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EXHIBIT 1 (e)
OFFER TO EXCHANGE
FIRST MORTGAGE BONDS, 6.86% SERIES A DUE 2008
FOR ALL OUTSTANDING FIRST MORTGAGE BONDS, 6.86% SERIES DUE 2008
$150 MILLION AGGREGATE PRINCIPAL AMOUNT OUTSTANDING
OF
THE CLEVELAND ELECTRIC ILLUMINATING COMPANY
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THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
, , 1999 UNLESS THE OFFER IS EXTENDED
(THE "EXPIRATION DATE"). TENDERS OF OLD BONDS MAY ONLY BE WITHDRAWN UNDER
THE CIRCUMSTANCES DESCRIBED IN THE PROSPECTUS AND THE LETTER OF TRANSMITTAL
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To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We are enclosing herewith an offer by The Cleveland Electric
Illuminating Company (the "Company") to exchange (the "Exchange Offer") its
First Mortgage Bonds, 6.86% Series A due 2008 (the "New Bonds") for all
outstanding First Mortgage Bonds, 6.86% Series due 2008 (the "Old Bonds"), upon
the terms and conditions set forth in the accompanying Prospectus dated
, 1999 (the "Prospectus") and related Letter of Transmittal and
instructions thereto (the "Letter of Transmittal").
The Letter of Transmittal is being circulated to holders of Old Bonds
with the Prospectus. The Exchange Offer also provides a procedure for holders to
tender the Old Bonds by means of guaranteed delivery.
Based on an interpretation of the Securities and Exchange Commission
(the "Commission"), New Bonds issued pursuant to the Exchange Offer in exchange
for Old Bonds may be offered for resale, resold and otherwise transferred by
holders thereof (other than (i) a broker-dealer who purchased such Old Bonds
directly from the Company for resale pursuant to Rule 144A or any other
available exemption under the Securities Act of 1933, as amended (the
"Securities Act") or (ii) a person that is an "affiliate" of the Company within
the meaning of Rule 405 under the Securities Act) without compliance with the
registration and prospectus delivery provisions of the Securities Act, provided
that the holder is acquiring the New Bonds in its ordinary course of business
and is not participating, and has no arrangement or understanding with any
person to participate, in the distribution of the New Bonds. Holders of Old
Bonds wishing to accept the Exchange Offer must represent to the Company that
such conditions have been met.
Each broker-dealer that receives New Bonds in exchange for Old Bonds
held for its own account, as a result of market making or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such New Bonds. The Letter of Transmittal states that by so
acknowledging and by delivering a prospectus, such broker-dealer will not be
deemed to admit that it is an "underwriter" within the meaning of the Securities
Act. This Prospectus, as it may be amended or supplemented from time to time,
may be used by such broker-dealer in connection with resales of New Bonds
received in exchange for Old Bonds. The Company has agreed that, for a period of
90 days after the Expiration Date, as defined herein, they will make this
Prospectus and any amendment or supplement thereto available to any
broker-dealer for use in connection with any such resale.
Notwithstanding any other term of the Exchange Offer, the Company may
terminate or amend the Exchange Offer as provided in the Prospectus and will not
be required to accept for exchange, or exchange New Bonds for, any Old Bonds not
accepted for exchange prior to such termination.
THE COMPANY RESERVES THE RIGHT NOT TO ACCEPT TENDERED OLD BONDS FROM
ANY TENDERING HOLDER IF THE COMPANY DETERMINES, IN ITS SOLE AND ABSOLUTE
DISCRETION, THAT SUCH ACCEPTANCE COULD RESULT IN A VIOLATION OF APPLICABLE
SECURITIES LAWS.
We are asking you to contact your clients for whom you hold Old Bonds
registered in your name or in the name of your nominee. In addition, we ask you
to contact your clients who, to your knowledge, hold Old Bonds registered in
their own names. The Company will not pay any fees or commissions to any broker,
dealer or other person (other than the Exchange Agent as described in the
Prospectus) in connection with the solicitation of tenders of Old Bonds pursuant
to the Exchange Offer. You will, however, be reimbursed by the Company for
customary mailing and handling expenses incurred by you in forwarding any of the
enclosed materials to your clients. The Company will pay any transfer taxes
applicable to the tender of Old Bonds to them or their order, except as
otherwise provided in the Prospectus and the Letter of Transmittal.
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Enclosed is a copy of each of the following documents:
1. The Prospectus.
2. A Letter of Transmittal for your use in connection with the
Exchange Offer and for the information of your clients.
3. A form of letter that may be sent to your clients for whose
accounts you hold Old Bonds registered in your name or the name of your
nominee, with space provided for obtaining the clients' instructions
with regard to the Exchange Offer.
4. A form of Notice of Guaranteed Delivery.
5. Guidelines for Certification of Taxpayer Identification Number
on Substitute Form W-9.
6. A return envelope addressed to The Chase Manhattan Bank, the
Exchange Agent.
YOUR PROMPT ATTENTION IS REQUESTED. THE EXCHANGE OFFER WILL EXPIRE AT
5:00 P.M., NEW YORK CITY TIME, ON , , 1999 UNLESS THE
OFFER IS EXTENDED (THE "EXPIRATION DATE"). OLD BONDS TENDERED PURSUANT TO THE
EXCHANGE OFFER MAY BE WITHDRAWN, SUBJECT TO THE PROCEDURES DESCRIBED IN THE
PROSPECTUS AND THE LETTER OF TRANSMITTAL, AT ANY TIME PRIOR TO 5:00 P.M., NEW
YORK CITY TIME, ON THE EXPIRATION DATE. THE EXCHANGE OFFER IS NOT CONDITIONED ON
ANY MINIMUM PRINCIPAL AMOUNT OF OLD BONDS BEING TENDERED.
To tender Old Bonds in the Exchange Offer, certificates for Old Bonds
(or confirmation of a book-entry transfer into the Exchange Agent's account at
The Depository Trust Company of Old Bonds tendered electronically) and a duly
executed and properly completed Letter of Transmittal or a facsimile thereof,
together with any other required documents, must be received by the Exchange
Agent as indicated in the Prospectus.
If holders desire to tender Old Bonds pursuant to the Exchange Offer
and (i) certificates representing such Old Bonds are not lost but are not
immediately available, (ii) time will not permit the Letter of Transmittal,
certificates evidencing such Old Bonds or other required documents to reach the
Exchange Agent prior to the Expiration Date or (iii) the procedures for
book-entry transfer cannot be completed prior to the Expiration Date, such
holders may effect a tender of such Old Bonds in accordance with the guaranteed
delivery procedures set forth in the Prospectus under the caption "The Exchange
Offer -- Guaranteed Delivery Procedures." Holders following the guaranteed
delivery procedure must still fully complete, execute and deliver the Letter of
Transmittal or facsimile thereof.
THE EXCHANGE OFFER IS NOT TO BE MADE TO, NOR WILL TENDERS BE ACCEPTED
FROM OR ON BEHALF OF, HOLDERS OF THE OLD BONDS IN ANY JURISDICTION IN WHICH THE
MAKING OF THE EXCHANGE OFFER OR ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE
WITH THE LAWS OF SUCH JURISDICTION OR WOULD OTHERWISE NOT BE IN COMPLIANCE WITH
ANY PROVISION OF ANY APPLICABLE SECURITIES LAW.
Additional copies of the enclosed material may be obtained from the
Exchange Agent.
NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY
PERSON AS AN AGENT OF THE COMPANY, THE TRUSTEE OR THE EXCHANGE AGENT, OR
AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENTS ON BEHALF OF ANY OF
THEM WITH RESPECT TO THE EXCHANGE OFFER OR THE SOLICITATION, EXCEPT FOR
STATEMENTS EXPRESSLY MADE IN THE PROSPECTUS OR THE LETTER OF TRANSMITTAL.
Very truly yours,
Nancy C. Ashcom, Corporate Secretary
THE CLEVELAND ELECTRIC ILLUMINATING COMPANY