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proceeds were to be added to petitioner's working capital for
ultimate application to the cost of its construction project,
including the payment of short-term borrowings made to provide
funds for the construction project. Petitioner also stated the
following in its petition to the Public Service Commission of
Indiana:
It is believed that the Notes issued in conjunction
with the Finance Subsidiary's issue and sale of the
Euronotes, could be issued at a relatively favorable
interest rate compared to domestically issued,
unsecured long-term debt of petitioner and would allow
petitioner additional flexibility in funding its
construction program.
On September 25, 1981, the Public Service Commission of
Indiana issued a certificate of authority providing that
petitioner was authorized to borrow the proceeds of the Euronote
issue and, in return, was authorized to issue its note in an
amount not to exceed $75 million to Finance, at an interest rate
which would be 1 percent greater than that borne by the
Euronotes. The certificate of authority also provided that
petitioner could unconditionally guarantee the amount of
principal, interest, and premium, if any, on the Euronotes in the
event of a default by Finance and that the guaranty would be a
direct unsecured obligation of petitioner and would rank equally
and ratably with all other unsecured senior debt of petitioner.
On October 6, 1981, Finance was authorized by its managing
director to issue and sell $70 million of guaranteed notes that
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