SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) June 7, 2005
--------------------------------
Commission Registrant, State of Incorporation, I.R.S. Employer
File Number Address and Telephone Number Identification No.
333-98553 Southern Power Company 58-2598670
(A Delaware Corporation)
270 Peachtree Street, N.W.
Atlanta, Georgia 30303
(404) 506-5000
The address of the registrant has not changed since the last report.
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
On June 8, 2005, Southern Power Company ("Southern Power") entered into
a Multi-Year Credit Agreement dated as of June 10, 2005 by and among Southern
Power, the Lenders (as defined therein), Citibank, N.A., as administrative
agent, and The Bank of Tokyo-Mitsubishi, Ltd., New York Branch, as Issuing Bank
(the "Agreement"), effective as of June 10, 2005. The Agreement is an unsecured
$400,000,000 revolving credit agreement. The Agreement is available for the
general corporate purposes of Southern Power (including, without limitation, to
provide liquidity support for commercial paper issued by Southern Power).
Southern Power also has the ability to have letters of credit issued under the
Agreement in an aggregate amount up to $100,000,000, which would be included in
the $400,000,000 maximum borrowing amount. The Agreement expires on June 10,
2010, unless the maturity date is extended in accordance with the terms of the
Agreement.
The Agreement includes representations and warranties, covenants and
events of default, including (i) a requirement that Southern Power maintain the
ratio of Indebtedness (as defined in the Agreement) to Capitalization (as
defined in the Agreement) at .65 to 1.0 or less and (ii) a minimum contract
maintenance covenant. The Agreement also includes limitations on liens,
consolidations, mergers and sale of all or substantially all of Southern Power's
assets. Revolving Loans (as defined in the Agreement) bear interest at (i) the
Adjusted Eurodollar Rate (as defined in the Agreement) or (ii) the Base Rate (as
defined in the Agreement). Amounts outstanding under the Agreement may be
accelerated and become due and payable upon an event of default and expiration
of any applicable cure periods. Events of default include: (i) nonpayment of
obligations under the applicable Agreement, (ii) failure to perform any covenant
or agreement in the applicable Agreement, (iii) material misrepresentations,
(iv) failure to pay, or certain other defaults under, certain other
indebtedness, (v) certain bankruptcy or insolvency events, (vi) material unpaid
judgments, (vii) a change of control and (viii) customary ERISA defaults.
Southern Power currently has no outstanding borrowings under the Agreement.
Effective June 10, 2005, the Agreement replaced Southern Power's $325
million unsecured syndicated revolving credit facility.
Item 2.01. Completion of Acquisition or Disposition of Assets.
On June 7, 2005, Southern Power, through certain of its wholly-owned
subsidiaries, acquired all of the outstanding general and limited partnership
interests of Oleander Power Project, L.P. ("Oleander") from Constellation Power,
Inc. and certain other subsidiaries of Constellation Energy Group, Inc. Southern
Power's acquisition of the general and limited partnership interests in Oleander
was pursuant to a Purchase and Sale Agreement dated April 8, 2005, for an
aggregate purchase price of approximately $206 million, plus approximately $12
million of working capital and other adjustments. Oleander owns a dual-fueled
generating plant in Brevard County, Florida with a nominal installed capacity of
680 megawatts. The entire output of the plant is sold under separate power
purchase agreements (the "PPAs") with Florida Power & Light Company and Seminole
Electric Cooperative, Inc. The PPAs expire in 2007 and 2009, respectively.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under
an Off-Balance Sheet Arrangement.
The information provided in Item 1.01 of this Current Report on 8-K is
incorporated herein by reference.
In addition, on June 10, 2005 and June 13, 2005, Southern Power issued
an aggregate of $154 million of commercial paper under its commercial paper
program. The proceeds of the commercial paper were used to repay intercompany
borrowings from The Southern Company and for working capital purposes. Southern
Power anticipates continued borrowings under its commercial paper program for
working capital purposes and general corporate purposes and to repay ongoing
maturities of commercial paper under the program.
Forward Looking Statements:
Certain information contained in this report is forward-looking
information based on current expectations and plans that involve risks and
uncertainties. Forward-looking information includes, among other things,
statements concerning Southern Power's anticipated borrowings under its
commercial paper program. Southern Power cautions that there are certain factors
that can cause actual results to differ materially from the forward-looking
information that has been provided. The reader is cautioned not to put undue
reliance on this forward-looking information, which is not a guarantee of future
performance and is subject to a number of uncertainties and other factors, many
of which are outside the control of Southern Power; accordingly, there can be no
assurance that such suggested results will be realized.
The following factors, in addition to those discussed in Southern
Power's Annual Report on Form 10-K for the year ended December 31, 2004, and
subsequent securities filings, could cause results to differ materially from
management expectations as suggested by such forward-looking information: the
impact of recent and future federal and state regulatory change, including
legislative and regulatory initiatives regarding deregulation and restructuring
of the electric utility industry, and also changes in environmental, tax and
other laws and regulations to which Southern Power is subject, as well as
changes in application of existing laws and regulations; current and future
litigation, regulatory investigations, proceedings or inquiries; the effects,
extent and timing of the entry of additional competition in the markets in which
Southern Power operates; variations in demand for electricity and gas, including
those relating to weather, the general economy and population and business
growth (and declines); available sources and costs of fuels; ability to control
costs; advances in technology; state and federal rate regulations; internal
restructuring or other restructuring options that may be pursued; potential
business strategies, including acquisitions or dispositions of assets or
businesses, which cannot be assured to be completed or beneficial to Southern
Power; the ability of counterparties of Southern Power to make payments as and
when due; the ability to obtain new short- and long-term contracts with
neighboring utilities; the direct or indirect effect on Southern Power's
business resulting from terrorist incidents and the threat of terrorist
incidents; interest rate fluctuations and financial market conditions and the
results of financing efforts, including Southern Power's credit ratings; the
ability of Southern Power to obtain additional generating capacity at
competitive prices; catastrophic events such as fires, earthquakes, explosions,
floods, hurricanes or other similar occurrences; the direct or indirect effects
on Southern Power's business resulting from incidents similar to the August 2003
power outage in the Northeast; and the effect of accounting pronouncements
issued periodically by standard-setting bodies. Southern Power expressly
disclaims any obligation to update any forward-looking information.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits
2.1*# Purchase and Sale Agreement, by and between CP Oleander, LP
and CP Oleander I, Inc., as Sellers, Constellation Power, Inc.
and SP Newco I LLC and SP Newco II LLC, as Purchasers, and
Southern Power, as Purchaser's Parent, for the Sale of
Partnership Interests of Oleander Power Project, LP, dated as
of April 8, 2005.
* Southern Power has requested confidential treatment for certain
portions of this document pursuant to an application for confidential
treatment sent to the Securities and Exchange Commission. Southern
Power has omitted such portions from this filing and filed them
separately with the Securities and Exchange Commission.
# Omits schedules and exhibits. Southern Power agrees to provide
supplementally the omitted schedules and exhibits to the Securities and
Exchange Commission upon request.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: June 13, 2005 SOUTHERN POWER COMPANY
By /s/Wayne Boston
Wayne Boston
Assistant Secretary