to
be included in a post-effective amendment by those paragraphs is contained
in periodic reports filed by PECO Energythe registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 (Exchange Act) that
are incorporated by reference in the registration statement;
(2) that for the purpose of determining any liability under the Securities Act, of 1933,
each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof; and
(3) to remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
R-4
B. INCORPORATION BY REFERENCE
The RegistrantsCompany hereby undertakeundertakes that, for purposes of determining any
liability under the Securities Act, of 1933, each filing of PECO Energy'sthe registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 that is
incorporated by reference in the registration statement shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
C. INDEMNIFICATION
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 haveforegoing provisions, or otherwise, the registrant has been
advised that in the opinion of the SEC 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 its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be governed by the
final adjudication of such issue.
II-3R-5
SIGNATURES
Pursuant to the requirements of the Securities Act ofPURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, the
registrant,THE
REGISTRANT, PECO Energy Company, certifies that it has reasonable grounds
to believe it meets all of the requirements for filing on FormENERGY COMPANY, CERTIFIES THAT IT HAS REASONABLE
GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE REQUIREMENTS FOR FILING ON
FORM S-3 and has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Philadelphia,
Commonwealth of Pennsylvania, on the 25th day of May,AND HAS DULY CAUSED THIS REGISTRATION STATEMENT OR AMENDMENT TO
BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED,
IN THE CITY OF PHILADELPHIA, COMMONWEALTH OF PENNSYLVANIA ON THE 4TH DAY
OF AUGUST, 1994.
PECO Energy CompanyENERGY COMPANY
By /s/ J. F. Paquette, Jr.
By------------------------------------------
J. F. Paquette, Jr., Chairman of the Board
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT OR AMENDMENT HAS BEEN SIGNED BY THE FOLLOWING
PERSONS IN THE CAPACITIES AND ON THE DATE INDICATED.
SIGNATURE TITLE DATE
- ----------------------- ---------------------------------- -----------------
/s/ J. F. PAQUETTE, JR. Chairman of the Board 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.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ J. F. Paquette, Jr. Chairman of the Board and Director May 25,August 4, 1994
- - - - ----------------------------------------------- (Principal Executive Officer)
J. F. PAQUETTE, JR.
/s/ C. A. McNeill, Jr.MCNEILL, JR. President and Director May 25,(Principal August 4, 1994
- - - - ------------------------ (Principal----------------------- Operating Officer)
C. A. MCNEILL, JR.
/s/ K. G. LawrenceLAWRENCE Senior Vice President--Finance May 25,President (Principal August 4, 1994
- - - - ------------------------ (Principal----------------------- Financial and Accounting Officer
K. G. LAWRENCE
Accounting Officer)
This registration statement has also been signed by K.G. Lawrence,
Attorney-in-Fact, on behalf of the following Directors on the date
indicated:THIS REGISTRATION STATEMENT OR AMENDMENT HAS ALSO BEEN SIGNED BY C. A.
MCNEILL, JR., ATTORNEY-IN-FACT, ON BEHALF OF THE FOLLOWING DIRECTORS ON THE
DATE INDICATED:
Susan W. Catherwood Joseph C. Ladd
M. Walter D'Alessio Edithe J. Levit
Richard G. Gilmore Kinnaird R. McKee
Richard H. Glanton Joseph J. McLaughlin
James A. Hagen John M. Palms
Nelson G. Harris Ronald Rubin
By /s/ K. G. Lawrence
By ---------------------------- May 25,C. A. MCNEILL, JR. August 4, 1994
K. G. LAWRENCE
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant, PECO Energy Capital, L.P.-------------------------------------
C. A. McNeill, Jr., certifies that it has reasonable
grounds to believe it meets all of the requirements for filing on Form S-3
and has duly caused this registration statement to be signed on its behalf
by the undersigned, thereunto duly authorized in the City of Philadelphia,
Pennsylvania, on the 25th day of May, 1994.
PECO Energy Capital, L.P.
By: PECO Energy Capital Corp.,
its general partner
/s/ J. B. Mitchell
By --------------------------------
J. B. MITCHELL
President
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.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ J. B. Mitchell President and Director May 25, 1994
- - - - ------------------------ (Principal Executive Officer and
J. B. MITCHELL Principal Financial and Accounting
Officer)
/s/ M. W. Rimerman Director May 25, 1994
- - - - ------------------------
M. W. RIMERMAN
/s/ K. G. Lawrence Director May 25, 1994
- - - - ------------------------
K. G. LAWRENCE
II-5
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION PAGE
------- ----------- ----
1-1 Form of Underwriting Agreement.
4-1 Certificate of Limited Partnership of PECO
Energy Capital, L.P.
4-2 Form of Amended and Restated Limited Partnership
Agreement of PECO Energy Capital, L.P.
4-3 Form of Action of General Partner creating Series A
Preferred Securities.
4-4 Form of Preferred Security Certificate
(included in Exhibit 4-2 above).
4-5 Form of Subordinated Debenture Indenture.
4-6 Form of Subordinated Debenture (included in
Exhibit 4-5 above).
4-7 Form of Payment and Guarantee Agreement.
5-1 Opinion of Ballard Spahr Andrews & Ingersoll relating
to the legality of the Subordinated Debentures and
Guarantees, including consent.
5-2 Opinion of Richards, Layton & Finger, P.A., relating
to the legality of the Preferred Securities, including
consent.
8 Opinion of Ballard Spahr Andrews & Ingersoll as to
tax matters.
12-1 Computations of PECO Energy's Ratio of Earnings to
Fixed Charges and Ratio of Earnings to Combined
Fixed Charges and Preferred Stock Dividend
Requirements for the years ended December 31,
1989-1993 and for the three-months ended March
31, 1993 and March 31, 1994 (incorporated by
reference to Exhibits 12-1 and 12-2,
respectively, of PECO Energy's 1993 Form 10-K,
File No. 1-1401 and PECO Energy's Quarterly
Reports on Form 10-Q for the quarters ended March
31, 1993 and March 31, 1994).
23-1 Consent of Independent Accountants.
23-2 Consent of Ballard Spahr Andrews & Ingersoll
(included in Exhibit 5-1).
23-3 Consent of Richards, Layton & Finger, P.A.
(included in Exhibit 5-2).
24 Powers of Attorney.
25 Statement of Eligibility under the Trust Indenture
Act of 1939 of a Corporation designated to act as
Trustee.Attorney-in-Fact
R-6