Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
THE NARRAGANSETT ELECTRIC COMPANY
(Exact name of registrant as specified in its charter)
RHODE ISLAND
(State or other jurisdiction of
incorporation or organization)
05-0187805
(I.R.S. Employer
Identification No.)
280 MELROSE STREET, PROVIDENCE, RHODE ISLAND 02907
401-784-7000
(Address and telephone number of principal executive office)
ALFRED D. HOUSTON ROBERT KING WULFF
Vice President and Treasurer Corporation Counsel
25 Research Drive 25 Research Drive
Westborough, Massachusetts 01582 Westborough, Massachusetts 01582
508-389-2000 508-389-2000
(Name, address and telephone number of agents for service)
Please send copies of all communications to:
GEORGE J. FORSYTH, ESQ.
MILBANK, TWEED, HADLEY & MCCLOY
1 Chase Manhattan Plaza
New York, New York 10005
Approximate date of commencement of proposed sale to the public: to be
determined by market conditions after the effective date of this Registration
Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. ( )
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, check the following box. (X)
CALCULATION OF REGISTRATION FEE
=============================================================================
Title of
Each Class of Proposed Proposed
Securities Amount Maximum Maximum Amount of
Being Being Offering Price Aggregate Registration
Registered Registered Per Unit* Offering Price* Fee
- ------------------------------------------------------------------------------
First $50,000,000 100% $50,000,000 $17,241
Mortgage
Bonds
=============================================================================
*Used only for purpose of calculating the amount of registration fee.
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
registration statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the registration statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
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# SUBJECT TO COMPLETION, DATED #
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PROSPECTUS
(LOGO)
THE NARRAGANSETT ELECTRIC COMPANY
(A SUBSIDIARY OF NEW ENGLAND ELECTRIC SYSTEM)
$50,000,000
FIRST MORTGAGE BONDS
BOND INTEREST WILL BE PAYABLE SEMIANNUALLY.
THE BONDS WILL BE ISSUED ONLY AS FULLY REGISTERED BONDS
IN DENOMINATIONS OF $1,000 OR ANY INTEGRAL MULTIPLE THEREOF.
The Narragansett Electric Company (the Company) intends to offer, from
time to time, not exceeding $50 million aggregate principal amount of its
First Mortgage Bonds (New Bonds). The New Bonds will be issued under one or
more supplements to the Company's First Mortgage Indenture and Deed of Trust
dated as of September 1, 1944. The New Bonds may be offered as one or more
series and/or issues, and each series and/or issue of New Bonds will bear
interest at a fixed rate, which, together with the series designation,
principal amount, purchase price, maturity, and interest payment dates,
redemption terms, and any other specific provisions, will be established at
the time of issuance and set forth in a prospectus supplement (Prospectus
Supplement) with respect to each series and/or issue of New Bonds. Interest
on the New Bonds will be payable semiannually, and upon maturity or earlier
redemption. The New Bonds will be secured by a direct first mortgage lien on
substantially all of the Company's properties. See "Description of the New
Bonds".
The Company may sell the New Bonds by publicly inviting bids for the
purchase of the New Bonds, through negotiation with one or more underwriters,
through one or more agents, to one or more agents as principal for resale to
investors, or through negotiation directly with investors. See "Plan of
Distribution". The names of the purchasers, underwriters or agents, the
initial public offering price, any applicable discounts or commissions and the
proceeds to the Company with respect to the New Bonds will be set forth in a
prospectus supplement.
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.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS IN CONNECTION
WITH THE OFFER CONTAINED HEREIN. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER
IN ANY STATE IN WHICH SUCH OFFER MAY NOT LAWFULLY BE MADE.
##############################################################################
# A registration statement relating to these securities has been filed #
# with the Securities and Exchange Commission but has not yet become #
# effective. Information contained herein is subject to completion or #
# amendment. These securities may not be sold nor may offers to buy be #
# accepted prior to the time the registration statement becomes effective. #
# This prospectus shall not constitute an offer to sell or the solicitation #
# of an offer to buy nor shall there be any sale of these securities in any #
# state in which such offer, solicitation or sale would be unlawful prior to #
# registration or qualification under the securities laws of any such state. #
##############################################################################
The date of this Prospectus is , 199 .
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
AND ADDITIONAL INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 and, in accordance therewith, files reports and other
information with the Securities and Exchange Commission (SEC). Certain
information, as of particular dates, with respect to the Company's directors
and officers, their remuneration, and their material interest in transactions
with the Company, if any, is disclosed in the Company's Annual Report on Form
10-K.
The following documents, which have heretofore been filed by the Company
with the SEC pursuant to the Securities Exchange Act of 1934, are incorporated
by reference in this prospectus and shall be deemed to be a part hereof:
(1) Annual Report on Form 10-K for the year ended December 31, 1994 which
incorporates by reference the financial statements of the Company as
of December 31, 1994 and 1993, and for the three years ended
December 31, 1994 and incorporates by reference the related report of
Coopers & Lybrand L.L.P., independent accountants.
(2) Quarterly Report on Form 10-Q for the quarter ended March 31, 1995.
(3) Current Reports on Form 8-K dated March 6, 1995 and July 5, 1995.
All documents filed by the Company with the SEC pursuant to section 13(a),
13(c), 14, or 15(d) of the Securities Exchange Act of 1934 subsequent to the
date of this prospectus and prior to the termination of the offering made by
this prospectus shall be incorporated herein by reference and shall be deemed
to be a part hereof from the date of filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part
hereof.
Such documents and other information can be inspected and copied at the
Public Reference Room in the office of the SEC at 450 Fifth Street, N.W.,
Washington, D.C. or at SEC Regional Offices at 7 World Trade Center, New York,
New York, and 500 West Madison Street, Chicago, Illinois. Copies of such
material can be obtained from the Public Reference Section of the SEC,
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.
THE COMPANY HEREBY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO EACH PERSON,
INCLUDING ANY BENEFICIAL OWNER, TO WHOM A COPY OF THIS PROSPECTUS HAS BEEN
DELIVERED, ON THE WRITTEN OR ORAL REQUEST OF ANY SUCH PERSON, A COPY OF ANY OR
ALL OF THE DOCUMENTS REFERRED TO ABOVE WHICH HAVE BEEN OR MAY BE INCORPORATED
BY REFERENCE IN THIS PROSPECTUS, OTHER THAN EXHIBITS TO SUCH DOCUMENTS.
WRITTEN OR ORAL REQUESTS FOR SUCH COPIES SHOULD BE DIRECTED TO THE SECRETARY,
THE NARRAGANSETT ELECTRIC COMPANY, 280 MELROSE STREET, PROVIDENCE, RHODE
ISLAND 02907 (TELEPHONE 401-784-7000).
SUMMARY INFORMATION
The following material is qualified in its entirety by the information and
financial statements appearing elsewhere in this prospectus and in the
documents and information incorporated herein by reference.
THE COMPANY
Company . . . . . . . . . . . . .The Narragansett Electric Company.
Parent. . . . . . . . . . . . . .New England Electric System.
Business. . . . . . . . . . . . .Retail electric utility.
Power Supply. . . . . . . . . . .New England Power Company (NEP), an
affiliated wholesale generation company.
Service Area. . . . . . . . . . .Covers approximately 80% of Rhode
Island with Providence, Rhode Island, the
largest city served.
Customers . . . . . . . . . . . .Approximately 324,000 as of December 31,
1994.
Revenue Distribution. . . . . . .For the 12 months ended December 31, 1994,
the Company's revenues from the sale of
electricity were derived 43% from
residential customers, 40% from commercial
customers, 15% from industrial customers,
and 2% from others.
THE OFFERING
Securities Offered. . . . . . . .Not exceeding $50,000,000 principal amount
of First Mortgage Bonds, in one or more
series.
Payment of Interest . . . . . . .Semiannually, on dates to be determined.
Maturity. . . . . . . . . . . . .To be determined.
Security Interest . . . . . . . .Secured, together with all other outstanding
First Mortgage Bonds, by a mortgage on
substantially all of the Company's
properties.
Improvement Fund. . . . . . . . .For all the Company's First Mortgage Bonds,
including the New Bonds, the Company will
make mandatory annual improvement fund
payments equal to 2-1/2% of the average
investment in depreciable property during
the preceding year, to be satisfied by First
Mortgage Bonds of any issue or series
(including the New Bonds), cash, or
additional property. See "Description of
the New Bonds - Improvement Fund".
Redemption. . . . . . . . . . . .To be determined for each series and/or
issue of New Bonds. See "Description of the
New Bonds - Redemption".
THE NARRAGANSETT ELECTRIC COMPANY
SELECTED FINANCIAL INFORMATION
(DOLLARS IN THOUSANDS)
12 Months Ended Years Ended December 31,
March 31, 1995 -----------------------------------------------------
(Unaudited) 1994 1993 1992 1991 1990
--------------- ---- ---- ---- ---- ----
STATEMENT OF INCOME DATA:
Operating Revenue............ $481,228 $481,669 $483,028 $468,252 $457,510 $412,273
Net Income................... $ 16,040 $ 14,589 $ 14,274 $ 21,052 $ 16,820 $ 17,599
Ratio of Earnings to Fixed
Charges (1)................ 2.14 2.10 2.23 3.04 2.55 2.79
Utility Plant, net (end of
period) (2)................... $502,734 $491,915 $421,577 $375,210 $358,348 $340,046
AS OF MARCH 31, 1995
(Unaudited)
----------------------
ACTUAL RATIO
-------- -------
CAPITAL STRUCTURE:
Long-Term Debt-First Mortgage
Bonds ............................. $193,873 43.5%
Cumulative Preferred Stock........... 36,500 8.2
Common Equity........................ 215,014 48.3
-------- -----
Total........................... $445,387 100.0%
======== ======
- ---------------
<FN>
(1) In determining the ratios of earnings to fixed charges, earnings were arrived at by
adding to net income all income taxes and fixed charges. Fixed charges consist of
interest and amortization of debt premiums, discounts and expense on all indebtedness.
(2) Includes construction work in progress.
The Company had $26,950,000 of short-term indebtedness outstanding as of March 31, 1995.
</FN>
THE COMPANY
The Company, incorporated by Special Act of the Rhode Island General
Assembly, is a retail electric utility subsidiary of New England Electric
System (NEES), a registered holding company under the Public Utility Holding
Company Act of 1935 (the 1935 Act). NEES owns all of the Company's common
stock. The executive offices of the Company are at 280 Melrose Street,
Providence, Rhode Island 02907 (telephone 401-784-7000).
USE OF PROCEEDS
The proceeds from the sale of the New Bonds will be applied to the cost
of, or the reimbursement of the treasury for, or to the payment of short-term
borrowings incurred for (i) the retirement or refunding of certain series of
outstanding First Mortgage Bonds, (ii) capitalizable additions and
improvements to the plant and property of the Company, or (iii) other
capitalizable expenditures.
CONSTRUCTION AND FINANCING
The Company's major construction project is the repowering of the
Manchester Street Station, a 140 megawatt electric generating station in
Providence, Rhode Island. Repowering will more than triple the power
generation capacity of Manchester Street Station and substantially increase
the plant's thermal efficiency. To facilitate financing this project, the
Company sold a 90 percent interest in the existing station to NEP effective
July 1, 1992. The total cost for the generating station, scheduled to be
placed in service in late 1995, is estimated to be approximately $520 million
including allowance for funds used during construction (AFDC). At March 31,
1995, $322 million, including AFDC, had been spent on the generating station
(including $30 million by the Company). In addition, related transmission
improvements were placed in service in September 1994 at a cost of
approximately $60 million (including approximately $45 million by the
Company).
The Company's construction expenditures, excluding AFDC but including the
Repowering Project, totaled $93 million in 1994, and are estimated to be
$55 million in 1995, $50 million in 1996, and $40 million in 1997. These
construction expenditures were and will be incurred principally for
improvements and additions to the Company's distribution and transmission
system. The Company conducts a continuing review of its construction program.
This program and the above estimates relating thereto are subject to revisions
based upon changes in assumptions concerning, among other things, load growth
and rates of inflation.
Approximately 40% and 60% of the funds needed to pay for construction
expenditures during 1995 and 1996, respectively, are expected to be provided
from internal sources and the balance from additional financing. It is
expected that any such additional financing will be provided initially from
short-term borrowings to be repaid either from the proceeds of the sale of
additional First Mortgage Bonds or from capital contributions made by NEES.
The Company's preferred stock preference provisions (which are an exhibit
to the Registration Statement and which reference hereto shall include terms
as defined therein) limit the amount of short-term unsecured indebtedness
which may be outstanding to 10% of the sum of secured indebtedness, capital,
premiums, and retained earnings, unless a higher amount is authorized by vote
of the preferred stockholders. The preferred stockholders have voted to
increase this limit to 20% for debt issued through September 30, 1998. At
March 31, 1995, this limit was approximately $90 million.
Without a vote of a majority (and 75% of the total number of shares
present or represented at the meeting, with respect to (b)(i) and (b)(iv), if
any of the 4-1/2% Series Cumulative Preferred Stock is outstanding) of the
outstanding Cumulative Preferred Stock and parity stock, voting together, the
Company shall not, pursuant to the preferred stock preference provisions:
(a) issue Cumulative Preferred Stock or any other stock ranking on a
parity therewith as to dividends or assets if after such issue the
aggregate combined outstanding par value of all series thereof would
exceed $60 million; or
(b) issue Cumulative Preferred Stock or any stock of prior or equal
rank as to dividends or assets unless (i) so long as any of the 4-1/2%
Series Cumulative Preferred Stock is outstanding, the par value of any
stock ranking junior to the Cumulative Preferred Stock as to dividends and
assets to be outstanding immediately after such issue shall at least equal
the greater of the aggregate par value of all preferred stock and of any
other such prior or parity stock or the aggregate amount payable upon
liquidation on all preferred stock and of any other such prior or parity
stock; (ii) immediately after such issue the Junior Stock Equity shall at
least equal the aggregate amount payable on liquidation or dissolution of
the Company to holders of Cumulative Preferred Stock and any other parity
stock; provided, however, that if for this purpose it shall have been
necessary to take into consideration any earned surplus of the Company,
the Company shall not (until such Junior Stock Equity exclusive of such
portion of earned surplus shall equal such aggregate) pay any dividends or
make any distribution on shares of its stock ranking junior to the
Preferred Stock as to dividends or assets which would result in reducing
such Junior Stock Equity to an amount less than such aggregate amount
payable on involuntary liquidation, dissolution or winding up of the
affairs of the Company; (iii) the gross income of the Company available
for interest on its indebtedness and for dividends on its Preferred Stock
and any other such prior or parity stock during a period of twelve
consecutive months in the preceding fifteen-month period is at least 1-1/2
times the annual interest charges and dividend requirements on all
interest bearing indebtedness and all Cumulative Preferred Stock and such
prior or parity stock to be outstanding immediately after the proposed
issue; and (iv) so long as any of the 4-1/2% Series Cumulative Preferred
Stock is outstanding, the net earnings of the Company available for
dividends are at least 2-1/2 times the annual dividend requirements of all
Cumulative Preferred Stock and any parity stock to be outstanding
immediately after the proposed issue. Under the most restrictive of these
issuance tests (the aggregate number of shares test), the Company could
issue approximately $24 million of new preferred stock at March 31, 1995.
For information on limitations on the Company's ability to issue First
Mortgage Bonds, see "Description of the New Bonds - Additional First Mortgage
Bonds" in this prospectus.
DESCRIPTION OF THE NEW BONDS
GENERAL
The New Bonds will be issued under and secured by a First Mortgage
Indenture and Deed of Trust dated as of September 1, 1944, from the Company to
Rhode Island Hospital Trust Company, Providence, Rhode Island, as Trustee, and
indentures supplemental thereto, including one or more supplemental indentures
relating to the New Bonds to Rhode Island Hospital Trust National Bank
(formerly Rhode Island Hospital Trust Company), as Trustee, with respect to
the New Bonds (collectively, the Indenture). Each series and/or issue of the
New Bonds will mature in the year shown in its title, and will bear interest
beginning from the date as of which such issue of New Bonds is first certified
and delivered, at the rate per annum shown in its title. Interest will be
payable semiannually. Principal and premium, if any, will be payable at the
office of the Trustee. Interest will be payable at the office of the Trustee
or, at the Company's option, by mailing checks to registered owners at their
addresses set forth in the bond register. It is the Company's general
practice to mail interest checks to registered owners.
The designation and principal amount of the New Bonds, the date of
maturity (which date will not be more than thirty years from the date on which
such New Bonds were first certified and delivered), the interest rate, the
interest payment dates, and the provisions for redemption (including any
premium or premiums payable thereon) will be separately established for each
series and/or issue and set forth in the applicable prospectus supplement.
The New Bonds will be issued only in the form of fully registered bonds
without coupons in denominations of $1,000 or any integral multiple thereof.
Any of the New Bonds may be presented at the office of the Trustee for
exchange for a like aggregate principal amount of New Bonds of the same issue
of other authorized denominations or for transfer, without payment in either
case of any charge other than stamp taxes or other governmental charges, if
any, required to be paid by the Company.
The brief summary herein of certain provisions of the Indenture is merely
an outline and does not purport to be complete. It uses defined terms and is
qualified in its entirety by reference to the Indenture which is filed as an
exhibit to the registration statement.
REDEMPTION
The redemption provisions of each series and/or issue of the New Bonds
will be described in the prospectus supplement relating thereto.
SECURITY AND PRIORITY
The New Bonds, when duly issued, will be secured, together with all other
outstanding First Mortgage Bonds, by a direct first mortgage lien on
substantially all the properties and franchises then owned by the Company,
subject only to liens permitted by the Indenture. Certain types of property
are excepted from the lien of the Indenture, including, but not limited to,
consumable property, fuel, automotive and office equipment, merchandise held
for sale, supplies, cash, receivables, and securities. The after-acquired
property clause of the Indenture, by its terms and to the extent permitted by
law, applies the lien of the Indenture to property subsequently acquired by
the Company. The Indenture provides for the release or substitution of
property subject to the lien of the Indenture under certain circumstances
provided that specific conditions are met.
No other securities may be issued ranking prior to or on a parity with the
New Bonds with respect to the security provided by the Indenture, except
additional First Mortgage Bonds issued in the manner summarized below and
obligations existing or created in connection with the acquisition of
after-acquired property, which may not exceed 60% of the cost or fair value,
whichever is less, of such property.
IMPROVEMENT FUND
There is an improvement fund applicable to all outstanding bonds of the
Company with an annual requirement, payable July 1, computed on the basis of
2-1/2% of the average investment in depreciable property during the preceding
calendar year. The annual improvement fund requirement may be satisfied in
cash or First Mortgage Bonds (including the New Bonds) of any series or by the
allocation of an amount of additional property (as defined in the Indenture).
The aggregate amount of additional property used to satisfy the improvement
fund requirement may be used to offset net retirements in computing the net
amount of additional property. For 1994, the improvement fund requirement was
approximately $13 million.
Any series and/or issue of New Bonds may be redeemed at special redemption
prices to satisfy the annual improvement fund requirement. However, the use
of cash for redemptions of New Bonds may be restricted by any noncallability
or nonrefundability provisions that may be established for that series and/or
issue of New Bonds.
ADDITIONAL FIRST MORTGAGE BONDS
Additional First Mortgage Bonds of any series may be issued as follows:
(A) against 60% of the net amount of additional property (70% after the
Series S, T, and U First Mortgage Bonds are retired);
(B) to refund a like amount of First Mortgage Bonds of any series
theretofore retired or for which retirement the Company has made
provision; and
(C) against the deposit of cash (to a limit of $10 million or 25% of the
principal amount of all First Mortgage Bonds outstanding immediately
after such issue, whichever is less, held by the Trustee).
Cash so deposited with the Trustee may be withdrawn in amounts equal to
the principal amount of First Mortgage Bonds otherwise issuable against
additional property or retired First Mortgage Bonds.
In connection with the issue of First Mortgage Bonds against additional
property or cash (other than cash provided for the retirement of First
Mortgage Bonds), the Company must demonstrate that net earnings for any twelve
consecutive calendar months within the preceding fifteen months are at least
twice the annual interest charges on all First Mortgage Bonds outstanding and
applied for and on all equal or prior lien indebtedness. For the twelve
months ended March 31, 1995, the ratio of net earnings to annual interest
charges on all Bonds outstanding was 2.28. Except under limited
circumstances, no earnings test is required in connection with the refunding
of a like amount of First Mortgage Bonds. The evidence of additional property
and net earnings may be demonstrated at a date prior to the actual issuance of
the First Mortgage Bonds.
The New Bonds will be issued against additional property or against First
Mortgage Bonds, which could include retired bonds or Unissued Bonds which have
been previously certified against additional property. At March 31, 1995, the
Company had approximately $135 million net amount of additional property
against which approximately $80 million of First Mortgage Bonds could be
issued.
Pursuant to the limitations described above (the net earnings requirement
currently being the most restrictive), the Company as of March 31, 1995 could
have issued approximately $27 million of additional First Mortgage Bonds.
DIVIDEND RESTRICTION
So long as any preferred stock is outstanding, certain restrictions on
payment of dividends on the common stock would come into effect if the junior
stock equity were, or by reason of payment of such dividends became, less than
25% of total capitalization. However, the junior stock equity at March 31,
1995, was approximately 48% of total capitalization and, accordingly, none of
the Company's retained earnings at March 31, 1995, were restricted as to
dividends on common stock under the foregoing restrictions.
PERIODIC INSPECTION OF PROPERTY
Inspection by an independent engineer is required at least once every five
years, or more often if requested by the Bond holders. The Company is to make
good any maintenance deficiency and to record retirements as called for by the
engineer's report.
MODIFICATION OF THE INDENTURE
Any provision of the Indenture may be modified with the consent of the
holders of not less than 66-2/3% of the aggregate principal amount of the
First Mortgage Bonds at the time outstanding (and, if one or more series of
First Mortgage Bonds are differently affected, with the consent of the holders
of 66-2/3% of the aggregate principal amount of the First Mortgage Bonds of
each series so affected). No such modification may (a) affect certain
provisions protecting the Trustee without the Trustee's assent, (b) affect the
payment of principal, premium, or interest on any First Mortgage Bonds, or
extend the maturity or time of payment, without the consent of the Bond
holders affected, (c) permit the creation by the Company of any lien ranking
prior to or on a parity with the lien of the Indenture except as expressly
authorized in the Indenture, (d) reduce the above specified percentages of
Bond holders, or (e) permit, in the opinion of the Trustee, a substantial
impairment of the benefits or lien of the Indenture. No such modification may
be made which would conflict with the Trust Indenture Act of 1939, as at the
time in effect.
THE TRUSTEE
The Company has a demand deposit account and a line of credit with the
Trustee under which borrowings have been made. RIHT Financial Corporation,
the parent of the Trustee, is wholly owned by Bank of Boston Corporation.
John W. Rowe, a director of the Company and President and Chief Executive
Officer of NEES, is a director of Bank of Boston Corporation. William Watkins
Jr., an officer of the Company, is a director of the Trustee. If the Trustee
acquires any conflicting interest, it is required to either eliminate the
conflicting interest or resign. There are limitations on the rights of the
Trustee in respect of certain payments and property received by the Trustee
within four months prior to a default (as defined below).
The Trustee may become the owner or pledgee of First Mortgage Bonds with
the same rights as if it were not the Trustee. The holders of a majority in
aggregate principal amount of the First Mortgage Bonds outstanding may require
the Trustee to take certain actions, except when any such action would be
unlawful, would involve the Trustee in personal liability, or would be
unjustifiably prejudicial to the nonassenting Bond holders, or when the
Trustee would not be sufficiently indemnified for any expenditures in the
action.
DEFAULT
The following are defaults under the Indenture: (a) failure to pay
principal when due; (b) failure for 30 days to pay interest after due;
(c) failure to pay any installment of the improvement fund for 60 days after
due; (d) the expiration of 60 days following the bankruptcy of, the
reorganization of, or the appointment of a receiver for, the Company;
(e) certain other acts of bankruptcy, insolvency, or reorganization; and
(f) failure to perform other provisions of the Indenture for 60 days following
a demand by the Trustee to the Company to cure such failure. The Company must
pay interest on overdue installments of interest at the rate of 6% per annum;
further, interest must be paid, under certain conditions, on overdue principal
at the rate of 6% per annum. The Trustee may withhold notice to the Bond
holders of any default, except default in the payment of principal, interest,
or any improvement fund installment, if certain officers and directors of the
Trustee determine in good faith that withholding such notice is in the
interest of the Bond holders.
EVIDENCE TO BE FURNISHED TO TRUSTEE
The Company must periodically furnish to the Trustee evidence as to the
absence of default in connection with certain improvement fund requirements
and as to compliance with certain other terms of the Indenture. Further,
prior to issuance of additional First Mortgage Bonds, release of property,
withdrawal of cash, and various other actions under the Indenture, evidence
must be furnished as to the absence of default and as to compliance with
certain terms of the Indenture. Whenever all indebtedness secured by the
Indenture shall have been paid, or adequate provision therefor made, the
Trustee shall, upon request of the Company and receipt by the Trustee of
evidence as to compliance with conditions precedent under the Indenture,
cancel and discharge the lien of the Indenture.
HIGHLY LEVERAGED TRANSACTIONS
The provisions of the Indenture which provide holders of the Company's
outstanding First Mortgage Bonds with some protection in the event of a highly
leveraged transaction are described above under Security and Priority,
Additional First Mortgage Bonds, and Modification of the Indenture. The
restrictions on dividend payments provided in the preferred stock provisions
of the Company are described under Dividend Restriction. Restrictions on the
issuance of additional preferred stock and unsecured debt are described under
Construction and Financing. Further, the issuance of debt instruments or
additional common stock, the sale of significant assets, or any disposition of
the Company's stock by NEES, are regulated by the Rhode Island Public
Utilities Commission and/or the Securities Exchange Commission under the
Public Utility Holding Company Act of 1935, as amended.
The Indenture provides that no sale of the Company substantially as an
entity or merger of the Company shall be made on terms which impair the lien
or security of the Indenture. Any successor to the Company must expressly
assume the obligations of the Company under the Indenture.
EXPERTS
The balance sheets as of December 31, 1994 and 1993 and the statements of
income, retained earnings, and cash flows for each of the three years in the
period ended December 31, 1994, all incorporated by reference in The
Narragansett Electric Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1994, incorporated by reference in this prospectus, have
been incorporated herein in reliance on the report of Coopers & Lybrand
L.L.P., independent accountants, given on the authority of that firm as
experts in accounting and auditing.
The statements of law and legal conclusions made in this prospectus, not
otherwise attributed, have been reviewed by Robert King Wulff, Corporation
Counsel, and/or Kirk L. Ramsauer, Assistant General Counsel, and are made upon
their authority as experts.
LEGAL MATTERS
Legal matters in connection with the securities offered hereby will be
passed upon for the Company by Robert King Wulff and/or Kirk L. Ramsauer,
25 Research Drive, Westborough, Massachusetts, and as to franchises, by
Edwards & Angell, One Hospital Trust Plaza, Providence, Rhode Island, and will
be passed upon for the purchasers by Milbank, Tweed, Hadley & McCloy, 1 Chase
Manhattan Plaza, New York, New York. The opinion of Messrs. Wulff and
Ramsauer as to legal matters in connection with the securities offered hereby
is filed as an exhibit to the registration statement.
PLAN OF DISTRIBUTION
The Company may sell the New Bonds in any of the following ways:
(i) through competitive bidding; (ii) through negotiation with one or more
underwriters; (iii) through one or more agents; (iv) to one or more agents as
principal for resale to investors; (v) through negotiation directly with
investors; or (vi) any combination of the above. The terms of any offering of
the New Bonds, including the name or names of any underwriters or agents with
whom the Company has entered into arrangements with respect to the sale of
such New Bonds, the proceeds to the Company, any underwriting discounts or
commissions and other terms constituting underwriters' compensation, the
initial public offering price and any discounts or concessions allowed or
reallowed or paid to dealers, will be set forth in the prospectus supplement
relating to such offering. Any initial public offering price and any
discounts or concessions allowed or reallowed or paid to dealers may be
changed from time to time.
If an underwriter or underwriters are involved in the sale of any of the
New Bonds, the Company will execute an underwriting or purchase agreement with
such underwriters at the time of sale, and the names of the underwriters, the
principal amount of the New Bonds to be purchased thereby and the other terms
and conditions of the transaction will be set forth in the prospectus
supplement relating to such sale. The New Bonds will be acquired by the
underwriters for their own account and may be resold from time to time in one
or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of the sale.
Unless otherwise indicated in the prospectus supplement, the underwriting or
purchase agreement will provide that the underwriter or underwriters are
obligated to purchase all of the New Bonds offered in the prospectus
supplement if any are purchased.
If any of the New Bonds are sold through an agent or agents designated by
the Company from time to time, the prospectus supplement will name any such
agent, set forth any commissions payable by the Company to any such agent and
the obligations of such agent with respect to the New Bonds. Unless otherwise
indicated in the prospectus supplement, any such agent will be acting on a
best efforts basis for the period of its appointment.
In connection with the sale of the New Bonds, any purchasers,
underwriters, or agents may receive compensation from the Company or from
purchasers in the form of concessions or commissions. The underwriters will
be, and any agents and any dealers participating in the distribution of the
New Bonds may be, deemed to be underwriters within the meaning of the
Securities Act of 1933. The agreement between the Company and any purchasers,
underwriters, or agents will contain reciprocal covenants of indemnity between
the Company and the purchasers, underwriters, or agents against certain
liabilities, including liabilities under the Securities Act of 1933.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Filing fees --Securities and Exchange Commission:
Registration Statement........................................ $ 17,241
#Services of New England Power Service Company (including
counsel)...................................................... 30,000
#Accountant's fees --Coopers & Lybrand L.L.P...................... 30,000
#Counsel fees --Edwards & Angell.................................. 1,000
#Trustee's fees (including counsel)............................... 27,750
#Printing and engraving costs..................................... 15,000
#Rating agency fees............................................... 48,000
#Miscellaneous (incl. recording and blue sky expenses)............ 17,625
--------
#Total expenses............................................... $186,616
========
#Estimated
Edwards & Angell of Providence, Rhode Island, have on various occasions
acted as counsel for the Company and some of its affiliates. The Company has
been advised by Edwards & Angell that they have no interest of a substantial
nature in the Company or any affiliate thereof but that certain partners hold
for investment, largely as fiduciaries, securities of the Company and of
various of its affiliates.
Milbank, Tweed, Hadley & McCloy of New York, New York have been selected
by the Company as independent counsel for the purchasers, underwriters, or
agents, who will pay their compensation and disbursements except as provided
in the purchase agreement. The above expenses do not include such
compensation and disbursements.
New England Power Service Company is an affiliated service company
operating pursuant to the provisions of the 1935 Act and the SEC's rules
thereunder. The services of New England Power Service Company are performed
at the actual cost thereof.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under Section 7-1.1-4.1 of the Rhode Island General Laws (R.I. Gen. Laws
S.7-1.1-4.1 (1985)), a corporation has the power to indemnify a director if
such director conducted himself in good faith, reasonably believed his conduct
was in the best interests of the corporation, and, if in a criminal
proceeding, had no reasonable cause to believe his conduct was unlawful.
Unless the articles of incorporation state otherwise, R.I. Gen. Laws
S.7-1.1-4.1 (1985) provide that a court can order a company to indemnify an
officer or director in certain circumstances. The statute also provides that
a company may provide officers and directors immunity, and that the
indemnification provided by the statute is not exclusive of any other
indemnification rights provided for under by-laws or other agreements. The
Company's charter provides that a director shall not be held liable to the
Company or the stockholders for breach of duty unless the liability is imposed
(i) under R.I. Gen. Laws S.7-1.1-43 (declaration of dividends), (ii) for a
breach of loyalty, (iii) for acts not in good faith or which involve
intentional misconduct, or (iv) due to the director deriving an improper
personal benefit. The Company does provide officers' and directors'
insurance. Under the provisions of the Agreement and Declaration of Trust of
New England Electric System, as amended, NEES will indemnify directors and
officers of the Company against liabilities and expenses, including counsel
fees reasonably incurred, resulting from litigation or threatened litigation
in which the director or officer may be involved by reason of his or her
position. Indemnification is withheld whenever the director or officer is
adjudicated "not to have acted in good faith in the reasonable belief that his
action was in the best interests" of NEES.
ITEM 16. EXHIBIT INDEX
EXHIBIT PREVIOUSLY FILED
- ------- ----------------
1-A --Form of Confirmation of Bid with schedules
attached, constituting the form of Purchase
Agreement for the New Bonds
1-B --Form of Distribution Agreement
1-C --Form of Underwriting Agreement
WITH
REGISTRATION AS
NUMBER EXHIBIT
------------ -------
4-A 2-7042 7-1 --First Mortgage Indenture and Deed of Trust,
dated as of September 1, 1944
4-B --Supplemental Indentures to First Mortgage
NUMBER DATED AS OF
------ -----------
2-7490 7-B First.......... May 1, 1948
2-9423 4-C Second......... March 1, 1952
2-10056 4-D Third.......... March 1, 1953
WITH
1980 FORM 10-K
--------------
0-898 4(a) Fourth......... March 1, 1956
0-898 4(a) Fifth.......... January 1, 1964
0-898 4(a) Sixth.......... February 1, 1968
0-898 4(a) Seventh........ April 1, 1970
0-898 4(a) Eighth......... March 1, 1972
0-898 4(a) Ninth.......... March 1, 1974
0-898 4(a) Tenth.......... August 1, 1974
0-898 4(a) Eleventh....... March 1, 1975
0-898 4(a) Twelfth........ August 1, 1980
WITH
1982 FORM 10-K
--------------
0-898 4(a) Thirteenth..... February 1, 1982
WITH
1983 FORM 10-K
--------------
0-898 4(a) Fourteenth..... January 1, 1984
WITH
1985 FORM 10-K
--------------
0-898 4(a) Fifteenth..... January 1, 1986
WITH
1986 FORM 10-K
--------------
0-898 4(a) Sixteenth..... June 1, 1986
WITH
1987 FORM 10-K
--------------
0-898 4(a) Seventeenth... November 1, 1987
WITH
1991 FORM 10-K
--------------
0-898 4(a) Eighteenth.... May 1, 1991
0-898 4(a) Nineteenth.... August 1, 1991
WITH
1992 FORM 10-K
--------------
0-898 4(a) Twentieth..... May 1, 1992
WITH
1993 FORM 10-K
--------------
0-898 4(a) Twenty-First.... October 1, 1993
4-C --Form of Supplemental Indenture
4-D --Certificate as to Form
4-E 33-49455 --Preferred stock provisions
5 --Opinion of Robert King Wulff, Esq., and/or
Kirk L. Ramsauer, Esq., with respect to the
legality of the securities being registered,
containing consent
WITH
MARCH 31, 1995
FORM 10-Q
--------------
12 0-898 12 --Statement re: computation of ratios
23 --Consent of Coopers & Lybrand L.L.P.
--Consent of counsel: See Exhibit 5
24-A --Certified copy of vote of Board of Directors,
containing power of attorney
24-B --Power of Attorney
25 --Statement of eligibility and qualification of
Rhode Island Hospital Trust National Bank (Form
T-1)
26 --Form of Public Invitation for Bids
UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made of
the securities registered hereby, 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;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of this 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 this
registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this registration statement or
any material change to such information in this registration statement;
provided, however, that the undertakings set forth in paragraphs (i) and (ii)
above do not apply if the information required to be included in a
post-effective amendment by these paragraphs is contained in periodic reports
filed by the registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in this
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.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering.
(4) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to section
13(a) or section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in this 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.
(5) To use its best efforts to distribute prior to any opening of bids,
to prospective bidders, underwriters, and dealers, a reasonable number of
copies of a prospectus which at that time meets the requirements of section
10(a) of the Securities Act of 1933, and relating to the securities offered at
competitive bidding, as contained in the registration statement, together with
any supplements thereto.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers, and controlling persons
of the Registrant pursuant to the provisions described under Item 15 above, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer,
or controlling person of the Registrant in the successful defense of any
action, suit, or proceeding) is asserted by such director, officer, or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act, and will be governed by the final adjudication
of such issue.
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON 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 PROVIDENCE, THE STATE OF RHODE ISLAND, ON THE
NINETEENTH DAY OF JULY, 1995.
THE NARRAGANSETT ELECTRIC COMPANY
s/Robert L. McCabe
ROBERT L. MCCABE, PRESIDENT
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATE INDICATED.
WE, THE UNDERSIGNED OFFICERS OF THE NARRAGANSETT ELECTRIC COMPANY, HEREBY
AUTHORIZE AND DIRECT ROBERT KING WULFF, JOHN G. COCHRANE, AND CRAIG L. EATON
OR ANY ONE OF THEM, AS ATTORNEYS-IN-FACT, TO EXECUTE IN THE NAME AND ON BEHALF
OF EACH OF THE UNDERSIGNED PERSONS, IN THE RESPECTIVE CAPACITIES INDICATED
BELOW, ANY AMENDMENT OR AMENDMENTS TO THE REGISTRATION STATEMENT OF THE
NARRAGANSETT ELECTRIC COMPANY UNDER THE SECURITIES ACT OF 1933 RELATING TO THE
PROPOSED ISSUE OF THE NEW BONDS.
SIGNATURE AND TITLE AS TO EACH SIGNATURE ON THIS PAGE, JULY 19, 1995.
(I) PRINCIPAL EXECUTIVE OFFICER:
s/Robert L. McCabe
ROBERT L. MCCABE, PRESIDENT
(II) PRINCIPAL FINANCIAL OFFICER:
s/Alfred D. Houston
ALFRED D. HOUSTON, VICE PRESIDENT
AND TREASURER
(III) PRINCIPAL ACCOUNTING OFFICER:
s/Howard W. McDowell
HOWARD W. MCDOWELL, CONTROLLER
(IV) DIRECTORS: (A MAJORITY)
STEPHEN A. CARDI
FRANCES H. GAMMELL s/John G. Cochrane
JOSEPH J. KIRBY
ROBERT L. MCCABE ALL BY:
RICHARD P. SERGEL JOHN G. COCHRANE
WILLIAM E. TRUEHEART ATTORNEY-IN-FACT
JOHN A. WILSON, JR.
DATE (AS TO ALL SIGNATURES ON THIS PAGE)
July 19, 1995