Pricing Supplement dated June 22, 2005 Filed Pursuant to Rule 424(b)(3)
(To Prospectus Supplement dated August 16, 2004 Registration No. 333-115100
and Prospectus dated June 21, 2004)
PUBLIC SERVICE ELECTRIC AND GAS COMPANY (PSE&G)
Secured Medium-Term Notes, Series D
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CUSIP: 74456QAP1 These Notes are DTC Eligible and will be issued in
Trade Date: June 22, 2005 Book-entry form
Original Issue Date: July 1, 2005
Principal Amount: $250,000,000 Agents:
Price to Public: 99.685% of Principal Amount, plus [_] Banc of America Securities LLC
accrued interest from the Original Issue Date if [X] Barclays Capital ($50,000,000)
settlement occurs after that date [_] BNP PARIBAS
Agents' Commission: $1,875,000 [_] Citigroup
Net Proceeds to Company: $247,337,500 [X] Deutsche Bank Securities ($50,000,000)
Interest Rate: 5.25% per annum [_] Jackson Securities
Interest Accrual Date: July 1, 2005 [X] JPMorgan ($50,000,000)
Interest Payment Dates: January 1 and July 1, [_] M.R. Beal & Company
commencing January 1, 2006 [X] Scotia Capital ($50,000,000)
Regular Record Dates: December 15 and June 15 [X] UBS Investment Bank ($50,000,000)
Maturity Date: July 1, 2035 [_] The Williams Capital Group, L.P.
Agents' Capacity: Agent of PSE&G
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Redemption Provisions:
The Secured Medium-Term Notes, Series D offered hereby (the "Secured
Medium-Term Notes") will be subject to redemption as described in the prospectus
and prospectus supplement.
Additionally, the Secured Medium-Term Notes will be subject to redemption
at any time prior to the Maturity Date on not less than 30 days prior written
notice to holders, either as a whole or in part, at the option of PSE&G, at a
redemption price equal to the greater of (i) 100% of the principal amount of the
Secured Medium-Term Notes to be redeemed and (ii) the sum of the present values
of the remaining scheduled payments of principal and interest thereon (exclusive
of accrued interest to the redemption date) discounted to the redemption date on
a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months)
at the Treasury Rate plus 20 basis points, plus, in either case, accrued
interest thereon to the date of redemption.
"Treasury Rate" means, with respect to any redemption date, the rate per
annum equal to the semi-annual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as
percentage of its principal amount) equal to the Comparable Treasury Price for
such redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the Secured Medium-Term Notes to be redeemed that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of the Secured Medium-Term Notes to be redeemed.
"Comparable Treasury Price" means, with respect to any redemption date,
(i) the average of three Reference Treasury Dealer Quotations for such
redemption date, after excluding the highest and lowest of five Reference
Treasury Dealer Quotations, or (ii) if the Trustee is unable to obtain five
Reference Treasury Dealer Quotations, the average of all Reference Treasury
Dealer Quotations so obtained.
"Independent Investment Banker" means one of the Reference Treasury
Dealers appointed by PSE&G and acceptable to the Trustee.
"Reference Treasury Dealer" means a primary U.S. Government Securities
Dealer in the United States (a "Primary Treasury Dealer") selected by PSE&G and
acceptable to the Trustee.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed, in each case, as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at or before 5:00 p.m.,
New York City time, on the third business day preceding such redemption date.
Use of Proceeds:
The net proceeds from the sale of the Secured Medium-Term Notes will be
added to the general funds of PSE&G and will be used to refund $125,000,000 of
its 9 1/8% Series BB First and Refunding Mortgage Bonds due 2005 on July 1, 2005
and to reduce its short-term debt consisting of commercial paper.
Delayed Settlement:
Delivery of the Secured Medium-Term Notes will be made against payment
therefor on or about July 1, 2005, which will be on the seventh business day
following the date on which the Secured Medium-Term Notes are priced ("T+7").
Under Rule 15c6-1 of the Securities Exchange Act of 1934, trades in the
secondary market generally are required to settle in three business days after
the date the securities are priced, unless the parties to any such trade
expressly agree otherwise. Accordingly, purchasers who wish to trade Secured
Medium-Term Notes on the day of pricing or the next three succeeding business
days will be required, by virtue of the fact that the Secured Medium-Term Notes
will settle in T+7, to specify an alternative settlement cycle at the time of
any such trade to prevent a failed settlement. Such purchasers should also
consult their own advisors in this regard.