Filed pursuant to Rule 424(b)(2)
File No. 333-20745
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED FEBRUARY 11, 1997)
$20,000,000
MINNESOTA POWER & LIGHT COMPANY
FIRST MORTGAGE BONDS, 6.68% SERIES DUE NOVEMBER 15, 2007
_______________
INTEREST PAYABLE MAY 15 AND NOVEMBER 15
_______________
The First Mortgage Bonds offered hereby (the "Offered
Bonds") constitute an issue of a series of the New Bonds. The
Offered Bonds are not redeemable prior to maturity. The Offered
Bonds will be represented by a global certificate ("Global
Security") in the principal amount of $20,000,000 registered in
the name of a nominee of The Depository Trust Company ("DTC").
Beneficial interests in the Global Security will be shown on, and
transfers thereof will be effected only through, records
maintained by DTC and its participants. Except as described
herein, Offered Bonds in definitive form will not be issued.
See "Certain Terms of the Offered Bonds" herein and
"Description of New Bonds" in the accompanying Prospectus.
_______________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT
OR THE ACCOMPANYING PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
==================================================================
Underwriting
Price to Discounts and Proceeds to
Public(1) Commissions(2) Company(1)(3)
------------------------------------------------------------------
Per Bond . . . . 100.00% 0.65% 99.35%
------------------------------------------------------------------
Total . . . . . . $20,000,000 $130,000 $19,870,000
==================================================================
(1) Plus accrued interest from November 15, 1997.
(2) See "Underwriting."
(3) Before deducting expenses estimated at $225,000, which are
payable by the Company.
_______________
The Offered Bonds are offered by the Underwriter, subject to
prior sale, when, as and if delivered to and accepted by the
Underwriter, and subject to its right to reject orders in whole
or in part. It is expected that delivery of the Offered Bonds
will be made in book-entry form only through the facilities of
DTC on or about November 24, 1997.
_______________
PAINEWEBBER INCORPORATED
_______________
The date of this Prospectus Supplement is November 18, 1997.
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN
TRANSACTIONS THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE
PRICE OF THE OFFERED BONDS. SPECIFICALLY, THE UNDERWRITER MAY
OVERALLOT IN CONNECTION WITH THIS OFFERING OR MAY BID FOR, AND
PURCHASE, THE OFFERED BONDS IN THE OPEN MARKET. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
_______________
CERTAIN TERMS OF THE OFFERED BONDS
The following information concerning the Offered Bonds
supplements and should be read in conjunction with the statements
under "Description of New Bonds" in the accompanying Prospectus.
Capitalized terms not defined herein are used as defined in the
accompanying Prospectus.
GENERAL. The $20,000,000 aggregate principal amount of
Offered Bonds will be issued as a new series of the Company's
First Mortgage Bonds under the Mortgage, as supplemented and
amended by various supplemental indentures, including the
Twentieth Supplemental Indenture dated as of November 1, 1997
relating to the Offered Bonds.
INTEREST, MATURITY AND PAYMENT. The Offered Bonds will
mature on November 15, 2007 and will bear interest from November
15, 1997 at the rate shown in their title, the first interest
payment to be made on May 15, 1998, with subsequent payments to
be made semi-annually on November 15 and May 15. Principal and
interest are payable at The Bank of New York.
REDEMPTION AND PURCHASE OF BONDS. The Offered Bonds are not
redeemable prior to maturity.
SINKING FUND OR IMPROVEMENT FUND. The Offered Bonds are not
entitled to the benefit of a sinking or improvement fund or other
provision for amortization prior to maturity.
BOOK-ENTRY ONLY ISSUANCE -- THE DEPOSITORY TRUST COMPANY.
The Depository Trust Company ("DTC") will act as securities
depository for all of the Offered Bonds. The Offered Bonds will
be issued as fully-registered bonds registered in the name of
Cede & Co., DTC's partnership nominee. One fully-registered
global certificate, representing the aggregate principal amount
of the Offered Bonds, will be issued and will be deposited with
DTC.
DTC is a limited-purpose trust company organized under the
New York Banking Law, a "banking organization" within the meaning
of the New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New
York Uniform Commercial Code and a "clearing agency" registered
pursuant to the provisions of Section 17A of the 1934 Act. DTC
holds securities that its participants ("Participants") deposit
with DTC. DTC also facilitates the settlement among Participants
of securities transactions, such as transfers and pledges, in
deposited securities through electronic computerized book-entry
changes in Participants' accounts, thereby eliminating the need
for physical movement of securities certificates. Direct
Participants include securities brokers and dealers, banks, trust
companies, clearing corporations and certain other organizations
("Direct Participants"). DTC is owned by a number of its Direct
Participants and by the New York Stock Exchange, Inc., the
American Stock Exchange, Inc., and the National Association of
Securities Dealers, Inc. Access to the DTC system is also
available to others, such as securities brokers and dealers,
banks and trust companies that clear transactions through or
maintain a direct or indirect custodial relationship with a
Direct Participant ("Indirect Participants"). The rules
applicable to DTC and its Participants are on file with the
Commission.
Purchases of the Offered Bonds within the DTC system must be
made by or through Direct Participants, which will receive a
credit for the Offered Bonds on DTC's records. The ownership
interest of each actual purchaser of each Offered Bond (the
"Beneficial Owner") is in turn to be recorded on the
S-2
Participants' records. Beneficial Owners will not receive
written confirmation from DTC of their purchases, but Beneficial
Owners are expected to receive written confirmations providing
details of the transactions, as well as periodic statements of
their holdings, from the Participants through which the
Beneficial Owners purchased Offered Bonds. Transfers of
ownership interests in the Offered Bonds are to be accomplished
by entries made on the books of Participants acting on behalf of
Beneficial Owners. Beneficial Owners will not receive
certificates representing their ownership interests in the
Offered Bonds, except in the event that use of the book-entry
system for Offered Bonds is discontinued.
To facilitate subsequent transfers, all Offered Bonds
deposited by Participants with DTC are registered in the name of
Cede & Co. The deposit of Offered Bonds with DTC and their
registration in the name of Cede & Co. effect no change in
beneficial ownership. DTC has no knowledge of the actual
Beneficial Owners of the Offered Bonds; DTC's records reflect
only the identity of the Direct Participants to whose accounts
such Offered Bonds are credited, which may or may not be the
Beneficial Owners. The Participants will remain responsible for
keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to
Direct Participants, by Direct Participants to Indirect
Participants and by Participants to Beneficial Owners will be
governed by arrangements among them, subject to any statutory or
regulatory requirements that may be in effect from time to time.
Neither DTC nor Cede & Co. will consent or vote with respect
to Offered Bonds. Under its usual procedures, DTC mails an
Omnibus Proxy to the Company as soon as possible after the record
date. The Omnibus Proxy assigns Cede & Co.'s consenting or
voting rights to those Direct Participants to whose accounts the
Offered Bonds are credited on the record date (identified in a
listing attached to the Omnibus Proxy).
Principal and interest payments on the Offered Bonds will be
made to DTC. DTC's practice is to credit Direct Participants'
accounts on the payable date in accordance with their respective
holdings shown on DTC's records unless DTC has reason to believe
that it will not receive payment on the payable date. Payments
by Participants to Beneficial Owners will be governed by standing
instructions and customary practices, as is the case with
securities held for the account of customers in bearer form or
registered in "street name," and will be the responsibility of
such Participants and not of DTC, the Company or the Trustees,
subject to any statutory or regulatory requirements as may be in
effect from time to time. Payment of principal and interest to
DTC is the responsibility of the Company and the paying agent,
disbursement of such payments to Direct Participants is the
responsibility of DTC, and disbursement of such payments to the
Beneficial Owners is the responsibility of Participants.
Except as provided herein, a Beneficial Owner will not be
entitled to receive physical delivery of Offered Bonds.
Accordingly, each Beneficial Owner must rely on the procedures of
DTC to exercise any rights under the Offered Bonds.
DTC may discontinue providing its services as securities
depository with respect to the Offered Bonds at any time by
giving reasonable notice to the Company. Under such
circumstances, in the event that a successor securities
depository is not obtained, bond certificates are required to be
printed and delivered. The Company may decide to discontinue use
of the system of book-entry transfers through DTC (or any
successor depository). In that event, bond certificates will be
printed and delivered.
The information in this section concerning DTC and DTC's
book-entry system has been obtained from sources that the Company
believes to be reliable, but the Company does not take
responsibility for the accuracy thereof.
S-3
APPLICATION OF PROCEEDS
The net proceeds to be received from the sale of the Offered
Bonds will be added to the Company's general funds and will be
used for the redemption or retirement of outstanding indebtedness
and for other general corporate purposes. Proceeds not
immediately used for such purpose will be temporarily invested in
short-term investments.
S-4
SELECTED INFORMATION
The following material, which is presented herein solely to
furnish limited introductory information, is qualified in its
entirety by, and should be considered in conjunction with, the
information appearing elsewhere in this Prospectus Supplement,
the accompanying Prospectus and in the Incorporated Documents.
THE OFFERING
Securities Offered by the $20,000,000 principal amount of
Company . . . . . . . . . First Mortgage Bonds, 6.68%
Series due November 15, 2007.
Maturity Date . . . . . . The Offered Bonds will be due
November 15, 2007.
Interest Payment Dates . May 15 and November 15
(beginning May 15, 1998).
Redemption Provisions . . The Offered Bonds are not
redeemable prior to maturity.
Use of Proceeds . . . . . Net proceeds will be used for
the redemption or retirement of
outstanding indebtedness and for
other general corporate
purposes.
RATIOS OF EARNINGS TO FIXED CHARGES
The Company has calculated ratios of earnings to fixed charges as
follows:
Year Ended December 31,
-----------------------
1992 1993 1994
---- ---- ----
Ratio of Earnings to Fixed Charges . 2.60 2.52 2.17
Year Ended
December 31, (Unaudited)
------------ Nine Months Ended
1995 1996 September 30, 1997
---- ---- ------------------
Ratio of Earnings to Fixed
Charges . . . . . . . . . . 1.90 2.12 2.50
SUPPLEMENTAL RATIOS OF EARNINGS TO FIXED CHARGES(1)
The Company has calculated supplemental ratios of earnings to
fixed charges as follows:
Year Ended December 31,
-----------------------
1992 1993 1994
---- ---- ----
Supplemental Ratios of Earnings to
Fixed Charges . . . . . . . . . . . 2.25 2.19 1.95
Year Ended
December 31, (Unaudited)
------------ Nine Months Ended
1995 1996 September 30, 1997
---- ---- ------------------
Supplemental Ratios of
Earnings to Fixed Charges 1.73 1.93 2.30
----------
(1) The supplemental ratio of earnings to fixed charges includes the
Company's obligations under a contract with Square Butte extending
through 2007 pursuant to which the Company is purchasing 71 percent
of the output of a generating unit capable of generating up to 470
megawatts. The Company is obligated to pay Square Butte all of
Square Butte's leasing, operating and debt service costs (less any
amounts collected from the sale of power or energy to others) that
shall not have been paid by Square Butte when due. See Note 17 of
the Company's Consolidated Financial Statements incorporated by
reference in the Company's 1996 Form 10-K.
S-5
SUMMARY FINANCIAL INFORMATION
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
YEAR ENDED
DECEMBER 31, (UNAUDITED)
------------------- NINE MONTHS
ENDED
SEPTEMBER
30,
1995 1996 1997
---- ---- ----------
Operating revenue and income . $672,917 $846,928 $698,682
Net income
Continuing operations . . . $ 61,857 $ 69,221 $ 58,029
Discontinued operations . . 2,848 -- --
-------- -------- --------
Total . . . . . . . . . . $ 64,705 $ 69,221 $ 58,029
Earnings per share of common
stock
Continuing operations
Electric operations . . . $1.36 $1.32 $1.16
Water operations . . . . . (.04) .18 .15
Automobile auctions . . . .00 .13 .39
Investments . . . . . . . 1.46 1.30 .68
Corporate charges and other (.72) (.65) (.53)
-------- -------- --------
Total continuing operations 2.06 2.28 1.85
Discontinued operations . . .10 -- --
-------- -------- --------
Total . . . . . . . . . . $2.16 $2.28 $1.85
SEPTEMBER 30,
1997
(UNAUDITED) PERCENT
----------- -------
Capitalization:
Common stock equity . . . . . . $ 642,322 45%
Preferred stock not subject to
mandatory redemption . . . . 11,492 1
Preferred stock subject to
mandatory redemption . . . . 20,000 2
Company obligated mandatorily
redeemable preferred
securities of MP&L Capital I
which holds solely Company
Junior Subordinated Debentures 75,000 5
Long-term debt . . . . . . . . 667,191 47
---------- ----
Total capitalization (excluding
current maturities) . . . . . $1,416,005 100%
S-6
UNDERWRITING
The Underwriter, PaineWebber Incorporated, has agreed,
subject to the terms and conditions set forth in an Underwriting
Agreement dated November 18, 1997 with the Company, to purchase
from the Company $20,000,000 aggregate principal amount of the
Offered Bonds.
The Underwriting Agreement provides that the obligation of
the Underwriter to pay for and accept delivery of the Offered
Bonds is subject to the approval of certain legal matters by its
counsel and to certain other conditions. In the Underwriting
Agreement, the Underwriter has agreed, subject to the terms and
conditions set forth therein, to purchase all the Offered Bonds
offered hereby if any Offered Bonds are purchased.
The Company has been advised by the Underwriter that it
proposes initially to offer the Offered Bonds to the public at
the public offering price set forth on the cover page of this
Prospectus Supplement, and to certain dealers at such price less
a concession not in excess of 0.40 of 1% of the principal amount
of the Offered Bonds. The Underwriter may allow, and such
dealers may reallow, a concession not in excess of 0.25 of 1% of
the principal amount of the Offered Bonds to certain other
dealers. After the initial public offering, the public offering
price and such concessions may be changed.
The Underwriting Agreement provides that the Company will
indemnify the Underwriter against certain liabilities, including
liabilities under the Securities Act of 1933.
Until the distribution of the Offered Bonds is completed,
rules of the Commission may limit the ability of the Underwriter
to bid for and purchase the Offered Bonds. As an exception to
these rules, the Underwriter is permitted to engage in certain
transactions that stabilize the price of the Offered Bonds. Such
transactions consist of bids or purchases for the purpose of
pegging, fixing or maintaining the price of the Offered Bonds.
In addition, if the Underwriter creates a short position in the
Offered Bonds in connection with this offering of the Offered
Bonds (i.e., they sell more Offered Bonds than are set forth on
the cover page of this Prospectus Supplement), the Underwriter
may reduce the short position by purchasing Offered Bonds in the
open market. In general, purchases of a security for the purpose
of stabilization 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 the Company nor the Underwriter 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 Offered Bonds. In addition, neither the Company nor
the Underwriter makes any representation that the Underwriter
will engage in such transactions or that such transactions, once
commenced, will not be discontinued without notice.
S-7
PROSPECTUS
----------
$80,000,000
MINNESOTA POWER & LIGHT COMPANY
FIRST MORTGAGE BONDS
----------------------
Minnesota Power & Light Company ("Company") intends to offer from time
to time not to exceed $80,000,000 aggregate principal amount of its First
Mortgage Bonds ("New Bonds"). The New Bonds will be offered on terms to be
determined at the time of sale. This Prospectus will be supplemented by a
prospectus supplement ("Prospectus Supplement") which will set forth, as
applicable, the specific designation, aggregate principal amount, the
purchase price, maturity date, interest rate or rates, time of payment of
interest, and the redemption terms and other specific terms of the series
of the New Bonds in respect of which this Prospectus and the Prospectus
Supplement are delivered ("Offered Bonds").
----------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
----------------------
The New Bonds may be sold directly by the Company or through agents
designated from time to time or through dealers or underwriters. If any
agent of the Company or any underwriters are involved in the sales of the
New Bonds, the names of such agents or such underwriters and any applicable
commissions or discounts and the net proceeds to the Company will be set
forth in the Prospectus Supplement.
----------------------
The date of this Prospectus is February 11, 1997.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NEW
BONDS OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN
THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT
ANY TIME.
----------------------
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended ("1934 Act") and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission ("Commission"). Such reports, proxy
statements and other information filed by the Company may be inspected and
copied at the public reference facilities maintained by the Commission at
450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at the
following Regional Offices of the Commission: New York Regional Office, 7
World Trade Center, 13th Floor, New York, New York 10048; and Chicago
Regional Office, Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such material may also be obtained at
prescribed rates from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549. The Commission maintains a Web
site (http://www.sec.gov) that contains reports, proxy statements and other
information regarding registrants that file electronically with the
Commission, including the Company. The Company's Common Stock and the
preferred share purchase rights attached thereto are listed on the New York
Stock Exchange. Reports and other information concerning the Company may be
inspected and copied at the office of such Exchange at 20 Broad Street, New
York, New York. In addition, the Company's 5% Preferred Stock, $100 par
value, is listed on the American Stock Exchange. Reports and other
information concerning the Company may be inspected and copied at the
office of such Exchange at 86 Trinity Place, New York, New York.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, filed by the Company with the Commission
pursuant to the 1934 Act, are hereby incorporated by reference:
1. The Company's Annual Report on Form 10-K for the year
ended December 31, 1995 ("1995 Form 10-K").
2. The Company's Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1996, June 30, 1996 and
September 30, 1996 (each as amended by a Form 10-Q/A
dated January 22, 1997).
3. The Company's Current Reports on Form 8-K dated April
9, 1996, June 18, 1996, August 2, 1996, August 23,
1996, September 5, 1996, October 3, 1996 and November
7, 1996.
Each document filed subsequent to the date of this Prospectus pursuant
to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act prior to the
termination of the offering made by this Prospectus shall be deemed to be
incorporated by reference in this Prospectus and shall be a part hereof
from the date of filing of such document; provided, however, that the
documents enumerated above or subsequently filed by the Company pursuant to
Section 13 or 15(d) of the 1934 Act prior to the filing with the Commission
of the Company's most recent Annual Report on Form 10-K shall not be
incorporated by reference in this Prospectus or be a part hereof from and
after the filing of such most recent Annual Report on Form 10-K. The
documents which are incorporated by reference in this Prospectus are
sometimes hereinafter referred to as the "Incorporated Documents."
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which is
- 2 -
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, upon the
written or oral request of any such person, a copy of any document referred
to above which has been or may be incorporated in this Prospectus by
reference, other than exhibits to such documents (unless such exhibits are
specifically incorporated by reference into such documents). Requests for
such copies should be directed to: Shareholder Services, Minnesota Power,
30 West Superior Street, Duluth, Minnesota 55802, telephone number (218)
723-3974 or (800) 535-3056.
THE COMPANY
The Company is an operating public utility incorporated under the laws
of the State of Minnesota since 1906. Its principal executive office is at
30 West Superior Street, Duluth, Minnesota 55802, and its telephone number
is (218) 722-2641. The Company has operations in four business segments:
(1) electric operations, which include electric and gas services, and coal
mining; (2) water operations, which include water and wastewater services;
(3) automobile auctions, which also include a finance company and an auto
transport company; and (4) investments, which include real estate
operations, a 21 percent equity investment in a financial guaranty
reinsurance company, and a securities portfolio. As of September 30, 1996
the Company and its subsidiaries had approximately 5,900 employees.
(UNAUDITED)
NINE MONTHS
YEAR ENDED DECEMBER ENDED
31, SEPTEMBER 30,
------------------- ------------
SUMMARY OF EARNINGS PER
SHARE (1) 1993 1994 1995 1995 1996
--------------------------------------------------------------------
CONSOLIDATED EARNINGS PER SHARE
Continuing Operations $ 2.27 $ 1.99 $ 2.06 $ 1.69 $ 1.68
Discontinued (.07) .07 .10 .10 -
Operations (2) ------ ------ ------ ------ ------
Total $ 2.20 $ 2.06 $ 2.16 $ 1.79 $ 1.68
====== ====== ====== ====== ======
PERCENTAGE OF EARNINGS BY BUSINESS SEGMENT
Continuing Operations
Electric Operations 67% 66% 63% 57% 59%
Water Operations 3 23 (2) 2 7
Automobile Auctions - - 0 2 7
Investments 55 40 67 66 54
Corporate Charges (22) (33) (33) (33) (27)
and Other (3)
Discontinued (3) 4 5 6 -
Operations (2) --- --- --- --- ---
100% 100% 100% 100% 100%
=== === === === ===
----------------
(1) Financial statement information may not be comparable between
periods due to the purchase of 80 percent of ADESA Corporation on
July 1, 1995, another 3 percent on January 31, 1996 and the
remaining 17 percent on August 21, 1996.
(2) On June 30, 1995 the Company sold its interest in its paper and
pulp business to Consolidated Papers, Inc. ("CPI") for $118
million in cash, plus CPI's assumption of certain debt and lease
obligations. The Company is still committed to a maximum
guarantee of $95 million to ensure a portion of a $33.4 million
annual lease obligation for paper mill equipment under an
operating lease extending to 2012. CPI has agreed to indemnify
the Company for any payments the Company may make as a result of
the Company's obligation relating to this operating lease.
(3) Includes the financial results for the Reach All Partnership and
general corporate expenses not allocable to a specific business
segment.
- 3 -
ELECTRIC OPERATIONS
Electric operations generate, transmit, distribute and sell
electricity. The Company provides electricity to 124,000 customers in
northern Minnesota, while the Company's wholly owned subsidiary, Superior
Water, Light and Power Company, sells electricity to 14,000 customers and
natural gas to 11,000 customers, and provides water to 10,000 customers in
northwestern Wisconsin. Another wholly owned subsidiary, BNI Coal, Ltd.
("BNI Coal") owns and operates a lignite mine in North Dakota. Two
electric generating cooperatives, Minnkota Power Cooperative, Inc. and
Square Butte Electric Cooperative ("Square Butte"), presently consume
virtually all of BNI Coal's production of lignite coal under coal supply
agreements extending to 2027. Under an agreement with Square Butte, the
Company purchases 71 percent of the output from the Square Butte unit,
which is capable of generating up to 470 megawatts.
In 1995 large industrial customers contributed about half of the
Company's electric operating revenue. The Company has large power
contracts to sell power to ten industrial customers (five taconite
producers, four paper companies and a pipeline company) each requiring 10
megawatts or more of power. These contracts, which have termination dates
ranging from October 1997 to December 2007, require the payment of minimum
monthly demand charges that cover most of the fixed costs, including a
return on common equity, associated with having the capacity available to
serve these customers.
WATER OPERATIONS
Water operations include Florida Water Services Corporation ("Florida
Water", formerly Southern States Utilities, Inc.), Heater Utilities, Inc.
("Heater") and Instrumentation Services, Inc. ("ISI"), three wholly owned
subsidiaries of the Company. Florida Water is the largest private water
supplier in Florida. At September 30, 1996 Florida Water provided water to
119,000 customers and wastewater treatment services to 54,000 customers in
Florida. At September 30, 1996 Heater provided water to 25,000 customers
and wastewater treatment services to 1,000 customers in North Carolina and
South Carolina. ISI provides maintenance services to water utility
companies in North Carolina, South Carolina, Florida, Georgia, Tennessee,
Virginia and Texas.
AUTOMOBILE AUCTIONS
ADESA Corporation ("ADESA") is a wholly owned subsidiary of the
Company and is the third largest automobile auction business in the United
States. Headquartered in Indianapolis, Indiana, ADESA owns and operates 25
automobile auctions in the United States and Canada through which used cars
and other vehicles are sold to franchised automobile dealers and licensed
used car dealers. Two wholly owned subsidiaries of ADESA, Automotive
Finance Corporation and ADESA Auto Transport, perform related services.
Sellers at ADESA's auctions include domestic and foreign auto
manufacturers, car dealers, fleet/lease companies, banks and finance
companies.
The Company acquired 80 percent of ADESA on July 1, 1995. On January
31, 1996 the Company provided additional capital in exchange for an
additional 3 percent of ADESA. On August 21, 1996 the Company acquired the
remaining 17 percent ownership interest of ADESA from the ADESA management
shareholders. In conjunction with the transaction, four of the management
shareholders left ADESA to pursue other opportunities.
INVESTMENTS
The Company owns 80 percent of Lehigh Acquisition Corporation, a real
estate company that owns various real estate properties and operations in
Florida.
The Company has a 21 percent equity investment in Capital Re
Corporation ("Capital Re"). Capital Re is a Delaware holding company
engaged primarily in financial and mortgage guaranty reinsurance through
its wholly owned subsidiaries, Capital Reinsurance Company and Capital
Mortgage Reinsurance Company. Capital Reinsurance Company is a reinsurer
of financial guarantees of municipal and non-municipal debt obligations.
- 4 -
Capital Mortgage Reinsurance Company is a reinsurer of residential mortgage
guaranty insurance. The Company's equity investment in Capital Re at
September 30, 1996 was $99 million.
As of September 30, 1996 the Company had approximately $160 million
invested in a securities portfolio. The majority of the portfolio consists
of stocks of other utility companies with investment grade debt securities
outstanding and are considered by the Company to be conservative
investments. Additionally, the Company sells common stock securities short
and enters into short sales of treasury futures contracts as part of an
overall investment portfolio hedge strategy.
APPLICATION OF PROCEEDS
The Company is offering a maximum of $80,000,000 aggregate principal
amount of its New Bonds. The net proceeds to be received from the issuance
and sale of the New Bonds will be used for general corporate purposes,
which may include the redemption or other acquisition, in whole or in part,
of certain of the Company's outstanding securities.
Reference is made to the Incorporated Documents with respect to the
Company's general capital requirements and general financing plans and
capabilities.
RATIOS OF EARNINGS TO FIXED CHARGES
The Company has calculated ratios of earnings to fixed charges as
follows:
Nine Months
Year Ended December 31, Ended
---------------------------- September 30,
1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ---- -------------
Ratio of Earnings to
Fixed Charges . . . 2.55 2.60 2.52 2.17 1.90 2.18
SUPPLEMENTAL RATIOS OF EARNINGS TO FIXED CHARGES
The Company has calculated supplemental ratios of earnings to
fixed charges as follows:
Nine Months
Year Ended December 31, Ended
----------------------------- September 30,
1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ---- ------------
Supplemental Ratio of
Earnings to Fixed
Charges . . . . . . 2.20 2.25 2.19 1.95 1.73 1.99
The supplemental ratio of earnings to fixed charges includes the
Company's obligations under a contract with Square Butte extending
through 2007 pursuant to which the Company is purchasing 71 percent of
the output of a generating unit capable of generating up to 470
megawatts. The Company is obligated to pay Square Butte all of Square
Butte's leasing, operating and debt service costs (less any amounts
collected from the sale of power or energy to others) that shall not
have been paid by Square Butte when due. See Note 12 of the Company's
Consolidated Financial Statements incorporated by reference in the
Company's 1995 Form 10-K.
- 5 -
DESCRIPTION OF NEW BONDS
General. The New Bonds are to be issued under the Company's
Mortgage and Deed of Trust, dated as of September 1, 1945, with Irving
Trust Company (now The Bank of New York) and Richard H. West (W.T.
Cunningham, successor), as Trustees, as supplemented by eighteen
supplemental indentures (herein collectively referred to as the
"Mortgage"), all of which are exhibits to the Registration Statement.
The statements herein with respect to the New Bonds and the Mortgage
are merely an outline and do not purport to be complete. They make
use of terms defined in the Mortgage and are qualified in their
entirety by express reference to the cited Articles and Sections of
the Mortgage.
Reference is made to the Prospectus Supplement for the following
terms of the Offered Bonds (among others): (i) the designation, series
and aggregate principal amount of the Offered Bonds; (ii) the
percentage or percentages of their principal amount at which such
Offered Bonds will be issued; (iii) the date or dates on which the
Offered Bonds will mature; (iv) the rate or rates per annum at which
the Offered Bonds will bear interest; (v) the times at which such
interest will be payable; and (vi) redemption terms or other specific
terms.
Form and Exchanges. The New Bonds will be issued in definitive
fully registered form without coupons in denominations of $1,000 and
multiples thereof and will be transferable and exchangeable without
charge (except for stamp taxes, if any, or other governmental charges)
at The Bank of New York, New York, New York.
Interest, Maturity and Payment. Reference is made to the
Prospectus Supplement for the interest rate or rates of the Offered
Bonds and the dates on which such interest is payable. Principal and
interest are payable at The Bank of New York, New York, New York.
Redemption and Purchase of Bonds. The New Bonds will be
redeemable, in whole or in part, on 30 days notice at the redemption
prices set forth in the Prospectus Supplement for redemptions
including (i) for the basic improvement fund, (ii) for the maintenance
and replacement fund, (iii) with certain deposited cash, (iv) with
proceeds of released property, or (v) at the option of the Company.
Reference is made to the Prospectus Supplement for the redemption
terms of the Offered Bonds.
If at the time notice of redemption is given the redemption
moneys are not on deposit with the Corporate Trustee, the redemption
may be made subject to their receipt before the date fixed for
redemption.
Cash deposited under any provisions of the Mortgage (with certain
exceptions) may be applied to the purchase of Bonds of any series.
(Mortgage, Art. X.)
Sinking or Improvement Fund. Reference is made to the Prospectus
Supplement concerning whether or not the Offered Bonds are entitled to
the benefit of a sinking or improvement fund or other provision for
amortization prior to maturity. Of the currently outstanding Bonds,
only the 6-1/2% Series due January 1, 1998 has sinking fund or
improvement fund provisions.
Replacement Fund. Although the New Bonds as such are not entitled
to the benefit of a replacement fund, so long as any Bonds of the 6-
1/2% Series due January 1, 1998 are outstanding, there shall be
expended for each year for replacements and improvements in respect of
the mortgaged electric, gas, steam and/or hot water utility property
and of certain automotive equipment an amount equal to $750,000 plus 2
percent of net additions to such depreciable mortgaged property made
after June 30, 1945 and prior to the beginning of such year. Such
requirement may be met with cash or gross property additions or by
certifying net cash expenditures for certain automotive equipment or
by taking credit for Bonds and qualified lien bonds retired. Any
excess in such credits may be applied against future requirements.
Such cash may be withdrawn on gross property additions or on waiver of
the right to issue Bonds or be applied to the purchase or redemption
of Bonds of such series as may be designated by the Company, including
the New Bonds. (Mortgage, Sec. 39; Fourth Supplemental, Sec. 3.)
- 6 -
Special Provisions for Retirement of Bonds. If, during any 12
month period, mortgaged property is disposed of by order of or to any
governmental authority resulting in the receipt of $5 million or more
as proceeds, the Company (subject to certain conditions) must apply
such proceeds, less certain deductions, to the retirement of Bonds.
(Mortgage, Sec. 64.) Reference is made to the Prospectus Supplement
for information concerning whether the New Bonds are redeemable for
this purpose and, if so, at what redemption prices.
Security. The New Bonds and any other Bonds now or hereafter
issued under the Mortgage will be secured by the Mortgage, which
constitutes, in the opinion of General Counsel for the Company, a
first lien on all of the electric generating plants and other
materially important physical properties of the Company and
substantially all other properties described in the Mortgage as owned
by the Company, subject to (a) leases of minor portions of the
Company's property to others for uses which, in the opinion of such
counsel, do not interfere with the Company's business, (b) leases of
certain property of the Company not used in its electric utility
business, and (c) excepted encumbrances, minor defects and
irregularities, but such counsel has not examined title to or passed
upon title to reservoir lands, easements or rights of way, any
property not costing in excess of $25,000, or lands or rights held for
flowage, flooding or seepage purposes, or riparian rights. There are
excepted from the lien: cash and securities; merchandise, equipment,
materials or supplies held for sale or other disposition; aircraft,
automobiles and other vehicles, and materials and supplies for
repairing and replacing the same; timber, minerals, mineral rights and
royalties; receivables, contracts, leases and operating agreements.
The Mortgage contains provisions for subjecting after-acquired
property (subject to pre-existing liens) to the lien thereof, subject
to limitations in the case of consolidation, merger or sale of
substantially all of the Company's assets.
The Mortgage provides that the Trustees shall have a lien upon
the mortgaged property, prior to the Bonds, for the payment of their
reasonable compensation, expenses and disbursements and for indemnity
against certain liabilities. (Mortgage, Sec. 96.)
No stocks or properties of subsidiaries are subject to the
Mortgage.
Issuance of Additional Bonds. The maximum principal amount of
Bonds which may be issued under the Mortgage is not limited. Bonds of
any series may be issued from time to time on the basis of: (1) 60
percent of property additions after adjustments to offset retirements;
(2) retirement of Bonds or qualified lien bonds; and (3) deposit of
cash. With certain exceptions in the case of (2) above, the issuance
of Bonds requires adjusted net earnings before income taxes for 12 out
of the preceding 15 months of at least twice the annual interest
requirements on all Bonds at the time outstanding, including the
additional issue, and on all indebtedness of prior rank. Such
adjusted net earnings are computed after provision for retirement and
depreciation of property equal to the replacement fund requirements
for such period. It is expected that the New Bonds will be issued
upon the basis of the retirement of Bonds or property additions.
Property additions generally include electric, gas, steam or hot
water property acquired after June 30, 1945, but may not include
securities, aircraft, automobiles or other vehicles, or property used
principally for the production or gathering of natural gas. There was
available, as of December 31, 1996, unfunded net property additions of
approximately $111,272,239.
In general, when the Bonds of the 6-1/2% Series due January 1,
1998 have been retired, property additions theretofore funded to
satisfy sinking or improvement funds and/or replacement funds for all
series will revert to unfunded status, and such property additions, as
well as any Bonds theretofore used to satisfy all series' sinking or
improvement funds and/or replacement funds, will become available as a
basis for the issuance of additional Bonds.
The Company has reserved the right to amend the Mortgage without
any consent or other action by holders of any series of Bonds
(including the New Bonds) other than the Bonds of the 6-1/2% Series
due January 1, 1998 so as to include nuclear fuel (and similar or
analogous devices or substances) as property additions.
- 7 -
The Mortgage contains certain restrictions upon the issuance of
Bonds against property subject to liens and upon the increase of the
amount of such liens. (Mortgage, Sec. 4-8, 20-30, and 46; Fifth
Supplemental, Sec. 2.)
Release and Substitution of Property. Property may be released
upon the basis of: (1) deposit of cash or, to a limited extent,
purchase money mortgages; (2) property additions, after adjustments in
certain cases to offset retirement and after making adjustments for
qualified lien bonds outstanding against property additions; and/or
(3) waiver of the right to issue Bonds without applying any earnings
test. Cash may be withdrawn upon the bases stated in (2) and (3)
above. When property released is not funded property, property
additions used to effect the release may again, in certain cases,
become available as credits under the Mortgage, and the waiver of the
right to issue Bonds to effect the release may, in certain cases,
cease to be effective as such a waiver. Similar provisions are in
effect as to cash proceeds of such property. The Mortgage contains
special provisions with respect to qualified lien bonds pledged, and
disposition of moneys received on pledged prior lien bonds. (Mortgage,
Sec. 5, 31, 32, 37, 46-50, 59-63, 100 and 118.)
Dividend Covenant. The Company covenants that it will not declare
or pay dividends (other than dividends payable in common stock) on or
make any other distributions on or acquire (unless without cost to it)
any of its common stock unless the provisions for depreciation and
retirement of property during the period beginning September 1, 1945
to the date of the proposed payment, distribution or acquisition, plus
earned surplus of the Company (including current net income available
to be transferred to earned surplus) remaining:
(a) after such payment, distribution or acquisition; and
(b) after deducting any remainder of the amount of earned
surplus of the Company as of August 31, 1945, after deducting
from such amount the charges to earned surplus subsequent to
August 31, 1945, other than charges occasioned by dividends
(other than dividends payable in common stock) on its common
stock or occasioned by other distributions on or acquisitions of
its common stock and other than charges to earned surplus with
corresponding credits to reserve for depreciation and retirement
of property;
shall be at least equal to the amount of replacement fund
requirements, if any, for such period. (See Replacement Fund.)
(Mortgage, Sec. 39.) None of the Company's retained earnings as of
September 30, 1996 was restricted as a result of such provisions.
Modification of the Mortgage. The rights of Bondholders may be
modified with the consent of the holders of 70 percent of the Bonds
and, if less than all series of Bonds are affected, the consent also
of the holders of 70 percent of the Bonds of each series affected.
The Company has reserved the right without any consent or other action
by the holders of any series of Bonds (including the New Bonds) other
than the Bonds of the 6-1/2% Series due January 1, 1998 to amend the
Mortgage so as to substitute 66 2/3 percent for 70 percent in the
foregoing provisions. In general, no modification of the terms of
payment of principal and interest, no modification of the obligations
of the Company under Section 64 and no modification affecting the lien
or reducing the percentage required for modification, is effective
against any Bondholder without his consent. (Mortgage, Art. XIX; Fifth
Supplemental, Sec. 3.)
Defaults and Notice Thereof. Defaults are defined as being
default in payment of principal; default for 60 days in payment of
interest or of installments of funds for retirement of Bonds; certain
defaults with respect to qualified lien bonds and certain events in
bankruptcy, insolvency or reorganization; and default of 90 days after
notice in other covenants. (Mortgage, Sec. 65.) The Trustees may
withhold notice of default (except in payment of principal, interest
or funds for retirement of Bonds) if they think it is in the interest
of the bondholders. (Mortgage, Sec. 66.) Under the Trust Indenture
Act of 1939, as amended, general periodic evidence is required to be
furnished as to compliance with the conditions and covenants under the
Mortgage.
The Corporate Trustee or the holders of 25 percent of the Bonds
may declare the principal and interest due on default, but a majority
may annul such declaration if the default has been cured. (Mortgage,
- 8 -
Sec. 67.) No holder of Bonds may enforce the lien of the Mortgage
without giving the Trustees written notice of a default and unless
holders of 25 percent of the Bonds have requested the Trustees to act
and offered them reasonable opportunity to act and indemnity
satisfactory to the Trustees and they shall have failed to act.
(Mortgage, Sec. 80.) The holders of a majority of the Bonds may
direct the time, method and place of conducting any proceedings for
any remedy available to the Trustees, or exercising any trust or power
conferred upon the Trustees, but the Trustees are not required to
follow such direction if not sufficiently indemnified for
expenditures. (Mortgage, Sec. 71.)
EXPERTS
The Company's consolidated financial statements incorporated in
this Prospectus by reference to the Company's 1995 Form 10-K, except
as they relate to ADESA, have been audited by Price Waterhouse LLP,
independent accountants, and, insofar as they relate to ADESA, by
Ernst & Young LLP, independent auditors. Such financial statements,
except as they relate to ADESA, have been so incorporated in reliance
on the report of Price Waterhouse LLP, given on the authority of said
firm as experts in auditing and accounting.
The financial statement schedule incorporated in this Prospectus
by reference to the Company's 1995 Form 10-K has been so incorporated
in reliance on the report of Price Waterhouse LLP, independent
accountants, given on the authority of said firm as experts in
auditing and accounting.
The consolidated financial statements of ADESA for the period
from July 1, 1995 to December 31, 1995 which are included in the
consolidated financial statements of the Company incorporated in this
Prospectus by reference to the Company's 1995 Form 10-K have been
audited by Ernst & Young LLP, independent auditors, as set forth in
their report thereon included in said 1995 Form 10-K. The
consolidated financial statements of ADESA for the period from July 1,
1995 to December 31, 1995 are included in the consolidated financial
statements of the Company in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
Legal conclusions and opinions specifically attributed to General
Counsel herein under Description of New Bonds and in the Incorporated
Documents have been reviewed by Philip R. Halverson, Esq., Duluth,
Minnesota, Vice President, General Counsel and Corporate Secretary of
the Company, and are set forth or incorporated by reference herein in
reliance upon his opinion given upon his authority as an expert.
As of December 31, 1996 Mr. Halverson owned approximately 4,432
shares of the Common Stock of the Company. Mr. Halverson is regularly
acquiring additional shares of Common Stock as a participant in the
Company's Employee Stock Purchase Plan, Employee Stock Ownership Plan
and Supplemental Retirement Plan.
LEGAL OPINIONS
The legality of the New Bonds will be passed upon for the Company
by Mr. Halverson and by Reid & Priest LLP, New York, New York, counsel
for the Company, and for any underwriter, dealer or agent by Lane &
Mittendorf LLP, New York, New York. Reid & Priest LLP and Lane &
Mittendorf LLP may rely as to all matters of Minnesota law upon the
opinion of Mr. Halverson.
PLAN OF DISTRIBUTION
The Company may sell the New Bonds in any of three ways: (i)
through underwriters or dealers; (ii) directly to a limited number of
institutional purchasers or to a single purchaser; or (iii) through
agents. The Prospectus Supplement relating to the Offered Bonds will
set forth the terms of the offering of the Offered Bonds, including
the name or names of any underwriters, dealers or agents, the purchase
price of the Offered Bonds and the net proceeds to the Company from
such sale, any underwriting discounts and other items constituting
underwriters' compensation, any initial public offering price and any
discounts or concessions allowed or reallowed or paid to dealers. Any
initial public offering price and any discounts or concessions allowed
or reallowed or paid to dealers may be changed from time to time.
- 9 -
If underwriters are used in any sale of the New Bonds, the
Offered Bonds will be acquired by the underwriters for their own
account and may be resold from time to time in one or more
transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale.
The underwriter or underwriters with respect to a particular
underwritten offering of Offered Bonds will be named in the Prospectus
Supplement relating to such offering and, if an underwriting syndicate
is used, the managing underwriter or underwriters will be set forth on
the cover page of such Prospectus Supplement. Unless otherwise set
forth in the Prospectus Supplement, the obligations of the underwriter
or underwriters to purchase the Offered Bonds will be subject to
certain conditions precedent and the underwriter or underwriters will
be obligated to purchase all the Offered Bonds if any are purchased
except that, in certain cases involving a default by one or more
underwriters, less than all of the Offered Bonds may be purchased.
Offered Bonds may be sold directly by the Company or through
agents designated by the Company from time to time. Any agent
involved in the offer or sale of the Offered Bonds in respect of which
this Prospectus is delivered will be named, and any commissions
payable by the Company to such agent will be set forth, in the
Prospectus Supplement. Unless otherwise indicated in the Prospectus
Supplement, any such agent will be acting on a best efforts basis for
the period of its appointment.
If so indicated in the Prospectus Supplement, the Company will
authorize agents, underwriters or dealers to solicit offers by certain
specified institutions to purchase Offered Bonds from the Company at
the public offering price to be set forth in the Prospectus Supplement
pursuant to delayed delivery contracts providing for payment and
delivery on a specified date in the future. Such contracts will be
subject to those conditions set forth in the Prospectus Supplement,
and the Prospectus Supplement will set forth the commission payable
for solicitation of such contracts.
Subject to certain conditions, agents and underwriters may be
entitled under agreements entered into with the Company to
indemnification by the Company against certain civil liabilities,
including liabilities under the Securities Act of 1933, as amended,
arising out of or based upon, among other things, any untrue statement
or alleged untrue statement of a material fact contained in the
registration statement, this Prospectus, a Prospectus Supplement or
the Incorporated Documents or the omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. See the
Prospectus Supplement.
- 10 -
============================== ==============================
NO PERSON HAS BEEN
AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION
WITH THIS OFFERING OTHER THAN
THOSE CONTAINED IN THIS
PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS AND, IF GIVEN OR $20,000,000
MADE, SUCH OTHER INFORMATION
AND REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR
ANY UNDERWRITER. NEITHER THE MINNESOTA
DELIVERY OF THIS PROSPECTUS
SUPPLEMENT OR THE PROSPECTUS
NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN POWER & LIGHT
NO CHANGE IN THE AFFAIRS OF
THE COMPANY SINCE THE DATE
HEREOF OR THAT THE INFORMATION
CONTAINED HEREIN IS CORRECT AS
OF ANY TIME SUBSEQUENT TO ITS
DATE. THIS PROSPECTUS COMPANY
SUPPLEMENT AND THE PROSPECTUS
DO NOT CONSTITUTE AN OFFER TO
SELL OR A SOLICITATION OF AN FIRST MORTGAGE BONDS,
OFFER TO BUY ANY SECURITIES 6.68% SERIES
OTHER THAN THE REGISTERED
SECURITIES TO WHICH THEY
RELATE. THIS PROSPECTUS DUE NOVEMBER 15, 2007
SUPPLEMENT AND THE PROSPECTUS
DO NOT CONSTITUTE AN OFFER TO
SELL OR A SOLICITATION OF AN
OFFER TO BUY SUCH SECURITIES IN
ANY CIRCUMSTANCES IN WHICH
SUCH OFFER OR SOLICITATION IS
UNLAWFUL.
---------- ----------
PROSPECTUS SUPPLEMENT
----------
TABLE OF CONTENTS
PAGE
----
PROSPECTUS SUPPLEMENT
CERTAIN TERMS OF THE
OFFERED BONDS..........S-2
APPLICATION OF PROCEEDS..S-4 PAINEWEBBER INCORPORATED
SELECTED INFORMATION.....S-5
UNDERWRITING.............S-7
PROSPECTUS
AVAILABLE INFORMATION....2
INCORPORATION OF
CERTAIN DOCUMENTS
BY REFERENCE...........2 ----------
THE COMPANY..............3
APPLICATION OF PROCEEDS..5
RATIOS OF EARNINGS TO
FIXED CHARGES..........5
SUPPLEMENTAL RATIOS OF
EARNINGS TO FIXED NOVEMBER 18, 1997
CHARGES................5
DESCRIPTION OF NEW
BONDS..................6
EXPERTS..................9
LEGAL OPINIONS...........9
PLAN OF DISTRIBUTION.....9
============================== ==============================