PROSPECTUS SUPPLEMENT Filed Pursuant to Rule 424(b)(5)
- --------------------- Registration Statement No. 333-39270
(To prospectus dated June 28, 2000) and 333-39270-01
$500,000,000
[FPL GROUP CAPITAL INC LOGO]
6 1/8% DEBENTURES, SERIES DUE MAY 15, 2007
THE DEBENTURES WILL BE ABSOLUTELY, IRREVOCABLY AND
UNCONDITIONALLY GUARANTEED BY
FPL GROUP, INC.
-----------------
FPL Group Capital Inc will pay interest, in cash, on these securities on
May 15 and November 15 of each year, beginning November 15, 2001. FPL Group
Capital may redeem some or all of these securities at any time before their
maturity date upon at least 30 but not more than 60 days notice, at a redemption
price calculated using the formula set forth on pages S-3 through S-4 of this
prospectus supplement.
FPL Group Capital's corporate parent, FPL Group, has agreed to absolutely,
irrevocably and unconditionally guarantee the payment of principal, interest and
premium on these securities. These securities are unsecured and rank equally
with FPL Group Capital's other unsecured indebtedness. FPL Group Capital does
not plan to list these securities on any securities exchange.
Both FPL Group Capital's and FPL Group's principal executive offices are
located at 700 Universe Boulevard, Juno Beach, Florida 33408, telephone number
(561) 694-4000, and their mailing address is P.O. Box 14000, Juno Beach, Florida
33408-0420.
-----------------
PER DEBENTURE TOTAL
------------- -----
Public Offering Price (1)............................ 99.39% $496,950,000
Underwriting Discount................................ .6125% $3,062,500
Proceeds to FPL Group Capital (before expenses)...... 98.7775% $493,887,500
(1) Plus accrued interest from May 11, 2001, if settlement is after that
date
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus supplement and the accompanying prospectus are truthful or complete.
Any representation to the contrary is a criminal offense.
These securities will be ready for delivery in book-entry form only through
The Depository Trust Company, on or about May 11, 2001.
-----------------
Merrill Lynch & Co.
Banc of America Securities LLC
JPMorgan
Salomon Smith Barney
BNY Capital Markets, Inc.
First Union Securities, Inc.
Fleet Securities, Inc.
-----------------
The date of this prospectus supplement is May 8, 2001.
YOU SHOULD RELY ONLY ON THE INFORMATION INCORPORATED BY REFERENCE OR
PROVIDED IN THIS PROSPECTUS SUPPLEMENT OR IN THE ACCOMPANYING PROSPECTUS.
NEITHER FPL GROUP CAPITAL NOR FPL GROUP HAS AUTHORIZED ANYONE ELSE TO PROVIDE
YOU WITH DIFFERENT INFORMATION. NEITHER FPL GROUP CAPITAL NOR FPL GROUP IS
MAKING AN OFFER OF THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER IS NOT
PERMITTED. YOU SHOULD NOT ASSUME THAT THE INFORMATION IN THIS PROSPECTUS
SUPPLEMENT OR IN THE ACCOMPANYING PROSPECTUS IS ACCURATE AS OF ANY DATE OTHER
THAN THE DATE ON THE FRONT OF THOSE DOCUMENTS.
-------------------------
TABLE OF CONTENTS
PAGE
----
PROSPECTUS SUPPLEMENT
Use of Proceeds....................................................... S-3
Consolidated Ratio of Earnings to Fixed Charges....................... S-3
Certain Terms of the Debentures....................................... S-3
Underwriting.......................................................... S-7
PROSPECTUS
Where You Can Find More Information................................... 2
Incorporation by Reference............................................ 2
Safe Harbor Statement Under the Private Securities Litigation
Reform Act of 1995.................................................. 2
FPL Group Capital..................................................... 4
FPL Group............................................................. 4
Use of Proceeds....................................................... 4
Consolidated Ratio of Earnings to Fixed Charges....................... 4
Description of Offered Debt Securities................................ 5
Description of the Guarantee.......................................... 14
Plan of Distribution.................................................. 16
Experts............................................................... 16
Legal Opinions........................................................ 17
S-2
USE OF PROCEEDS
The information in this section adds to the information in the "Use of
Proceeds" section on page 4 of the accompanying prospectus. Please read these
two sections together.
The $500,000,000 aggregate principal amount of 6 1/8% Debentures, Series
due May 15, 2007 offered by this prospectus supplement and the accompanying
prospectus are referred to in this prospectus supplement as the "Debentures."
FPL Group Capital will add the net proceeds from the sale of the Debentures
to its general funds. FPL Group Capital expects to use its general funds to
repay a portion of commercial paper issued to fund investments by FPL Group
Capital in independent power projects. As of March 31, 2001, FPL Group Capital
had an aggregate of $1.2 billion of commercial paper outstanding, which had
maturities of up to 20 days and which had annual interest rates ranging from
5.35% to 6.00%. FPL Group Capital will temporarily invest in short-term
instruments any proceeds that are not immediately required for these purposes.
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
The information in this section adds to the information in the
"Consolidated Ratio of Earnings to Fixed Charges" section on page 4 of the
accompanying prospectus. Please read these two sections together. For the fiscal
year ended December 31, 2000 and for the three months ended March 31, 2001, FPL
Group's consolidated ratios of earnings to fixed charges were 4.30 and 2.69,
respectively.
CERTAIN TERMS OF THE DEBENTURES
The information in this section adds to the information in the "Description
of Offered Debt Securities" section beginning on page 5 of the accompanying
prospectus. Please read these two sections together.
GENERAL. FPL Group Capital will issue the Debentures under the Indenture,
dated as of June 1, 1999, between FPL Group Capital and The Bank of New York, as
Indenture Trustee. An Officer's Certificate will supplement the Indenture and
establish the specific terms of the Debentures. Under the Indenture, FPL Group
Capital may issue an unlimited amount of additional debt securities.
The Indenture Trustee will initially be the Security Registrar and the
Paying Agent for the Debentures. All transactions with respect to the
Debentures, including registration, transfer and exchange of the Debentures,
will be handled by the Security Registrar at an office in New York City
designated by FPL Group Capital. FPL Group Capital has initially designated the
Corporate Trust Office of the Indenture Trustee as that office. In addition,
holders of the Debentures should address any notices to FPL Group Capital
regarding the Debentures to that office. FPL Group Capital will notify holders
of the Debentures of any change in the location of that office.
INTEREST AND PAYMENT. FPL Group Capital will pay interest in cash on the
Debentures at the rate of 6 1/8% per annum. The Debentures will mature on May
15, 2007. FPL Group Capital will pay interest on the Debentures on May 15 and
November 15 of each year (each an "Interest Payment Date"). The first Interest
Payment Date for the Debentures will be November 15, 2001. So long as the
Debentures are registered in the name of The Depository Trust Company ("DTC") or
its nominee, the record date for interest payable on any Interest Payment Date
shall be the close of business on the business day immediately preceding such
Interest Payment Date. Interest on the Debentures will accrue from and including
the date of original issuance to and excluding the first Interest Payment Date.
Starting on the first Interest Payment Date, interest on each Debenture will
accrue from and including the last Interest Payment Date to which FPL Group
Capital has paid, or duly provided for the payment of, interest on that
Debenture. No interest will accrue on a Debenture for the day that the Debenture
matures.
OPTIONAL REDEMPTION. FPL Group Capital may redeem any of the Debentures, at
its option, at any time or from time to time, on any date prior to their
maturity (each a "Redemption Date"). FPL Group Capital will give notice of its
intent to redeem Debentures at least 30 days prior to a Redemption Date. If FPL
Group Capital redeems all or any part of the Debentures, it will pay a
redemption price ("Redemption Price") equal to the sum of (1) 100% of the
S-3
principal amount of the Debentures being redeemed plus (2) accrued and unpaid
interest thereon, if any, to the Redemption Date plus (3) any applicable
"make-whole premium." The Redemption Price for the Debentures will never be less
than 100% of the principal amount of those Debentures plus accrued and unpaid
interest on those Debentures to the Redemption Date.
The amount of the make-whole premium with respect to any Debentures to be
redeemed will be equal to the excess, if any, of:
(1) the sum of the present values, calculated as of the Redemption Date,
of:
(a) each interest payment that, but for such redemption, would have
been payable on the Debentures being redeemed on each Interest
Payment Date occurring after the Redemption Date (excluding any
accrued interest for the period prior to the Redemption Date);
and
(b) the principal amount that, but for such redemption, would have
been payable at the final maturity of the Debentures being
redeemed; over
(2) the principal amount of the Debentures being redeemed.
The present values of interest and principal payments referred to in clause
(1) above will be determined in accordance with generally accepted principles of
financial analysis. Such present values will be calculated by discounting the
amount of each payment of interest or principal from the date that each such
payment would have been payable, but for the redemption, to the Redemption Date
at a discount rate equal to the Treasury Yield (as defined below) plus 25 basis
points.
FPL Group Capital will appoint an independent investment banking
institution of national standing to calculate the make-whole premium; provided
that Merrill Lynch, Pierce, Fenner & Smith Incorporated will make such
calculation if (1) FPL Group Capital fails to make such appointment at least 30
days prior to the Redemption Date, or (2) the institution so appointed is
unwilling or unable to make such calculation. If Merrill Lynch, Pierce, Fenner &
Smith Incorporated is to make such calculation but is unwilling or unable to do
so, then the Indenture Trustee will appoint an independent investment banking
institution of national standing to make such calculation. In any case, the
institution making such calculation is referred to in this prospectus supplement
as an "Independent Investment Banker."
For purposes of determining the make-whole premium, "Treasury Yield" means
a rate of interest per annum equal to the weekly average yield to maturity of
United States Treasury Notes that have a constant maturity that corresponds to
the remaining term to maturity of the Debentures to be redeemed, calculated to
the nearest 1/12th of a year (the "Remaining Term"). The Independent Investment
Banker will determine the Treasury Yield as of the third business day
immediately preceding the applicable Redemption Date.
The Independent Investment Banker will determine the weekly average yields
of United States Treasury Notes by reference to the most recent statistical
release published by the Federal Reserve Bank of New York and designated
"H.15(519) Selected Interest Rates" or any successor release (the "H.15
Statistical Release"). If the H.15 Statistical Release sets forth a weekly
average yield for United States Treasury Notes having a constant maturity that
is the same as the Remaining Term, then the Treasury Yield will be equal to such
weekly average yield. In all other cases, the Independent Investment Banker will
calculate the Treasury Yield by interpolation, on a straight-line basis, between
the weekly average yields on the United States Treasury Notes that have a
constant maturity closest to and greater than the Remaining Term and the United
States Treasury Notes that have a constant maturity closest to and less than the
Remaining Term (in each case as set forth in the H.15 Statistical Release). The
Independent Investment Banker will round any weekly average yields so calculated
to the nearest 1/100th of 1%, and will round upward for any figure of 1/200th of
1% or above. If weekly average yields for United States Treasury Notes are not
available in the H.15 Statistical Release or otherwise, then the Independent
Investment Banker will select comparable rates and calculate the Treasury Yield
by reference to those rates.
S-4
If FPL Group Capital at any time elects to redeem only a part of the
Debentures, the Security Registrar will select the particular Debentures to be
redeemed using any method that it deems fair and appropriate.
If at the time notice of redemption is given, the redemption moneys are not
on deposit with the Indenture Trustee, then the redemption shall be subject to
their receipt before the Redemption Date and such notice shall be of no effect
unless such moneys are received.
MANDATORY REDEMPTION. The following constitute "Guarantor Events" with
respect to the Debentures:
(1) the Guarantee Agreement, dated as of June 1, 1999, between FPL Group,
as Guarantor, and The Bank of New York, as Guarantee Trustee, ceases
to be in full force and effect;
(2) a court issues a decree ordering or acknowledging the bankruptcy or
insolvency of the Guarantor, or appointing a custodian, receiver or
other similar official for the Guarantor, or ordering the winding up
or liquidation of its affairs, and the decree remains in effect for 90
days; or
(3) the Guarantor seeks or consents to relief under Federal or State
bankruptcy or insolvency laws, or to the appointment of a custodian,
receiver or other similar official for the Guarantor, or makes an
assignment for the benefit of its creditors, or admits in writing that
it is bankrupt or insolvent.
FPL Group Capital shall, if a Guarantor Event occurs and is continuing,
redeem all of the outstanding Debentures within 60 days after the occurrence of
the Guarantor Event at a redemption price equal to the principal amount thereof
plus accrued interest to the date of redemption unless, within 30 days after the
occurrence of the Guarantor Event, Standard & Poor's Ratings Service (a Division
of the McGraw Hill Companies, Inc.) and Moody's Investors Service, Inc. (if the
Debentures are then rated by those rating agencies, or, if the Debentures are
not then rated by those rating agencies but are then rated by one or more other
nationally recognized rating agencies, then at least one of those other
nationally recognized rating agencies) shall have reaffirmed in writing that,
after giving effect to such Guarantor Event, the credit rating on the Debentures
is investment grade (i.e. in one of the four highest categories, without regard
to subcategories within such rating categories, of such rating agency).
If a Guarantor Event occurs and FPL Group Capital is not required to redeem
the Debentures as described above, FPL Group Capital will provide to the
Indenture Trustee and the holders of the Debentures annual and quarterly reports
containing the information that FPL Group Capital would be required to file with
the SEC under Section 13 or Section 15(d) of the Securities Exchange Act of 1934
if it were subject to the reporting requirements of those Sections. If FPL Group
Capital is, at that time, subject to the reporting requirements of those
Sections, the filing of annual and quarterly reports with the SEC pursuant to
those Sections will satisfy this requirement.
EVENTS OF DEFAULT. In addition to the events of default relating to any
series of debt securities issued under the Indenture, as set forth under the
"Description of Offered Debt Securities -- Events of Default" section on pages 9
and 10 of the accompanying prospectus, each of the following events will be an
event of default under the Indenture with respect to the Debentures:
(1) the Guarantor consolidates with or merges into any other entity or
conveys, transfers or leases substantially all of its properties and
assets to any entity, unless
(a) the entity formed by such consolidation or into which the
Guarantor is merged, or the entity to which the Guarantor
conveys, transfers or leases substantially all of its properties
and assets is an entity organized and existing under the laws of
the United States of America, any State thereof or the District
of Columbia, and expressly assumes the obligations of the
Guarantor under the Guarantee Agreement; and
(b) immediately after giving effect to such transaction, no event of
default under the Indenture and no event that, after notice or
lapse of time or both, would become an event of default under the
Indenture, shall have occurred and be continuing; or
S-5
(2) FPL Group Capital fails to redeem any of the Debentures that it is
required to redeem as described under "Certain Terms of the
Debentures-- Mandatory Redemption" above.
BOOK-ENTRY ONLY ISSUANCE--THE DEPOSITORY TRUST COMPANY. The Debentures will
trade through DTC. The Debentures will be represented by a global certificate
and registered in the name of Cede & Co., DTC's nominee.
DTC is a New York clearing corporation and a clearing agency registered
under Section 17A of the Securities Exchange Act of 1934. DTC holds securities
for its participants. DTC facilitates settlement of securities transactions
among its participants through electronic computerized book-entry changes in the
participants' accounts. This eliminates the need for physical movement of
securities certificates. The participants include securities brokers and
dealers, banks, trust companies and clearing corporations. DTC is owned by a
number of its participants and by the New York Stock Exchange, Inc., the
American Stock Exchange LLC, and the National Association of Securities Dealers,
Inc. Others who maintain a custodial relationship with a participant can use the
DTC system. The rules that apply to DTC and those using its systems are on file
with the Securities and Exchange Commission.
Purchases of the Debentures within the DTC system must be made through
participants, which will receive a credit for the Debentures on DTC's records.
The beneficial ownership interest of each purchaser will be recorded on the
participants' records. Beneficial owners will not receive written confirmation
from DTC of their purchases, but beneficial owners should receive written
confirmations of the transactions, as well as periodic statements of their
holdings, from the participants through which they purchased Debentures.
Beneficial owners will not receive certificates for their Debentures, except if
use of the book-entry system for the Debentures is discontinued.
To facilitate subsequent transfers, all Debentures deposited by
participants with DTC are registered in the name of DTC's nominee, Cede & Co.
The deposit of the Debentures with DTC and their registration in the name of
Cede & Co. effects no change in beneficial ownership. DTC has no knowledge of
the actual beneficial owners of the Debentures. DTC's records reflect only the
identity of the participants to whose accounts such Debentures are credited.
These participants may or may not be the beneficial owners. Participants will
remain responsible for keeping account of their holdings on behalf of their
customers.
Conveyance of notices and other communications by DTC to participants, and
by participants to beneficial owners, will be governed by arrangements among
them.
Redemption notices will be sent to Cede & Co. If less than all of the
Debentures are being redeemed, DTC's practice is to determine by lot the amount
of Debentures of each participant to be redeemed.
Neither DTC nor Cede & Co. will itself consent or vote with respect to
Debentures. Under its usual procedures, DTC would mail an omnibus proxy to FPL
Group Capital as soon as possible after the record date. The omnibus proxy
assigns the consenting or voting rights of Cede & Co. to those participants to
whose accounts the Debentures are credited on the record date. FPL Group Capital
believes that these arrangements will enable the beneficial owners to exercise
rights equivalent in substance to the rights that can be directly exercised by a
registered holder of the Debentures.
Payments of redemption proceeds, principal of, and interest on the
Debentures will be made to DTC. DTC's practice is to credit 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 that payment date. Payments by participants to
beneficial owners will be governed by standing instructions and customary
practices. Payments will be the responsibility of participants and not of DTC,
The Bank of New York or FPL Group Capital. Payment of redemption proceeds,
principal and interest to DTC is the responsibility of FPL Group Capital.
Disbursement of payments to participants is the responsibility of DTC, and
disbursement of payments to the beneficial owners is the responsibility of
participants.
S-6
Except as provided in this prospectus supplement, a beneficial owner will
not be entitled to receive physical delivery of the Debentures. Accordingly,
each beneficial owner must rely on the procedures of DTC to exercise any rights
under the Debentures.
DTC may discontinue providing its services as securities depository with
respect to the Debentures at any time by giving reasonable notice to FPL Group
Capital. In the event no successor securities depository is obtained,
certificates for the Debentures will be printed and delivered. If FPL Group
Capital decides to discontinue use of the DTC system of book-entry transfers,
certificates for the Debentures will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that FPL Group Capital and FPL Group believe to
be reliable, but FPL Group Capital and FPL Group do not take responsibility for
the accuracy of this information.
UNDERWRITING
FPL Group Capital is selling the Debentures to the underwriters named in
the table below pursuant to an underwriting agreement dated the date of this
prospectus supplement. FPL Group Capital has agreed to sell to each of the
underwriters, and each of the underwriters has severally agreed to purchase, the
principal amount of Debentures set forth opposite that underwriter's name in the
table below:
UNDERWRITER PRINCIPAL
----------- AMOUNT
------
Merrill Lynch, Pierce, Fenner & Smith
Incorporated..................... $305,000,000
Banc of America Securities LLC............. 40,000,000
J.P. Morgan Securities Inc................. 40,000,000
Salomon Smith Barney Inc................... 40,000,000
BNY Capital Markets, Inc................... 25,000,000
First Union Securities, Inc................ 25,000,000
Fleet Securities, Inc...................... 25,000,000
------------
Total............................ $500,000,000
============
Under the terms and conditions of the underwriting agreement, the
underwriters must buy all of the Debentures if they buy any of them. The
underwriting agreement provides that the obligations of the underwriters
pursuant thereto are subject to certain conditions. In the event of a default by
an underwriter, the underwriting agreement provides that, in certain
circumstances, the purchase commitment of the non-defaulting underwriters may be
increased or the underwriting agreement may be terminated. The underwriters will
sell the Debentures to the public when and if the underwriters buy the
Debentures from FPL Group Capital. The underwriters reserve the right to
withdraw, cancel or modify offers to the public and to reject orders in whole or
in part.
FPL Group Capital has been advised by the underwriters that the
underwriters initially propose to offer the Debentures to the public at the
public offering price on the cover page of this prospectus supplement, and to
dealers at that price less a concession not in excess of .375% of the principal
amount of the Debentures. The underwriters may allow, and the dealers may
reallow, a discount not in excess of .25% of the principal amount of the
Debentures to other dealers. After the initial public offering, the public
offering price, concession and discount may be changed.
FPL Group Capital has been advised by the underwriters that the
underwriters intend to make a market in the Debentures but are not obligated to
do so and may discontinue market-making at any time without notice. No assurance
can be given as to the liquidity of the trading market for the Debentures.
In connection with the offering, the underwriters are permitted to engage
in transactions that stabilize the market price of the Debentures. Such
transactions consist of bids or purchases to peg, fix or maintain the price of
S-7
the Debentures. If the underwriters create a short position in the Debentures in
connection with the offering, i.e., if the underwriters sell more Debentures
than are on the cover page of this prospectus supplement, the underwriters may
reduce that short position by purchasing Debentures in the open market.
Purchases of a security to stabilize the price or to reduce a short position
could cause the price of the security to be higher than it might be in the
absence of such purchases.
Neither FPL Group Capital, FPL Group 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 Debentures. In
addition, neither FPL Group Capital, FPL Group nor any of the underwriters makes
any representation that the underwriters will engage in these transactions or
that these transactions, once commenced, will not be discontinued without
notice.
FPL Group Capital estimates that its expenses in connection with the sale
of the Debentures, other than underwriting discounts, will be $400,000. This
estimate includes expenses relating to printing, rating agency fees, trustees'
fees and legal fees, among other expenses.
FPL Group Capital has agreed to indemnify the underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
Certain of the underwriters or their affiliates may engage from time to
time in various general financing and banking transactions with FPL Group
Capital and its affiliates.
S-8
PROSPECTUS
$500,000,000
FPL GROUP CAPITAL INC
DEBT SECURITIES
THE DEBT SECURITIES WILL BE ABSOLUTELY, IRREVOCABLY AND
UNCONDITIONALLY GUARANTEED BY
FPL GROUP, INC.
---------------------------------------------------
FPL Group Capital Inc may issue from time to time up to $500,000,000 of its
unsecured debt securities. FPL Group Capital Inc's corporate parent, FPL Group,
Inc., has agreed to absolutely, irrevocably and unconditionally guarantee the
payment of principal, interest and premium, if any, on these debt securities.
FPL Group Capital will provide specific terms of these debt securities,
including their offering prices, in supplements to this prospectus. The
supplements may also add, update or change information contained in this
prospectus. You should read this prospectus and any supplement carefully before
you invest.
FPL Group Capital may offer these debt securities directly or through
underwriters, agents or dealers. The supplements to this prospectus will
describe the terms of any particular plan of distribution, including any
underwriting arrangements. The "Plan of Distribution" section on page 16 of this
prospectus also provides more information on this topic.
Both FPL Group Capital's and FPL Group's principal executive offices are
located at 700 Universe Boulevard, Juno Beach, Florida 33408, telephone number
(561) 694-4000, and their mailing address is P.O. Box 14000, Juno Beach, Florida
33408-0420.
---------------------------------------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
June 28, 2000
WHERE YOU CAN FIND MORE INFORMATION
FPL Group files annual, quarterly and other reports and other information
with the SEC. You can read and copy any information filed by FPL Group with the
SEC at the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington,
D.C. 20549. You can obtain additional information about the Public Reference
Room by calling the SEC at 1-800-SEC-0330.
In addition, the SEC maintains an Internet site (http://www.sec.gov) that
contains reports, proxy and information statements, and other information
regarding issuers that file electronically with the SEC, including FPL Group.
FPL Group also maintains an Internet site (http://www.fplgroup.com).
FPL Group Capital does not file reports or other information with the SEC.
FPL Group includes summarized financial information relating to FPL Group
Capital in some of its reports filed with the SEC. FPL Group does not intend to
include any separate financial information with respect to FPL Group Capital in
its consolidated financial statements because FPL Group and FPL Group Capital
have determined that this information is not material to the holders of these
debt securities.
INCORPORATION BY REFERENCE
The SEC allows FPL Group Capital and FPL Group to "incorporate by
reference" the information that FPL Group files with the SEC, which means that
FPL Group Capital and FPL Group may, in this prospectus, disclose important
information to you by referring you to those documents. The information
incorporated by reference is an important part of this prospectus. Information
that FPL Group files in the future with the SEC will automatically update and
supersede this information. FPL Group Capital and FPL Group are incorporating by
reference the documents listed below and any future filings FPL Group makes with
the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act
of 1934, until FPL Group Capital sells all of these debt securities:
(1) FPL Group's Annual Report on Form 10-K for the year ended December 31,
1999; and
(2) FPL Group's Quarterly Report on Form 10-Q for the quarter ended March
31, 2000.
You may request a copy of these documents, at no cost to you, by writing or
calling Robert J. Reger, Jr., Esq., Thelen Reid & Priest LLP, 40 West 57th
Street, New York, New York, 10019, (212) 603-2000.
SAFE HARBOR STATEMENT UNDER
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
In connection with the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, FPL Group and FPL Group Capital are hereby filing
cautionary statements identifying important factors that could cause FPL Group's
and FPL Group Capital's actual results to differ materially from those projected
in forward-looking statements (as that term is defined in the Private Securities
Litigation Reform Act of 1995) made by or on behalf of FPL Group or FPL Group
Capital which are made in this prospectus or any supplement to this prospectus,
in presentations, in response to questions or otherwise. Any statements that
express, or involve discussions as to, expectations, beliefs, plans, objectives,
assumptions or future events or performance (often, but not always, through the
use of words or phrases such as "will likely result", "are expected to", "will
continue", "is anticipated", "estimated", "projection" or "outlook") are not
statements of historical facts and may be forward-looking. Forward-looking
statements involve estimates, assumptions and uncertainties. Accordingly, any of
those statements are qualified in their entirety by reference to, and are
accompanied by, the following important factors that could cause FPL Group's or
FPL Group Capital's actual results to differ materially from those contained in
forward-looking statements made by or on behalf of FPL Group or FPL Group
Capital.
Any forward-looking statement speaks only as of the date on which that
statement is made, and neither FPL Group nor FPL Group Capital undertakes any
obligation to update any forward-looking statement to reflect events or
circumstances after the date on which that statement is made or to reflect the
occurrence of unanticipated events. New factors emerge from time to time, and it
is not possible for management to predict all of those factors, nor can it
2
assess the impact of each of those factors on the business or the extent to
which any factor, or combination of factors, may cause actual results to differ
materially from those contained in any forward-looking statement.
Some important factors that could cause actual results or outcomes to
differ materially from those discussed in the forward-looking statements include
changes in laws or regulations and changing governmental policies and regulatory
actions, including those of the Federal Energy Regulatory Commission, the
Florida Public Service Commission and the Nuclear Regulatory Commission, with
respect to:
(1) allowed rates of return, including return on common equity and equity
ratio limits,
(2) industry and rate structure,
(3) operation of nuclear power facilities,
(4) acquisition, disposal, depreciation and amortization of assets and
facilities,
(5) operation and construction of plant facilities,
(6) recovery of fuel and purchased power costs,
(7) decommissioning costs, and
(8) present or prospective wholesale and retail competition, including
retail wheeling and transmission costs.
The business and profitability of FPL Group and FPL Group Capital are also
influenced by economic and geographic factors including:
(1) political and economic risks,
(2) changes in and compliance with environmental and safety laws and
policies,
(3) weather conditions, including natural disasters such as hurricanes,
(4) population growth rates and demographic patterns,
(5) competition for retail and wholesale customers,
(6) availability, pricing and transportation of fuel and other energy
commodities,
(7) market demand for energy from generating plants or facilities,
(8) changes in tax rates or policies or in rates of inflation or in
accounting standards,
(9) unanticipated delays or changes in costs for capital projects,
(10) unanticipated changes in operating expenses and capital expenditures,
(11) capital market conditions,
(12) competition for new energy development opportunities, and
(13) legal and administrative proceedings, whether civil, such as
environmental, or criminal, and settlements.
3
All of these factors are difficult to predict and contain uncertainties
that may materially affect actual results and are beyond the control of FPL
Group and FPL Group Capital.
FPL GROUP CAPITAL
FPL Group Capital was incorporated in 1985 as a Florida corporation and is
a wholly-owned subsidiary of FPL Group. FPL Group Capital holds the capital
stock of, and provides funding for, FPL Group's operating subsidiaries other
than Florida Power & Light Company. These operating subsidiaries' business
activities primarily consist of independent power projects.
FPL GROUP
FPL Group is a holding company incorporated in 1984 as a Florida
corporation. FPL Group's principal subsidiary, Florida Power & Light Company, is
engaged in the generation, transmission, distribution and sale of electric
energy. Other operations are conducted through FPL Group Capital.
USE OF PROCEEDS
Unless otherwise stated in a prospectus supplement, FPL Group Capital will
add the net proceeds from the sale of these debt securities to its general
funds. FPL Group Capital uses its general funds for corporate purposes,
including to repay short-term borrowings and to redeem or repurchase outstanding
long-term debt obligations. FPL Group Capital will temporarily invest any
proceeds that it does not need to use immediately in short-term instruments.
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
The following table shows FPL Group's consolidated ratio of earnings to
fixed charges for each of its last five fiscal years:
Fiscal years ended December 31,
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
5.26 3.88 4.09 4.20 3.97
FPL Group's consolidated ratio of earnings to fixed charges for the three
months ended March 31, 2000 was 3.63.
4
DESCRIPTION OF OFFERED DEBT SECURITIES
GENERAL. FPL Group Capital will issue these debt securities, in one or more
series, under an Indenture, dated as of June 1, 1999, between FPL Group Capital
and The Bank of New York, as Trustee. This Indenture, as it may be amended and
supplemented from time to time, is referred to in this prospectus as the
"Indenture." The Bank of New York, as Trustee under the Indenture, is referred
to in this prospectus as the "Indenture Trustee." These debt securities are
referred to in this prospectus as the "Offered Debt Securities."
The Indenture provides for the issuance of debentures, notes or other debt
by FPL Group Capital in an unlimited amount from time to time. The Offered Debt
Securities and all other debentures, notes or other debt of FPL Group Capital
issued under the Indenture are collectively referred to in this prospectus as
the "Debt Securities."
This section briefly summarizes some of the terms of the Offered Debt
Securities and some of the provisions of the Indenture and uses some terms that
are not defined in this prospectus but that are defined in the Indenture. This
summary does not contain a complete description of the Offered Debt Securities.
You should read this summary together with the Indenture and the officer's
certificates or other documents establishing the Offered Debt Securities for a
complete understanding of the provisions that may be important to you and for
the definitions of some terms used in this summary. The Indenture, the form of
officer's certificate that may be used to establish a series of Offered Debt
Securities and a form of Offered Debt Securities are on file with the SEC and
are incorporated by reference in this prospectus. In addition, the Indenture is
subject to the provisions of the Trust Indenture Act of 1939. You should read
the Trust Indenture Act for a complete understanding of provisions that may be
important to you.
Each series of Offered Debt Securities will have different terms. FPL Group
Capital will include all of the following information about a specific series of
Offered Debt Securities in the prospectus supplement(s) relating to those
Offered Debt Securities:
(1) the title of those Offered Debt Securities,
(2) any limit upon the aggregate principal amount of those Offered Debt
Securities,
(3) the date(s) on which FPL Group Capital will pay the principal of those
Offered Debt Securities,
(4) the rate(s) of interest on those Offered Debt Securities, or how the
rate(s) of interest will be determined, the date(s) from which interest
will accrue, the dates on which FPL Group Capital will pay interest and the
record date for any interest payable on any interest payment date,
(5) the person to whom FPL Group Capital will pay interest on those Offered
Debt Securities on any interest payment date, if other than the person in
whose name those Offered Debt Securities are registered at the close of
business on the record date for that interest payment,
(6) the place(s) at which or methods by which FPL Group Capital will make
payments on those Offered Debt Securities and the place(s) at which or
methods by which the registered owners of those Offered Debt Securities may
transfer or exchange those Offered Debt Securities and serve notices and
demands to or upon FPL Group Capital,
(7) the Security Registrar and any Paying Agent or Agents for those Offered
Debt Securities,
(8) any date(s) on which the price(s) at which and the terms and conditions
upon which FPL Group Capital may, at its option, redeem those Offered Debt
Securities, in whole or in part, and any restrictions on those redemptions,
(9) any sinking fund or other provisions or options held by the registered
owners of those Offered Debt Securities that would obligate FPL Group
Capital to repurchase or redeem those Offered Debt Securities,
5
(10) the denominations in which FPL Group Capital may issue those Offered
Debt Securities, if other than denominations of $1,000 and any integral
multiple of $1,000,
(11) the currency or currencies in which FPL Group Capital may pay the
principal of or premium, if any, or interest on those Offered Debt
Securities (if other than in U.S. dollars),
(12) if FPL Group Capital or a registered owner may elect to make, or
receive, principal of or premium, if any, or interest on that Offered Debt
Security in a currency other than that in which that Offered Debt Security
is stated to be payable, the terms and conditions upon which that election
may be made,
(13) if FPL Group Capital will, or may, pay the principal of or premium, if
any, or interest on those Offered Debt Securities in securities or other
property, the type and amount of those securities or other property and the
terms and conditions upon which FPL Group Capital or a registered owner may
elect to receive those payments,
(14) if the amount payable in respect of principal of or premium, if any,
or interest on those Offered Debt Securities may be determined by reference
to an index or other fact or event ascertainable outside of the Indenture,
the manner in which those amounts will be determined,
(15) the portion of the principal amount of those Offered Debt Securities
that FPL Group Capital will pay upon declaration of acceleration of the
maturity of those Offered Debt Securities, if other than the entire
principal amount of those Offered Debt Securities,
(16) any events of default with respect to those Offered Debt Securities
and any covenants of FPL Group Capital for the benefit of the registered
owners of those Offered Debt Securities, other than those specified in the
Indenture,
(17) the terms, if any, pursuant to which those Offered Debt Securities may
be converted into or exchanged for shares of capital stock or other
securities of FPL Group Capital or any other entity,
(18) a definition of "Eligible Obligations" under the Indenture with
respect to those Offered Debt Securities denominated in a currency other
than U.S. dollars, and any other provisions for the reinstatement of FPL
Group Capital's indebtedness in respect of those Offered Debt Securities
after their satisfaction and discharge,
(19) if FPL Group Capital will issue those Offered Debt Securities in
global form, necessary information relating to the issuance of those
Offered Debt Securities in global form,
(20) if FPL Group Capital will issue those Offered Debt Securities as
bearer securities, necessary information relating to the issuance of those
Offered Debt Securities as bearer securities,
(21) any limits on the rights of the registered owners of those Offered
Debt Securities to transfer or exchange those Offered Debt Securities or to
register their transfer, and any related service charges,
(22) any exceptions to the provisions governing payments due on legal
holidays or any variations in the definition of Business Day with respect
to those Offered Debt Securities,
(23) other than the Guarantee described under "Description of the
Guarantee" below, any collateral security, assurance, or guarantee for
those Offered Debt Securities, and
(24) any other terms of those Offered Debt Securities that are not
inconsistent with the provisions of the Indenture (Indenture, Section 301).
FPL Group Capital may sell Offered Debt Securities at a discount below
their principal amount. Some of the important United States Federal income tax
considerations applicable to Offered Debt Securities sold at a discount below
their principal amount may be described in the related prospectus supplement. In
6
addition, some of the important United States Federal income tax or other
considerations applicable to any Offered Debt Securities that are denominated in
a currency other than U.S. dollars may be described in the related prospectus
supplement.
Except as otherwise stated in the related prospectus supplement, the
covenants in the Indenture would not give registered owners of Offered Debt
Securities protection in the event of a highly-leveraged transaction involving
FPL Group Capital.
SECURITY AND RANKING. The Offered Debt Securities will be unsecured
obligations of FPL Group Capital. The Indenture does not limit FPL Group
Capital's ability to provide security with respect to other Debt Securities. All
Debt Securities issued under the Indenture will rank equally and ratably with
all other Debt Securities issued under the Indenture, except to the extent that
FPL Group Capital elects to provide security with respect to any Debt Security
without providing that security to all outstanding Debt Securities as allowed
under the Indenture. The Indenture does not limit FPL Group Capital's ability to
issue other unsecured debt.
FPL Group Capital is a holding company that derives substantially all of
its income from its subsidiaries. The Debt Securities therefore will be
effectively subordinated to debt and preferred stock issued by those
subsidiaries. The Indenture does not limit the amount of debt and preferred
stock issuable by FPL Group Capital's subsidiaries.
PAYMENT AND PAYING AGENTS. Except as stated in the related prospectus
supplement, on each interest payment date FPL Group Capital will pay interest on
each Offered Debt Security to the person in whose name that Offered Debt
Security is registered as of the close of business on the record date relating
to that interest payment date. However, on the date that the Offered Debt
Securities mature, FPL Group Capital will pay the interest to the person to whom
it pays the principal. Also, if FPL Group Capital has defaulted in the payment
of interest on any Offered Debt Security, it may pay that defaulted interest to
the registered owner of that Offered Debt Security:
(1) as of the close of business on a date that the Indenture Trustee
selects, which may not be more than 15 days or less than 10 days before the
date that FPL Group Capital proposes to pay the defaulted interest, or
(2) in any other lawful manner that does not violate the requirements of
any securities exchange on which that Offered Debt Security is listed and
that the Indenture Trustee believes is acceptable (Indenture, Section 307).
Unless otherwise stated in the related prospectus supplement, at the
maturity of a series of Offered Debt Securities, FPL Group Capital will pay
their principal and any premium and interest when they are presented at the main
corporate trust office of The Bank of New York, as Paying Agent, in The City of
New York. FPL Group Capital may change the place of payment on the Offered Debt
Securities, appoint one or more additional Paying Agents, including itself, and
remove any Paying Agent (Indenture, Section 602).
TRANSFER AND EXCHANGE. Unless otherwise stated in the related prospectus
supplement, Offered Debt Securities may be transferred or exchanged at the main
corporate trust office of The Bank of New York, as Security Registrar, in The
City of New York. FPL Group Capital may change the place for transfer and
exchange of the Offered Debt Securities and may designate one or more additional
places for that transfer and exchange.
Except as otherwise stated in the related prospectus supplement, there will
not be any service charge for any transfer or exchange of the Offered Debt
Securities. However, FPL Group Capital may require payment of any tax or other
governmental charge in connection with any transfer or exchange of the Offered
Debt Securities.
FPL Group Capital will not be required to transfer or exchange any Offered
Debt Security selected for redemption. Also, FPL Group Capital will not be
required to transfer or exchange any Offered Debt Security during a period of 15
days before selection of Offered Debt Securities to be redeemed (Indenture,
Section 305).
DEFEASANCE. FPL Group Capital may, at any time, elect to have all of its
obligations discharged with respect to all or a portion of any Debt Securities.
To do so, FPL Group Capital must irrevocably deposit with the Indenture Trustee
or any Paying Agent, in trust:
7
(1) money in an amount that will be sufficient to pay all or that portion
of the principal, premium, if any, and interest due and to become due on
those Debt Securities, on or prior to their maturity, or
(2) in the case of a deposit made prior to the maturity of that series of
Debt Securities,
(a) direct obligations of, or obligations unconditionally guaranteed
by, the United States and entitled to the benefit of its full faith
and credit that do not contain provisions permitting their redemption
or other prepayment at the option of their issuer, and
(b) certificates, depositary receipts or other instruments that
evidence a direct ownership interest in those obligations or in any
specific interest or principal payments due in respect of those
obligations that do not contain provisions permitting their redemption
or other prepayment at the option of their issuer,
the principal of and the interest on which, when due, without any regard to
reinvestment of that principal or interest, will provide money that,
together with any money deposited with or held by the Indenture Trustee,
will be sufficient to pay all or that portion of the principal, premium, if
any, and interest due and to become due on those Debt Securities, on or
prior to their maturity, or
(3) a combination of (1) and (2) that will be sufficient to pay all or that
portion of the principal, premium, if any, and interest due and to become
due on those Debt Securities, on or prior to their maturity (Indenture,
Section 701).
LIMITATION ON LIENS. So long as any Debt Securities remain outstanding, FPL
Group Capital will not secure any indebtedness with a lien on any shares of the
capital stock of any of its majority-owned subsidiaries, which shares of capital
stock FPL Group Capital now or hereafter directly owns, unless FPL Group Capital
equally secures all Debt Securities. However, this restriction does not apply to
or prevent:
(1) any lien on capital stock created at the time FPL Group Capital
acquires that capital stock, or within 270 days after that time, to secure
all or a portion of the purchase price for that capital stock,
(2) any lien on capital stock existing at the time FPL Group Capital
acquires that capital stock (whether or not FPL Group Capital assumes the
obligations secured by the lien and whether or not the lien was created in
contemplation of the acquisition),
(3) any extensions, renewals or replacements of the liens described in (1)
and (2) above, or of any indebtedness secured by those liens; provided,
that,
(a) the principal amount of indebtedness secured by those liens
immediately after the extension, renewal or replacement may not exceed
the principal amount of indebtedness secured by those liens
immediately before the extension, renewal or replacement, and
(b) the extension, renewal or replacement lien is limited to no more
than the same proportion of all shares of capital stock as were
covered by the lien that was extended, renewed or replaced, or
(4) any lien arising in connection with court proceedings; provided, that,
either
(a) the execution or enforcement of that lien is effectively stayed
within 30 days after entry of the corresponding judgment (or the
corresponding judgment has been discharged within that 30 day period)
and the claims secured by that lien are being contested in good faith
by appropriate proceedings,
(b) the payment of that lien is covered in full by insurance and the
insurance company has not denied or contested coverage, or
8
(c) so long as that lien is adequately bonded, any appropriate legal
proceedings that have been duly initiated for the review of the
corresponding judgement, decree or order have not been fully
terminated or the periods within which those proceedings may be
initiated have not expired.
Liens on any shares of the capital stock of any of FPL Group Capital's
majority-owned subsidiaries, which shares of capital stock FPL Group Capital now
or hereafter directly owns, other than liens described in (1) through (4) above,
are referred to in this prospectus as "Restricted Liens." The foregoing
limitation does not apply to the extent that FPL Group Capital creates any
Restricted Liens to secure indebtedness that, together with all other
indebtedness of FPL Group Capital secured by Restricted Liens, does not at the
time exceed 5% of FPL Group Capital's Consolidated Capitalization (Indenture,
Section 608).
The foregoing limitation does not limit in any manner the ability of:
(1) FPL Group Capital to place liens on any of its assets other than the
capital stock of directly held, majority-owned subsidiaries,
(2) FPL Group Capital or FPL Group to cause the transfer of its assets or
those of its subsidiaries, including the capital stock covered by the
foregoing restrictions,
(3) FPL Group to place liens on any of its assets, or
(4) any of the direct or indirect subsidiaries of FPL Group Capital or FPL
Group (other than FPL Group Capital) to place liens on any of their assets.
CONSOLIDATION, MERGER, AND SALE OF ASSETS. Under the Indenture, FPL Group
Capital may not consolidate with or merge into any other entity or convey,
transfer or lease its properties and assets substantially as an entirety to any
entity, unless:
(1) the entity formed by that consolidation, or the entity into which FPL
Group Capital is merged, or the entity that acquires or leases FPL Group
Capital's property and assets, is an entity organized and existing under
the laws of the United States, any State or the District of Columbia and
that entity expressly assumes FPL Group Capital's obligations on all Debt
Securities and under the Indenture,
(2) immediately after giving effect to the transaction, no event of default
under the Indenture and no event that, after notice or lapse of time or
both, would become an event of default under the Indenture exists, and
(3) FPL Group Capital delivers an officer's certificate and an opinion of
counsel to the Indenture Trustee, as provided in the Indenture (Indenture,
Section 1101).
The Indenture does not restrict FPL Group Capital in a merger in which FPL
Group Capital is the surviving entity.
EVENTS OF DEFAULT. Each of the following is an event of default under the
Indenture with respect to the Debt Securities of any series:
(1) failure to pay interest on the Debt Securities of that series within 30
days after it is due,
(2) failure to pay principal or premium, if any, on the Debt Securities of
that series when it is due,
(3) failure to comply with any other covenant in the Indenture, other than
a covenant that does not relate to that series of Debt Securities, that
continues for 90 days after FPL Group Capital receives written notice from
the Indenture Trustee or FPL Group Capital and the Indenture Trustee
receive written notice from the registered owners of at least 33% in
principal amount of the Debt Securities of that series,
(4) certain events of bankruptcy, insolvency or reorganization of FPL Group
Capital, and
9
(5) any other event of default specified with respect to the Debt
Securities of that series (Indenture, Section 801).
An event of default with respect to the Debt Securities of a particular
series will not necessarily constitute an event of default with respect to Debt
Securities of any other series issued under the Indenture.
REMEDIES. If an event of default applicable to the Debt Securities of one
or more series, but not applicable to all outstanding Debt Securities, exists,
then either the Indenture Trustee or the registered owners of at least 33% in
aggregate principal amount of the Debt Securities of each of those series may
declare the principal of and interest on all the Debt Securities of that series
to be due and payable immediately. However, under the Indenture, some Debt
Securities may provide for a specified amount less than their entire principal
amount to be due and payable upon that declaration. These Debt Securities are
defined as "Discount Securities" in the Indenture.
If the event of default is applicable to all outstanding Debt Securities,
then only the Indenture Trustee or the registered owners of at least 33% in
aggregate principal amount of all outstanding Debt Securities of all series,
voting as one class, and not the registered owners of any one series, may make a
declaration of acceleration. However, the event of default giving rise to the
declaration relating to any series of Debt Securities will be automatically
waived, and that declaration and its consequences will be automatically
rescinded and annulled, if, at any time after that declaration and before a
judgment or decree for payment of the money due has been obtained:
(1) FPL Group Capital deposits with the Indenture Trustee a sum sufficient
to pay:
(a) all overdue interest on all Debt Securities of that series,
(b) the principal of and any premium on any Debt Securities of that
series that have become due for reasons other than that declaration,
and interest that is then due,
(c) interest on overdue interest for that series, and
(d) all amounts due to the Indenture Trustee under the Indenture, and
(2) any other event of default with respect to the Debt Securities of that
series has been cured or waived as provided in the Indenture (Indenture,
Section 802).
Other than its obligations and duties in case of an event of default under
the Indenture, the Indenture Trustee is not obligated to exercise any of its
rights or powers under the Indenture at the request or direction of any of the
registered owners, unless those registered owners offer reasonable indemnity to
the Indenture Trustee (Indenture, Section 903). If they provide this reasonable
indemnity, the registered owners of a majority in principal amount of any series
of Debt Securities will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Indenture Trustee, or
exercising any trust or power conferred on the Indenture Trustee, with respect
to the Debt Securities of that series. However, if an event of default under the
Indenture relates to more than one series of Debt Securities, only the
registered owners of a majority in aggregate principal amount of all affected
series of Debt Securities, considered as one class, will have the right to make
that direction. Also, the direction must not violate any law or the Indenture,
and may not expose the Indenture Trustee to personal liability in circumstances
where its indemnity would not, in the Indenture Trustee's sole discretion, be
adequate (Indenture, Section 812).
No registered owner of Debt Securities of any series will have any right to
institute any proceeding under the Indenture, or any remedy under the Indenture,
unless:
(1) that registered owner has previously given to the Indenture Trustee
written notice of a continuing event of default with respect to the Debt
Securities of that series,
(2) the registered owners of a majority in aggregate principal amount of
the outstanding Debt Securities of all series in respect of which an event
of default under the Indenture exists, considered as one class, have made
written request to the Indenture Trustee, and have offered reasonable
indemnity to the Indenture Trustee to institute that proceeding in its own
name as trustee, and
10
(3) the Indenture Trustee has failed to institute any proceeding, and has
not received from the registered owners of a majority in aggregate
principal amount of the outstanding Debt Securities of that series a
direction inconsistent with that request, within 60 days after that notice,
request and offer (Indenture, Section 807).
However, these limitations do not apply to a suit instituted by a registered
owner of a Debt Security for the enforcement of payment of the principal of or
any premium or interest on that Debt Security on or after the applicable due
date specified in that Debt Security (Indenture, Section 808).
FPL Group Capital is required to deliver to the Indenture Trustee an annual
statement as to its compliance with all conditions and covenants under the
Indenture (Indenture, Section 606).
MODIFICATION AND WAIVER. Without the consent of any registered owner of
Debt Securities, FPL Group Capital and the Indenture Trustee may amend or
supplement the Indenture for any of the following purposes:
(1) to provide for the assumption by any permitted successor to FPL Group
Capital of FPL Group Capital's obligations under the Indenture and the Debt
Securities in the case of a merger or consolidation or a sale of its
assets,
(2) to add covenants of FPL Group Capital or to surrender any right or
power conferred upon FPL Group Capital by the Indenture,
(3) to add any additional events of default,
(4) to change, eliminate or add any provision of the Indenture, provided
that if that change, elimination or addition will materially adversely
affect the interests of the registered owners of Debt Securities of any
series or Tranche, that change, elimination or addition will become
effective with respect to that series or Tranche only
(a) when the consent of the registered owners of Debt Securities of
that series or Tranche has been obtained, or
(b) when no Debt Securities of that series or Tranche remain
outstanding under the Indenture,
(5) to provide security for all but not part of the Debt Securities,
(6) to establish the form or terms of Debt Securities of any other series
or Tranche,
(7) to provide for the authentication and delivery of bearer securities and
the related coupons and for other matters relating to those bearer
securities,
(8) to accept the appointment of a successor Indenture Trustee with respect
to the Debt Securities of one or more series and to change any of the
provisions of the Indenture as necessary to provide for the administration
of the trusts under the Indenture by more than one trustee,
(9) to add procedures to permit the use of a non-certificated system of
registration for the Debt Securities of all or any series or Tranche,
(10) to change any place where
(a) the principal of and premium, if any, and interest on all or any
series or Tranche of Debt Securities are payable,
(b) all or any series or Tranche of Debt Securities may be transferred
or exchanged, and
11
(c) notices and demands to or upon FPL Group Capital in respect of
Debt Securities and the Indenture may be served, or
(11) to cure any ambiguity or inconsistency or to add or change any other
provisions with respect to matters and questions arising under the
Indenture, provided those changes or additions may not materially adversely
affect the interests of the registered owners of Debt Securities of any
series or Tranche (Indenture, Section 1201).
The registered owners of a majority in aggregate principal amount of the
Debt Securities of all series then outstanding may waive compliance by FPL Group
Capital with certain restrictive provisions of the Indenture (Indenture, Section
607). The registered owners of a majority in principal amount of the outstanding
Debt Securities of any series may waive any past default under the Indenture
with respect to that series, except a default in the payment of principal,
premium, if any, or interest and a default with respect to certain restrictive
covenants or provisions of the Indenture that cannot be modified or amended
without the consent of the registered owner of each outstanding Debt Security of
that series affected (Indenture, Section 813).
In addition to any amendments described above, if the Trust Indenture Act
is amended after the date of the Indenture in a way that requires changes to the
Indenture or in a way that permits changes to, or the elimination of, provisions
that were previously required by the Trust Indenture Act, the Indenture will be
deemed to be amended to conform to that amendment of the Trust Indenture Act or
to make those changes, additions or eliminations. FPL Group Capital and the
Indenture Trustee may, without the consent of any registered owners, enter into
supplemental indentures to make that amendment (Indenture, Section 1201).
Except for any amendments described above, the consent of the registered
owners of a majority in aggregate principal amount of the Debt Securities of all
series then outstanding, considered as one class, is required for all other
modifications to the Indenture. However, if less than all of the series of Debt
Securities outstanding are directly affected by a proposed supplemental
indenture, then the consent only of the registered owners of a majority in
aggregate principal amount of outstanding Debt Securities of all directly
affected series, considered as one class, is required. But, if FPL Group Capital
issues any series of Debt Securities in more than one Tranche and if the
proposed supplemental indenture directly affects the rights of the registered
owners of Debt Securities of less than all of those Tranches, then the consent
only of the registered owners of a majority in aggregate principal amount of the
outstanding Debt Securities of all directly affected Tranches, considered as one
class, will be required. However, none of those amendments or modifications may:
(1) change the dates on which the principal of or interest on a Debt
Security is due without the consent of the registered owner of that Debt
Security,
(2) reduce any Debt Security's principal amount or rate of interest (or the
amount of any installment of that interest) or change the method of
calculating that rate without the consent of the registered owner of that
Debt Security,
(3) reduce any premium payable upon the redemption of a Debt Security
without the consent of the registered owner of that Debt Security,
(4) change the currency (or other property) in which a Debt Security is
payable without the consent of the registered owner of that Debt Security,
(5) impair the right to sue to enforce payments on any Debt Security on or
after the date that it states that the payment is due (or, in the case of
redemption, on or after the redemption date) without the consent of the
registered owner of that Debt Security,
(6) reduce the percentage in principal amount of the outstanding Debt
Security of any series or Tranche whose owners must consent to an
amendment, supplement or waiver without the consent of the registered owner
of each outstanding Debt Security of that series or Tranche,
(7) reduce the requirements for quorum or voting of any series or Tranche
without the consent of the registered owner of each outstanding Debt
Security of that series or Tranche, or
12
(8) modify certain of the provisions of the Indenture relating to
supplemental indentures, waivers of certain covenants and waivers of past
defaults with respect to the Debt Securities of any series or Tranche,
without the consent of the registered owner of each outstanding Debt
Security affected by the modification.
A supplemental indenture that changes or eliminates any provision of the
Indenture that has expressly been included only for the benefit of one or more
particular series or Tranches of Debt Securities, or that modifies the rights of
the registered owners of Debt Securities of that series or Tranche with respect
to that provision, will not affect the rights under the Indenture of the
registered owners of the Debt Securities of any other series or Tranche
(Indenture, Section 1202).
The Indenture provides that, in order to determine whether the registered
owners of the required principal amount of the outstanding Debt Securities have
given any request, demand, authorization, direction, notice, consent or waiver
under the Indenture, or whether a quorum is present at the meeting of the
registered owners of Debt Securities, Debt Securities owned by FPL Group Capital
or any other obligor upon the Debt Securities or any affiliate of FPL Group
Capital or of that other obligor (unless FPL Group Capital, that affiliate or
that obligor owns all Debt Securities outstanding under the Indenture,
determined without regard to this provision) will be disregarded and deemed not
to be outstanding.
If FPL Group Capital solicits any action under the Indenture from
registered owners of Debt Securities, FPL Group Capital may, at its option, by
signing a written request to the Indenture Trustee, fix in advance a record date
for determining the registered owners of Debt Securities entitled to take that
action. However, FPL Group Capital will not be obligated to do this. If FPL
Group Capital does do this, that action may be taken before or after that record
date, but only the registered owners of record at the close of business on that
record date will be deemed to be registered owners of Debt Securities for the
purposes of determining whether registered owners of the required proportion of
the outstanding Debt Securities have authorized that action. For these purposes
the outstanding Debt Securities will be computed as of the record date. Any
action of a registered owner of any Debt Security under the Indenture will bind
every future registered owner of that Debt Security, or any Debt Security
replacing that Debt Security, with respect to anything that the Indenture
Trustee or FPL Group Capital do, fail to do, or allow to be done in reliance on
that action, whether or not that action is noted upon that Debt Security
(Indenture, Section 104).
RESIGNATION OF INDENTURE TRUSTEE. The Indenture Trustee may resign at any
time with respect to any series of Debt Securities by giving written notice of
its resignation to FPL Group Capital. Also, the registered owners of a majority
in principal amount of the outstanding Debt Securities of one or more series of
Debt Securities may remove the Indenture Trustee any time with respect to the
Debt Securities of that series, by delivering an instrument evidencing this
action to the Indenture Trustee and FPL Group Capital. The resignation or
removal of the Indenture Trustee and the appointment of a successor trustee will
not become effective until a successor trustee accepts its appointment.
Except with respect to an Indenture Trustee appointed by the registered
owners of Debt Securities, the Indenture Trustee will be deemed to have resigned
and the successor will be deemed to have been appointed as trustee in accordance
with the Indenture if:
(1) no event of default under the Indenture or event that, after notice or
lapse of time, or both, would become an event of default under the
Indenture exists, and
(2) FPL Group Capital has delivered to the Indenture Trustee a resolution
of its Board of Directors appointing a successor trustee and that successor
has accepted that appointment in accordance with the terms of the Indenture
(Indenture, Section 910).
NOTICES. Notices to registered owners of Debt Securities will be sent by
mail to the addresses of those registered owners as they appear in the security
register for those Debt Securities.
TITLE. FPL Group Capital, the Indenture Trustee, and any agent of FPL Group
Capital or the Indenture Trustee, may treat the person in whose name a Debt
Security is registered as the absolute owner of that Debt Security, whether or
not that Debt Security is overdue, for the purpose of making payments and for
all other purposes, regardless of any notice to the contrary.
13
GOVERNING LAW. The Indenture and the Debt Securities will be governed by,
and interpreted in accordance with, the laws of the State of New York, without
regard to New York's conflict of law principles, except to the extent that the
law of any other jurisdiction is mandatorily applicable.
REGARDING THE INDENTURE TRUSTEE. In addition to acting as Indenture
Trustee, The Bank of New York acts as Security Registrar and Paying Agent under
the Indenture and as Guarantee Trustee under the Guarantee Agreement described
under "Description of the Guarantee" below. FPL Group Capital also maintains
various banking and trust relationships with The Bank of New York.
SUPPORT AGREEMENT. FPL Group Capital and FPL Group entered into a Support
Agreement dated as of December 18, 1985. The registered owners of the Offered
Debt Securities are not entitled to enforce the covenants and agreements
contained in the Support Agreement. The Support Agreement may be modified or
terminated at any time without the consent of those registered owners.
DESCRIPTION OF THE GUARANTEE
GENERAL. This section briefly summarizes some of the provisions of the
Guarantee Agreement, dated as of June 1, 1999, between FPL Group and The Bank of
New York, as Guarantee Trustee. The Guarantee Agreement was executed for the
benefit of the Indenture Trustee, which holds the Guarantee Agreement for the
benefit of registered owners of the Debt Securities covered by the Guarantee
Agreement. This summary does not contain a complete description of the Guarantee
Agreement. You should read this summary together with the Guarantee Agreement
for a complete understanding of the provisions that may be important to you and
for the definitions of some terms used in this summary that are not defined in
this prospectus but are defined in the Guarantee Agreement. The Guarantee
Agreement is on file with the SEC and is incorporated by reference in this
prospectus. In addition, the Guarantee Agreement is qualified as an indenture
under the Trust Indenture Act and is therefore subject to the provisions of the
Trust Indenture Act. You should read the Trust Indenture Act for a complete
understanding of provisions that may be important to you.
Under the Guarantee Agreement, FPL Group absolutely, irrevocably and
unconditionally guarantees the prompt and full payment, when due and payable
(including upon acceleration or redemption), of the principal, interest and
premium, if any, on the Debt Securities that are covered by the Guarantee
Agreement to the registered owners of those Debt Securities, according to the
terms of those Debt Securities and the Indenture. All of the Offered Debt
Securities will be covered by the Guarantee Agreement. This guarantee is
referred to in this prospectus as the "Guarantee." FPL Group is only required to
make these payments if FPL Group Capital fails to pay or provide for punctual
payment of any of those amounts on or before the expiration of any applicable
grace periods. In the Guarantee Agreement, FPL Group has waived its right to
require the Guarantee Trustee, the Indenture Trustee or the registered owners of
Debt Securities covered by the Guarantee Agreement to exhaust their remedies
against FPL Group Capital prior to bringing suit against FPL Group.
The Guarantee is a guarantee of payment when due (i.e., the guaranteed
party may institute a legal proceeding directly against FPL Group to enforce its
rights under the Guarantee Agreement without first instituting a legal
proceeding against any other person or entity). The Guarantee is not a guarantee
of collection.
SECURITY AND RANKING. The Guarantee is an unsecured obligation of FPL
Group, and will rank equally with all other unsecured and unsubordinated
indebtedness of FPL Group. There is no limit on the amount of other
indebtedness, including guarantees, that FPL Group may issue.
FPL Group is a holding company that derives substantially all of its income
from its operating subsidiaries. Therefore, the Guarantee is effectively
subordinated to debt and preferred stock issued by FPL Group's subsidiaries.
Neither the Indenture nor the Guarantee Agreement places any limit on the amount
of debt or preferred stock that FPL Group's subsidiaries may issue.
EVENTS OF DEFAULT. An event of default under the Guarantee Agreement will
occur upon the failure of FPL Group to perform any of its payment obligations
under the Guarantee Agreement. The registered owners of a majority of the
aggregate principal amount of the Debt Securities covered by the Guarantee
Agreement have the right to:
14
(1) direct the time, method and place of conducting any proceeding for any
remedy available to the Guarantee Trustee with respect to the Guarantee
Agreement, or
(2) direct the exercise of any trust or power conferred upon the Guarantee
Trustee under the Guarantee Agreement.
The Guarantee Trustee must give notice of all defaults known to the
Guarantee Trustee to the registered owners of Debt Securities covered by the
Guarantee Agreement within 90 days after the occurrence of that default, in the
manner and to the extent provided in subsection (c) of Section 313 of the Trust
Indenture Act.
The Guarantee Trustee, the Indenture Trustee and the registered owners of
Offered Debt Securities covered by the Guarantee Agreement have all of the
rights and remedies available under applicable law and may sue to enforce the
terms of the Guarantee Agreement and to recover damages for the breach of the
Guarantee Agreement. The remedies of each of the Guarantee Trustee, the
Indenture Trustee and the registered owners of Debt Securities covered by the
Guarantee Agreement, to the extent permitted by law, are cumulative and in
addition to any other remedy now or hereafter existing at law or in equity. At
the option of each of the Guarantee Trustee, the Indenture Trustee or the
registered owners of Debt Securities covered by the Guarantee Agreement, that
person or entity may join the Guarantor in any lawsuit commenced by that person
or entity against FPL Group Capital with respect to any obligations under the
Guarantee Agreement. Also, that person or entity may recover against the
Guarantor in that lawsuit, or in any independent lawsuit against the Guarantor,
without first asserting, prosecuting or exhausting any remedy or claim against
FPL Group Capital.
FPL Group is required to deliver to the Guarantee Trustee an annual
statement as to its compliance with all conditions under the Guarantee
Agreement.
MODIFICATION. The Guarantor and the Guarantee Trustee may, without the
consent of any registered owner of Debt Securities, agree to any changes to the
Guarantee Agreement that add additional debt securities to the Guarantee
Agreement or that do not materially adversely affect the rights of registered
owners. The Guarantee Agreement may be amended with the prior approval of the
registered owners of a majority in aggregate principal amount of all Debt
Securities covered by the Guarantee Agreement. However, the right of any
registered owner of Debt Securities to receive payment under the Guarantee
Agreement on the due date of the Debt Securities held by that registered owner,
or to institute suit for the enforcement of that payment on or after that due
date, may not be impaired or affected without the consent of that registered
owner.
REGARDING THE GUARANTEE TRUSTEE. The Guarantee Trustee, prior to the
occurrence of a default by FPL Group in performance of the Guarantee Agreement,
will undertake to perform only those duties as are specifically set forth in the
Guarantee Agreement and, after default with respect to the Guarantee Agreement,
must exercise the same degree of care as a prudent individual would exercise in
the conduct of his or her own affairs.
TERMINATION OF THE GUARANTEE AGREEMENT. The Guarantee Agreement will
terminate and be of no further force and effect upon full payment of all Debt
Securities covered by the Guarantee Agreement.
GOVERNING LAW. The Guarantee Agreement will be governed by and construed in
accordance with the laws of the State of New York, without regard to conflict of
laws principles thereunder, except to the extent that the law of any other
jurisdiction is mandatorily applicable.
15
PLAN OF DISTRIBUTION
FPL Group Capital may sell the Offered Debt Securities:
(1) through underwriters or dealers,
(2) through agents, or
(3) directly to one or more purchasers.
THROUGH UNDERWRITERS OR DEALERS. If FPL Group Capital uses underwriters in
the sale, the underwriters will acquire the Offered Debt Securities for their
own account. The underwriters may resell the Offered Debt Securities in one or
more transactions, including negotiated transactions, at a fixed public offering
price or at varying prices determined at the time of sale. The underwriters may
sell the Offered Debt Securities directly or through underwriting syndicates
represented by managing underwriters. Unless otherwise stated in the prospectus
supplement relating to Offered Debt Securities, the obligations of the
underwriters to purchase those Offered Debt Securities will be subject to
certain conditions, and the underwriters will be obligated to purchase all of
those Offered Debt Securities if they purchase any of them. If FPL Group Capital
uses a dealer in the sale, FPL Group Capital will sell Offered Debt Securities
to the dealer as principal. The dealer may then resell those Offered Debt
Securities at varying prices determined at the time of resale.
Any initial public offering price and any discounts or concessions allowed
or reallowed or paid to dealers may be changed from time to time.
THROUGH AGENTS. FPL Group Capital may designate one or more agents to sell
Offered Debt Securities. Unless stated in a prospectus supplement, the agents
will agree to use their best efforts to solicit purchases for the period of
their appointment.
DIRECTLY. FPL Group Capital may sell Offered Debt Securities directly to
one or more purchasers. In this case, no underwriters or agents would be
involved.
GENERAL INFORMATION. A prospectus supplement will state the name of any
underwriter, dealer or agent and the amount of any compensation, underwriting
discounts or concessions paid, allowed or reallowed to them. A prospectus
supplement will also state the proceeds to FPL Group Capital from the sale of
Offered Debt Securities, any initial public offering price and other terms of
the offering of those Offered Debt Securities.
FPL Group Capital may authorize agents, underwriters or dealers to solicit
offers by certain institutions to purchase Offered Debt Securities from FPL
Group Capital at the public offering price and on terms described in the related
prospectus supplement pursuant to delayed delivery contracts providing for
payment and delivery on a specified date in the future.
FPL Group Capital and FPL Group may have agreements to indemnify agents,
underwriters and dealers against certain civil liabilities, including
liabilities under the Securities Act of 1933.
EXPERTS
The audited consolidated financial statements of FPL Group and subsidiaries
appearing in FPL Group's Annual Report on Form 10-K incorporated herein by
reference have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their report included in said Annual Report on Form 10-K, which report
is incorporated herein by reference, and have been so incorporated in reliance
upon the report of such firm given upon their authority as experts in accounting
and auditing.
16
Legal conclusions and opinions specifically attributed to counsel in the
documents incorporated by reference in this prospectus have been reviewed by
Steel Hector & Davis LLP, West Palm Beach, Florida, counsel to FPL Group, and
are set forth on the authority of that firm as experts.
LEGAL OPINIONS
Steel Hector & Davis LLP, West Palm Beach, Florida and Thelen Reid & Priest
LLP, New York, New York, co-counsel to FPL Group and FPL Group Capital, will
pass upon the legality of the Offered Debt Securities and the Guarantee for FPL
Group Capital and FPL Group. Winthrop, Stimson, Putnam & Roberts, New York, New
York will pass upon the legality of the Offered Debt Securities and the
Guarantee for any underwriter, dealer or agent. Thelen Reid & Priest LLP and
Winthrop, Stimson, Putnam & Roberts may rely as to all matters of Florida law
upon the opinion of Steel Hector & Davis LLP. Steel Hector & Davis LLP may rely
as to all matters of New York law upon the opinion of Thelen Reid & Priest LLP.
-----------------------------------
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT. NEITHER FPL GROUP
CAPITAL NOR FPL GROUP HAS AUTHORIZED ANYONE ELSE TO PROVIDE YOU WITH DIFFERENT
INFORMATION. NEITHER FPL GROUP CAPITAL NOR FPL GROUP IS MAKING AN OFFER OF THESE
OFFERED DEBT SECURITIES IN ANY JURISDICTION WHERE THE OFFER IS NOT PERMITTED.
YOU SHOULD NOT ASSUME THAT THE INFORMATION IN THIS PROSPECTUS OR ANY PROSPECTUS
SUPPLEMENT IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT OF THOSE
DOCUMENTS.
17
$500,000,000
[FPL Group Capital Inc Logo]
6 1/8% Debentures, Series due May 15, 2007
The Debentures will be Absolutely, Irrevocably and
Unconditionally Guaranteed by
FPL GROUP, INC.
---------------------
PROSPECTUS SUPPLEMENT
---------------------
MERRILL LYNCH & Co.
BANC OF AMERICA SECURITIES LLC
JPMORGAN
SALOMON SMITH BARNEY
BNY CAPITAL MARKETS, INC.
FIRST UNION SECURITIES, INC.
FLEET SECURITIES, INC.
May 8, 2001