Exhibit 5(a)
Milbank, Tweed, Hadley & McCloy
1 Chase Manhattan Plaza
New York, New York 10005
February 5, 1997
Public Service Company of Oklahoma
c/o Central and South West Corporation
1616 Woodall Rodgers Freeway
Dallas, Texas 75202
PSO Capital I
c/o Central and South West Corporation
1616 Woodall Rodgers Freeway
Dallas, Texas 75202
PSO Capital II
c/o Central and South West Corporation
1616 Woodall Rodgers Freeway
Dallas, Texas 75202
Re: Registration Statement on Form S-3 of
Public Service Company of Oklahoma
Ladies and Gentlemen:
We are acting as special counsel to Public Service Company of
Oklahoma, an Oklahoma corporation (the "Company"), in connection with the
proposed issuance and sale by the Company from time to time of up to $75 million
aggregate principal amount of the Company's Junior Subordinated Debentures (the
"Debentures"), to be issued in one or more series pursuant to an indenture
between the Company and The Bank of New York, as Trustee (the "Indenture"), and
the proposed public offering by PSO Capital I and PSO Capital II, each a
business trust created under the laws of the State of Delaware (collectively,
the "Issuer Trusts"), from time to time in one or more series, of an amount not
to exceed $75 million of preferred securities, representing preferred undivided
beneficial interests in the assets of such Issuer Trusts (the "Preferred
Securities"), all as contemplated by the Registration Statement on Form S-3 (the
"Registration Statement") to be filed by the Company and the Issuer Trusts with
the Securities and Exchange Commission (the "Commission") for the registration
of the Debentures and Preferred Securities under the Securities Act of 1933, as
amended (the "Act") and their sale pursuant to one or more underwriting
agreements filed as an exhibit to the Registration Statement (each, an
"Underwriting Agreement"). Capitalized terms used herein and not otherwise
defined have the meanings ascribed to them in the Registration Statement.
As described in the Registration Statement, the Company may issue the
Debentures to (a) the public or institutional investors or (b) the Issuer Trusts
in connection with the issuance of Preferred Securities. If Preferred Securities
are issued by the Issuer Trusts, the proceeds therefrom, together with the
capital contribution of the Company, as owner of the common securities of each
Issuer Trust, will be used to purchase Debentures. The Company will guarantee
pursuant to a Guarantee Agreement between the Company and The Bank of New York,
as trustee, the payment by each Issuer Trust of distributions that are required
to be made from time to time with respect to the Preferred Securities and of
amounts due upon liquidation of each Issuer Trust or the redemption of the
Preferred Securities (the "Guarantee," or when referred to collectively, the
"Guarantees"), all to the extent such Issuer Trust has funds available therefor
as set forth in the Guarantees. The Preferred Securities are to be issued by
each Issuer Trust pursuant to a Trust Agreement, each as amended and restated.
We have examined originals, or copies certified to our satisfaction,
of such corporate records of the Company and the Issuer Trusts, certificates of
public officials, certificates of officers and representatives of the Company
and the Issuer Trusts and other documents, as we have deemed it necessary to
require as a basis for the opinions hereinafter expressed. In our examination we
have assumed the genuineness of all signatures and the authenticity of all
documents submitted to us as originals and the conformity with the originals of
all documents submitted to us as copies. As to various questions of fact
material to such opinions we have, when relevant facts were not independently
established, relied upon certifications by officers of the Company and other
appropriate persons and statements contained in the Registration Statement.
Based on the foregoing, and having regard to legal considerations we
deem relevant, we are of the opinion that when the Indenture has been duly
authorized, executed and delivered by the Company and duly executed and
delivered by The Bank of New York, as Trustee, when the supplemental indenture
with respect to a series of Debentures has been duly authorized, executed and
delivered, when the Guarantee Agreement relating to the Guarantee with respect
to a series of Preferred Securities has been duly authorized, executed and
delivered, when the Amended and Restated Trust Agreement of the Issuer Trust
issuing the Preferred Securities has been duly authorized, executed and
delivered, and when the Debentures and Preferred Securities of such series have
been duly authorized, executed, and, in the case of the Debentures,
authenticated, and issued in accordance with the terms of the Indenture and the
applicable supplemental indenture and delivered against payment therefor in
accordance with the terms of the applicable Underwriting Agreement, the
Debentures of such series and the Guarantee relating to such series of Preferred
Securities of such Issuer Trust, will constitute legal, valid and binding
obligations of the Company, entitled to the benefits of, and subject to the
provisions of, the Indenture and the applicable supplemental indenture, and the
Guarantee Agreement, except (i) as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other laws of general
applicability affecting the enforcement of creditors' rights and (ii) that such
enforceability may be limited by the application of general principals of equity
(regardless of whether considered in a proceeding in equity or at law),
including without limitation (x) the possible unavailability of specific
performance, injunctive relief or any other equitable remedies and (y) concepts
of materiality, reasonableness, good faith and fair dealing.
We do not express any opinion as to matters governed by any laws other
than the Federal laws of the United States and the laws of the State of New
York, and we are expressing no opinion as to the effects of the laws of any
other jurisdiction.
We hereby consent to the use of this opinion as Exhibit 5(a) to the
Registration Statement and further consent to the use of our name in the
Registration Statement, and any amendment thereto, and in the preliminary
Prospectus and the preliminary Prospectus Supplement constituting a part
thereof.
Very truly yours,
/s/ MILBANK, TWEED, HADLEY & McCLOY