Filed Pursuant to Rule 424(b)(5)
File Nos. 333-40629
333-40629-01
333-40629-02
333-40629-03
PROSPECTUS SUPPLEMENT
(To Prospectus Dated December 2, 1997)
$200,000,000
Alabama Power Company
a subsidiary of The Southern Company
SERIES B 7% SENIOR QUARTERLY INTEREST NOTES DUE DECEMBER 31, 2047
------------------------
INTEREST ON THE SERIES B 7% SENIOR QUARTERLY INTEREST NOTES DUE DECEMBER 31,
2047 (THE "SERIES B SENIOR NOTES") AT THE RATE OF 7% PER ANNUM (THE "SECURITIES
RATE") WILL BE PAYABLE QUARTERLY IN ARREARS ON MARCH 31, JUNE 30, SEPTEMBER 30
AND DECEMBER 31 OF EACH YEAR (EACH, AN "INTEREST PAYMENT DATE"), COMMENCING
MARCH 31, 1998. THE SERIES B SENIOR NOTES WILL BE REDEEMABLE AT 100% OF THE
PRINCIPAL AMOUNT REDEEMED PLUS ACCRUED INTEREST TO THE REDEMPTION DATE AT THE
OPTION OF ALABAMA POWER COMPANY (THE "COMPANY") IN WHOLE OR IN PART ON OR AFTER
FEBRUARY 26, 2003. THE SERIES B SENIOR NOTES WILL BE AVAILABLE FOR PURCHASE IN
DENOMINATIONS OF $25 AND ANY INTEGRAL MULTIPLE THEREOF.
THE SERIES B SENIOR NOTES WILL BE DIRECT, UNSECURED AND UNSUBORDINATED
OBLIGATIONS OF THE COMPANY RANKING pari passu WITH ALL OTHER UNSECURED AND
UNSUBORDINATED OBLIGATIONS OF THE COMPANY. THE SERIES B SENIOR NOTES WILL BE
EFFECTIVELY SUBORDINATED TO ALL SECURED DEBT OF THE COMPANY, INCLUDING ITS FIRST
MORTGAGE BONDS, AGGREGATING APPROXIMATELY $2,559,000,000 OUTSTANDING AT
SEPTEMBER 30, 1997. THE SENIOR NOTE INDENTURE CONTAINS NO RESTRICTIONS ON THE
AMOUNT OF ADDITIONAL INDEBTEDNESS THAT MAY BE INCURRED BY THE COMPANY.
THE SERIES B SENIOR NOTES INITIALLY WILL BE REPRESENTED BY A GLOBAL CERTIFICATE
OR CERTIFICATES REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY ("DTC")
OR ITS NOMINEE. BENEFICIAL INTERESTS IN THE SERIES B SENIOR NOTES WILL BE SHOWN
ON, AND TRANSFERS THEREOF WILL BE EFFECTED ONLY THROUGH, RECORDS MAINTAINED BY
PARTICIPANTS (AS DEFINED HEREIN) IN DTC. EXCEPT AS DESCRIBED HEREIN, SERIES B
SENIOR NOTES IN CERTIFICATED FORM WILL NOT BE ISSUED IN EXCHANGE FOR THE GLOBAL
CERTIFICATES. SEE "DESCRIPTION OF THE SERIES B SENIOR NOTES -- BOOK-ENTRY ONLY
ISSUANCE -- THE DEPOSITORY TRUST COMPANY."
THE SERIES B SENIOR NOTES ARE EXPECTED TO BE APPROVED FOR LISTING ON THE NEW
YORK STOCK EXCHANGE, SUBJECT TO OFFICIAL NOTICE OF ISSUANCE. TRADING OF THE
SERIES B SENIOR NOTES ON THE NEW YORK STOCK EXCHANGE IS EXPECTED TO COMMENCE
WITHIN A 30-DAY PERIOD AFTER THE INITIAL DELIVERY OF THE SERIES B SENIOR NOTES.
SEE "UNDERWRITING" HEREIN.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
------------------------
PRICE 100% AND ACCRUED INTEREST, IF ANY
------------------------
PRICE TO UNDERWRITING DISCOUNTS PROCEEDS TO
PUBLIC(1) AND COMMISSIONS(2)(4) COMPANY(3)(4)
--------------- ---------------------- ---------------
Per Series B Senior Note........................ 100.00% 3.15% 96.85%
Total........................................... $200,000,000 $6,300,000 $193,700,000
- ------------
(1) Plus accrued interest, if any, from the date of original issuance.
(2) See "Underwriting" for a description of the indemnification arrangements
with the Underwriters.
(3) Before deducting expenses of the offering payable by the Company estimated
to be $305,000.
(4) The Underwriting Discount will be 1.00% of the principal amount of the
Series B Senior Notes sold to certain institutions. Therefore, to the extent
any such sales are made to such institutions, the actual total Underwriting
Discount will be less than, and the actual total Proceeds to Company will be
greater than, the amounts shown in the table above.
------------------------
The Series B Senior Notes are offered, subject to prior sale, when, as and
if accepted by the Underwriters named herein and subject to approval of certain
legal matters by Dewey Ballantine LLP, counsel for the Underwriters. It is
expected that delivery of the Series B Senior Notes will be made on or about
February 26, 1998, through the book-entry facilities of DTC against payment
therefor in immediately available funds.
------------------------
MORGAN STANLEY DEAN WITTER
CREDIT SUISSE FIRST BOSTON
A.G. EDWARDS & SONS, INC.
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
SALOMON SMITH BARNEY
EDWARD D. JONES & CO., L.P.
February 20, 1998
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS
PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER OR
SOLICITATION BY ANYONE IN ANY STATE IN WHICH SUCH OFFER OR SOLICITATION IS NOT
AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL UNDER ANY
CIRCUMSTANCE CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS
OF THE COMPANY SINCE THE DATE HEREOF.
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE SERIES B SENIOR
NOTES OFFERED HEREBY, INCLUDING BY ENTERING STABILIZING BIDS, PURCHASING SERIES
B SENIOR NOTES TO COVER SYNDICATE SHORT POSITIONS AND IMPOSING PENALTY BIDS. FOR
A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING" HEREIN.
------------------------
TABLE OF CONTENTS
PAGE
----
PROSPECTUS SUPPLEMENT
Summary of Offering......................................... S-3
Capitalization.............................................. S-4
Use of Proceeds............................................. S-4
Recent Results of Operations................................ S-4
Description of the Series B Senior Notes.................... S-5
Underwriting................................................ S-9
Glossary.................................................... S-12
PROSPECTUS
Available Information....................................... 2
Incorporation of Certain Documents by Reference............. 2
Selected Information........................................ 3
Alabama Power Company....................................... 4
The Trusts.................................................. 5
Accounting Treatment........................................ 5
Use of Proceeds............................................. 5
Recent Results of Operations................................ 6
Description of the Senior Notes............................. 6
Description of the Junior Subordinated Notes................ 9
Description of the Preferred Securities..................... 15
Description of the Guarantees............................... 15
Relationship Among the Preferred Securities, the Junior
Subordinated Notes and the Guarantees..................... 17
Plan of Distribution........................................ 19
Legal Matters............................................... 19
Experts..................................................... 20
S-2
SUMMARY OF OFFERING
The following summary is qualified in its entirety by reference to the
detailed information appearing elsewhere in this Prospectus Supplement and in
the accompanying Prospectus. Capitalized terms not otherwise defined shall have
the meanings assigned in the Glossary.
The Company................ The Company is a corporation organized under the
laws of the State of Alabama on November 10,
1927, by the consolidation of a predecessor
Alabama Power Company, Gulf Electric Company and
Houston Power Company. The Company has its
principal office at 600 North 18th Street,
Birmingham, Alabama 35291, telephone (205)
257-1000. The Company is a wholly owned
subsidiary of The Southern Company.
The Company is a regulated public utility engaged
in the generation, transmission, distribution and
sale of electric energy within an approximately
44,500 square mile service area comprising most
of the State of Alabama.
Series B Senior Notes
Offered.................... The Company is offering $200,000,000 aggregate
principal amount of its Series B Senior Notes.
Interest on the Series B Senior Notes will be
payable quarterly in arrears on March 31, June
30, September 30 and December 31 of each year,
commencing on March 31, 1998.
Record Date................ The regular record date for each Interest Payment
Date will be the close of business on the 15th
calendar day prior to such Interest Payment Date.
Ranking.................... The Series B Senior Notes will be direct, unsecured
and unsubordinated obligations of the Company
ranking pari passu with all other unsecured and
unsubordinated obligations of the Company. The
Series B Senior Notes will be effectively
subordinated to all secured debt of the Company,
including its first mortgage bonds, aggregating
approximately $2,559,000,000 outstanding at
September 30, 1997. The Senior Note Indenture
contains no restrictions on the amount of
additional indebtedness that may be incurred by
the Company.
Redemption................. The Series B Senior Notes will be redeemable by the
Company (in whole or in part), from time to time
on or after February 26, 2003, at 100% of the
principal amount to be redeemed plus accrued
interest to the redemption date. See "Description
of the Series B Senior Notes -- Redemption"
herein.
Proposed Listing........... New York Stock Exchange.
S-3
CAPITALIZATION
The following table sets forth the capitalization of the Company as of
September 30, 1997, and as adjusted to reflect the transactions described in
note (1) below. The following data is qualified in its entirety by reference to
and, therefore, should be read together with the detailed information and
financial statements appearing in the documents incorporated herein by
reference. See also "Selected Information" in the accompanying Prospectus.
CAPITALIZATION (UNAUDITED) AS OF
SEPTEMBER 30, 1997
--------------------------------
ACTUAL AS ADJUSTED(1)
---------- -------------------
(THOUSANDS, EXCEPT PERCENTAGES)
Common Stock Equity......................................... $2,775,321 $2,775,321 46.2%
Cumulative Preferred Stock.................................. 278,400 255,512 4.3
Company Obligated Mandatorily Redeemable Preferred
Securities of Subsidiary Trusts Holding Company Junior
Subordinated Notes (2).................................... 297,000 297,000 4.9
Senior Notes................................................ -- 393,800 6.6
Other Long-Term Debt........................................ 2,219,594 2,284,594 38.0
---------- ---------- -----
Total, excluding amounts due within one year...... $5,570,315 $6,006,227 100.0%
========== ========== =====
- ---------------
(1) Reflects (i) the retirement in December 1997 of 228,883 shares ($22,888,300
aggregate par value) of the 4.20% Series Preferred Stock in connection with
a tender offer for such series by The Southern Company; (ii) the issuance in
November 1997 by The Industrial Development Board of the Town of Columbia of
$65,000,000 aggregate principal amount of its Variable Rate Demand Revenue
Bonds (Alabama Power Company Project) Series 1997 (Taxable) for the benefit
of the Company; (iii) the issuance in December 1997 of $193,800,000
principal amount of Series A 7 1/8% Senior Notes due December 1, 2047; and
(iv) the issuance of the Series B Senior Notes.
(2) As described in the accompanying Prospectus, substantially all of the assets
of the respective Trusts are Junior Subordinated Notes of the Company, and
upon redemption of such debt, the related Preferred Securities will be
mandatorily redeemable.
USE OF PROCEEDS
The proceeds from the sale of the Series B Senior Notes will be used by the
Company to repay a portion of its outstanding short-term indebtedness, which
aggregated approximately $381,000,000 as of February 19, 1998.
RECENT RESULTS OF OPERATIONS
For the twelve months ended January 31, 1998, "Operating Revenues," "Income
Before Interest Charges" and "Net Income After Dividends on Preferred Stock"
were $3,140,473,000, $643,501,000 and $373,278,000, respectively. In the opinion
of the management of the Company, the above amounts for the twelve months ended
January 31, 1998 reflect all adjustments (which were only normal recurring
adjustments) necessary to present fairly the results of operations for such
period. The "Ratio of Earnings to Fixed Charges" and the "Ratio of Earnings to
Fixed Charges Plus Preferred Dividend Requirements (Pre-Income Tax Basis)" for
the twelve months ended January 31, 1998 were 3.26 and 3.03, respectively.
S-4
DESCRIPTION OF THE SERIES B SENIOR NOTES
Set forth below is a description of the specific terms of the Series B
Senior Notes. This description supplements, and should be read together with,
the description of the general terms and provisions of the Senior Notes set
forth in the accompanying Prospectus under the caption "Description of the
Senior Notes." The following description does not purport to be complete and is
subject to, and is qualified in its entirety by reference to, the description in
the accompanying Prospectus and the Senior Note Indenture (as defined therein).
GENERAL
The Series B Senior Notes will be issued as a series of Senior Notes under
the Senior Note Indenture. The Series B Senior Notes will be limited in
aggregate principal amount to $200,000,000.
The entire principal amount of the Series B Senior Notes will mature and
become due and payable, together with any accrued and unpaid interest thereon,
on December 31, 2047. The Series B Senior Notes are not subject to any sinking
fund provision.
INTEREST
Each Series B Senior Note shall bear interest at the Securities Rate from
the date of original issuance, payable quarterly in arrears on March 31, June
30, September 30 and December 31 of each year to the person in whose name such
Series B Senior Note is registered at the close of business on the fifteenth
calendar day prior to such payment date. The initial Interest Payment Date is
March 31, 1998. The amount of interest payable will be computed on the basis of
a 360-day year of twelve 30-day months. In the event that any date on which
interest is payable on the Series B Senior Notes is not a Business Day, then
payment of the interest payable on such date will be made on the next succeeding
day which is a Business Day (and without any interest or other payment in
respect of any such delay), except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date.
TRADING CHARACTERISTICS
The Series B Senior Notes are expected to trade at a price that takes into
account the value, if any, of accrued but unpaid interest; thus, purchasers will
not pay and sellers will not receive accrued and unpaid interest with respect to
the Series B Senior Notes that is not included in the trading price thereof. Any
portion of the trading price of a Series B Senior Note received that is
attributable to accrued interest will be treated as ordinary interest income for
federal income tax purposes and will not be treated as part of the amount
realized for purposes of determining gain or loss on the disposition of the
Series B Senior Note.
The trading price of the Series B Senior Notes is likely to be sensitive to
the level of interest rates generally. If interest rates rise in general, the
trading price of the Series B Senior Notes may decline to reflect the additional
yield requirements of the purchasers. Conversely, a decline in interest rates
may increase the trading price of the Series B Senior Notes, although any
increase will be moderated by the Company's ability to call the Series B Senior
Notes at any time on or after February 26, 2003 at a Redemption Price equal to
100% of the principal amount to be redeemed plus accrued but unpaid interest.
OPTIONAL REDEMPTION
The Company shall have the right to redeem the Series B Senior Notes, in
whole or in part, without premium, from time to time, on or after February 26,
2003, upon not less than 30 nor more than 60 days' notice, at a Redemption Price
equal to 100% of the principal amount to be redeemed plus any accrued and unpaid
interest to the Redemption Date.
S-5
REDEMPTION PROCEDURES
If the Senior Note Indenture Trustee gives a notice of redemption in
respect of Series B Senior Notes (which notice will be irrevocable), then, by
2:00 P.M., New York City time, on the redemption date, the Senior Note Indenture
Trustee will irrevocably deposit with the securities depositary, so long as the
Series B Senior Notes are in book-entry only form, sufficient funds to pay the
Redemption Price. See "-- Book-Entry Only Issuance -- The Depository Trust
Company" below. If the Series B Senior Notes are no longer in book-entry only
form, the Senior Note Indenture Trustee shall irrevocably deposit with the
Paying Agent funds sufficient to pay the applicable Redemption Price and will
give the Paying Agent irrevocable instructions to pay the Redemption Price to
the holders thereof upon surrender of their Series B Senior Notes certificates.
If notice of redemption shall have been given and funds deposited as required,
then immediately prior to the close of business on the date of such deposit,
interest will cease to accrue and all rights of holders of such Series B Senior
Notes so called for redemption will cease, except the right of the holders of
such Series B Senior Notes to receive the Redemption Price, but without interest
on such Redemption Price. In the event that any date fixed for redemption of
Series B Senior Notes is not a Business Day, then payment of the Redemption
Price payable on such date will be made on the next succeeding day which is a
Business Day (and without any interest or other payment in respect of any such
delay), except that, if such Business Day falls in the next calendar year, such
payment will be made on the immediately preceding Business Day. In the event
that payment of the Redemption Price in respect of Series B Senior Notes is
improperly withheld or refused and not paid by the Company, interest on such
Series B Senior Notes will continue to accrue at the Securities Rate, from such
redemption date originally established by the Company for such Series B Senior
Notes to the date such Redemption Price is actually paid. See "Description of
the Senior Notes -- Events of Default" in the accompanying Prospectus.
Subject to the foregoing and to applicable law (including, without
limitation, United States federal securities laws), the Company or its
affiliates may, at any time and from time to time, purchase outstanding Series B
Senior Notes by tender, in the open market or by private agreement.
LIMITATION ON SALE AND LEASE-BACK TRANSACTIONS
The Senior Note Indenture provides that, so long as any of the Series B
Senior Notes remain outstanding, the Company shall not enter into any
arrangement with any person providing for the leasing by the Company of any
assets which have been or are to be sold or transferred by the Company to such
person (a "Sale and Lease-Back Transaction") unless: (i) such transaction
involves a lease for a temporary period not to exceed three years; (ii) such
transaction is between the Company and an affiliate of the Company; (iii) such
transaction is entered into within 60 days after the initial acquisition by the
Company of the assets or property subject to such transaction; (iv) after giving
effect thereto, the aggregate amount of all attributable debt with respect to
all such Sale and Lease-Back Transactions does not exceed 10% of consolidated
net tangible assets of the Company and its subsidiaries on a consolidated basis;
or (v) within the 12 months preceding the sale or transfer or the 12 months
following the sale or transfer, the Company applies, in the case of a sale or
transfer for cash, an amount equal to the net proceeds thereof and, in the case
of a sale or transfer otherwise than for cash, an amount equal to the fair value
of the assets so leased at the time of entering into such arrangement (as
determined by the Board of Directors of the Company), (a) to the retirement of
indebtedness for money borrowed, incurred or assumed by the Company which by its
terms matures at, or is extendible or renewable at the option of the obligor to,
a date more than 12 months after the date of incurring, assuming or guaranteeing
such debt or (b) to investment in any assets of the Company.
BOOK-ENTRY ONLY ISSUANCE -- THE DEPOSITORY TRUST COMPANY
The Depository Trust Company ("DTC") will act as the initial securities
depositary for the Series B Senior Notes. The Series B Senior Notes will be
issued only as fully registered securities registered in the name of Cede & Co.,
DTC's nominee. One or more fully registered global Series B Senior Notes
certificates will be issued, representing in the aggregate the total principal
amount of Series B Senior Notes, and will be deposited with DTC.
S-6
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the 1934 Act. DTC holds
securities that its participants ("Participants") deposit with DTC. DTC also
facilitates the settlement among Participants of securities transactions, such
as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Direct Participants
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations ("Direct Participants"). DTC is
owned by a number of its Direct Participants and by the NYSE, the American Stock
Exchange, Inc., and the National Association of Securities Dealers, Inc. Access
to the DTC system is also available to others such as securities brokers and
dealers, banks and trust companies that clear through or maintain a custodial
relationship with a Direct Participant, either directly or indirectly ("Indirect
Participants"). The rules applicable to DTC and its Participants are on file
with the Commission.
Purchases of Series B Senior Notes within the DTC system must be made by or
through Direct Participants, which will receive a credit for the Series B Senior
Notes on DTC's records. The ownership interest of each actual purchaser of
Series B Senior Notes ("Beneficial Owner") is in turn to be recorded on the
Direct and Indirect Participants' records. Beneficial Owners will not receive
written confirmation from DTC of their purchases, but Beneficial Owners are
expected to receive written confirmations providing details of the transactions,
as well as periodic statements of their holdings, from the Direct or Indirect
Participants through which the Beneficial Owners purchased Series B Senior
Notes. Transfers of ownership interests in the Series B Senior Notes 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 Series B Senior Notes, except in the event that use
of the book-entry system for the Series B Senior Notes is discontinued.
DTC has no knowledge of the actual Beneficial Owners of the Series B Senior
Notes. DTC's records reflect only the identity of the Direct Participants to
whose accounts such Series B Senior Notes are credited, which may or may not be
the Beneficial Owners. The Participants will remain responsible for keeping
account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Redemption notices shall be sent to DTC. If less than all of the Series B
Senior Notes are being redeemed, DTC will reduce the amount of the interest of
each Direct Participant in the Series B Senior Notes in accordance with its
procedures.
Although voting with respect to the Series B Senior Notes is limited, in
those cases where a vote is required, neither DTC nor Cede & Co. will itself
consent or vote with respect to Series B Senior Notes. Under its usual
procedures, DTC would mail an Omnibus Proxy to the Company 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 Series B Senior
Notes are credited on the record date (identified in a listing attached to the
Omnibus Proxy).
Payments on the Series B Senior Notes will be made to DTC. DTC's practice
is to credit Direct Participants' accounts on the relevant payment date in
accordance with their respective holdings shown on DTC's records unless DTC has
reason to believe that it will not receive payments on such payment date.
Payments by Participants to Beneficial Owners will be governed by standing
instructions and customary practices, as is the case with securities held for
the account of customers registered in "street name," and will be the
responsibility of such Participant and not of DTC or the Company, subject to any
statutory or regulatory requirements as may be in effect from time to time.
Payment to DTC is the responsibility of the Company, disbursement of such
payments to Direct Participants is the responsibility of DTC, and disbursement
of such payments to the Beneficial Owners is the responsibility of Direct and
Indirect Participants.
S-7
Except as provided herein, a Beneficial Owner of a global Series B Senior
Note will not be entitled to receive physical delivery of Series B Senior Notes.
Accordingly, each Beneficial Owner must rely on the procedures of DTC to
exercise any rights under the Series B Senior Notes. The laws of some
jurisdictions require that certain purchasers of securities take physical
delivery of securities in definitive form. Such laws may impair the ability to
transfer beneficial interests in a global Series B Senior Note.
DTC may discontinue providing its services as securities depositary with
respect to the Series B Senior Notes at any time by giving reasonable notice to
the Company. Under such circumstances, in the event that a successor securities
depositary is not obtained, Series B Senior Notes certificates will be printed
and delivered to the holders of record. Additionally, the Company may decide to
discontinue use of the system of book-entry transfers through DTC (or a
successor depositary) with respect to the Series B Senior Notes. In that event,
certificates for the Series B Senior Notes will be printed and delivered to the
holders of record.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Company believes to be reliable, but the
Company takes no responsibility for the accuracy thereof. The Company has no
responsibility for the performance by DTC or its Participants of their
respective obligations as described herein or under the rules and procedures
governing their respective operations.
S-8
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement, the
Company has agreed to sell to each of the Underwriters named below (for whom
Morgan Stanley & Co. Incorporated, Credit Suisse First Boston Corporation, A.G.
Edwards & Sons, Inc., PaineWebber Incorporated, Prudential Securities
Incorporated, Smith Barney Inc. and Edward D. Jones & Co., L.P. are acting as
Representatives) and each of the Underwriters has severally agreed to purchase
from the Company the respective principal amount of Series B Senior Notes set
forth opposite its name below:
PRINCIPAL AMOUNT OF
SERIES B
NAME SENIOR NOTES
---- -------------------
Morgan Stanley & Co. Incorporated........................... $ 23,150,000
Credit Suisse First Boston Corporation...................... 22,875,000
A.G. Edwards & Sons, Inc.................................... 22,875,000
PaineWebber Incorporated.................................... 22,875,000
Prudential Securities Incorporated.......................... 22,875,000
Smith Barney Inc............................................ 22,875,000
Edward D. Jones & Co., L.P.................................. 22,875,000
Robert W. Baird & Co. Incorporated.......................... 1,500,000
J.C. Bradford & Co. ........................................ 1,500,000
BT Alex. Brown Incorporated................................. 1,500,000
CIBC Oppenheimer Corp....................................... 1,500,000
EVEREN Securities, Inc...................................... 1,500,000
Goldman, Sachs & Co. ....................................... 1,500,000
Interstate/Johnson Lane Corporation......................... 1,500,000
Lehman Brothers Inc. ....................................... 1,500,000
Morgan Keegan & Company, Inc. .............................. 1,500,000
Regions Investment Company, Inc. ........................... 1,500,000
SouthTrust Securities, Inc.................................. 1,500,000
Sterne, Agee & Leach, Inc. ................................. 1,500,000
Tucker Anthony Incorporated................................. 1,500,000
Wheat First Securities, Inc. ............................... 1,500,000
Advest, Inc. ............................................... 600,000
Cowen & Company............................................. 600,000
Craigie Incorporated........................................ 600,000
Crowell, Weedon & Co. ...................................... 600,000
Dain Rauscher Incorporated.................................. 600,000
Davenport & Company LLC..................................... 600,000
Fahnestock & Co. Inc. ...................................... 600,000
First Albany Corporation.................................... 600,000
J.J.B. Hilliard, W.L. Lyons, Inc............................ 600,000
Janney Montgomery Scott Inc. ............................... 600,000
Kennedy, Cabot & Co. ....................................... 600,000
Legg Mason Wood Walker, Incorporated........................ 600,000
McDonald & Company Securities, Inc. ........................ 600,000
McGinn, Smith & Co., Inc. .................................. 600,000
Mesirow Financial, Inc. .................................... 600,000
H.J. Meyers & Co., Inc. .................................... 600,000
The Ohio Company............................................ 600,000
Olde Discount Corporation................................... 600,000
Pershing Division of Donaldson, Lufkin & Jenrette Securities
Corporation............................................... 600,000
Piper Jaffray Inc. ......................................... 600,000
Pryor, McClendon, Counts & Co., Inc. ....................... 600,000
Raymond James & Associates, Inc. ........................... 600,000
The Robinson-Humphrey Company, LLC.......................... 600,000
Roney & Co., L.L.C.......................................... 600,000
S-9
PRINCIPAL AMOUNT OF
SERIES B
NAME SENIOR NOTES
---- -------------------
Scott & Stringfellow, Inc. ................................. 600,000
Muriel Siebert & Co., Inc. ................................. 600,000
Stephens Inc. .............................................. 600,000
Stifel, Nicolaus & Company Incorporated..................... 600,000
Sutro & Co. Incorporated.................................... 600,000
U.S. Clearing Corp. ........................................ 600,000
Wedbush Morgan Securities................................... 600,000
------------
Total............................................. $200,000,000
============
In the Underwriting Agreement, the Underwriters have agreed, subject to the
terms and conditions set forth therein, to purchase all of the Series B Senior
Notes offered hereby if any of the Series B Senior Notes are purchased.
The Underwriters propose to offer the Series B Senior Notes 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 not in excess of $0.50 per Series B
Senior Note. The Underwriters may allow, and such dealers may reallow, a
concession not in excess of $0.40 per Series B Senior Note to certain brokers
and dealers. After the Series B Senior Notes are released for sale to the
public, the offering price and other selling terms may from time to time be
varied by the Representatives.
The Company has agreed, during the period of 15 days from the date of the
Underwriting Agreement, not to sell, offer to sell, grant any option for the
sale of, or otherwise dispose of any Series B Senior Notes, any security
convertible into or exchangeable into or exercisable for Series B Senior Notes
or any debt securities substantially similar to the Series B Senior Notes
(except for the Series B Senior Notes issued pursuant to the Underwriting
Agreement), without the prior written consent of the Representatives.
Prior to this offering, there has been no public market for the Series B
Senior Notes. The Series B Senior Notes are expected to be approved for listing
on the NYSE, subject to official notice of issuance. Trading of the Series B
Senior Notes on the NYSE is expected to commence within a 30-day period after
the initial delivery of the Series B Senior Notes. The Representatives have
advised the Company that they intend to make a market in the Series B Senior
Notes prior to the commencement of trading on the NYSE. The Representatives will
have no obligation to make a market in the Series B Senior Notes, however, and
may cease market making activities, if commenced, at any time.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the 1933 Act. The Underwriters have
agreed to reimburse the Company for certain expenses.
In connection with this offering and in compliance with applicable law and
industry practice, the Underwriters may overallot or effect transactions which
stabilize, maintain or otherwise affect the market price of the Series B Senior
Notes at levels above those which might otherwise prevail in the open market,
including by entering stabilizing bids, purchasing Series B Senior Notes to
cover syndicate short positions and imposing penalty bids. A stabilizing bid
means the placing of any bid, or the effecting of any purchase, for the purpose
of pegging, fixing or maintaining the price of a security. Covering a syndicate
short position means placing a bid or effecting a purchase of a security on
behalf of the underwriting syndicate to reduce a short position created in
connection with the offering. Imposing a penalty bid means purchasing a security
in the open market to reduce the underwriting syndicate's short position or to
stabilize the price of the security and in connection therewith reclaiming the
amount of the selling concession from the underwriters and selling group members
who sold such securities as part of the offering.
In general, purchases of a security for the purpose of stabilization or to
reduce a syndicate short position could cause the price of the security to be
higher than it might be in the absence of such purchases. The imposition of a
penalty bid might also have an effect on the price of a security to the extent
that it were to discourage resales of the security.
Neither the Company nor any of the Underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the
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Series B Senior Notes. In addition, neither the Company nor any of the
Underwriters makes any representation that the Underwriters will engage in such
transactions or that such transactions once commenced will not be discontinued
without notice.
Certain of the Underwriters engage in transactions with, and, from time to
time, have performed services for, the Company and its affiliates in the
ordinary course of business.
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GLOSSARY
1933 Act................... The Securities Act of 1933, as amended.
1934 Act................... The Securities Exchange Act of 1934, as amended.
Company.................... Alabama Power Company.
DTC........................ The Depository Trust Company, a "clearing
corporation" that initially will hold (through its
agents) a global certificate evidencing the Series
B Senior Notes.
Interest Payment Dates..... March 31, June 30, September 30 and December 31 of
each year.
NYSE....................... New York Stock Exchange.
Record Date................ The close of business on the 15th calendar day
prior to an Interest Payment Date.
Redemption Price........... 100% of the principal amount of the Series B Senior
Notes being redeemed, plus accrued and unpaid
interest thereon to the date of payment.
Securities Rate............ The per annum interest rate on the Series B Senior
Notes, and set forth on the cover page of this
Prospectus Supplement.
Senior Note Indenture...... The indenture pursuant to which the Company's
Series B Senior Notes will be issued.
Senior Note Indenture
Trustee.................... The trustee under the Senior Note Indenture;
initially, The Chase Manhattan Bank.
Series B Senior Notes...... The Series B 7% Senior Quarterly Interest Notes due
December 31, 2047 of the Company.
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