SOUTHERN COMPANY
Filed Pursuant to Rule 424(b)(5)
Registration Nos. 333-138503
333-138503-01
333-138503-02
This
Prospectus Supplement and the accompanying Prospectus relate to
an effective registration statement under the Securities Act of
1933, as amended, but are not complete and may be changed. This
Prospectus Supplement and the accompanying Prospectus are not an
offer to sell these securities and are not soliciting an offer
to buy these securities in any jurisdiction where the offer or
sale is not permitted.
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Subject to Completion, Dated
January 11, 2007
PRELIMINARY PROSPECTUS SUPPLEMENT
(To Prospectus dated
January 11, 2007)
$500,000,000
Series 2007A %
Senior Notes
due January 15,
2012
This is a public offering by The Southern Company of
$500,000,000 of Series 2007A %
Senior Notes due January 15, 2012. Interest on the
Series 2007A Senior Notes is payable semiannually in
arrears on January 15 and July 15 of each year,
beginning July 15, 2007.
The Southern Company may redeem the Series 2007A Senior
Notes, in whole or in part, at any time and from time to time,
at a make-whole redemption price as described under the caption
Description of the Series 2007A Senior
Notes Optional Redemption.
The Series 2007A Senior Notes are unsecured and
unsubordinated and rank equally with all of The Southern
Companys other unsecured and unsubordinated indebtedness
from time to time outstanding and will be effectively
subordinated to all secured indebtedness of The Southern Company.
See RISK FACTORS beginning on page S-3 for a
description of certain risks associated with investing in the
Series 2007A Senior Notes.
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Per Series
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2007A
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Senior Note
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Total
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Public Offering Price (1)
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%
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$
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Underwriting Discount
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%
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$
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Proceeds, before expenses, to The
Southern Company
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%
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$
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(1) |
Plus accrued interest, if any, from the date of original
issuance of the Series 2007A Senior Notes, which is
expected to be January , 2007.
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Neither the Securities and Exchange Commission nor any other
regulatory body has approved or disapproved of these securities
or passed upon the accuracy or adequacy of this Prospectus
Supplement or the accompanying Prospectus. Any representation to
the contrary is a criminal offense.
The Series 2007A Senior Notes should be delivered on or
about January , 2007 through the book-entry
facilities of The Depository Trust Company.
Joint Book-Running Managers
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Barclays
Capital |
Lehman
Brothers |
Co-Managers
Morgan Keegan & Company, Inc.
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SunTrust Robinson Humphrey
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The Williams Capital Group, L.P.
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January , 2007
In making your investment decision, you should rely only on the
information contained or incorporated by reference in this
Prospectus Supplement and the accompanying Prospectus and any
written communication from The Southern Company or the
underwriters specifying the final terms of the offering. We have
not, and the underwriters have not, authorized anyone to provide
you with any other information. If you receive any unauthorized
information, you must not rely on it.
We are offering to sell the Series 2007A Senior Notes only
in places where sales are permitted.
You should not assume that the information contained or
incorporated by reference in this Prospectus Supplement and the
accompanying Prospectus is accurate as of any date other than
its respective date.
TABLE OF
CONTENTS
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Page
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Prospectus Supplement
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S-3
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S-3
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S-3
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S-4
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S-5
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S-9
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Page
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Prospectus
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About this Prospectus
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2
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Risk Factors
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2
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Available Information
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2
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Incorporation of Certain Documents
by Reference
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3
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The Southern Company
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3
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Certain Ratios
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4
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The Trusts
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4
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Accounting Treatment of the Trusts
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5
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Use of Proceeds
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5
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Description of the Common Stock
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5
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Description of the Senior Notes
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5
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Description of the Junior
Subordinated Notes
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9
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Description of the Preferred
Securities
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14
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Description of the Guarantees
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15
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Relationship among the Preferred
Securities, the Junior Subordinated Notes and the Guarantees
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17
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Plan of Distribution
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18
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Legal Matters
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19
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Experts
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19
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S-2
RISK
FACTORS
Investing in the Series 2007A Senior Notes involves risk.
Please see the risk factors in The Southern Companys
Annual Report on
Form 10-K
for the fiscal year ended December 31, 2005, along with the
disclosure related to risk factors contained in The Southern
Companys Quarterly Reports on
Form 10-Q
for the quarters ended March 31, 2006, June 30, 2006
and September 30, 2006, which are all incorporated by
reference in this Prospectus Supplement and the accompanying
Prospectus. Before making an investment decision, you should
carefully consider these risks as well as other information
contained or incorporated by reference in this Prospectus
Supplement and the accompanying Prospectus. The risks and
uncertainties not presently known to The Southern Company or
that The Southern Company currently deems immaterial may also
impair its business operations, its financial results and the
value of the Series 2007A Senior Notes.
THE
COMPANY
The Southern Company (the Company) was incorporated
under the laws of Delaware on November 9, 1945. The Company
is domesticated under the laws of Georgia and is qualified to do
business as a foreign corporation under the laws of Alabama. The
principal executive offices of the Company are located at
30 Ivan Allen Jr. Boulevard, N.W., Atlanta, Georgia 30308,
and the telephone number is (404) 506-5000.
SELECTED
FINANCIAL INFORMATION
The following selected financial information for the years ended
December 31, 2001 through December 31, 2005 has been
derived from the Companys audited financial statements and
related notes and the unaudited selected financial data,
incorporated by reference in this Prospectus Supplement and the
accompanying Prospectus. The following selected financial
information for the nine months ended September 30, 2006
has been derived from the Companys unaudited financial
statements and related notes, incorporated by reference in this
Prospectus Supplement and the accompanying Prospectus. The
information set forth below is qualified in its entirety by
reference to and, therefore, should be read together with
managements discussion and analysis of results of
operations and financial condition, the financial statements and
related notes and other financial information incorporated by
reference in this Prospectus Supplement and the accompanying
Prospectus.
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Nine
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Months
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Ended
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Year Ended December 31,
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September 30,
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2001
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2002
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2003
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2004
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2005
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2006(1)
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(Millions, except ratios)
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Operating Revenues
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$
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10,155
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$
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10,447
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$
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11,018
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$
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11,729
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$
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13,554
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$
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11,204
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Earnings from Continuing
Operations Before Income Taxes
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1,678
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1,841
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2,101
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2,114
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2,186
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2,120
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Earnings from Continuing Operations
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1,120
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1,315
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1,483
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1,529
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1,591
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1,386
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Net Income
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1,262
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1,318
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1,474
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1,532
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1,591
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1,385
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Ratio of Earnings to Fixed
Charges(2)
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3.12
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3.57
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3.88
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3.86
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3.65
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4.03
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Capitalization
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As of September 30, 2006
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Actual
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As Adjusted(3)
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(Millions, except percentages)
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Common Stockholders Equity
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$
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11,286
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$
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11,286
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44.2
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%
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Preferred and Preference Stock of
Subsidiaries
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597
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747
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2.9
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Senior Notes
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8,060
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9,020
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35.3
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Long-term Debt Payable to
Affiliated Trusts
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1,893
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1,562
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6.1
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Other Long-term Debt
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2,930
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2,930
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11.5
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Total, excluding amounts due
within one year
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$
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24,766
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$
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25,545
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100.0
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%
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S-3
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(1) |
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Due to seasonal variations in the demand for energy, operating
results for the nine months ended September 30, 2006 do not
necessarily indicate operating results for the entire year. |
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(2) |
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This ratio is computed as follows: (i) Earnings
have been calculated by adding to Earnings from Continuing
Operations Before Income Taxes Interest expense, net
of amounts capitalized, Interest expense to
affiliate trusts, Distributions on mandatorily
redeemable preferred securities and the debt portion of
allowance for funds used during construction; and
(ii) Fixed Charges consist of Interest
expense, net of amounts capitalized, Interest
expense to affiliate trusts, Preferred and
preference dividends of subsidiaries, Distributions
on mandatorily redeemable preferred securities and the
debt portion of allowance for funds used during construction. In
computing this ratio, Preferred and preference dividends
of subsidiaries represent the before tax earnings
necessary to pay such dividends, computed at the effective tax
rates for the applicable periods. |
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(3) |
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Reflects (i) the issuance in November 2006 by Southern
Power Company of $200,000,000 aggregate principal amount of
Series E 6.375% Senior Notes due November 15, 2036;
(ii) the issuance in December 2006 by Alabama Power Company
of 6,000,000 Shares ($150,000,000 aggregate stated value)
of 5.625% Series Preference Stock, Non-Cumulative, Par Value $1
per Share; (iii) the issuance in December 2006 by Georgia
Power Company of $150,000,000 aggregate principal amount of
Series 2006A 5.65% Senior Insured Quarterly Notes due
December 15, 2040; (iv) the issuance in December 2006
by Gulf Power Company of $110,000,000 aggregate principal amount
of Series M 5.300% Senior Notes due December 1, 2016;
(v) the redemption in December 2006 by Gulf Power Company
of $30,000,000 aggregate principal amount of Series D
7.375% Junior Subordinated Notes due September 30, 2041 and
the related 7.375% Trust Preferred Securities of Gulf Power
Capital Trust III (as well as $928,000 of such
Series D Junior Subordinated Notes related to Gulf Power
Companys ownership of the Common Securities of Gulf Power
Capital Trust III); (vi) the defeasance in December
2006 by Southern Company Capital Funding, Inc. (Capital
Funding) of $222,393,000 aggregate principal amount of
Series A 8.19% Junior Subordinated Notes due
February 1, 2037 and the related 8.19% Trust Preferred
Securities of Southern Company Capital Trust I (as well as
$10,052,000 of such Series A Junior Subordinated Notes
related to Capital Fundings ownership of the Common
Securities of Southern Company Capital Trust I);
(vii) the defeasance in December 2006 by Capital Funding of
$66,136,000 aggregate principal amount of Series B 8.14%
Junior Subordinated Notes due February 15, 2027 and the
related 8.14% Trust Preferred Securities of Southern Company
Capital Trust II (as well as $2,320,000 of such
Series B Junior Subordinated Notes related to Capital
Fundings ownership of the Common Securities of Southern
Capital Trust II); and (viii) the proposed issuance of
the Series 2007A Senior Notes offered hereby. |
USE OF
PROCEEDS
The proceeds from the sale of the Series 2007A Senior Notes
will be used by the Company to repay a portion of its
outstanding short-term indebtedness, which aggregated
approximately $799,000,000 as of January 9, 2007, a portion
of which was incurred to defease the outstanding principal
amount of Capital Fundings Series A 8.19% Junior
Subordinated Notes due February 1, 2037 and the outstanding
principal amount of Capital Fundings Series B 8.14%
Junior Subordinated Notes due February 15, 2027, and for
other general corporate purposes.
S-4
DESCRIPTION
OF THE SERIES 2007A SENIOR NOTES
Set forth below is a description of the specific terms of the
Series 2007A % Senior Notes
due January 15, 2012 (the Series 2007A Senior
Notes). This description supplements, and should be read
together with, the description of the general terms and
provisions of the senior notes set forth in the accompanying
Prospectus under the caption Description of the Senior
Notes. The following description does not purport to be
complete and is subject to, and is qualified in its entirety by
reference to, the description in the accompanying Prospectus and
the Senior Note Indenture (the Senior Note
Indenture) to be entered into between the Company and
Wells Fargo Bank, National Association, as trustee (the
Senior Note Indenture Trustee).
General
The Series 2007A Senior Notes will be issued as a series of
senior notes under the Senior Note Indenture. The
Series 2007A Senior Notes will be initially issued in the
aggregate principal amount of $500,000,000. The Company may,
without the consent of the holders of the Series 2007A
Senior Notes, issue additional notes having the same ranking and
interest rate, maturity and other terms as the Series 2007A
Senior Notes, except for the public offering price and issue
date and the initial interest accrual date and initial Interest
Payment Date (as defined below), if applicable. Any additional
notes having such similar terms, together with the
Series 2007A Senior Notes, will constitute a single series
of senior notes under the Senior Note Indenture.
The entire principal amount of the Series 2007A Senior
Notes will mature and become due and payable, together with any
accrued and unpaid interest thereon, on January 15, 2012.
The Series 2007A Senior Notes are not subject to any
sinking fund provision. The Series 2007A Senior Notes are
available for purchase in denominations of $1,000 and any
integral multiple thereof.
Interest
Each Series 2007A Senior Note will bear interest at the
rate of % per year (the
Securities Rate) from the date of original issuance,
payable semiannually in arrears on January 15 and
July 15 of each year (each, an Interest Payment
Date) to the person in whose name such Series 2007A
Senior Note is registered at the close of business on the
fifteenth calendar day prior to such Interest Payment Date
(whether or not a Business Day). The initial Interest Payment
Date is July 15, 2007. The amount of interest payable will
be computed on the basis of a
360-day year
of twelve
30-day
months. In the event that any date on which interest is payable
on the Series 2007A Senior Notes is not a Business Day,
then payment of the interest payable on such date will be made
on the next succeeding day which is a Business Day (and without
any interest or other payment in respect of any such delay),
with the same force and effect as if made on such date.
Business Day means a day other than (i) a
Saturday or Sunday, (ii) a day on which banks in New York,
New York are authorized or obligated by law or executive order
to remain closed or (iii) a day on which the Senior Note
Indenture Trustees corporate trust office is closed for
business.
Ranking
The Series 2007A Senior Notes will be direct, unsecured and
unsubordinated obligations of the Company and will rank equally
with all other unsecured and unsubordinated obligations of the
Company. Since the Company is a holding company, the right of
the Company and, hence, the right of creditors of the Company
(including holders of the Series 2007A Senior Notes) to
participate in any distribution of the assets of any subsidiary
of the Company, whether upon liquidation, reorganization or
otherwise, is subject to prior claims of creditors of each
subsidiary. The Series 2007A Senior Notes will be
effectively subordinated to all secured debt of the Company. The
Company had no secured debt outstanding at September 30,
2006. The Senior Note Indenture contains no restrictions on the
amount of additional indebtedness that may be incurred by the
Company.
Optional
Redemption
The Series 2007A Senior Notes will be subject to redemption
at the option of the Company in whole or in part at any time and
from time to time upon not less than 30 nor more than
60 days notice. The Company shall have the
S-5
right to redeem the Series 2007A Senior Notes in whole or
in part at a redemption price (the Redemption Price)
equal to the greater of:
(i) 100% of the principal amount of the Series 2007A
Senior Notes to be redeemed or (ii) the sum of the present
values of the remaining scheduled payments of principal and
interest on the Series 2007A Senior Notes being redeemed
discounted (for purposes of determining present value) to the
redemption date on a semiannual basis (assuming a
360-day year
consisting of twelve
30-day
months) at a discount rate equal to the Treasury Yield (as
defined below) plus basis
points, plus, in each case, accrued interest thereon to the date
of redemption.
Treasury Yield means, with respect to any redemption
date, the rate per annum equal to the semiannual equivalent
yield to maturity of the Comparable Treasury Issue, assuming a
price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date.
Comparable Treasury Issue means the United States
Treasury security selected by an Independent Investment Banker
as having a maturity comparable to the remaining term of the
Series 2007A Senior Notes to be redeemed that would be
utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate
debt securities of comparable maturity to the remaining term of
the Series 2007A Senior Notes.
Comparable Treasury Price means, with respect to any
redemption date, (i) the average of the Reference Treasury
Dealer Quotations for such redemption date, after excluding the
highest and lowest such Reference Treasury Dealer Quotations or
(ii) if the Company obtains fewer than four such Reference
Treasury Dealer Quotations, the average of all such quotations.
Independent Investment Banker means an independent
investment banking institution of national standing appointed by
the Company and reasonably acceptable to the Senior Note
Indenture Trustee.
Reference Treasury Dealer means a primary
U.S. Government securities dealer in New York City
appointed by the Company and reasonably acceptable to the Senior
Note Indenture Trustee.
Reference Treasury Dealer Quotation means, with
respect to each Reference Treasury Dealer and any redemption
date, the average, as determined by the Company, of the bid and
asked prices for the Comparable Treasury Issue (expressed in
each case as a percentage of its principal amount and quoted in
writing to the Company by such Reference Treasury Dealer at
5:00 p.m. on the third Business Day in New York City
preceding such redemption date).
If notice of redemption is given as aforesaid, the
Series 2007A Senior Notes so to be redeemed shall, on the
redemption date, become due and payable at the Redemption Price
together with any accrued and unpaid interest thereon, and from
and after such date (unless the Company shall default in the
payment of the Redemption Price and accrued interest) such
Series 2007A Senior Notes shall cease to bear interest. If
any Series 2007A Senior Note called for redemption shall
not be paid upon surrender thereof for redemption, the principal
shall, until paid, bear interest from the redemption date at the
Securities Rate. See Description of the Senior
Notes Events of Default in the accompanying
Prospectus.
Subject to the foregoing and to applicable law (including,
without limitation, United States federal securities laws), the
Company or its affiliates may, at any time and from time to
time, purchase outstanding Series 2007A Senior Notes by
tender, in the open market or by private agreement.
Book-Entry
Only Issuance The Depository Trust Company
The Depository Trust Company (DTC) will act as the
initial securities depository for the Series 2007A Senior
Notes. The Series 2007A Senior Notes will be issued only as
fully registered securities registered in the name of Cede &
Co., DTCs partnership nominee, or such other name as may
be requested by an authorized representative of DTC. One or more
fully registered global Series 2007A Senior Notes
certificates will be issued, representing in
S-6
the aggregate the total principal amount of the
Series 2007A Senior Notes, and will be deposited with the
Senior Note Indenture Trustee on behalf of DTC.
DTC, the worlds largest securities 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 1934 Act). DTC holds and
provides asset servicing for over 2.2 million issues of
U.S. and
non-U.S.
equity issues, corporate and municipal debt issues and money
market instruments from over 100 countries that DTCs
participants (Direct Participants) deposit with DTC.
DTC also facilitates the post-trade settlement among Direct
Participants of sales and other securities transactions in
deposited securities, through electronic computerized book-entry
transfers and pledges between Direct Participants
accounts. This eliminates the need for physical movement of
securities certificates. Direct Participants include both U.S.
and non-U.S.
securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations. DTC is a
wholly-owned subsidiary of The Depository Trust &
Clearing Corporation (DTCC). DTCC, in turn, is owned
by a number of Direct Participants of DTC and members of the
National Securities Clearing Corporation, Fixed Income Clearing
Corporation and Emerging Markets Clearing Corporation (NSCC,
FICC and EMCC, also subsidiaries of DTCC), as well as by the New
York Stock Exchange, Inc., the American Stock Exchange LLC and
the National Association of Securities Dealers, Inc. Access to
the DTC system is also available to others such as both U.S. and
non-U.S.
securities brokers and dealers, banks, trust companies and
clearing corporations that clear through or maintain a custodial
relationship with a Direct Participant, either directly or
indirectly (Indirect Participants). DTC has
Standard & Poors, a division of The McGraw Hill
Companies, Inc., highest rating: AAA. The DTC rules applicable
to its Direct and Indirect Participants are on file with the
Securities and Exchange Commission. More information about DTC
can be found at www.dtcc.com and www.dtc.org.
Purchases of Series 2007A Senior Notes under the DTC system
must be made by or through Direct Participants, which will
receive a credit for the Series 2007A Senior Notes on
DTCs records. The ownership interest of each actual
purchaser of Series 2007A Senior Notes (Beneficial
Owner) is in turn to be recorded on the Direct and
Indirect Participants records. Beneficial Owners will not
receive written confirmation from DTC of their purchases.
Beneficial Owners are, however, expected to receive written
confirmations providing details of the transactions, as well as
periodic statements of their holdings, from the Direct or
Indirect Participants through which the Beneficial Owners
purchased Series 2007A Senior Notes. Transfers of ownership
interests in the Series 2007A Senior Notes are to be
accomplished by entries made on the books of Direct and Indirect
Participants acting on behalf of Beneficial Owners. Beneficial
Owners will not receive certificates representing their
ownership interests in Series 2007A Senior Notes, except in
the event that use of the book-entry system for the
Series 2007A Senior Notes is discontinued.
To facilitate subsequent transfers, all Series 2007A Senior
Notes deposited by Direct Participants with DTC are registered
in the name of DTCs partnership nominee, Cede &
Co., or such other name as may be requested by an authorized
representative of DTC. The deposit of Series 2007A Senior
Notes with DTC and their registration in the name of
Cede & Co. or such other DTC nominee do not effect any
changes in beneficial ownership. DTC has no knowledge of the
actual Beneficial Owners of the Series 2007A Senior Notes.
DTCs records reflect only the identity of the Direct
Participants to whose accounts such Series 2007A Senior
Notes are credited, which may or may not be the Beneficial
Owners. The Direct and Indirect 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 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 DTC. If less than all of the
Series 2007A Senior Notes are being redeemed, DTCs
practice is to determine by lot the amount of interest of each
Direct Participant in such Series 2007A Senior Notes to be
redeemed.
S-7
Although voting with respect to the Series 2007A Senior Notes is
limited, in those cases where a vote is required, neither DTC
nor Cede & Co. (nor any other DTC nominee) will consent or
vote with respect to the Series 2007A Senior Notes unless
authorized by a Direct Participant in accordance with DTCs
procedures. 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
Series 2007A Senior Notes are credited on the record date
(identified in a listing attached to the Omnibus Proxy).
Payments on the Series 2007A Senior Notes will be made to
Cede & Co., or such other nominee as may be requested by an
authorized representative of DTC. DTCs practice is to
credit Direct Participants accounts upon DTCs
receipt of funds and corresponding detail information from the
Company or the Senior Note Indenture Trustee on the relevant
payment date in accordance with their respective holdings shown
on DTCs records. Payments by Direct or Indirect
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 registered in
street name, and will be the responsibility of such
Direct or Indirect Participant and not of DTC or the Company,
subject to any statutory or regulatory requirements as may be in
effect from time to time. Payment to Cede & Co. (or such
other nominee as may be requested by an authorized
representative of DTC) is the responsibility of the Company,
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 Direct and Indirect
Participants.
Except as provided herein, a Beneficial Owner of a global
Series 2007A Senior Note will not be entitled to receive
physical delivery of Series 2007A Senior Notes.
Accordingly, each Beneficial Owner must rely on the procedures
of DTC to exercise any rights under the Series 2007A Senior
Notes. The laws of some jurisdictions require that certain
purchasers of securities take physical delivery of securities in
definitive form. Such laws may impair the ability to transfer
beneficial interests in a global Series 2007A Senior Note.
DTC may discontinue providing its services as securities
depository with respect to the Series 2007A Senior Notes at
any time by giving reasonable notice to the Company. Under such
circumstances, in the event that a successor securities
depository is not obtained, Series 2007A Senior Notes
certificates will be required to be printed and delivered to the
holders of record. Additionally, the Company may decide to
discontinue use of the system of book-entry transfers through
DTC (or a successor securities depository) with respect to the
Series 2007A Senior Notes. The Company understands,
however, that under current industry practices, DTC would notify
its Direct and Indirect Participants of the Companys
decision, but will only withdraw beneficial interests from a
global Series 2007A Senior Note at the request of each
Direct or Indirect Participant. In that event, certificates for
the Series 2007A Senior Notes will be printed and delivered
to the applicable Direct or Indirect Participant.
The information in this section concerning DTC and DTCs
book-entry system has been obtained from sources that the
Company believes to be reliable, but the Company takes no
responsibility for the accuracy thereof. The Company has no
responsibility for the performance by DTC or its Direct or
Indirect Participants of their respective obligations as
described herein or under the rules and procedures governing
their respective operations.
S-8
UNDERWRITING
Subject to the terms and conditions of an underwriting agreement
(the Underwriting Agreement), the Company has agreed
to sell to each of the underwriters named below (the
Underwriters) and each of the Underwriters has
severally agreed to purchase from the Company the principal
amount of the Series 2007A Senior Notes set forth opposite
its name below:
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Principal Amount of
|
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|
|
Series 2007A
|
|
Underwriters
|
|
Senior Notes
|
|
|
Barclays Capital Inc.
|
|
$
|
|
|
Lehman Brothers Inc.
|
|
|
|
|
Morgan Keegan & Company,
Inc.
|
|
|
|
|
SunTrust Capital Markets,
Inc.
|
|
|
|
|
The Williams Capital Group,
L.P.
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|
|
|
|
|
|
|
|
Total
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|
$
|
500,000,000
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|
|
|
|
|
|
In the Underwriting Agreement, the Underwriters have agreed,
subject to the terms and conditions set forth therein, to
purchase all of the Series 2007A Senior Notes offered
hereby, if any of the Series 2007A Senior Notes are
purchased.
The Underwriters propose to offer the Series 2007A Senior
Notes directly to the public at the public offering price set
forth on the cover page of this Prospectus Supplement and may
offer them to certain securities dealers at such price less a
concession not in excess of % of
the principal amount per Series 2007A Senior Note. The
Underwriters may allow, and such dealers may reallow, a
concession not in excess of % of
the principal amount per Series 2007A Senior Note to
certain brokers and dealers. After the initial public offering,
the offering price and other selling terms may from time to time
be varied by the Underwriters.
The Series 2007A Senior Notes are a new issue of securities
with no established trading market. The Series 2007A Senior
Notes will not be listed on any securities exchange or on any
automated dealer quotation system. The Underwriters may make a
market in the Series 2007A Senior Notes after completion of
the offering, but will not be obligated to do so and may
discontinue any market-making activities at any time without
notice. No assurance can be given as to the liquidity of the
trading market for the Series 2007A Senior Notes or that an
active public market for the Series 2007A Senior Notes will
develop. If an active public trading market for the
Series 2007A Senior Notes does not develop, the market
price and liquidity of the Series 2007A Senior Notes may be
adversely affected.
The Company has agreed to indemnify the Underwriters against
certain liabilities, including liabilities under the Securities
Act of 1933, as amended.
The Companys expenses associated with the offer and sale
of the Series 2007A Senior Notes are estimated to be
$485,000.
The Company has agreed with the Underwriters, that during the
period of 15 days from the date of the Underwriting
Agreement, it will not sell, offer to sell, grant any option for
the sale of, or otherwise dispose of any Series 2007A
Senior Notes, any security convertible into, exchangeable into
or exercisable for the Series 2007A Senior Notes or any
debt securities substantially similar to the Series 2007A
Senior Notes (except for the Series 2007A Senior Notes
issued pursuant to the Underwriting Agreement), without the
prior written consent of Barclays Capital Inc. and Lehman
Brothers Inc. This agreement does not apply to issuances of
commercial paper or other debt securities with scheduled
maturities of less than one year.
In order to facilitate the offering of the Series 2007A
Senior Notes, the Underwriters may engage in transactions that
stabilize, maintain or otherwise affect the price of the
Series 2007A Senior Notes. Specifically, the Underwriters
may over-allot in connection with the offering, creating short
positions in the Series 2007A Senior Notes for their own
account. In addition, to cover over-allotments or to stabilize
the price of the Series 2007A Senior Notes, the
Underwriters may bid for, and purchase, Series 2007A Senior
Notes in the open market. The
S-9
Underwriters may reclaim selling concessions allowed to an
Underwriter or dealer for distributing Series 2007A Senior
Notes in the offering, if the Underwriters repurchase previously
distributed Series 2007A Senior Notes in transactions to
cover syndicate short positions, in stabilization transactions
or otherwise. Any of these activities may stabilize or maintain
the market price of the Series 2007A Senior Notes above
independent market levels. The Underwriters are not required to
engage in these activities, and may end any of these activities
at any time without notice.
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. The imposition of a penalty bid might
also have an effect on the price of a security to the extent
that it were to discourage resales of the security.
Neither the Company nor any 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 Series 2007A Senior Notes. In addition, neither the
Company nor any Underwriter makes any representation that the
Underwriters will engage in such transactions or that such
transactions once commenced will not be discontinued without
notice.
It is expected that delivery of the Series 2007A Senior
Notes will be made, against payment for the Series 2007A
Senior Notes, on or about January , 2007, which
will be the business day following
the pricing of the Series 2007A Senior Notes. Under
Rule 15c6-1
under the 1934 Act, purchases or sales of securities in the
secondary market generally are required to settle within three
business days (T+3), unless the parties to any such transactions
expressly agree otherwise. Accordingly, purchasers of the
Series 2007A Senior Notes who wish to trade the
Series 2007A Senior Notes on the date of this Prospectus
Supplement or the next succeeding
business day(s) will be required, because the Series 2007A
Senior Notes initially will settle
within business days
(T+ ), to specify an alternate settlement cycle at
the time of any such trade to prevent a failed settlement.
Purchasers of the Series 2007A Senior Notes who wish to
trade on the date of this Prospectus Supplement or the
next succeeding business day(s)
should consult their own legal advisors.
Certain of the Underwriters and their affiliates have engaged
and may in the future engage in transactions with, and, from
time to time, have performed and may perform investment banking
and/or commercial banking services for, the Company and its
affiliates in the ordinary course of business, for which they
have received and will receive customary compensation.
S-10
PROSPECTUS
The Southern Company
Common Stock
Senior Notes
Junior Subordinated
Notes
Southern Company Capital Trust
VII
Southern Company Capital Trust
VIII
Trust Preferred
Securities
Fully And Unconditionally
Guaranteed, As Described Herein, By
The Southern Company
We will provide the specific terms of these securities in
supplements to this Prospectus. You should read this Prospectus
and the applicable Prospectus Supplement carefully before you
invest.
See Risk Factors on page 2 for information on
certain risks related to the purchase of these securities.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or determined if this Prospectus is truthful or
complete. Any representation to the contrary is a criminal
offense.
January 11, 2007
ABOUT
THIS PROSPECTUS
This Prospectus is part of a registration statement filed with
the Securities and Exchange Commission (the
Commission) using a shelf registration
process under the Securities Act of 1933, as amended (the
1933 Act). Under the shelf process, The Southern
Company (the Company) may sell, in one or more
transactions,
common stock (the Common Stock)
senior notes (the Senior Notes)
junior subordinated notes (the Junior
Subordinated Notes)
and Southern Company Capital Trust VII and Southern Company
Capital Trust VIII (individually, a Trust and
collectively, the Trusts) may sell
trust preferred securities or capital securities
(the Preferred Securities)
in one or more offerings. The Preferred Securities will be
guaranteed by the Company, to the extent described in this
Prospectus. This Prospectus provides a general description of
those securities. Each time the Company or a Trust sells
securities, the Company and/or a Trust will provide a prospectus
supplement that will contain specific information about the
terms of that offering (Prospectus Supplement). The
Prospectus Supplement may also add, update or change information
contained in this Prospectus. You should read this Prospectus
and the applicable Prospectus Supplement together with
additional information under the heading Available
Information.
RISK
FACTORS
Investing in the Companys securities involves risk. Please
see the risk factors described in the Companys Annual
Report on
Form 10-K
for the fiscal year ended December 31, 2005, along with the
disclosures related to risk factors contained in the
Companys Quarterly Reports on
Form 10-Q
for the quarters ended March 31, 2006, June 30, 2006
and September 30, 2006, which are all incorporated by
reference in this Prospectus. Before making an investment
decision, you should carefully consider these risks as well as
other information contained or incorporated by reference in this
Prospectus. The risks and uncertainties described are not the
only ones facing the Company. Additional risks and uncertainties
not presently known to the Company or that the Company currently
deems immaterial may also impair its business operations, its
financial results and the value of its securities.
AVAILABLE
INFORMATION
The Company and the Trusts have filed with the Commission a
combined registration statement on Form S-3 (the
Registration Statement, which term encompasses any
amendments of and exhibits to the Registration Statement) under
the 1933 Act. As permitted by the rules and regulations of the
Commission, this Prospectus does not contain all of the
information set forth in the Registration Statement and the
exhibits and schedules to the Registration Statement, to which
reference is made.
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the 1934
Act), and in accordance with the 1934 Act files reports,
proxy statements and other information with the Commission. Such
reports, proxy statements and other information can be inspected
and copied at the Public Reference Room of the Commission at 100
F Street, N.E., Room 1580, Washington, D.C. 20549. Information
on the operation of the Public Reference Room may be obtained by
calling the Commission at 1-800-SEC-0330. The Commission
maintains a Web site that contains reports, proxy and
information statements and other information regarding
registrants including the Company that file electronically at
http://www.sec.gov. In addition, reports and other material
concerning the Company can be inspected at the offices of the
New York Stock Exchange, 20 Broad Street, New York, New York
10005, on which exchange the common stock of the Company is
listed.
No separate financial statements of any Trust are included in
this Prospectus. The Company considers that such statements
would not be material to holders of the Preferred Securities
because each Trust has no independent operations and exists for
the sole purpose of investing the proceeds of the sale of its
Trust Securities (as defined below) in Junior Subordinated Notes.
2
INCORPORATION
OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed with the Commission
pursuant to the 1934 Act and are incorporated in this Prospectus
by reference and made a part of this Prospectus:
(a) the Companys Annual Report on Form 10-K for
the fiscal year ended December 31, 2005;
(b) the Companys Quarterly Reports on Form 10-Q for
the quarters ended March 31, 2006, June 30, 2006 and
September 30, 2006; and
(c) the Companys Current Reports on
Form 8-K
dated January 4, 2006, February 20, 2006,
March 16, 2006, March 17, 2006, June 15, 2006,
June 27, 2006, October 17, 2006, October 18,
2006, October 27, 2006 and November 16, 2006.
All documents filed by the Company with the Commission pursuant
to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act
subsequent to the date of this Prospectus and prior to the
termination of this offering shall be deemed to be incorporated
in this Prospectus by reference and made a part of this
Prospectus from the date of filing of such documents; provided,
however, that the Company is not incorporating any information
furnished under Items 2.02 or 7.01 of any Current Report on Form
8-K unless specifically stated otherwise. Any statement
contained in a document incorporated or deemed to be
incorporated by reference in this Prospectus shall be deemed to
be modified or superseded for purposes of this Prospectus to the
extent that a statement contained in this Prospectus or in any
other subsequently filed document which also is or is deemed to
be incorporated by reference in this Prospectus modifies or
supersedes such statement. Any 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 to
whom this Prospectus is delivered, on the written or oral
request of any such person, a copy of any or all documents
incorporated in this Prospectus by reference (other than the
exhibits to such documents unless such exhibits are specifically
incorporated by reference). Such requests should be directed to
Patricia L. Roberts, Assistant Secretary, The Southern Company,
30 Ivan Allen Jr. Blvd., N.W., Atlanta, Georgia 30308, telephone
(404) 506-5000.
THE
SOUTHERN COMPANY
The Company was incorporated under the laws of Delaware on
November 9, 1945. The Company is domesticated under the
laws of Georgia and is qualified to do business as a foreign
corporation under the laws of Alabama. The principal executive
offices of the Company are located at 30 Ivan Allen Jr. Blvd.,
N.W., Atlanta, Georgia 30308, and the telephone number is (404)
506-5000.
The Company owns all the outstanding common stock of Alabama
Power Company (Alabama Power), Georgia Power Company
(Georgia Power), Gulf Power Company and Mississippi
Power Company, each of which is an operating public utility
company. The retail operating companies supply electric service
in the states of Alabama, Georgia, Florida and Mississippi.
Effective July 1, 2006, Savannah Electric and Power Company,
which was an operating public utility company and a wholly-owned
subsidiary of the Company, was merged with and into Georgia
Power. In addition, the Company owns all of the common stock of
Southern Power Company (Southern Power), which is
also an operating public utility company. Southern Power
constructs, owns and manages the Companys competitive
generation assets and sells electricity at market-based rates in
the wholesale market.
The Company also owns all the outstanding common stock or
membership interests of Southern Communications Services, Inc.
(SouthernLINC Wireless), Southern Nuclear Operating
Company, Inc. (Southern Nuclear), Southern Company
Services, Inc. (SCS), Southern Telecom, Inc.
(Southern Telecom), Southern Company Holdings, Inc.
(Southern Holdings) and other direct and indirect
subsidiaries. SouthernLINC Wireless provides digital wireless
communications services to the retail operating companies and
also markets these services to the public within the Southeast.
Southern Nuclear provides services to Alabama Powers and
Georgia Powers nuclear plants. SCS is the system service
company providing, at cost, specialized services to the Company
and its subsidiary companies. Southern Telecom provides
wholesale fiber optic solutions to telecommunication providers
in the Southeast. Southern Holdings is an intermediate holding
subsidiary for the Companys investments in synthetic fuels
and leveraged leases and various other energy-related businesses.
Alabama Power and Georgia Power each own 50% of the outstanding
common stock of Southern Electric Generating Company
(SEGCO). SEGCO is an operating public utility
company that owns electric generating units. Alabama Power and
Georgia Power are each entitled to one-half of SEGCOs
capacity and energy.
3
CERTAIN
RATIOS
The following table sets forth the Ratios of Earnings to Fixed
Charges and Earnings to Fixed Charges Plus Preferred Dividend
Requirements (Pre-Income Tax Basis) for the periods indicated.
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Nine Months
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Ended
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Year Ended December 31,
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September 30,
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2001
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2002
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2003
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2004
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2005
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2006(1)
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Ratio of Earnings to Fixed
Charges(2)
|
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3.12
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|
3.57
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|
3.88
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|
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|
3.86
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|
3.65
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|
4.03
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Ratio of Earnings to Fixed Charges
Plus Preferred Dividend Requirements (Pre-Income Tax Basis)(2)
|
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3.12
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|
3.57
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3.88
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3.86
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3.65
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4.03
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(1)
|
Due to seasonal variations in the demand for energy, operating
results for the nine months ended September 30, 2006 do not
necessarily indicate operating results for the entire year.
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(2)
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This ratio is computed as follows: (i) Earnings
have been calculated by adding to Earnings from Continuing
Operations Before Income Taxes Interest expense, net
of amounts capitalized, Interest expense to
affiliate trusts, Distributions on mandatorily
redeemable preferred securities and the debt portion of
allowance for funds used during construction; and
(ii) Fixed Charges consist of Interest
expense, net of amounts capitalized, Interest
expense to affiliate trusts, Preferred and
preference dividends of subsidiaries, Distributions
on mandatorily redeemable preferred securities and the
debt portion of allowance for funds used during construction. In
computing this ratio, Preferred and preference dividends
of subsidiaries represent the before tax earnings
necessary to pay such dividends, computed at the effective tax
rates for the applicable periods.
|
The Companys Ratios of Earnings to Fixed Charges Plus
Preferred Dividend Requirements (Pre-Income Tax Basis) for the
periods indicated above are the same as the Companys
Ratios of Earnings to Fixed Charges set forth above because the
Company had no shares of preferred or preference stock
outstanding during the periods indicated and currently has no
shares of preferred or preference stock outstanding.
THE
TRUSTS
Each Trust is a statutory trust created under Delaware law
pursuant to the filing of a certificate of trust with the
Delaware Secretary of State on September 28, 1998, and
amendment thereto on November 6, 2006, with respect to
Southern Company Capital Trust VII and June 16, 1999,
and amendment thereto on November 6, 2006, with respect to
Southern Company Capital Trust VIII. Each Trusts business
is defined in an amended and restated trust agreement, executed
by Southern Company Capital Funding, Inc., the Company, as
Depositor, and the Delaware Trustee of each Trust. This trust
agreement of each Trust will be further amended and restated in
its entirety by the Company, as Depositor, and the trustees
named therein in connection with the issuance of Preferred
Securities substantially in the form filed as an exhibit to the
Registration Statement of which this Prospectus forms a part
(the Trust Agreement). Each Trust Agreement will be
qualified as an indenture under the Trust Indenture Act of 1939,
as amended (the 1939 Act). The Company will own all
the common securities (the Common Securities and,
together with the Preferred Securities, the Trust
Securities) of each Trust. The Trust Securities represent
undivided beneficial interests in the assets of the respective
Trusts. Each Trust exists for the exclusive purposes of
(i) issuing its Trust Securities representing undivided
beneficial interests in the assets of such Trust,
(ii) investing the gross proceeds of its Trust Securities
in a related series of Junior Subordinated Notes, and
(iii) engaging in only those other activities necessary,
appropriate, convenient or incidental to these purposes. The
payment of periodic cash distributions on the Preferred
Securities of each Trust and payments on liquidation and
redemption with respect to the Preferred Securities of each
Trust, in each case to the extent each Trust has funds legally
and immediately available for these purposes, will be guaranteed
by the Company (individually, a Guarantee and
collectively, the Guarantees) to the extent set
forth under Description of the Guarantees.
Each Trusts business and affairs will be conducted by its
trustees, which shall be appointed by the Company as the holder
of the Common Securities: two employees of the Company as
Administrative Trustees; a Property Trustee; and The Bank of New
York (Delaware) as Delaware Trustee (collectively, the
Securities Trustees). The Property Trustee of each
Trust will act as the indenture trustee with respect to such
Trust for purposes of compliance with the provisions of the 1939
Act.
The principal place of business of each Trust shall be
c/o the Company, 30 Ivan Allen Jr. Blvd., N.W., Atlanta,
Georgia 30308, telephone (404)
506-5000,
Attn: Assistant Secretary.
4
Reference is made to the Prospectus Supplement relating to the
Preferred Securities of a Trust for further information
concerning such Trust.
ACCOUNTING
TREATMENT OF THE TRUSTS
For financial reporting purposes, each Trust is a variable
interest entity. The Company does not meet the definition of
primary beneficiary and, therefore, accounts for its investment
in each Trust under the equity method in accordance with
Financial Accounting Standards Board Interpretation
No. 46R, Consolidation of Variable Interest
Entities. The Junior Subordinated Notes payable to each
Trust will be presented as a separate line item in the
Companys balance sheet. Interest related to the Junior
Subordinated Notes will be reflected as a separate line item on
the Companys income statement and appropriate disclosures
concerning the Preferred Securities, the Guarantees and the
Junior Subordinated Notes will be included in the notes to the
Companys financial statements.
USE OF
PROCEEDS
Each Trust will invest the proceeds received from the sale of
the Preferred Securities in Junior Subordinated Notes. Except as
may be otherwise described in an applicable Prospectus
Supplement, the net proceeds received by the Company from such
investment and any proceeds received from the sale of the Common
Stock or the Senior Notes or other sales of the Junior
Subordinated Notes will be used to pay scheduled maturities
and/or refundings of its securities, to repay short-term
indebtedness to the extent outstanding and for other general
corporate purposes.
DESCRIPTION
OF THE COMMON STOCK
The authorized capital stock of the Company currently consists
of 1,000,000,000 shares of common stock, par value $5 per share.
As of September 30, 2006, there were
742,740,228 shares of common stock issued and outstanding.
All shares of common stock of the Company participate equally
with respect to dividends and rank equally upon liquidation.
Each holder is entitled to one vote for each share held and to
cumulative voting at elections of directors. The vote of
two-thirds of the outstanding common stock is required to
authorize or create preferred stock or to effect certain changes
in the charter provisions affecting the common stock. No
stockholder is entitled to preemptive rights.
The shares of Common Stock offered hereby will be fully paid and
nonassessable by the Company and, therefore, will not be subject
to further calls or assessment by the Company.
Certain business combination transactions, including mergers,
sales of assets or securities having a fair market value of
$100,000,000 or more, liquidations, dissolutions,
reclassifications or recapitalizations, between the Company or
any of its subsidiaries and any beneficial owner of more than 5%
of the outstanding voting stock of the Company or any affiliate
of such owner must be approved the holders of 75% of the
outstanding voting stock and a majority of the outstanding
voting stock held by persons other than such beneficial owner,
unless approved by a majority of the Disinterested
Directors (generally directors not affiliated with such
beneficial owner) or certain minimum price and procedural
requirements are met. These provisions may have the effect of
delaying, deferring or preventing a change in control of the
Company.
The transfer agent and registrar for the common stock is SCS,
30 Ivan Allen Jr. Blvd., Atlanta, Georgia, 30308.
DESCRIPTION
OF THE SENIOR NOTES
Set forth below is a description of the general terms of the
Senior Notes. The following description does not purport to be
complete and is subject to, and is qualified in its entirety by
reference to, the Senior Note Indenture to be entered into
between the Company and the trustee named in the Senior Note
Indenture (the Senior Note Indenture Trustee), as to
be supplemented by a supplemental indenture to the Senior Note
Indenture establishing the Senior Notes of each series (the
Senior Note Indenture, as so supplemented, is referred to as the
Senior Note Indenture), the forms of which are filed
as exhibits to the Registration Statement of which this
Prospectus forms a part. The terms of the Senior Notes will
include those stated in the Senior Note Indenture and those made
a part of the Senior Note Indenture by reference to the 1939
Act. Certain capitalized terms used in this Prospectus are
defined in the Senior Note Indenture.
5
General
The Senior Notes will be issued as unsecured senior debt
securities under the Senior Note Indenture and will rank equally
with all other unsecured and unsubordinated debt of the Company.
The Senior Notes will be effectively subordinated to all secured
debt of the Company. The Company had no secured debt outstanding
at September 30, 2006. Since the Company is a holding
company, the right of the Company and, hence, the right of
creditors of the Company (including holders of Senior Notes) to
participate in any distribution of the assets of any subsidiary
of the Company, whether upon liquidation, reorganization or
otherwise, is subject to prior claims of creditors of each
subsidiary. The Senior Note Indenture does not limit the
aggregate principal amount of Senior Notes that may be issued
under the Senior Note Indenture and provides that Senior Notes
may be issued from time to time in one or more series pursuant
to an indenture supplemental to the Senior Note Indenture. The
Senior Note Indenture gives the Company the ability to reopen a
previous issue of Senior Notes and issue additional Senior Notes
of such series, unless otherwise provided.
Reference is made to the Prospectus Supplement that will
accompany this Prospectus for the following terms of the series
of Senior Notes being offered by such Prospectus Supplement:
(i) the title of such Senior Notes; (ii) any limit on
the aggregate principal amount of such Senior Notes;
(iii) the date or dates on which the principal of such
Senior Notes is payable; (iv) the rate or rates at which
such Senior Notes shall bear interest, if any, or any method by
which such rate or rates will be determined, the date or dates
from which such interest will accrue, the interest payment dates
on which such interest shall be payable, and the regular record
date for the interest payable on any interest payment date;
(v) the place or places where the principal of (and
premium, if any) and interest, if any, on such Senior Notes
shall be payable; (vi) the period or periods within which,
the price or prices at which and the terms and conditions on
which such Senior Notes may be redeemed, in whole or in part, at
the option of the Company or at the option of the holder prior
to their maturity; (vii) the obligation, if any, of the
Company to redeem or purchase such Senior Notes; (viii) the
date or dates, if any, after which such Senior Notes may be
converted or exchanged at the option of the holder into or for
shares of Common Stock of the Company and the terms for any such
conversion or exchange; (ix) the denominations in which
such Senior Notes shall be issuable; (x) if other than the
principal amount of such Senior Notes, the portion of the
principal amount of such Senior Notes which shall be payable
upon declaration of acceleration of the maturity of such Senior
Notes; (xi) any deletions from, modifications of or
additions to the Events of Default or covenants of the Company
as provided in the Senior Note Indenture pertaining to such
Senior Notes; (xii) whether such Senior Notes shall be
issued in whole or in part in the form of a Global Security; and
(xiii) any other terms of such Senior Notes.
The Senior Note Indenture does not contain provisions that
afford holders of Senior Notes protection in the event of a
highly leveraged transaction involving the Company.
Events of
Default
The Senior Note Indenture provides that any one or more of the
following described events with respect to the Senior Notes of
any series, which has occurred and is continuing, constitutes an
Event of Default with respect to the Senior Notes of
such series:
(a) failure for 30 days to pay interest on the Senior
Notes of such series, when due on an interest payment date other
than at maturity or upon earlier redemption; or
(b) failure to pay principal or premium, if any, or
interest on the Senior Notes of such series when due at maturity
or upon earlier redemption; or
(c) failure for three Business Days to deposit any sinking
fund payment when due by the terms of a Senior Note of such
series; or
(d) failure to observe or perform any other covenant or
warranty of the Company in the Senior Note Indenture (other than
a covenant or warranty which has expressly been included in the
Senior Note Indenture solely for the benefit of one or more
series of Senior Notes other than such series) for 90 days
after written notice to the Company from the Senior Note
Indenture Trustee or the holders of at least 25% in principal
amount of the outstanding Senior Notes of such series; or
(e) certain events of bankruptcy, insolvency or
reorganization of the Company.
6
The holders of not less than a majority in aggregate outstanding
principal amount of the Senior Notes of any series have the
right to direct the time, method and place of conducting any
proceeding for any remedy available to the Senior Note Indenture
Trustee with respect to the Senior Notes of such series. If a
Senior Note Indenture Event of Default occurs and is continuing
with respect to the Senior Notes of any series, then the Senior
Note Indenture Trustee or the holders of not less than 25% in
aggregate outstanding principal amount of the Senior Notes of
such series may declare the principal amount of the Senior Notes
due and payable immediately by notice in writing to the Company
(and to the Senior Note Indenture Trustee if given by the
holders), and upon any such declaration such principal amount
shall become immediately due and payable. At any time after such
a declaration of acceleration with respect to the Senior Notes
of any series has been made and before a judgment or decree for
payment of the money due has been obtained as provided in
Article Five of the Senior Note Indenture, the holders of not
less than a majority in aggregate outstanding principal amount
of the Senior Notes of such series may rescind and annul such
declaration and its consequences if the default has been cured
or waived and the Company has paid or deposited with the Senior
Note Indenture Trustee a sum sufficient to pay all matured
installments of interest and principal due otherwise than by
acceleration and all sums paid or advanced by the Senior Note
Indenture Trustee, including reasonable compensation and
expenses of the Senior Note Indenture Trustee.
The holders of not less than a majority in aggregate outstanding
principal amount of the Senior Notes of any series may, on
behalf of the holders of all the Senior Notes of such series,
waive any past default with respect to such series, except
(i) a default in the payment of principal or interest or
(ii) a default in respect of a covenant or provision which
under Article Nine of the Senior Note Indenture cannot be
modified or amended without the consent of the holder of each
outstanding Senior Note of such series affected.
Registration
and Transfer
The Company shall not be required to (i) issue, register
the transfer of or exchange Senior Notes of any series during a
period of 15 days immediately preceding the date notice is given
identifying the Senior Notes of such series called for
redemption, or (ii) issue, register the transfer of or
exchange any Senior Notes so selected for redemption, in whole
or in part, except the unredeemed portion of any Senior Note
being redeemed in part.
Payment
and Paying Agent
Unless otherwise indicated in an applicable Prospectus
Supplement, payment of principal of any Senior Notes will be
made only against surrender to the Paying Agent of such Senior
Notes. Principal of and interest on Senior Notes will be
payable, subject to any applicable laws and regulations, at the
office of such Paying Agent or Paying Agents as the Company may
designate from time to time, except that, at the option of the
Company, payment of any interest may be made by wire transfer or
by check mailed to the address of the person entitled to an
interest payment as such address shall appear in the Security
Register with respect to the Senior Notes. Payment of interest
on Senior Notes on any interest payment date will be made to the
person in whose name the Senior Notes (or predecessor security)
are registered at the close of business on the record date for
such interest payment.
Unless otherwise indicated in an applicable Prospectus
Supplement, the Senior Note Indenture Trustee will act as Paying
Agent with respect to the Senior Notes. The Company may at any
time designate additional Paying Agents or rescind the
designation of any Paying Agents or approve a change in the
office through which any Paying Agent acts.
All moneys paid by the Company to a Paying Agent for the payment
of the principal of or interest on the Senior Notes of any
series which remain unclaimed at the end of two years after such
principal or interest shall have become due and payable will be
repaid to the Company, and the holder of such Senior Notes will
from that time forward look only to the Company for payment of
such principal and interest.
Modification
The Senior Note Indenture contains provisions permitting the
Company and the Senior Note Indenture Trustee, with the consent
of the holders of not less than a majority in principal amount
of the outstanding Senior Notes of each series that is affected,
to modify the Senior Note Indenture or the rights of the holders
of the Senior Notes of such series; provided, that no such
modification may, without the consent of the holder of each
outstanding
7
Senior Note that is affected, (i) change the stated
maturity of the principal of, or any installment of principal of
or interest on, any Senior Note, or reduce the principal amount
of any Senior Note or the rate of interest on any Senior Note or
any premium payable upon the redemption of any Senior Note, or
change the method of calculating the rate of interest of any
Senior Note, or impair the right to institute suit for the
enforcement of any such payment on or after the stated maturity
of any Senior Note (or, in the case of redemption, on or after
the redemption date), or (ii) reduce the percentage of
principal amount of the outstanding Senior Notes of any series,
the consent of whose holders is required for any such
supplemental indenture, or the consent of whose holders is
required for any waiver (of compliance with certain provisions
of the Senior Note Indenture or certain defaults under the
Senior Note Indenture and their consequences) provided for in
the Senior Note Indenture, or (iii) modify any of the
provisions of the Senior Note Indenture relating to supplemental
indentures, waiver of past defaults, or waiver of certain
covenants, except to increase any such percentage or to provide
that certain other provisions of the Senior Note Indenture
cannot be modified or waived without the consent of the holder
of each outstanding Senior Note that is affected.
In addition, the Company and the Senior Note Indenture Trustee
may execute, without the consent of any holders of Senior Notes,
any supplemental indenture for certain other usual purposes,
including the creation of any new series of senior notes.
Consolidation,
Merger and Sale
The Company shall not consolidate with or merge into any other
corporation or convey, transfer or lease its properties and
assets substantially as an entirety to any person, unless
(1) such other corporation or person is a corporation
organized and existing under the laws of the United States, any
state in the United States or the District of Columbia and such
other corporation or person expressly assumes, by supplemental
indenture executed and delivered to the Senior Note Indenture
Trustee, the payment of the principal of (and premium, if any)
and interest on all the Senior Notes and the performance of
every covenant of the Senior Note Indenture on the part of the
Company to be performed or observed; (2) immediately after
giving effect to such transactions, no Event of Default, and no
event which, after notice or lapse of time or both, would become
an Event of Default, shall have happened and be continuing; and
(3) the Company has delivered to the Senior Note Indenture
Trustee an officers certificate and an opinion of counsel,
each stating that such transaction complies with the provisions
of the Senior Note Indenture governing consolidation, merger,
conveyance, transfer or lease and that all conditions precedent
to the transaction have been complied with.
Information
Concerning the Senior Note Indenture Trustee
The Senior Note Indenture Trustee, prior to an Event of Default
with respect to Senior Notes of any series, undertakes to
perform, with respect to Senior Notes of such series, only such
duties as are specifically set forth in the Senior Note
Indenture and, in case an Event of Default with respect to
Senior Notes of any series has occurred and is continuing, shall
exercise, with respect to Senior Notes of such series, the same
degree of care as a prudent individual would exercise in the
conduct of his or her own affairs. Subject to such provision,
the Senior Note Indenture Trustee is under no obligation to
exercise any of the powers vested in it by the Senior Note
Indenture at the request of any holder of Senior Notes of any
series, unless offered reasonable indemnity by such holder
against the costs, expenses and liabilities which might be
incurred by the Senior Note Indenture Trustee. The Senior Note
Indenture Trustee is not required to expend or risk its own
funds or otherwise incur any financial liability in the
performance of its duties if the Senior Note Indenture Trustee
reasonably believes that repayment or adequate indemnity is not
reasonably assured to it.
The Company and certain of its subsidiaries may maintain deposit
accounts and banking relationships with the Senior Note
Indenture Trustee. The Senior Note Indenture Trustee and certain
of its affiliates may also serve as trustee under other
indentures pursuant to which securities of the Company and
certain subsidiaries of the Company are outstanding.
Governing
Law
The Senior Note Indenture and the Senior Notes will be governed
by, and construed in accordance with, the internal laws of the
State of New York.
8
Miscellaneous
The Company will have the right at all times to assign any of
its rights or obligations under the Senior Note Indenture to a
direct or indirect wholly-owned subsidiary of the Company;
provided, that, in the event of any such assignment, the Company
will remain primarily liable for all such obligations. Subject
to the foregoing, the Senior Note Indenture will be binding upon
and inure to the benefit of the parties to the Senior Note
Indenture and their respective successors and assigns.
DESCRIPTION
OF THE JUNIOR SUBORDINATED NOTES
Set forth below is a description of the general terms of the
Junior Subordinated Notes. The following description does not
purport to be complete and is subject to, and is qualified in
its entirety by reference to, the Subordinated Note Indenture to
be entered into between the Company and the trustee as named in
the Subordinated Note Indenture (the Subordinated Note
Indenture Trustee), as to be supplemented by a
supplemental indenture to the Subordinated Note Indenture
establishing the Junior Subordinated Notes of each series (the
Subordinated Note Indenture, as so supplemented, is referred to
as the Subordinated Note Indenture), the forms of
which are filed as exhibits to the Registration Statement of
which this Prospectus forms a part. The terms of the Junior
Subordinated Notes will include those stated in the Subordinated
Note Indenture and those made a part of the Subordinated Note
Indenture by reference to the 1939 Act. Certain capitalized
terms used in this Prospectus are defined in the Subordinated
Note Indenture.
General
The Junior Subordinated Notes will be issued as unsecured junior
subordinated debt securities under the Subordinated Note
Indenture. The Subordinated Note Indenture does not limit the
aggregate principal amount of Junior Subordinated Notes that may
be issued under the Subordinated Note Indenture and provides
that Junior Subordinated Notes may be issued from time to time
in one or more series pursuant to an indenture supplemental to
the Subordinated Note Indenture. The Subordinated Note Indenture
gives the Company the ability to reopen a previous issue of
Junior Subordinated Notes and issue additional Junior
Subordinated Notes of such series, unless otherwise provided.
Reference is made to the Prospectus Supplement that will
accompany this Prospectus for the following terms of the series
of Junior Subordinated Notes being offered by such Prospectus
Supplement: (i) the title of such Junior Subordinated
Notes; (ii) any limit on the aggregate principal amount of
such Junior Subordinated Notes; (iii) the date or dates on
which the principal of such Junior Subordinated Notes is
payable; (iv) the rate or rates at which such Junior
Subordinated Notes shall bear interest, if any, or any method by
which such rate or rates will be determined, the date or dates
from which such interest will accrue, the interest payment dates
on which such interest shall be payable, and the regular record
date for the interest payable on any interest payment date;
(v) the place or places where the principal of (and
premium, if any) and interest, if any, on such Junior
Subordinated Notes shall be payable; (vi) the period or
periods within which, the price or prices at which and the terms
and conditions on which such Junior Subordinated Notes may be
redeemed, in whole or in part, at the option of the Company or
at the option of the holder prior to their maturity;
(vii) the obligation, if any, of the Company to redeem or
purchase such Junior Subordinated Notes; (viii) the date or
dates, if any, after which such Junior Subordinated Notes may be
converted or exchanged at the option of the holder into or for
shares of Common Stock of the Company and the terms for any such
conversion or exchange; (ix) the denominations in which
such Junior Subordinated Notes shall be issuable; (x) if
other than the principal amount of the Junior Subordinated
Notes, the portion of the principal amount of such Junior
Subordinated Notes which shall be payable upon declaration of
acceleration of the maturity of such Junior Subordinated Notes;
(xi) any deletions from, modifications of or additions to
the Events of Default or covenants of the Company as provided in
the Subordinated Note Indenture pertaining to such Junior
Subordinated Notes; (xii) whether such Junior Subordinated
Notes shall be issued in whole or in part in the form of a
Global Security; (xiii) the right, if any, of the Company
to extend the interest payment periods of such Junior
Subordinated Notes; and (xiv) any other terms of such
Junior Subordinated Notes. The terms of each series of Junior
Subordinated Notes issued to a Trust will correspond to those of
the related Preferred Securities of such Trust as described in
the Prospectus Supplement relating to such Preferred Securities.
9
The Subordinated Note Indenture does not contain provisions that
afford holders of Junior Subordinated Notes protection in the
event of a highly leveraged transaction involving the Company.
Subordination
The Junior Subordinated Notes are subordinated and junior in
right of payment to all Senior Indebtedness (as defined below)
of the Company. No payment of principal of (including redemption
payments, if any), or premium, if any, or interest on (including
Additional Interest (as defined below)) the Junior Subordinated
Notes may be made if (a) any Senior Indebtedness is not
paid when due and any applicable grace period with respect to
such default has ended with such default not being cured or
waived or otherwise ceasing to exist, or (b) the maturity
of any Senior Indebtedness has been accelerated because of a
default, or (c) notice has been given of the exercise of an
option to require repayment, mandatory payment or prepayment or
otherwise. Upon any payment or distribution of assets of the
Company to creditors upon any liquidation, dissolution,
winding-up, reorganization, assignment for the benefit of
creditors, marshalling of assets or liabilities, or any
bankruptcy, insolvency or similar proceedings of the Company,
the holders of Senior Indebtedness shall be entitled to receive
payment in full of all amounts due or to become due on or in
respect of all Senior Indebtedness before the holders of the
Junior Subordinated Notes are entitled to receive or retain any
payment or distribution. Subject to the prior payment of all
Senior Indebtedness, the rights of the holders of the Junior
Subordinated Notes will be subrogated to the rights of the
holders of Senior Indebtedness to receive payments and
distributions applicable to such Senior Indebtedness until all
amounts owing on the Junior Subordinated Notes are paid in full.
The term Senior Indebtedness means, with respect to
the Company, (i) any payment due in respect of indebtedness
of the Company, whether outstanding at the date of execution of
the Subordinated Note Indenture or incurred, created or assumed
after such date, (a) in respect of money borrowed
(including any financial derivative, hedging or futures contract
or similar instrument) and (b) evidenced by securities,
debentures, bonds, notes or other similar instruments issued by
the Company that, by their terms, are senior or senior
subordinated debt securities including, without limitation, all
such obligations under its indentures with various trustees;
(ii) all capital lease obligations; (iii) all
obligations issued or assumed as the deferred purchase price of
property, all conditional sale obligations and all obligations
of the Company under any title retention agreement (but
excluding trade accounts payable arising in the ordinary course
of business and long-term purchase obligations); (iv) all
obligations for the reimbursement of any letter of credit,
bankers acceptance, security purchase facility or similar
credit transaction; (v) all obligations of the type referred to
in clauses (i) through (iv) above of other persons the
payment of which the Company is responsible or liable as
obligor, guarantor or otherwise; and (vi) all obligations
of the type referred to in clauses (i) through (v) above of
other persons secured by any lien on any property or asset of
the Company (whether or not such obligation is assumed by the
Company), except for (1) any such indebtedness that is by
its terms subordinated to or that ranks equally with the Junior
Subordinated Notes and (2) any unsecured indebtedness
between or among the Company or its affiliates. Such Senior
Indebtedness shall continue to be Senior Indebtedness and be
entitled to the benefits of the subordination provisions
contained in the Subordinated Note Indenture irrespective of any
amendment, modification or waiver of any term of such Senior
Indebtedness.
The Subordinated Note Indenture does not limit the aggregate
amount of Senior Indebtedness that may be issued by the Company.
As of September 30, 2006, Senior Indebtedness of the
Company aggregated approximately $578,000,000. Since the Company
is a holding company, the right of the Company and, hence, the
right of creditors of the Company (including holders of Junior
Subordinated Notes) to participate in any distribution of the
assets of any subsidiary of the Company, whether upon
liquidation, reorganization or otherwise, is subject to prior
claims of creditors of each subsidiary.
Additional
Interest
Additional Interest is defined in the Subordinated
Note Indenture as (i) such additional amounts as may be
required so that the net amounts received and retained by a
holder of Junior Subordinated Notes (if the holder is a Trust)
after paying taxes, duties, assessments or governmental charges
of whatever nature (other than withholding taxes) imposed by the
United States or any other taxing authority will not be less
than the amounts the holder would have received had no such
taxes, duties, assessments or other governmental charges been
imposed; and (ii) any
10
interest due and not paid on an interest payment date, together
with interest on such interest due from such interest payment
date to the date of payment, compounded quarterly, on each
interest payment date.
Certain
Covenants
The Company covenants in the Subordinated Note Indenture, for
the benefit of the holders of each series of Junior Subordinated
Notes, that, (i) if at such time the Company shall have
given notice of its election to extend an interest payment
period for such series of Junior Subordinated Notes and such
extension shall be continuing, (ii) if at such time the
Company shall be in default with respect to its payment or other
obligations under the Guarantee with respect to the Trust
Securities, if any, related to such series of Junior
Subordinated Notes, or (iii) if at such time an Event of
Default under the Subordinated Note Indenture with respect to
such series of Junior Subordinated Notes shall have occurred and
be continuing, (a) the Company shall not declare or pay any
dividend or make any distributions with respect to, or redeem,
purchase, acquire or make a liquidation payment with respect to,
any of its capital stock, and (b) the Company shall not
make any payment of interest, principal or premium, if any, on
or repay, repurchase or redeem any debt securities (including
guarantees other than the Guarantees) issued by the Company
which rank equally with or junior to the Junior Subordinated
Notes. None of the foregoing, however, shall restrict
(i) any of the actions described in the preceding sentence
resulting from any reclassification of the Companys
capital stock or the exchange or conversion of one class or
series of the Companys capital stock for another class or
series of the Companys capital stock, (ii) the
purchase of fractional interests in shares of the Companys
capital stock pursuant to the conversion or exchange provisions
of such capital stock or the security being converted or
exchanged, (iii) dividends, payments or distributions
payable in shares of capital stock, (iv) redemptions,
purchases or other acquisitions of shares of capital stock in
connection with any employment contract, incentive plan, benefit
plan or other similar arrangement of the Company or any of its
subsidiaries or in connection with a dividend reinvestment or
stock purchase plan, or (v) any declaration of a dividend
in connection with implementation of any stockholders
rights plan, or the issuance of rights, stock or other property
under any such plan, or the redemption, repurchase or other
acquisition of any such rights pursuant thereto.
The Subordinated Note Indenture further provides that, for so
long as the Trust Securities of any Trust remain outstanding,
the Company covenants (i) to directly or indirectly
maintain 100% ownership of the Common Securities of such Trust;
provided, however, that any permitted successor of the Company
under the Subordinated Note Indenture may succeed to the
Companys ownership of such Common Securities, and
(ii) to use its reasonable efforts to cause such Trust
(a) to remain a statutory trust, except in connection with
the distribution of Junior Subordinated Notes to the holders of
Trust Securities in liquidation of such Trust, the redemption of
all of the Trust Securities of such Trust, or certain mergers,
consolidations or amalgamations, each as permitted by the
related Trust Agreement, and (b) to otherwise continue to
be classified as a grantor trust for United States federal
income tax purposes.
Events of
Default
The Subordinated Note Indenture provides that any one or more of
the following described events with respect to the Junior
Subordinated Notes of any series, which has occurred and is
continuing, constitutes an Event of Default with
respect to the Junior Subordinated Notes of such series:
(a) failure for 30 days to pay interest on the Junior
Subordinated Notes of such series, including any Additional
Interest (as defined in clause (ii) of the definition of
Additional Interest in the Subordinated Note Indenture) on such
unpaid interest, when due on an interest payment date other than
at maturity or upon earlier redemption; provided, however, that
a valid extension of the interest payment period by the Company
shall not constitute a default in the payment of interest for
this purpose; or
(b) failure for 30 days to pay Additional Interest (as
defined in clause (i) of the definition of Additional
Interest in the Subordinated Note Indenture); or
(c) failure to pay principal or premium, if any, or
interest, including Additional Interest (as defined in clause
(ii) of the definition of Additional Interest in the
Subordinated Note Indenture), on the Junior Subordinated Notes
of such series when due at maturity or upon earlier redemption;
or
11
(d) failure for three Business Days to deposit any sinking
fund payment when due by the terms of a Junior Subordinated Note
of such series; or
(e) failure to observe or perform any other covenant or
warranty of the Company in the Subordinated Note Indenture
(other than a covenant or warranty which has expressly been
included in the Subordinated Note Indenture solely for the
benefit of one or more series of Junior Subordinated Notes other
than such series) for 90 days after written notice to the
Company from the Subordinated Note Indenture Trustee or the
holders of at least 25% in principal amount of the outstanding
Junior Subordinated Notes of such series; or
(f) certain events of bankruptcy, insolvency or
reorganization of the Company.
The holders of not less than a majority in aggregate outstanding
principal amount of the Junior Subordinated Notes of any series
have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the
Subordinated Note Indenture Trustee with respect to the Junior
Subordinated Notes of such series. If a Subordinated Note
Indenture Event of Default occurs and is continuing with respect
to the Junior Subordinated Notes of any series, then the
Subordinated Note Indenture Trustee or the holders of not less
than 25% in aggregate outstanding principal amount of the Junior
Subordinated Notes of such series may declare the principal
amount of the Junior Subordinated Notes due and payable
immediately by notice in writing to the Company (and to the
Subordinated Note Indenture Trustee if given by the holders),
and upon any such declaration such principal amount shall become
immediately due and payable. At any time after such a
declaration of acceleration with respect to the Junior
Subordinated Notes of any series has been made and before a
judgment or decree for payment of the money due has been
obtained as provided in Article Five of the Subordinated Note
Indenture, the holders of not less than a majority in aggregate
outstanding principal amount of the Junior Subordinated Notes of
such series may rescind and annul such declaration and its
consequences if the default has been cured or waived and the
Company has paid or deposited with the Subordinated Note
Indenture Trustee a sum sufficient to pay all matured
installments of interest (including any Additional Interest) and
principal due otherwise than by acceleration and all sums paid
or advanced by the Subordinated Note Indenture Trustee,
including reasonable compensation and expenses of the
Subordinated Note Indenture Trustee.
A holder of Preferred Securities may institute a legal
proceeding directly against the Company, without first
instituting a legal proceeding against the Property Trustee or
any other person or entity, for enforcement of payment to such
holder of principal of or interest on the Junior Subordinated
Notes of the related series having a principal amount equal to
the aggregate stated liquidation amount of the Preferred
Securities of such holder on or after the due dates specified in
the Junior Subordinated Notes of such series.
The holders of not less than a majority in aggregate outstanding
principal amount of the Junior Subordinated Notes of any series
may, on behalf of the holders of all the Junior Subordinated
Notes of such series, waive any past default with respect to
such series, except (i) a default in the payment of
principal or interest or (ii) a default in respect of a
covenant or provision which under Article Nine of the
Subordinated Note Indenture cannot be modified or amended
without the consent of the holder of each outstanding Junior
Subordinated Note of such series affected.
Registration
and Transfer
The Company shall not be required to (i) issue, register
the transfer of or exchange Junior Subordinated Notes of any
series during a period of 15 days immediately preceding the date
notice is given identifying the Junior Subordinated Notes of
such series called for redemption, or (ii) issue, register
the transfer of or exchange any Junior Subordinated Notes so
selected for redemption, in whole or in part, except the
unredeemed portion of any Junior Subordinated Note being
redeemed in part.
Payment
and Paying Agent
Unless otherwise indicated in an applicable Prospectus
Supplement, payment of principal of any Junior Subordinated
Notes will be made only against surrender to the Paying Agent of
such Junior Subordinated Notes. Principal of and interest on
Junior Subordinated Notes will be payable, subject to any
applicable laws and regulations, at the office of such Paying
Agent or Paying Agents as the Company may designate from time to
time, except that, at the option of the Company, payment of any
interest may be made by wire transfer or by check mailed
12
to the address of the person entitled to an interest payment as
such address shall appear in the Security Register with respect
to the Junior Subordinated Notes. Payment of interest on Junior
Subordinated Notes on any interest payment date will be made to
the person in whose name the Junior Subordinated Notes (or
predecessor security) are registered at the close of business on
the record date for such interest payment.
Unless otherwise indicated in an applicable Prospectus
Supplement, the Subordinated Note Indenture Trustee will act as
Paying Agent with respect to the Junior Subordinated Notes. The
Company may at any time designate additional Paying Agents or
rescind the designation of any Paying Agents or approve a change
in the office through which any Paying Agent acts.
All moneys paid by the Company to a Paying Agent for the payment
of the principal of or interest on the Junior Subordinated Notes
of any series which remain unclaimed at the end of two years
after such principal or interest shall have become due and
payable will be repaid to the Company, and the holder of such
Junior Subordinated Notes will from that time forward look only
to the Company for payment of such principal and interest.
Modification
The Subordinated Note Indenture contains provisions permitting
the Company and the Subordinated Note Indenture Trustee, with
the consent of the holders of not less than a majority in
principal amount of the outstanding Junior Subordinated Notes of
each series that is affected, to modify the Subordinated Note
Indenture or the rights of the holders of the Junior
Subordinated Notes of such series; provided, that no such
modification may, without the consent of the holder of each
outstanding Junior Subordinated Note that is affected,
(i) change the stated maturity of the principal of, or any
installment of principal of or interest on, any Junior
Subordinated Note, or reduce the principal amount of any Junior
Subordinated Note or the rate of interest (including Additional
Interest) of any Junior Subordinated Note or any premium payable
upon the redemption of any Junior Subordinated Note, or change
the method of calculating the rate of interest on any Junior
Subordinated Note, or impair the right to institute suit for the
enforcement of any such payment on or after the stated maturity
of any Junior Subordinated Note (or, in the case of redemption,
on or after the redemption date), or (ii) reduce the
percentage of principal amount of the outstanding Junior
Subordinated Notes of any series, the consent of whose holders
is required for any such supplemental indenture, or the consent
of whose holders is required for any waiver (of compliance with
certain provisions of the Subordinated Note Indenture or certain
defaults under the Subordinated Note Indenture and their
consequences) provided for in the Subordinated Note Indenture,
or (iii) modify any of the provisions of the Subordinated
Note Indenture relating to supplemental indentures, waiver of
past defaults, or waiver of certain covenants, except to
increase any such percentage or to provide that certain other
provisions of the Subordinated Note Indenture cannot be modified
or waived without the consent of the holder of each outstanding
Junior Subordinated Note that is affected, or (iv) modify
the provisions of the Subordinated Note Indenture with respect
to the subordination of the Junior Subordinated Notes in a
manner adverse to such holder.
In addition, the Company and the Subordinated Note Indenture
Trustee may execute, without the consent of any holders of
Junior Subordinated Notes, any supplemental indenture for
certain other usual purposes, including the creation of any new
series of Junior Subordinated Notes.
Consolidation,
Merger and Sale
The Company shall not consolidate with or merge into any other
corporation or convey, transfer or lease its properties and
assets substantially as an entirety to any person, unless
(1) such other corporation or person is a corporation
organized and existing under the laws of the United States, any
state of the United States or the District of Columbia and such
other corporation or person expressly assumes, by supplemental
indenture executed and delivered to the Subordinated Note
Indenture Trustee, the payment of the principal of (and premium,
if any) and interest (including Additional Interest) on all the
Junior Subordinated Notes and the performance of every covenant
of the Subordinated Note Indenture on the part of the Company to
be performed or observed; (2) immediately after giving
effect to such transactions, no Event of Default, and no event
which, after notice or lapse of time or both, would become an
Event of Default, shall have happened and be continuing; and
(3) the Company has delivered to the Subordinated Note
Indenture Trustee an officers certificate and an opinion
of counsel, each stating that such
13
transaction complies with the provisions of the Subordinated
Note Indenture governing consolidation, merger, conveyance,
transfer or lease and that all conditions precedent to the
transaction have been complied with.
Information
Concerning the Subordinated Note Indenture Trustee
The Subordinated Note Indenture Trustee, prior to an Event of
Default with respect to Junior Subordinated Notes of any series,
undertakes to perform, with respect to Junior Subordinated Notes
of such series, only such duties as are specifically set forth
in the Subordinated Note Indenture and, in case an Event of
Default with respect to Junior Subordinated Notes of any series
has occurred and is continuing, shall exercise, with respect to
Junior Subordinated Notes of such series, the same degree of
care as a prudent individual would exercise in the conduct of
his or her own affairs. Subject to such provision, the
Subordinated Note Indenture Trustee is under no obligation to
exercise any of the powers vested in it by the Subordinated Note
Indenture at the request of any holder of Junior Subordinated
Notes of any series, unless offered reasonable indemnity by such
holder against the costs, expenses and liabilities which might
be incurred by the Subordinated Note Indenture Trustee. The
Subordinated Note Indenture Trustee is not required to expend or
risk its own funds or otherwise incur any financial liability in
the performance of its duties if the Subordinated Note Indenture
Trustee reasonably believes that repayment or adequate indemnity
is not reasonably assured to it.
The Subordinated Note Indenture Trustee may serve as Senior Note
Indenture Trustee, as Property Trustee and as Guarantee Trustee
under the Trust Agreement relating to the Preferred Securities
of a Trust. The Company and certain of its subsidiaries may
maintain deposit accounts and banking relationships with the
Subordinated Note Indenture Trustee. The Subordinated Note
Indenture Trustee and certain of its affiliates may also serve
as trustee under other indentures pursuant to which securities
of the Company and certain subsidiaries of the Company are
outstanding.
Governing
Law
The Subordinated Note Indenture and the Junior Subordinated
Notes will be governed by, and construed in accordance with, the
internal laws of the State of New York.
Miscellaneous
The Company will have the right at all times to assign any of
its rights or obligations under the Subordinated Note Indenture
to a direct or indirect wholly-owned subsidiary of the Company;
provided, that, in the event of any such assignment, the Company
will remain primarily liable for all such obligations. Subject
to the foregoing, the Subordinated Note Indenture will be
binding upon and inure to the benefit of the parties to the
Subordinated Note Indenture and their respective successors and
assigns.
DESCRIPTION
OF THE PREFERRED SECURITIES
Each Trust may issue only one series of Preferred Securities
having terms described in the Prospectus Supplement relating to
such Trust. The Trust Agreement of each Trust will authorize the
Administrative Trustees, on behalf of the Trust, to issue the
Preferred Securities of such Trust. The Preferred Securities of
each Trust will have such terms, including distributions,
redemption, voting, liquidation rights and such other preferred,
deferral or other special rights or such restrictions as shall
be set forth in the Trust Agreement of such Trust. Reference is
made to the Prospectus Supplement relating to the Preferred
Securities of a Trust for specific terms, including (i) the
distinctive designation of such Preferred Securities;
(ii) the number of Preferred Securities issued by such
Trust; (iii) the annual distribution rate (or method of
determining such rate) for Preferred Securities of such Trust
and the date or dates on which such distributions shall be
payable; (iv) whether distributions on such Preferred
Securities shall be cumulative and, in the case of Preferred
Securities having cumulative distribution rights, the date or
dates, or method of determining the date or dates, from which
distributions on such Preferred Securities shall be cumulative;
(v) the amount or amounts that shall be paid out of the
assets of such Trust to the holders of the Preferred Securities
of such Trust upon voluntary or involuntary dissolution,
winding-up or termination of such Trust; (vi) the
obligation, if any, of such Trust to purchase or redeem such
Preferred Securities and the price or prices at which, the
period or periods within which, and the terms and conditions
upon which such Preferred Securities shall be
14
purchased or redeemed, in whole or in part, pursuant to such
obligation; (vii) the date or dates, if any, after which
such Preferred Securities may be converted or exchanged at the
option of the holder into or for shares of Common Stock of the
Company and the terms for any such conversion or exchange;
(viii) the voting rights, if any, of such Preferred
Securities in addition to those required by law, including the
number of votes per Preferred Security and any requirement for
the approval by the holders of Preferred Securities as a
condition to specified action or amendments to the Trust
Agreement of such Trust; (ix) the rights, if any, to defer
distributions on the Preferred Securities by extending the
interest payment period on the related Junior Subordinated
Notes; and (x) any other relative rights, preferences,
privileges, limitations or restrictions of such Preferred
Securities not inconsistent with the Trust Agreement of such
Trust or applicable law. All Preferred Securities offered by
this Prospectus will be guaranteed by the Company to the extent
set forth under Description of the Guarantees. Any
material United States federal income tax considerations
applicable to an offering of Preferred Securities will be
described in the Prospectus Supplement relating to the Preferred
Securities.
DESCRIPTION
OF THE GUARANTEES
Set forth below is a summary of information concerning the
Guarantees that will be executed and delivered by the Company
for the benefit of the holders of Preferred Securities of the
respective Trusts from time to time. Each Guarantee will be
qualified as an indenture under the 1939 Act. The Subordinated
Note Indenture Trustee may act as indenture trustee under each
Guarantee (the Guarantee Trustee) for purposes of
the 1939 Act. The terms of the respective Guarantees will be
those set forth in such Guarantee and those made part of such
Guarantee by the 1939 Act. The following summary does not
purport to be complete and is subject in all respects to the
provisions of, and is qualified in its entirety by reference to,
the Guarantees, the form of which is filed as an exhibit to the
Registration Statement of which this Prospectus forms a part,
and the 1939 Act. Each Guarantee will be held by the Guarantee
Trustee for the benefit of holders of the Preferred Securities
to which it relates.
General
Pursuant to each Guarantee, the Company will irrevocably and
unconditionally agree, to the extent set forth in the Guarantee,
to pay in full, to the holders of the related Preferred
Securities, the Guarantee Payments (as defined below), to the
extent not paid by, or on behalf of, the related Trust,
regardless of any defense, right of set-off or counterclaim that
the Company may have or assert against any person. The following
payments or distributions with respect to the Preferred
Securities of any Trust to the extent not paid or made by, or on
behalf of, such Trust will be subject to the Guarantee related
to the Preferred Securities (without duplication): (i) any
accrued and unpaid distributions required to be paid on the
Preferred Securities of such Trust but if and only if and to the
extent that such Trust has funds legally and immediately
available for these distributions, (ii) the redemption
price, including all accrued and unpaid distributions to the
date of redemption (the Redemption Price), with
respect to any Preferred Securities called for redemption by
such Trust, but if and only to the extent such Trust has funds
legally and immediately available to pay such Redemption Price,
and (iii) upon a dissolution, winding-up or termination of
such Trust (other than in connection with the distribution of
Junior Subordinated Notes to the holders of Trust Securities of
such Trust or the redemption of all of the Preferred Securities
of such Trust), the lesser of (a) the aggregate of the
liquidation amount and all accrued and unpaid distributions on
the Preferred Securities of such Trust to the date of payment,
to the extent such Trust has funds legally and immediately
available for such purpose, and (b) the amount of assets of
such Trust remaining available for distribution to holders of
Preferred Securities of such Trust in liquidation of such Trust
(the Guarantee Payments). The Companys
obligation to make a Guarantee Payment may be satisfied by
direct payment of the required amounts by the Company to the
holders of the related Preferred Securities or by causing the
related Trust to pay such amounts to such holders.
Each Guarantee will be a guarantee of the Guarantee Payments
with respect to the related Preferred Securities from the time
of issuance of such Preferred Securities, but will not apply to
the payment of distributions and other payments on such
Preferred Securities when the related Trust does not have
sufficient funds legally and immediately available to make such
distributions or other payments. If the Company does not make
interest payments on the Junior Subordinated Notes held by the
Property Trustee under any Trust, such Trust will not make
distributions on its Preferred Securities.
15
Subordination
The Companys obligations under each Guarantee to make the
Guarantee Payments will constitute an unsecured obligation of
the Company and will rank (i) subordinate and junior in
right of payment to all other liabilities of the Company,
including the Junior Subordinated Notes, except those
obligations or liabilities made equal to or subordinate by their
terms, (ii) equal to the most senior preferred or
preference stock now issued by the Company or issued at a later
date by the Company and with any guarantee now entered into by
the Company or entered into at a later date by the Company in
respect of any preferred or preference securities of any
affiliate of the Company, and (iii) senior to all common
stock of the Company. The terms of the Preferred Securities will
provide that each holder of Preferred Securities by acceptance
of Preferred Securities agrees to the subordination provisions
and other terms of the Guarantee related to the Preferred
Securities.
Each Guarantee will constitute a guarantee of payment and not of
collection (that is, the guaranteed party may institute a legal
proceeding directly against the guarantor to enforce its rights
under the guarantee without first instituting a legal proceeding
against any other person or entity).
Amendments
and Assignment
Except with respect to any changes that do not materially and
adversely affect the rights of holders of the related Preferred
Securities (in which case no consent will be required), each
Guarantee may be amended only with the prior approval of the
holders of not less than
662/3%
in liquidation amount of such outstanding Preferred Securities.
The manner of obtaining any such approval of holders of the
Preferred Securities will be as set forth in an accompanying
Prospectus Supplement. All guarantees and agreements contained
in each Guarantee shall bind the successors, assigns, receivers,
trustees and representatives of the Company and shall inure to
the benefit of the holders of the related Preferred Securities
then outstanding.
Termination
Each Guarantee will terminate and be of no further force and
effect as to the related Preferred Securities upon full payment
of the Redemption Price of all such Preferred Securities, upon
distribution of Junior Subordinated Notes to the holders of such
Preferred Securities, or upon full payment of the amounts
payable upon liquidation of the related Trust. Each Guarantee
will continue to be effective or will be reinstated, as the case
may be, if at any time any holder of the related Preferred
Securities must restore payment of any sums paid with respect to
such Preferred Securities or under such Guarantee.
Events of
Default
An event of default under each Guarantee will occur upon the
failure by the Company to perform any of its payment obligations
under such Guarantee. The holders of a majority in liquidation
amount of the Preferred Securities to which any Guarantee
relates have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the
Guarantee Trustee in respect of such Guarantee or to direct the
exercise of any trust or power conferred upon the Guarantee
Trustee under such Guarantee. Any holder of the related
Preferred Securities may institute a legal proceeding directly
against the Company to enforce its rights under such Guarantee
without first instituting a legal proceeding against the
Guarantee Trustee or any other person or entity. The holders of
a majority in liquidation amount of Preferred Securities of any
series may, by vote, on behalf of the holders of all the
Preferred Securities of such series, waive any past event of
default and its consequences.
Information
Concerning the Guarantee Trustee
The Guarantee Trustee, prior to the occurrence of any event of
default with respect to any Guarantee and after the curing or
waiving of all events of default with respect to such Guarantee,
undertakes to perform only such duties as are specifically set
forth in such Guarantee and, in case an event of default has
occurred, shall exercise the same degree of care as a prudent
individual would exercise in the conduct of his or her own
affairs. Subject to such provisions, the Guarantee Trustee is
under no obligation to exercise any of the powers vested in it
by any Guarantee at the request of any holder of the related
Preferred Securities, unless offered reasonable indemnity
against the costs, expenses and liabilities which might be
incurred by the Guarantee Trustee.
16
The Guarantee Trustee may also serve as Property Trustee and as
Subordinated Note Indenture Trustee. The Company and certain of
its subsidiaries may maintain deposit accounts and banking
relationships with the Guarantee Trustee. The Guarantee Trustee
and certain of its affiliates may serve as trustee under other
indentures pursuant to which securities of the Company and
certain subsidiaries of the Company are outstanding.
Governing
Law
Each Guarantee will be governed by, and construed in accordance
with, the internal laws of the State of New York.
The
Agreements as to Expenses and Liabilities
Pursuant to an Agreement as to Expenses and Liabilities to be
entered into by the Company under each Trust Agreement, the
Company will irrevocably and unconditionally guarantee to each
person or entity to whom each Trust becomes indebted or liable
the full payment of any indebtedness, expenses or liabilities of
such Trust, other than obligations of such Trust to pay to the
holders of the related Preferred Securities or other similar
interests in such Trust the amounts due such holders pursuant to
the terms of such Preferred Securities or such other similar
interests, as the case may be.
RELATIONSHIP
AMONG THE PREFERRED SECURITIES,
THE JUNIOR SUBORDINATED NOTES AND THE GUARANTEES
As long as payments of interest and other payments are made when
due on each series of Junior Subordinated Notes issued to a
Trust, such payments will be sufficient to cover distributions
and payments due on the related Trust Securities of such Trust
primarily because (i) the aggregate principal amount of
each series of Junior Subordinated Notes will be equal to the
sum of the aggregate stated liquidation amount of the related
Trust Securities; (ii) the interest rate and interest and
other payment dates on each series of Junior Subordinated Notes
will match the distribution rate and distribution and other
payment dates for the related Preferred Securities;
(iii) the Company shall pay for all costs and expenses of
each Trust pursuant to the Agreements as to Expenses and
Liabilities; and (iv) each Trust Agreement provides that
the Securities Trustees under each Trust Agreement shall not
cause or permit the Trust to, among other things, engage in any
activity that is not consistent with the purposes of the Trust.
Payments of distributions (to the extent funds for such purpose
are legally and immediately available) and other payments due on
the Preferred Securities (to the extent funds for such purpose
are legally and immediately available) will be guaranteed by the
Company as and to the extent set forth under Description
of the Guarantees. If the Company does not make interest
payments on any series of Junior Subordinated Notes, it is not
expected that the related Trust will have sufficient funds to
pay distributions on its Preferred Securities. Each Guarantee is
a guarantee from the time of its issuance, but does not apply to
any payment of distributions unless and until the related Trust
has sufficient funds legally and immediately available for the
payment of such distributions.
If the Company fails to make interest or other payments on any
series of Junior Subordinated Notes when due (taking into
account any extension period as described in the applicable
Prospectus Supplement), the Trust Agreement provides a mechanism
that allows the holders of the related Preferred Securities to
appoint a substitute Property Trustee. Such holders may also
direct the Property Trustee to enforce its rights under the
Junior Subordinated Notes of such series, including proceeding
directly against the Company to enforce such Junior Subordinated
Notes. If the Property Trustee fails to enforce its rights under
any series of Junior Subordinated Notes, to the fullest extent
permitted by applicable law, any holder of related Preferred
Securities may institute a legal proceeding directly against the
Company to enforce the Property Trustees rights under such
series of Junior Subordinated Notes without first instituting
any legal proceeding against the Property Trustee or any other
person or entity. Notwithstanding the foregoing, a holder of
Preferred Securities may institute a legal proceeding directly
against the Company, without first instituting a legal
proceeding against the Property Trustee or any other person or
entity, for enforcement of payment to such holder of principal
of or interest on Junior Subordinated Notes of the related
series having a principal amount equal to the aggregate stated
liquidation amount of the Preferred Securities of such holder on
or after the due dates specified in the Junior Subordinated
Notes of such series.
17
If the Company fails to make payments under any Guarantee, such
Guarantee provides a mechanism that allows the holders of the
Preferred Securities to which such Guarantee relates to direct
the Guarantee Trustee to enforce its rights under such
Guarantee. In addition, any holder of Preferred Securities may
institute a legal proceeding directly against the Company to
enforce the Guarantee Trustees rights under the related
Guarantee without first instituting a legal proceeding against
the Guarantee Trustee or any other person or entity.
Each Guarantee, the Subordinated Note Indenture, the Junior
Subordinated Notes of the related series, the related Trust
Agreement and the related Agreement as to Expenses and
Liabilities, as described above, constitute a full and
unconditional guarantee by the Company of the payments due on
the related series of Preferred Securities.
Upon any voluntary or involuntary dissolution, winding-up or
termination of any Trust, unless Junior Subordinated Notes of
the related series are distributed in connection with such
action, the holders of Preferred Securities of such Trust will
be entitled to receive, out of assets legally available for
distribution to holders, a liquidation distribution in cash as
described in the applicable Prospectus Supplement. Upon any
voluntary or involuntary liquidation or bankruptcy of the
Company, the Property Trustee, as holder of the related series
of Junior Subordinated Notes, would be a subordinated creditor
of the Company, subordinated in right of payment to all Senior
Indebtedness, but entitled to receive payment in full of
principal and interest, before any stockholders of the Company
receive payments or distributions. Because the Company is
guarantor under each Guarantee and has agreed to pay for all
costs, expenses and liabilities of each Trust (other than the
Trusts obligations to holders of the Preferred Securities)
pursuant to the related Agreement as to Expenses and
Liabilities, the positions of a holder of Preferred Securities
and a holder of Junior Subordinated Notes of the related series
relative to other creditors and to stockholders of the Company
in the event of liquidation or bankruptcy of the Company would
be substantially the same.
Since the Company is a holding company, the right of the Company
and, hence, the right of creditors of the Company (including
holders of Junior Subordinated Notes) to participate in any
distribution of the assets of any subsidiary of the Company,
whether upon liquidation, reorganization or otherwise, is
subject to prior claims of creditors of each subsidiary.
A default or event of default under any Senior Indebtedness
would not constitute a default or Event of Default under the
Subordinated Note Indenture. However, in the event of payment
defaults under, or acceleration of, Senior Indebtedness, the
subordination provisions of the Junior Subordinated Notes
provide that no payments may be made in respect of the Junior
Subordinated Notes until such Senior Indebtedness has been paid
in full or any payment default of Senior Indebtedness has been
cured or waived. Failure to make required payments on the Junior
Subordinated Notes of any series would constitute an Event of
Default under the Subordinated Note Indenture with respect to
the Junior Subordinated Notes of such series except that failure
to make interest payments on the Junior Subordinated Notes of
such series will not be an Event of Default during an extension
period as described in the applicable Prospectus Supplement.
PLAN OF
DISTRIBUTION
The Company may sell the Common Stock, the Senior Notes and the
Junior Subordinated Notes and the Trusts may sell the Preferred
Securities in one or more of the following ways from time to
time: (i) to underwriters for resale to the public or to
institutional investors; (ii) directly to institutional
investors; or (iii) through agents to the public or to
institutional investors. The Prospectus Supplement with respect
to Common Stock and each series of Senior Notes, Junior
Subordinated Notes or Preferred Securities will set forth the
terms of the offering of such Common Stock, Senior Notes, Junior
Subordinated Notes or Preferred Securities, including the name
or names of any underwriters or agents, the purchase price of
such Common Stock, Senior Notes, Junior Subordinated Notes or
Preferred Securities and the proceeds to the Company or the
applicable Trust from such sale, any underwriting discounts or
agency fees and other items constituting underwriters or
agents compensation, any initial public offering price,
any discounts or concessions allowed or reallowed or paid to
dealers and any securities exchange on which such Common Stock,
Senior Notes, Junior Subordinated Notes or Preferred Securities
may be listed.
If underwriters participate in the sale, such Common Stock,
Senior Notes, Junior Subordinated Notes or Preferred Securities
will be acquired by the underwriters for their own account and
may be resold from time to time
18
in one or more transactions, including negotiated transactions,
at a fixed public offering price or at varying prices determined
at the time of sale.
Unless otherwise set forth in the Prospectus Supplement, the
obligations of the underwriters to purchase any series of Common
Stock, Senior Notes, Junior Subordinated Notes or Preferred
Securities will be subject to certain conditions precedent and
the underwriters will be obligated to purchase all of such
series of Common Stock, Senior Notes, Junior Subordinated Notes
or Preferred Securities, if any are purchased.
Underwriters and agents may be entitled under agreements entered
into with the Company and/or the applicable Trust to
indemnification against certain civil liabilities, including
liabilities under the 1933 Act. Underwriters and agents and
their affiliates may engage in transactions with, or perform
services for, the Company in the ordinary course of business.
Each series of Common Stock, Senior Notes, Junior Subordinated
Notes or Preferred Securities will be a new issue of securities
and will have no established trading market. Any underwriters to
whom Common Stock, Senior Notes, Junior Subordinated Notes or
Preferred Securities are sold for public offering and sale may
make a market in such Common Stock, Senior Notes, Junior
Subordinated Notes or Preferred Securities, but such
underwriters will not be obligated to do so and may discontinue
any market making at any time without notice. The Common Stock,
Senior Notes, Junior Subordinated Notes or Preferred Securities
may or may not be listed on a national securities exchange.
LEGAL
MATTERS
Certain matters of Delaware law relating to the validity of the
Preferred Securities will be passed upon on behalf of the
Company and the Trusts by Richards, Layton & Finger,
P.A., Wilmington, Delaware, special Delaware counsel to the
Company and the Trusts. The validity of the Common Stock, the
Senior Notes, the Junior Subordinated Notes, the Guarantees and
certain matters relating to such securities will be passed upon
on behalf of the Company by Troutman Sanders LLP, Atlanta,
Georgia. Certain legal matters will be passed upon for the
underwriters by Dewey Ballantine LLP, New York, New York. From
time to time, Dewey Ballantine LLP acts as counsel to affiliates
of the Company for some matters.
EXPERTS
The consolidated financial statements, the related consolidated
financial statement schedule and managements report on the
effectiveness of internal control over financial reporting
incorporated in this prospectus by reference from the
Companys Annual Report on
Form 10-K
have been audited by Deloitte & Touche LLP, an independent
registered public accounting firm, as stated in their reports,
which are incorporated herein by reference and have been so
incorporated in reliance upon the reports of such firm given
upon their authority as experts in accounting and auditing.
19
$500,000,000
Series 2007A %
Senior Notes
due January 15,
2012
PROSPECTUS SUPPLEMENT
January , 2007
Joint Book-Running Managers
|
|
Barclays
Capital |
Lehman
Brothers |
Co-Managers
Morgan Keegan & Company, Inc.
|
|
|
SunTrust Robinson Humphrey
|
|
|
The Williams Capital Group, L.P.
|