Rule 424(b)(2)
Registration No. 33-60133
PROSPECTUS SUPPLEMENT
(To Prospectus dated July 11, 1995)
$470,000,000
SOUTHERN NEW ENGLAND TELECOMMUNICATIONS CORPORATION
MEDIUM-TERM NOTES, SERIES 2
DUE FROM THREE TO THIRTY YEARS FROM DATE OF ISSUE
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Southern New England Telecommunications Corporation ("Corporation") may
offer from time to time up to $470 million of Medium-Term Notes ("Notes"),
Series 2, in the United States. Unless otherwise specified in the applicable
Pricing Supplement ("Pricing Supplement"), each Note will mature from three to
thirty years from the date of issue, as selected by the purchaser and agreed
to by the Corporation.
The interest rate on each Note will be a fixed rate and, with any other
applicable terms for such Note, will be established by the Corporation at the
date of issue of such Note and will be set forth therein and in a Pricing
Supplement to this Prospectus Supplement ("Prospectus Supplement"). Unless
otherwise specified in the applicable Pricing Supplement, interest on each
Note is payable each June 15 and December 15 and at maturity. Unless otherwise
specified in the applicable Pricing Supplement, the Notes may not be redeemed
by the Corporation prior to maturity.
Unless otherwise specified in the applicable Pricing Supplement, the Notes
will be issued only in fully registered form in denominations of $100,000 or
any amount in excess that is an integral multiple of $1,000. Each Note will be
represented by either a global note ("Global Note" or "Global Security")
representing Book-Entry Notes (as defined below) registered in the name of a
nominee of The Depository Trust Company, as depository ("Depository"), or a
certificate issued in definitive form as specified in the applicable Pricing
Supplement. Beneficial interests in Book-Entry Notes will be shown on, and
transfers thereof will be effected only through, records maintained by the
Depository and its participants. Book-Entry Notes will not be issuable in
definitive form, except under the circumstances described herein. See
"Description of Medium-Term Notes, Series 2".
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURI-
TIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT, ANY PRICING SUP-
PLEMENT HERETO OR THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
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Price to Agents' Proceeds to
Public(1) Commission(2) Corporation(1)(3)
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Per Note......... 100% .350%-.875% 99.650%-99.125%
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Total............ $470,000,000 $1,645,000-$4,112,500 $468,355,000-$465,887,500
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(1) Notes will be issued at 100% of their principal amount, unless otherwise
specified in the applicable Pricing Supplement.
(2) The Corporation will pay Lehman Brothers, Lehman Brothers Inc. (including
its affiliate, Lehman Government Securities, Inc.), Goldman, Sachs & Co.,
and Salomon Brothers Inc (the "Agents") a commission from .350% to .875%,
in the form of a discount, depending on maturity, of the principal amount
of any Notes sold through them as Agents. The Corporation has agreed to
indemnify the Agents against certain liabilities, including liabilities
under the Securities Act of 1933.
(3) Before deducting expenses payable by the Corporation estimated at
$395,070, including reimbursement of the Agents' expenses.
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Offers to purchase Notes are being solicited, on a commercially reasonable
best efforts basis, from time to time by the Agents on behalf of the
Corporation. Notes may be sold to the Agents on their own behalf at negotiated
discounts. The Corporation reserves the right to sell the Notes directly on
its own behalf. The Corporation also reserves the right to withdraw, cancel or
modify the offering contemplated hereby without notice. No termination date
for the offering of the Notes has been established. The Corporation or the
Agents may reject any order as a whole or in part. See "Plan of Distribution".
LEHMAN BROTHERS
GOLDMAN, SACHS & CO.
SALOMON BROTHERS INC
August 4, 1995.
IN CONNECTION WITH THE DISTRIBUTION OF NOTES UNDERWRITTEN BY AN AGENT ACTING
AS PRINCIPAL, SUCH AGENT MAY OVER ALLOT OR EFFECT TRANSACTIONS IN THE NOTES
WITH A VIEW TO STABILIZING OR MAINTAINING THE MARKET PRICE OF THE NOTES AT
LEVELS OTHER THAN THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED IN ANY OVER-THE-COUNTER MARKET OR OTHERWISE AND,
IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
DESCRIPTION OF MEDIUM-TERM NOTES, SERIES 2
The information herein concerning the Notes should be read in conjunction
with the statements under "Description of the Debt Securities" in the
Prospectus dated July 11, 1995.
GENERAL
The Notes constitute a single series and are to be issued under an Indenture
dated as of July 10, 1991 ("Indenture"), between the Corporation and Shawmut
Bank Connecticut, as Trustee ("Trustee"). Under this Prospectus Supplement,
Notes may be issued in an aggregate principal amount of up to $470,000,000
within the United States pursuant to Registration Statement No. 33-60133
("Registration Statement"). See "Plan of Distribution".
The Notes are being offered from time to time and will mature from three to
thirty years from the date of issue, as selected by the purchaser and agreed to
by the Corporation and specified in the applicable Pricing Supplement.
Notes will be issued in fully registered form only. Each Note will be issued
initially as either a Note represented by a global security (a "Book-Entry
Note") or a certificate issued in definitive form (a "Certificated Note").
Except as set forth under "Book-Entry System" below, Book-Entry Notes will not
be issuable as Certificated Notes. Unless otherwise indicated in the Pricing
Supplement, Notes will be issued in denominations of $100,000 or any amount in
excess thereof which is a multiple of $1,000.
The Notes will constitute unsecured and unsubordinated indebtedness of the
Corporation and will rank on a parity with the Corporation's other unsecured
and unsubordinated indebtedness. Unless otherwise specified in the applicable
Pricing Supplement, the Notes may not be redeemed by the Corporation prior to
maturity and will not be subject to any sinking fund.
PAYMENT OF PRINCIPAL AND INTEREST
Principal and premium, if any, and interest will be payable to registered
holders (which, in the case of Book-Entry Notes will be a nominee of the
Depository), and the Notes will be transferable, at the office of the Trustee,
777 Main Street, Hartford, Connecticut 06115 or at Shawmut Trust Company, c/o
First Chicago Trust Company, 14 Wall Street--8th Floor, Window #2, New York,
New York 10005 or at such other place or places as may be designated pursuant
to the Indenture. At the maturity of any Note, the principal thereof, together
with any accrued interest thereon, will be payable in immediately available
funds upon surrender thereof at the office of the Trustee at the above
addresses or at such other place or places as may be designated pursuant to the
Indenture.
Each Note will bear interest from the date of issue at the rate per annum
stated therein and in the applicable Pricing Supplement, until the principal
thereof is paid or made available for payment. Interest will be payable on each
interest payment date ("Interest Payment Date"). Interest will be payable to
the person in whose name a Note is registered (which person, in the case of
Book-Entry Notes represented by a Global Note, will be a nominee of the
Depository) at the close of business on the record date ("Record Date") with
respect to the Interest Payment Date. The first payment of interest on any Note
originally issued between a
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Record Date and an Interest Payment Date will be payable on the next succeeding
Interest Payment Date to the registered holder of such Note at the close of
business on the Record Date for such next succeeding Interest Payment Date. The
Record Date with respect to any Interest Payment Date shall be the date 15
calendar days prior to such Interest Payment Date, unless such date is not a
Business Day in which case the Record Date would be the Business Day next
preceding. "Business Day" means any day, other than a Saturday or Sunday, that
is not a day on which banking institutions are authorized or required by law or
regulation to close in The City of New York or the State of Connecticut.
Interest on the Notes will be payable on June 15 and December 15 of each year
(except as provided above with respect to Notes issued between a Record Date
and an Interest Payment Date). Each date on which interest is payable on a Note
is referred to herein as an Interest Payment Date.
Unless otherwise specified in the applicable Pricing Supplement, interest
payments shall be the amount of interest accrued from the date of issue or from
the last date to which interest has been paid to, but excluding, the Interest
Payment Date ("Interest Period").
Interest on the Notes will be calculated on the basis of a year of twelve
thirty-day months.
BOOK-ENTRY SYSTEM
The Depository will act as securities depository for the Book-Entry Notes.
The Book-Entry Notes will be issued as fully registered securities registered
in the name of Cede & Co. (the Depository's partnership nominee). One fully-
registered Book-Entry Note will be issued for each issue of the Notes, each in
the aggregate principal amount of such issue, and will be deposited with the
Depository. If, however, the aggregate principal amount of any issue exceeds
$200 million, one Book-Entry Note will be issued with respect to each $200
million of principal amount and an additional Book-Entry Note will be issued
with respect to any remaining principal amount of such issue.
The Depository 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 Securities
Exchange Act of 1934, as amended. The Depository holds securities that its
participants ("Participants") deposit with the Depository. The Depository 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
("Direct Participants") include securities brokers and dealers, banks, trust
companies, clearing corporations, and certain other organizations. The
Depository 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 Depository's system is
also available to others, such as securities brokers and dealers, banks and
trust companies that clear through or maintain a custodial relationship with a
Direct Participant, either directly or indirectly ("Indirect Participants").
The rules applicable to the Depository and its Participants are on file with
the Securities and Exchange Commission.
Purchases of Book-Entry Notes under the Depository's system must be made by
or through Direct Participants, which will receive a credit for the Book-Entry
Note on the Depository's records. The ownership interest of each actual
purchaser of each Book-Entry Note ("Beneficial Owner") is in turn to be
recorded on the Direct and Indirect Participants' records. Beneficial Owners
will not receive written confirmation from the Depository of their purchases,
but Beneficial Owners are expected to receive written confirmations providing
details of the transaction, as well as periodic statements of their holdings,
from the Direct and Indirect Participant through which the Beneficial Owners
entered into the transaction. Transfers of ownership interests in the Book-
Entry Notes 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
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interests in Book-Entry Notes, except in the event that use of the book-entry
system for one or more Book-Entry Notes is discontinued.
To facilitate subsequent transfers, all Book-Entry Notes deposited by
Participants with the Depository are registered in the name of the Depository's
partnership nominee, Cede & Co. The deposit of Book-Entry Notes with the
Depository and their registration in the name of Cede & Co. effect no change in
beneficial ownership. The Depository has no knowledge of the actual Beneficial
Owners of the Book-Entry Notes; the Depository's records reflect only the
identity of the Direct Participants to whose accounts such Book-Entry Notes 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 the Depository to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. If less than all of a Book-
Entry Note is being redeemed, the Depository's current practice is to determine
by lot the amount of the interest of each Direct Participant in such issue to
be redeemed.
Neither the Depository nor Cede & Co. will consent or vote with respect to
Book-Entry Notes. Under its usual procedures, the Depository will mail an
Omnibus Proxy to the Corporation 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 Book-Entry Notes are credited on the record
date (identified by a listing attached to the Omnibus Proxy).
Principal and interest payments on the Book-Entry Notes will be made to the
Depository. The Depository's practice is to credit Direct Participants'
accounts on the payable date in accordance with their respective holdings shown
on the Depository's records unless the Depository has reason to believe 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 in
the case with securities held for accounts of customers in bearer form or
registered in "street name," and will be the responsibility of such Participant
and not of the Depository, or the Corporation, subject to any statutory or
regulatory requirements as may be in effect from time to time. Payment of
principal and interest to the Depository is the responsibility of the
Corporation, disbursements of such payments to Direct Participants shall be the
responsibility of the Depository, and disbursements of such payments to the
Beneficial Owners shall be the responsibility of the Direct and Indirect
Participants.
A Beneficial Owner shall give notice to elect to have its Book-Entry Notes
purchased or tendered, through its Participant, to the paying agent, and shall
effect delivery of such Book-Entry Notes by causing the Direct Participant to
transfer the Participant's interest in the Book-Entry Notes, on the
Depository's records, to the paying agent. The requirement for physical
delivery of Book-Entry Notes in connection with a demand for purchase or a
mandatory purchase will be deemed satisfied when the ownership rights in the
Book-Entry Notes are transferred by Direct Participants on the Depository's
records.
The Depository may discontinue providing its services as securities
depository with respect to Book-Entry Notes at any time by giving reasonable
notice to the Corporation or the Agents. Under such circumstances, in the event
that a successor securities depository is not obtained, Certificated Notes will
be printed and delivered in exchange for the Book-Entry Notes represented by
the Global Securities held by the Depository.
The Corporation may decide to discontinue use of the system of book-entry
transfers through the Depository (or a successor securities depository). In
that event, Certificated Notes will be printed and delivered in exchange for
the Book-Entry Notes represented by the Global Securities held by the
Depository.
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The information in this section concerning the Depository and the
Depository's book-entry system has been obtained from sources that the
Corporation believes to be reliable, but the Corporation takes no
responsibility for the accuracy thereof.
Neither the Corporation, the Trustee, any paying agent nor the registrar for
the Notes will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in a Book-Entry Note or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
TAXATION
The following statements of certain United States Federal income tax
consequences of the ownership of Notes reflect the opinion of Day, Berry &
Howard, tax counsel to the Corporation. These statements address only the tax
consequences to those United States Holders (as defined below) holding Notes as
capital assets and do not address the tax consequences of holding Notes to
dealers in securities, life insurance companies or United States Holders whose
"functional currency", as defined in Section 985 of the Internal Revenue Code
of 1986, as amended ("Code"), is not the U.S. dollar.
The following is a general and abbreviated summary of the applicable
provisions of the Code and Treasury regulations currently in effect. For the
complete provisions, reference should be made to the pertinent Code sections
and regulations. The Code and regulations are subject to change by legislative
or administrative action, which changes may have retroactive effect.
Persons considering the purchase of Notes should consult their own tax
advisors concerning the application of United States Federal income tax laws,
as well as the laws of any state or local taxing jurisdictions, to their
particular situations.
Interest on a Note and amounts received with respect to sale or retirement of
a Note also may be subject to state and local taxes, which are not covered by
this discussion.
As used herein, the terms "United States Holder" or "Holder" of a Note mean a
holder who or which is either (i) a citizen or resident of the United States
for Federal income tax purposes, (ii) a corporation, partnership or other
entity created or organized in or under the laws of the United States or of any
political subdivision thereof, or (iii) an estate or trust the income of which
is subject to United States Federal income taxation regardless of its source.
PAYMENTS OF INTEREST
Interest on a Note will generally be taxable to a United States Holder as
ordinary interest income at the time it accrues or is paid in accordance with
the United States Holder's method of accounting for Federal income tax
purposes.
PREMIUM AND MARKET DISCOUNT
If a United States Holder who acquires a Note after its original issuance has
a tax basis in the Note that is less than its stated redemption price at
maturity, the amount of the difference will be treated as "market discount" for
Federal income tax purposes, unless such difference is less than a specified de
minimis amount. Under the market discount rules of the Code, a United States
Holder will be required to treat any principal payment on, or any gain on the
sale, exchange, retirement or other disposition of a Note as ordinary income to
the extent of any accrued market discount which has not previously been
included in income. If such Note is disposed of in a nontaxable transaction
(other than a nonrecognition transaction described in Section 1276(d) of the
Code), accrued market discount will be includible as ordinary income to the
United States Holder as if such Holder had sold the Note at its then fair
market value. In addition, the United States Holder
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may not be allowed to deduct immediately a portion of the interest expense on
any indebtedness incurred or continued to purchase or to carry such Note.
Market discount will be considered to accrue ratably during the period from
the date of acquisition to the maturity date of the Note, unless the United
States Holder elects to accrue on a constant yield to maturity basis. A United
States Holder may elect to include market discount in income currently as it
accrues (on either a ratable or constant yield to maturity basis), in which
case the rule described above regarding deferral of interest deductions will
not apply. An election to include market discount currently, once made will
apply to all market discount obligations acquired by the United States Holder
on or after the first day of the first taxable year to which the election
applies, and may not be revoked without the consent of the Internal Revenue
Service.
If a United States Holder acquires a Note for an amount that is greater than
its stated redemption price at maturity, the United States Holder will be
considered to have purchased such Note at a premium equal in amount to such
excess and may elect to amortize such premium, using a constant yield method,
over the remaining term of the Note. However, if such Note by its terms may be
optionally redeemed after a United States Holder acquires it at a price in
excess of its stated redemption price at maturity, special rules would apply
which could result in a deferral of the amortization of some bond premium until
later in the term of the Note.
TAX BASIS
A United States Holder's adjusted tax basis in a Note will equal the cost of
the Note to such Holder, increased by any amounts of market discount previously
included in taxable income by the Holder with respect to such Note and reduced
by any amortized premium and any principal payments received by such Holder.
SALE, EXCHANGE OR RETIREMENT OF THE NOTES
Subject to the foregoing discussion of market discount, upon the sale,
exchange or retirement of a Note, a United States Holder will recognize capital
gain or loss equal to the difference between the amount realized on the sale,
exchange or retirement of the Note and such Holder's adjusted tax basis in the
Note. Except to the extent described below, such gain or loss will be long-term
capital gain or loss if at the time of the sale, exchange or retirement the
Note has been held by such Holder for more than one year.
CAPITAL GAIN OR LOSS
Under current provisions of the Code, there is a maximum tax rate of 28% on
long-term capital gains for certain individual taxpayers. In addition, a
corporation cannot offset ordinary income with net capital loss, and an
individual taxpayer can offset only $3,000 ($1,500 in the case of a married
individual filing a separate return) per year of ordinary income with net
capital loss.
BACKUP WITHHOLDING AND INFORMATION REPORTING
Under current United States Federal income tax law, a 31% "backup"
withholding tax and information reporting requirements apply to certain
interest and principal payments made to, and to the proceeds of sales before
maturity by, certain non-corporate United States Holders. However, backup
withholding will generally not apply if the United States Holder payee has
supplied an accurate taxpayer identification number (which for an individual is
his social security number), unless the Internal Revenue Service has determined
that such Holder has not reported all interest and dividend income required to
be shown on the Holder's Federal income tax return.
Any amounts withheld from a payment to a United States Holder under the
backup withholding rules will be allowed as a credit against such Holder's
United States Federal income tax liability.
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PLAN OF DISTRIBUTION
Subject to the terms and conditions set forth in the Selling Agency
Agreement, dated August 4, 1995, the Notes are being offered on a continuous
basis by the Corporation through the Agents, who have agreed to use
commercially reasonable best efforts to solicit purchases of the Notes. The
Corporation will have the sole right to accept offers to purchase Notes and may
reject any proposed purchase of Notes, as a whole or in part. The Agents will
have the right, in their discretion reasonably exercised, to reject any offer
to purchase Notes, as a whole or in part. The Corporation will pay the Agents a
commission of from .350% to .875% of the principal amount of the Notes,
depending upon maturity, for sales made through them as Agents.
The Corporation may also sell Notes to the Agents as principals for their own
accounts at a discount to be agreed upon at the time of sale, or the purchasing
Agents may receive from the Corporation a commission or discount equivalent to
that set forth on the cover page hereof in the case of any such principal
transaction in which no other discount is agreed. Such Notes may be resold at
prevailing market prices, or at prices related thereto, at the time of such
resale, as determined by the Agents. The Corporation reserves the right to sell
Notes directly on its own behalf. No commission will be payable on any Notes
sold directly by the Corporation.
The Agents, as agents or principals, may be deemed to be "underwriters"
within the meaning of the Securities Act of 1933 (the "Act"). The Corporation
has agreed to indemnify the Agents against certain liabilities, including
liabilities under the Act. The Corporation has agreed to reimburse the Agents
for certain expenses.
Notes may also be sold at the price to the public set forth herein to dealers
who may resell to investors. Such dealers may be deemed to be "underwriters"
within the meaning of the Act.
The Notes are a new issue of securities with no established trading market
and will not be listed on any securities exchange. No assurance can be given as
to the existence or liquidity of the secondary market for the Notes.
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PROSPECTUS
$470,000,000
SOUTHERN NEW ENGLAND
TELECOMMUNICATIONS CORPORATION
DEBT SECURITIES
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Southern New England Telecommunications Corporation ("Corporation"), through
agents designated from time to time, or through dealers or underwriters also
to be designated, may sell from time to time debt securities ("Debt
Securities") of the Corporation in registered form, for an aggregate offering
price of up to $470,000,000, on terms to be determined at the time of sale.
The specific designation, aggregate principal amount, maturities, rates and
time of payment of interest, purchase price, any terms for redemption, whether
Debt Securities initially will be represented by a single global security, and
the agent, dealer or underwriter in connection with the sale of, and any other
terms with respect to, the Debt Securities in respect of which this Prospectus
("Prospectus") is being delivered are set forth in the accompanying Prospectus
Supplement ("Prospectus Supplement"). The Corporation reserves the sole right
to accept and, together with its agents from time to time, to reject in whole
or in part any proposed purchase of Debt Securities to be made through agents.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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If an agent of the Corporation or a dealer or an underwriter is involved in
the sale of the Debt Securities in respect of which this Prospectus is being
delivered, the agent's commission, or dealer's or underwriter's discount will
be set forth in, or may be calculated from, the Prospectus Supplement and the
net proceeds to the Corporation from such sale will be the purchase price of
such Debt Securities less such commission in the case of an agent, the
purchase price of such Debt Securities in the case of a dealer or the public
offering price less such discount in the case of an underwriter, and less, in
each case, the other attributable issuance expenses. The aggregate net
proceeds to the Corporation from all the Debt Securities will be the purchase
price of Debt Securities sold, less the aggregate of agents' commissions and
underwriters' discounts and other expenses of issuance and distribution. The
net proceeds to the Corporation from the sale of Debt Securities also will be
set forth in the Prospectus Supplement. See "Plan of Distribution" for
possible indemnification arrangements for the agents, dealers and
underwriters.
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The date of this Prospectus is July 11, 1995.
AVAILABLE INFORMATION
The Corporation is subject to the informational requirements of the
Securities Exchange Act of 1934 ("Exchange Act") and, in accordance therewith,
files reports and other information with the Securities and Exchange
Commission ("SEC"). Such reports and other information filed by the
Corporation can be inspected and copied at the public reference facilities of
the SEC, Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, DC
20549, as well as the following SEC Regional Offices: 7 World Trade Center,
Suite 1300, New York, NY 10048 and 500 West Madison Street, Suite 1400,
Chicago, IL 60661. Such material can also be inspected at the New York and
Pacific Stock Exchanges on which the Corporation's common stock is listed.
Copies can be obtained from the SEC by mail at prescribed rates. Requests
should be directed to the SEC's Public Reference Section, Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, DC 20549.
The Corporation is not required and does not intend to provide annual or
other reports to holders of the Debt Securities.
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INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents have been filed by the Corporation with the SEC
(File No. 1-9157) and are incorporated herein by reference:
(1) The Corporation's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994 and Amendment No. 1 dated June 8, 1995;
(2) The Corporation's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1995; and
(3) The Corporation's Current Reports on Form 8-K dated January 24, 1995,
April 20, 1995, May 18, 1995 and July 1, 1995.
All documents filed pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of this Prospectus and prior to the
termination of the offering of the Debt Securities shall be deemed to be
incorporated by reference in this Prospectus and to be part hereof from the
date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent
that a statement contained herein or in any other subsequently filed document
which also is or is deemed to be incorporated by reference herein or in the
accompanying Prospectus Supplement 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.
Copies of the above documents (excluding exhibits to such documents, unless
such exhibits are specifically incorporated by reference therein) may be
obtained upon written or oral request without charge by each person, including
beneficial owners, to whom this Prospectus is delivered, from the Director-
Investor Relations of the Corporation, Shareholder Services Center, 1st Floor,
300 George Street, New Haven, Connecticut 06511 (telephone number 1-800-243-
1110).
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THE CORPORATION
The Corporation was incorporated in 1986 under the laws of the State of
Connecticut and has its principal executive offices at 227 Church Street, New
Haven, Connecticut 06510 (telephone number (203) 771-5200). The Corporation is
a holding company engaged through its subsidiaries in operations principally
in the State of Connecticut: The Southern New England Telephone Company (the
"Telephone Company") (providing, for the most part, regulated
telecommunications services and directory publishing and advertising
services); SNET Cellular, Inc. ("Cellular"), SNET Mobility, Inc. and SNET
Paging, Inc. (providing wireless communications services); SNET America, Inc.
(providing national and international long-distance services to Connecticut
customers); SNET Diversified Group, Inc. (primarily engaged in the sale and
leasing of communications equipment to residential and business customers; and
providing other telecommunications services not subject to regulation); and
SNET Real Estate, Inc. (engaging in leasing commercial real estate). The
Corporation furnishes financial and strategic planning, and shareholder
relations functions on its own behalf and on behalf of its subsidiaries.
The Telephone Company, the Corporation's principal subsidiary, is a local
exchange carrier ("LEC") engaged in the provision of telecommunications
services in the State of Connecticut, most of which are subject to rate
regulation. These telecommunications services include: (i) local and
intrastate toll services; (ii) exchange access service, which links customers'
premises to the facilities of other carriers; and (iii) other services such as
digital transmission of data and transmission of radio and television
programs, packet switched data network and private line services. Through its
directory publishing operations, the Telephone Company publishes and
distributes telephone directories throughout Connecticut and certain adjacent
communities. The publishing division also develops and provides electronic
publishing services.
In 1994, approximately 74% of the Corporation's consolidated revenues and
sales were derived from the Telephone Company's rate regulated
telecommunication services. The remainder was derived principally from the
Corporation's other subsidiaries, directory publishing operations, and
activities associated with the provision of facilities and non-access services
to interexchange carriers. About 71% of the operating revenues from rate
regulated services were attributable to intrastate operations, with the
remainder attributable to interstate access services.
The Corporation also provides wireless communications services, which
consist of wholesale and retail cellular telephone communications and paging
services, through its subsidiaries Cellular, SNET Mobility, Inc. and SNET
Paging, Inc. Through Cellular, the Corporation maintains an 82.5% partnership
interest in the Springwich Cellular Limited Partnership ("Springwich"), which
provides wholesale cellular radio telecommunications services in the Hartford,
New Haven, New London, and Fairfield, Connecticut New England County
Metropolitan Areas ("NECMAs") and in the Springfield, Massachusetts NECMA.
Springwich is also licensed to provide cellular wholesale service in three
Rural Service Areas, Windham and Litchfield Counties in Connecticut and
Franklin County in Massachusetts. The combined population of this region is
approximately 4 million.
On November 22, 1994, Cellular entered into multiple definitive agreements
with Bell Atlantic Corporation ("Bell Atlantic") and NYNEX Corporation
("NYNEX") to purchase, for $450 million in aggregate, certain cellular
properties in Rhode Island and New Bedford and Pittsfield, Massachusetts, and
an increased interest in Springwich. The individual transactions are with New
Bedford Cellular Telephone Company, Providence Cellular Telephone Company,
Metro Mobile CTS of Newport, Inc., NYNEX (minority interest in Springwich),
New York Cellular Geographic Service Area, Inc. (minority interest in
Springwich and majority interest in Berkshire Cellular Limited Partnership)
and Richmond Telephone Company (minority interest in Berkshire Cellular
Limited Partnership). None of these to be acquired businesses meet the
definition of a significant subsidiary nor would the aggregate impact exceed
20% of the Corporation's 1994 audited consolidated total assets. These
acquisitions were completed as of July 1, 1995.
3
USE OF PROCEEDS
The Corporation intends to apply the net proceeds from the sale of the Debt
Securities to refinance, as market conditions warrant, commercial paper and/or
other interim financing arrangements utilized in connection with the
acquisition of the cellular properties discussed above.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of Earnings to Fixed Charges of the
Corporation for the periods indicated:
THREE MONTHS
ENDED YEAR ENDED DECEMBER 31,
MARCH 31, --------------------------
1995 1994 1993** 1992 1991 1990
------------ ---- ------ ---- ---- ----
Ratio of Earnings to Fixed Charges*..... 4.7 4.6 -- 3.5 2.8 3.0
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* For the purpose of calculating this ratio, earnings consist of income
(loss) from continuing operations before income taxes and fixed charges.
Fixed charges include interest on indebtedness and the portion of rental
expense representative of the interest factor. 1993 loss from continuing
operations before income taxes includes a before-tax restructuring charge
of $355.0 million.
** 1993 earnings, as a result of the restructuring charge, were insufficient
to cover fixed charges; the amount of the coverage deficiency was $87.8
million in 1993.
DESCRIPTION OF THE DEBT SECURITIES
The Debt Securities are to be issued under a form of indenture ("Indenture")
between the Corporation and Shawmut Bank Connecticut, as trustee ("Trustee").
The statements below are subject to and are qualified in their entirety by
reference to the detailed provisions of the Indenture, the form of which is
filed as an exhibit to the Registration Statement of which this Prospectus is
a part. Article and section references in parentheses are to the form of
Indenture.
GENERAL
The Indenture will not limit the aggregate principal amount of Debt
Securities which may be issued by the Corporation and provides that the Debt
Securities may be issued from time to time in one or more series. The Debt
Securities will be unsecured obligations of the Corporation. Reference is made
to the Prospectus Supplement or Pricing Supplement ("Pricing Supplement")
accompanying this Prospectus for a description of the Debt Securities being
offered thereby including: (1) the aggregate principal amount of such Debt
Securities; (2) the date(s) on which Debt Securities will mature; (3) the
rate(s) per annum at which such Debt Securities will bear interest; (4) the
times at which such interest will be payable; (5) the terms for redemption, if
any; (6) the denominations in which such Debt Securities are authorized to be
issued; (7) whether any series of Debt Securities will be represented by one
or more global securities and, if so, the identity of the depository for such
global security or securities and the method of transferring beneficial
interests in such global security or securities; (8) information with respect
to book-entry procedures, if any; and (9) any other terms, including any terms
which may be required by or advisable under Federal laws and regulations or
advisable in connection with the marketing of the Debt Securities of such
series, which will not be inconsistent with the provisions of the Indenture.
Debt Securities of any series will be registered Debt Securities.
Additionally, Debt Securities of any series may be represented by a single
global security registered in the name of a depository's nominee and, if so
represented, beneficial interests in such global security will be shown on,
and transfers thereof will be effected
4
only through, records maintained by a designated depository and its
participants. Unless otherwise indicated in the Pricing Supplement, the Debt
Securities will be issued only in denominations of $100,000, and any integral
multiple of $1,000 over $100,000.
Unless otherwise indicated in the Prospectus Supplement, principal and
interest will be payable at the office of the Trustee. Debt Securities may be
registered for transfer or exchanged at the office of the Trustee, subject to
the limitations in the Indenture. No service charge will be made for any such
transfer or exchange of such Debt Securities, but the Corporation may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
GLOBAL SECURITIES
So long as the depository's nominee is the registered owner of a global
security, such nominee will be considered the sole owner of the Debt
Securities represented by such global security for all purposes under the
Indenture. Except as provided in the Prospectus Supplement, owners of
beneficial interests in a global security will not be entitled to have Debt
Securities of the series represented by the global security registered in
their names, will not receive or be entitled to receive physical delivery of
Debt Securities of such series in definitive form and will not be considered
the owners or holders thereof under the Indenture. Principal of, premium, if
any, and interest on a global security will be payable in the manner described
in the Prospectus Supplement.
COVENANTS
The Corporation will covenant in the Indenture that it will not issue,
assume, incur or guarantee any indebtedness for borrowed money secured by a
mortgage, pledge, lien or other encumbrance, directly or indirectly, on any of
the common stock of a principal subsidiary (as defined below) unless the
outstanding securities under the Indenture and, if the Corporation so elects,
any other indebtedness of the Corporation ranking on a parity with such
outstanding securities, shall be secured equally and ratably with, or prior
to, such secured indebtedness for borrowed money so long as they are
outstanding (Section 4.03). A principal subsidiary of the Corporation is any
majority-held subsidiary of the Corporation whose consolidated tangible assets
comprise in excess of 25% of consolidated tangible assets of the Corporation
and its consolidated subsidiaries. Consolidated tangible assets with respect
to any entity and its subsidiaries means the amount at which the assets, other
than goodwill, patents, trademarks and other assets classified as intangible
assets in accordance with generally accepted accounting principles, would be
shown on its consolidated balance sheet at such time.
The Corporation also will covenant in the Indenture that it will not, and
will not permit a principal subsidiary to, issue, sell, assign, transfer or
otherwise dispose of, directly or indirectly, any of the common stock of such
principal subsidiary (except to the Corporation or for the purpose of
qualifying directors); provided, however, that this covenant shall not apply
if (i) the entire common stock of such principal subsidiary then owned by the
Corporation is disposed of in a single transaction, or in a series of related
transactions, for a consideration consisting of cash or other property which
is at least equal to the fair market value of such common stock, as determined
in good faith by the Board of Directors of the Corporation; or (ii) the
issuance, sale, assignment, transfer or other disposition is required to
comply with the order of a court or regulatory authority of competent
jurisdiction, other than an order issued at the request of the Corporation or
such principal subsidiary; or (iii) after giving effect to the issuance, sale,
assignment, transfer or other disposition, the Corporation would own directly
or indirectly at least 80% of the issued and outstanding common stock of such
principal subsidiary and such issuance, sale, assignment, transfer or other
disposition is made for a consideration consisting of cash or other property
which is at least equal to the fair market value of such common stock, as
determined in good faith by the Board of Directors of the Corporation (Section
4.04).
The Corporation is required to deliver to the Trustee annually a brief
certificate as to any default by the Corporation in the performance or
fulfillment of any covenant or condition contained in the Indenture (Section
4.07).
5
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
The Indenture provides that nothing contained therein or in any of the Debt
Securities will prevent (1) any consolidation of the Corporation with, or the
merger of the Corporation into, any other corporation or corporations (whether
or not affiliated with the Corporation), or successive consolidations or
mergers to which the Corporation or its successor or successors shall be a
party or parties or (2) any sale or conveyance of the property of the
Corporation as an entirety or substantially as an entirety to any other
corporation (whether or not affiliated with the Corporation) authorized to
acquire and operate such property. The Indenture requires, however, and the
Corporation will covenant and agree therein, that upon any such consolidation,
merger, sale or conveyance, the payment of principal of (and premium, if any)
and interest on all Debt Securities of each series and the performance and
observance of all of the covenants and conditions of the Indenture to be
performed and observed by the Corporation, will be expressly assumed by a
supplemental indenture satisfactory in form to the Trustee and executed and
delivered to the Trustee by the corporation formed by such consolidation, or
into which the Corporation shall have been merged or which shall have acquired
such property, and immediately after giving effect to such transaction, no
event of default will have occurred and be continuing (Section 11.01).
The Indenture also provides that nothing contained therein or in any of the
Debt Securities of any series will prevent the Corporation from merging into
itself any other corporation (whether or not affiliated with the Corporation)
or acquiring by purchase or otherwise all or part of the property of any other
corporation (whether or not affiliated with the Corporation) (Section 11.02).
The Indenture does not contain any covenants that afford protection to
holders of the Debt Securities in the event of a highly leveraged transaction.
MODIFICATIONS
The Indenture will contain provisions permitting the Corporation and the
Trustee, with the consent of the holders of not less than 66 2/3% in principal
amount of the Debt Securities at the time outstanding, as defined in the
Indenture, of all series to be affected (voting as one class), to modify the
Indenture or any supplemental indenture or the rights of the holders of the
Debt Securities of each such series; provided that no such modification shall
(i) extend the fixed maturity of any Debt Securities, or reduce the principal
amount thereof, or reduce the rate or extend the time of payment of interest
thereon, or reduce any premium payable upon the redemption thereof, without
the consent of the holder of each Debt Security so affected, or (ii) reduce
the aforesaid percentage of Debt Securities, the consent of the holders of
which is required for any such modification without the consent of the holders
of all Debt Securities then outstanding. The Indenture will also contain
provisions permitting the Corporation and the Trustee, without the consent of
the holders of Debt Securities, to modify the Indenture or any supplemental
indenture or the rights of the holders of the Debt Securities for certain
limited purposes (Section 9.02).
EVENTS OF DEFAULT
Under the Indenture, an Event of Default means: default for 90 days in
payment of interest, default in payment of principal or premium, default for
90 days after notice by the Trustee or the holders of at least 25% in
aggregate principal amount of the Debt Securities then outstanding in
performance of any other covenants in the Indenture, certain events in
bankruptcy, insolvency or reorganization, default and acceleration of
indebtedness under any other indenture or instrument under which the
Corporation has outstanding at least $100,000,000 aggregate principal amount
of indebtedness and such default is not waived or cured or such acceleration
is not rescinded or annulled, or any other event of default applicable to any
particular series of Debt Securities and described in the Pricing Supplement
(Section 6.01).
SATISFACTION AND DISCHARGE OF INDENTURE
Except as otherwise provided with respect to the Debt Securities of any
series, if (i) the Corporation delivers to the Trustee canceled or for
cancellation all Debt Securities of any series previously authenticated (other
than
6
Debt Securities which have been destroyed, lost or stolen and which have been
replaced or paid) or (ii) all Debt Securities of any series not previously
delivered to the Trustee canceled or for cancellation become due and payable,
or are by their terms to become due and payable within one year or are to be
called for redemption within one year (under arrangements satisfactory to the
Trustee for the giving of notice of redemption), and if the Corporation
deposits or causes to be deposited with the Trustee the entire amount
sufficient to pay at maturity or upon redemption all such Debt Securities of
such series not previously delivered to the Trustee canceled or for
cancellation, including principal (and premium, if any) and interest due or to
become due to such date of maturity or date fixed for redemption, as the case
may be, (excluding, however, amounts repaid to the Corporation as provided in
the next paragraph or paid to any state or to the District of Columbia
pursuant to unclaimed property laws) and if in either case the Corporation
also pays or causes to be paid all other sums payable by it under the
Indenture, then the Indenture shall cease to be of further effect, except as
to provisions applicable to transfers and exchanges of Debt Securities of such
series (Section 12.01).
Any monies deposited with or paid to the Trustee for payment of the
principal of (and premium, if any) or interest on Debt Securities of any
series and not applied but remaining unclaimed by the holders of Debt
Securities of such series for two years after the date upon which the
principal of (and premium, if any) or interest on such Debt Securities, as the
case may be, shall have become due and payable, will be repaid to the
Corporation by the Trustee on demand. The holder of any of the Debt Securities
shall thereafter look only to the Corporation for any payment which such
holder may be entitled to collect (Section 12.04).
TRUSTEE
Subject to the duty of the Trustee during default to act with the specified
standard of care, the Trustee before taking any action under the Indenture is
entitled to reasonable security of indemnity (Sections 7.01 and 7.02). Subject
to such provisions for the indemnification of the Trustee, the holders of a
majority of the principal amount of outstanding Debt Securities of each series
affected (with each series voting as a separate class) may direct the time,
method and place for certain actions by the Trustee (Section 6.06).
The Trustee has banking relationships in the ordinary course of business
with the Corporation.
PLAN OF DISTRIBUTION
The Corporation will sell the Debt Securities being offered hereby through
agents, dealers or underwriters. Any or all of the foregoing may be customers
of, engage in transactions with or perform services for the Corporation in the
ordinary course of business.
The distribution of the Debt Securities may be effected from time to time in
one or more transactions at a fixed price or prices, which may be changed, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
Offers to purchase the Debt Securities may be solicited by agents designated
by the Corporation from time to time. Any such agent, who may be deemed to be
an underwriter, as that term is defined in the Securities Act of 1933
("Securities Act"), involved in the offer or sale of the Debt Securities in
respect of which this Prospectus is delivered will be named, and any
commissions payable by the Corporation 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. Agents may be entitled under agreements, which may
be entered into with the Corporation, to indemnification by the Corporation
against certain civil liabilities, including liabilities under the Securities
Act or to contribution by the Corporation to payments the agents may be
required to make in respect thereof.
If a dealer is utilized in the sale of the Debt Securities in respect of
which this Prospectus is delivered, the Corporation will sell such Debt
Securities to the dealer, as principal. The dealer may then resell such Debt
7
Securities to the public at varying prices to be determined by such dealer at
the time of resale. Dealers may be entitled to indemnification by the
Corporation against certain liabilities, including liabilities under the
Securities Act or to contribution by the Corporation to payments the dealers
may be required to make in respect thereof.
If the sale is accomplished through an underwriter or underwriters, the
Corporation will enter into an underwriting agreement with such underwriters
at the time of sale to them and the names of the underwriters and the terms of
the transaction will be set forth in the Prospectus Supplement, which will be
used by the underwriters to make resales of the Debt Securities in respect of
which this Prospectus is delivered to the public. The underwriters may be
entitled, under the relevant underwriting agreement, to indemnification by the
Corporation against certain liabilities, including liabilities under the
Securities Act or to contribution by the Corporation to payments the
underwriters may be required to make in respect thereof.
LEGAL OPINIONS
Certain legal matters in connection with the offering of the Debt Securities
will be passed upon for the Corporation by Madelyn M. DeMatteo, Vice
President, General Counsel and Secretary of the Corporation. As of May 18,
1995, Ms. DeMatteo owned 13,798 common shares of the Corporation and had
options to acquire 69,550 additional common shares. Certain legal matters will
be passed upon for the agents, if any, by Davis Polk & Wardwell of New York
City.
EXPERTS
The consolidated financial statements and financial statement schedule of
the Corporation incorporated by reference or included in the Annual Report on
Form 10-K for the fiscal year December 31, 1994 are incorporated herein by
reference in reliance upon the reports of Coopers & Lybrand L.L.P.,
independent accountants, given on their authority as experts in accounting and
auditing.
8
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS OTHER THAN AS CONTAINED IN THIS PROSPECTUS SUPPLEMENT, ANY PRICING
SUPPLEMENT OR THE PROSPECTUS, IN CONNECTION WITH THE OFFER CONTAINED HEREIN
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE CORPORATION OR BY THE AGENTS. THIS PRO-
SPECTUS SUPPLEMENT, ANY PRICING SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTI-
TUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES
OTHER THAN THE SECURITIES DESCRIBED IN THIS PROSPECTUS SUPPLEMENT AND ANY
PRICING SUPPLEMENT OR ANY OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS
NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CRE-
ATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS COR-
RECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF SUCH INFORMATION
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TABLE OF CONTENTS
Page
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PROSPECTUS SUPPLEMENT
Description of Medium Term Notes, Series 2................................. S-2
Taxation................................................................... S-5
Plan of Distribution....................................................... S-7
PROSPECTUS
Available Information...................................................... 2
Incorporation of Documents by Reference.................................... 2
The Corporation............................................................ 3
Use of Proceeds............................................................ 4
Ratio of Earnings to Fixed Charges......................................... 4
Description of the Debt Securities......................................... 4
Plan of Distribution....................................................... 7
Legal Opinions............................................................. 8
Experts.................................................................... 8
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$470,000,000
SOUTHERN NEW ENGLAND TELECOMMUNICATIONS CORPORATION
MEDIUM-TERM NOTES, SERIES 2
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PROSPECTUS SUPPLEMENT
August 4, 1995
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LEHMAN BROTHERS
GOLDMAN, SACHS & CO.
SALOMON BROTHERS INC
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