sv3
As filed with the Securities and Exchange Commission on
January 20, 2006
Registration
Nos. 333-
333- -01
333- -02
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
HAWAIIAN ELECTRIC COMPANY, INC.
(Exact name of registrant as specified in its charter)
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Hawaii |
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99-0040500 |
(State or other jurisdiction of
incorporation or organization) |
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(I.R.S. Employer Identification
No.) |
900 Richards Street,
Honolulu, Hawaii 96813
(808) 543-7771
(Address, including zip code, and telephone number, including
area code, of registrant’s principal executive offices)
HAWAII ELECTRIC LIGHT COMPANY, INC.
(Exact name of registrant as specified in its charter)
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Hawaii |
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99-0041070 |
(State or other jurisdiction of
incorporation or organization) |
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(I.R.S. Employer Identification
No.) |
1200 Kilauea Avenue,
Hilo, Hawaii 96720
(808) 935-1171
(Address, including zip code, and telephone number, including
area code, of registrant’s principal executive offices)
MAUI ELECTRIC COMPANY, LIMITED
(Exact name of registrant as specified in its charter)
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Hawaii |
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99-0047800 |
(State or other jurisdiction of
incorporation or organization) |
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(I.R.S. Employer Identification
No.) |
210 West Kamehameha Avenue,
Kahului, Hawaii 96732
(808) 871-8461
(Address, including zip code, and telephone number, including
area code, of registrant’s principal executive offices)
Tayne S.Y. Sekimura
Financial Vice President
Hawaiian Electric Company, Inc.
900 Richards Street,
Honolulu, Hawaii 96813
(808) 543-7840
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
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David J.
Reber, Esq. |
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Jeffrey J.
Delaney, Esq. |
Goodsill Anderson
Quinn & Stifel |
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Pillsbury Winthrop Shaw Pittman
LLP |
A Limited Liability Law
Partnership LLP |
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1540 Broadway |
1099 Alakea Street |
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New York, New York
10036-4039 |
Honolulu, Hawaii 96813 |
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(212) 858-1000 |
(808) 547-5600 |
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Approximate date of commencement of proposed sale to public:
As soon as practicable after the effective date of this
Registration Statement.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans,
please check the following
box. o
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to
Rule 415 under the Securities Act of 1933, other than
securities offered only in connection with dividend or interest
reinvestment plans, check the following
box. o
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act,
please check the following box and list the Securities Act
registration statement number of the earlier effective
registration statement for the same
offering. o
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following
box and list the Securities Act registration statement number of
the earlier effective registration statement for the same
offering. o
If this Form is a registration statement pursuant to General
Instruction I.D. or a post-effective amendment thereto that
shall become effective upon filing with the Commission pursuant
to Rule 462(e) under the Securities Act, check the
following
box. o
If this Form is a post-effective amendment to a registration
statement filed pursuant to General Instruction I.D. filed
to register additional securities or additional classes of
securities pursuant to Rule 413(b) under the Securities
Act, check the following
box. o
(Calculation of Registration Fee on following page)
CALCULATION OF REGISTRATION FEE
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Proposed Maximum |
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Proposed Maximum |
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Title of Each Class of Securities |
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Amount to be |
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Offering Price Per |
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Aggregate Offering |
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Amount of |
to be Registered |
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Registered |
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Unit(1)(2) |
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Price(1)(2) |
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Registration Fee |
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Hawaiian Electric Company, Inc.
Notes
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$100,000,000
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100%
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$100,000,000
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$10,700
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Hawaii Electric Light Company, Inc.
Notes
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$50,000,000
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100%
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$50,000,000
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$5,350
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Maui Electric Company, Limited Notes
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$15,000,000
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100%
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$15,000,000
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$1,605
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Hawaiian Electric Company, Inc.
Guarantees with respect to the Hawaii Electric Light Company,
Inc. Notes and the Maui Electric Company, Limited Notes
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(3)
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(3)
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(3)
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(3)
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Total
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$165,000,000
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100%
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$165,000,000
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$17,655
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(1) |
Estimated solely for the purpose of determining the registration
fee. |
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(2) |
Exclusive of accrued interest, if any. |
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(3) |
Pursuant to Rule 457(n), no separate fee is payable for the
Guarantees. |
The Registrants hereby amend this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the Registrants shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a)
of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission,
acting pursuant to said Section 8(a), may determine.
The information in this preliminary
prospectus is not complete and may be changed. These securities
may not be sold until the registration statement filed with the
Securities and Exchange Commission is effective. This
preliminary prospectus is not an offer to sell these securities
nor does it seek 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 20, 2006.
$100,000,000
Hawaiian Electric Company, Inc.
% Notes due 2036
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$50,000,000
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$15,000,000
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Hawaii Electric Light |
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Maui Electric Company, |
Company, Inc. |
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Limited |
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% Notes
due 2036
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% Notes due 2036
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Fully and Unconditionally Guaranteed by
Hawaiian Electric Company, Inc.
Hawaiian Electric Company, Inc. (“HECO”), Hawaii
Electric Light Company, Inc. (“HELCO”) and Maui
Electric Company, Limited (“MECO”) (collectively, the
“Companies”) are offering $100,000,000, $50,000,000
and $15,000,000 aggregate principal amount, respectively, of
their respective Notes due 2036 (referred to as the “HECO
Notes”, the “HELCO Notes” and the “MECO
Notes”, respectively, and, collectively, as the
“Notes”) pursuant to this prospectus.
The Companies will pay interest on the Notes on March 1 and
September 1 of each year. The first such payment will be
made on September 1, 2006. The Notes will be issued only in
denominations of $1,000 and integral multiples thereof. The
Notes will mature on March 1, 2036. Each of the Companies,
at its option, may redeem its Notes, in whole or in part, on any
business day on or
after ,
20 , at a redemption price equal
to % of the principal amount of the
Notes being redeemed, together with accrued and unpaid interest
thereon to the date of redemption. Each of the HELCO Notes and
the MECO Notes will be fully and unconditionally guaranteed by
HECO.
The Notes of each Company will be that Company’s senior
unsecured obligations and will rank equally with all of its
other unsecured and unsubordinated debt outstanding from time to
time.
The address of HECO’s principal executive offices is 900
Richards Street, Honolulu, Hawaii 96813 and its telephone number
is (808) 543-7771. The address of HELCO’s principal
executive offices is 1200 Kilauea Avenue, Hilo, Hawaii 96720 and
its telephone number is (808) 935-1171. The address of
MECO’s principal executive offices is 210 West
Kamehameha Avenue, Kahului, Hawaii 96732 and its telephone
number is (808) 871-8461.
See “Risk Factors” beginning on page 3 to read
about certain factors you should consider before buying the
Notes.
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. Any
representation to the contrary is a criminal offense.
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Proceeds, Before | |
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Initial Public | |
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Underwriting | |
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Expenses, to | |
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Offering Price | |
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Discounts | |
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Each Company | |
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Per HECO Note
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Total
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$ |
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$ |
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$ |
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Per HELCO Note
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% |
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Total
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$ |
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$ |
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$ |
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Per MECO Note
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% |
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Total
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$ |
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$ |
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$ |
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The initial public offering price set forth above does not
include accrued interest, if any. Interest on the Notes will
accrue
from ,
2006 and must be paid by the purchasers if the Notes are
delivered
after ,
2006.
The underwriters expect to deliver the Notes through the
facilities of The Depository Trust Company against payment in
New York, New York on or
about ,
2006.
Goldman, Sachs & Co.
Prospectus
dated ,
2006.
PROSPECTUS SUMMARY
The following information should be read together with the
information contained in other parts of this prospectus. It may
not contain all the information that is important to you. In
this prospectus, unless the context otherwise requires, we refer
to Hawaiian Electric Company, Inc. (“HECO”) and to its
electric utility subsidiaries, Hawaii Electric Light Company,
Inc. (“HELCO”) and Maui Electric Company, Limited
(“MECO”), collectively, as the “Companies”
or “we” or “us”. You should carefully read
this entire prospectus to understand fully the terms of the
Notes and the related guarantees provided by HECO. You should
pay special attention to the “Risk Factors” section of
this prospectus to determine whether an investment in the Notes
is appropriate for you. You should also read the information
that is “incorporated by reference” from documents
filed by HECO with the Securities and Exchange Commission (the
“SEC”). This prospectus may add to, update or change
information in incorporated documents. If the information in
this prospectus is inconsistent with the information in such
incorporated documents, the information in this prospectus will
apply and supersede that information in the incorporated
documents, unless the incorporated documents are filed with the
SEC after the date of this prospectus, in which case the
information in the incorporated document will apply.
The Companies
HECO, HELCO and MECO, each a Hawaii corporation, are regulated
operating electric public utilities providing the only electric
public utility service on the islands of Oahu; Hawaii; and Maui,
Lanai and Molokai, respectively. These five islands collectively
include approximately 95 percent of the State of
Hawaii’s population. The utilities are regulated by the
Hawaii Public Utilities Commission (the “PUC”). On
December 29, 2005, the Companies applied for PUC approval
of the issuance of the Notes. The Notes may not be sold until
such approval is obtained.
Ratio of Earnings to Fixed Charges
HECO’s consolidated ratio of earnings to fixed charges was
as follows for the periods indicated:
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Nine Months | |
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Ended | |
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Years Ended December 31, | |
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September 30, | |
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2000 | |
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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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Ratio of Earnings to Fixed Charges
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3.39 |
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3.51 |
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3.71 |
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3.36 |
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3.49 |
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3.79 |
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3.24 |
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For purposes of calculating the ratio of earnings to fixed
charges, “earnings” represent the sum of
(i) pretax income before preferred stock dividends of HECO
and before adjustment for undistributed income or loss from
equity investees and (ii) fixed charges (as hereinafter
defined, but excluding the allowance for borrowed funds used
during construction). “Fixed charges” represent the
sum of (i) interest, whether capitalized or expensed,
(ii) amortization of debt expense and discount or premium
related to any indebtedness, whether capitalized or expensed,
(iii) the estimate of the interest within rental expense,
(iv) the preferred stock dividend requirements of HELCO and
MECO, increased to an amount representing the pretax earnings
required to cover such dividend requirements and (v) in
2003 and prior years, when the trust subsidiaries were
consolidated, the preferred securities distribution requirements
of the trust subsidiaries.
1
The Offering
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Securities Offered |
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$100,000,000 % HECO
Notes due 2036 |
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$ 50,000,000 % HELCO
Notes due 2036 |
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$ 15,000,000 % MECO
Notes due 2036 |
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HECO Guarantees |
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Each of the HELCO Notes and MECO Notes will be fully and
unconditionally guaranteed by HECO. |
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Ranking |
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The Notes of each Company will be that Company’s senior
unsecured obligations and will rank equally with all of its
other unsecured and unsubordinated debt outstanding from time to
time. The guarantees of HECO will be senior unsecured
obligations of HECO and will rank equally with all of its other
unsecured and unsubordinated debt outstanding from time to time,
including the HECO Notes. The Notes of each Company will rank
junior to any future secured debt incurred by that Company. |
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Stated Maturity |
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March 1, 2036, or the next succeeding Business Day. |
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Optional Redemption |
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Each of the Companies, at its option, may redeem its Notes, in
whole or in part, on any business day on or
after ,
20 , at a redemption price equal
to % of the principal amount of
the Notes being redeemed, together with accrued interest to the
redemption date. |
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Sinking Fund |
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None. |
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Use of Proceeds |
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For capital expenditures and to repay short-term indebtedness
(including borrowings from affiliates) that was incurred to
finance and refinance capital expenditures. See “Use of
Proceeds.” |
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Form and Denomination |
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The Notes will be issued in fully registered form in
denominations of $1,000 and in integral multiples thereof. |
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DTC Eligibility |
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Each Company’s Notes will be represented by a global
certificate deposited with, or on behalf of, The Depository
Trust Company or its nominee. See “Description of the Notes
and Guarantees — Book-Entry Notes.” |
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Trustee |
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Wells Fargo Bank, National Association. |
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No Listing |
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The Notes will not be listed on any national securities exchange. |
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RISK FACTORS
An investment in the Notes involves a number of risks, some
of which relate to the Companies and others of which relate to
the Notes. You should carefully consider the following
information, together with the other information in this
prospectus and in the documents that are incorporated by
reference in this prospectus, about risks concerning the
Companies and the Notes before buying any Notes. You should also
consider that there may be risks and uncertainties that are not
presently known to us or that we currently deem immaterial that
may in the future also impair our operations, our financial
results and the value of the Notes.
Risks Relating to the Companies
Actions of the PUC are largely outside the control of the
Companies and could result in inadequate or untimely rate
relief, in rate reductions or refunds or in unanticipated
delays, expenses or writedowns in connection with the
construction of new projects.
The rates that we are allowed to charge for our services, and
the timeliness of permitted rate increases, are among the most
important items influencing our financial condition, results of
operations and liquidity. The PUC has broad discretion over the
rates that the Companies charge their customers. HECO currently
has a rate case pending before the PUC in which it is seeking
rate increases largely to recover the costs of capital
improvements since its last rate case, the purchase of
additional firm capacity and energy from Kalaeloa Energy
Partners, L.P., the cost of measures taken to address peak load
increases until generation capacity can be added on Oahu and
increased operation and maintenance (“O&M”)
expenses. In addition, HELCO has notified the PUC of its
intention to file a request for a rate increase in spring 2006
intended to recover the cost of improvements to its transmission
and distribution lines and the two generating units at its
Keahole generating plant that became available for commercial
operation since its last rate case in 2000. The increased level
of our O&M expenses (including increased retirement benefit
costs or other post retirement benefit costs), increased capital
expenditures, or other factors could result in the Companies
seeking rate relief more often than in the past. Any adverse
decision by the PUC concerning the level or method of
determining electric utility rates, the returns on equity or
rate base found to be reasonable, the potential consequences of
exceeding or not meeting such returns, or any prolonged delay in
rendering a decision in a rate or other proceeding, could have a
material adverse effect on HECO’s consolidated financial
condition, results of operations and liquidity.
We could be required to refund to our customers, with interest,
revenues we receive under interim rate orders if and to the
extent they exceed the amounts allowed in final rate orders. At
the end of September 2005, HECO implemented the interim general
rate increase of $53.3 million in annual base revenues
granted by the PUC in HECO’s current rate case. At
September 30, 2005, HECO had recognized an aggregate of
$19 million of revenues with respect to this interim
general rate increase and other interim orders regarding certain
integrated resource planning costs.
The rate schedules of each of the Companies include energy cost
adjustment clauses under which electric rates charged to
customers are automatically adjusted for changes in the
weighted-average price paid for fuel oil and certain components
of purchased power, and the relative amounts of
company-generated power and purchased power. In 2004 PUC
decisions approving the Companies’ fuel supply contracts,
the PUC affirmed the Companies’ right to include in their
respective energy cost adjustment clauses the stated costs
incurred pursuant to their respective new fuel supply contracts,
to the extent that these costs are not included in their
respective base rates, and restated its intention to examine the
need for continued use of energy cost adjustment clauses in the
pending HECO rate case and in HELCO’s and MECO’s
future respective rate cases. While there was no opposition to
the continuation of the clause by the parties in the pending
HECO rate case, there can be no assurance concerning actions the
PUC may take in its final order in the pending HECO rate case or
otherwise in the future with respect to these clauses. In
addition, there
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has been some indication that the State Legislature may consider
legislation which addresses alternatives to the current energy
cost adjustment clauses and, at this time, it is not possible to
predict the outcome of those possible deliberations.
Many public utility projects require PUC approval and various
permits (e.g., environmental and land use permits) from
other governmental agencies. Difficulties in obtaining, or the
inability to obtain, the necessary approvals or permits, or any
adverse decision or policy made or adopted, or any prolonged
delay in rendering a decision, by an agency with respect to such
approvals and permits, can result in significantly increased
project costs or even cancellation of projects. Two major
capital improvement projects — HECO’s East Oahu
Transmission Project and the expansion of HELCO’s Keahole
generating plant — have encountered substantial
opposition and consequent delay, and the recovery of the costs
incurred in connection with these projects has not been
determined by the PUC. If a project does not proceed, or if the
PUC disallows cost recovery for all or part of the project,
project costs may need to be written off in amounts that could
result in significant reductions in our consolidated net income.
The Companies are subject to risks associated with the Hawaii
economy, volatile U.S. capital markets and changes in the
interest rate environment that could result in declines in
kilowatthour sales and restrictions on our ability to borrow
money.
Because our core business is providing local electric public
utility services in Hawaii, our operating results are
significantly influenced by Hawaii’s economy, which in turn
is influenced by economic conditions in the mainland
U.S. (particularly California) and Asia (particularly
Japan) as a result of the impact of those conditions on tourism,
which comprises a significant portion of Hawaii’s economy.
A decline in the Hawaii economy, or the U.S. or Asian
economies, could lead to a decline in our kilowatthour sales and
an increase in uncollected billings and have other adverse
effects on our business.
Changes in the U.S. capital markets can also have
significant effects on the Companies. For example, our pension
income or expense is affected by the market performance of the
assets in the master pension trust maintained for our pension
plans, and by the discount rate we use to determine the service
and interest cost components of our net periodic pension cost
(returns).
We are exposed to interest rate risk primarily due to our
periodic borrowing requirements. Interest rates are sensitive to
many factors, including general economic conditions and the
policies of government and regulatory authorities. We cannot
predict future changes in interest rates, nor be certain that
interest rate risk management strategies we have implemented
will be successful in managing interest rate risk.
If Standard & Poor’s or Moody’s Investors
Service were to downgrade HECO’s long-term debt ratings, or
if future events were to adversely affect the availability of
capital to the Companies, our ability to borrow could be
constrained and our future borrowing costs would likely increase
with resulting reductions in our consolidated net income in
future periods. Further, if HECO’s ratings were to be
downgraded, HECO might not be able to sell commercial paper
under current market conditions and might be required to draw on
more expensive bank lines of credit or to defer capital or other
expenditures.
The Companies could be required to recognize a substantial
additional minimum liability for pension and other
postretirement benefits.
Depending on investment results at each year end from the assets
held in trust to satisfy our retirement benefit plan obligations
and the status of interest rates, the Companies, like many
sponsors of defined benefit pension plans, could be required in
future years to recognize an additional minimum liability as
prescribed by Statement of Accounting Standards
(SFAS) No. 87, “Employers’ Accounting for
Pensions”. The recognition of an additional minimum
liability is required if the accumulated benefit obligation
exceeds the fair value of plan assets on the measurement date.
4
The recognition of the liability would also require the removal
of the prepaid pension asset ($101 million as of
September 30, 2005) from our consolidated balance sheet and
from our rate base and the sum of these amounts (net of taxes)
would be recorded as a reduction to stockholders’ equity
through a non-cash charge to accumulated other comprehensive
income (“AOCI”), and would not affect net income. By
application filed on December 8, 2005, we have requested
the PUC to permit us to record, as a regulatory asset pursuant
to SFAS No. 71, “Accounting for the Effects of
Certain Types of Regulation,” any amount that would
otherwise be charged to AOCI as a result of recording a minimum
pension liability, but no assurance can be given concerning how
or when the PUC will act on this request.
The amount of additional minimum liability and charge to AOCI,
if any, that might be recorded could be material and will depend
upon a number of factors, including the year-end discount rate
assumption, asset returns experienced during the year, any
changes to actuarial assumptions or plan provisions, and
contributions made by the Companies to the plans during the
year. In addition, retirement benefits expenses and cash funding
requirements could increase in future years depending on the
performance of the U.S. equity markets and trends in
interest rates. Retirement benefit expenses based on net
periodic pension and other postretirement benefit costs have
been an allowable expense for rate-making, and higher retirement
benefit expenses, along with other factors, may affect the need
to request an electric rate increase.
If the Companies are required to record substantially greater
charges to AOCI in the future, consolidated HECO’s
financial ratios may deteriorate, which could result in security
ratings downgrades and difficulty (or greater expense) in
obtaining future financing. In addition, there may be possible
financial covenant violations (although there are no advances
currently outstanding under any credit facility subject to
financial covenants) as certain of HECO’s bank lines of
credit require that it maintain a minimum ratio of consolidated
common equity to consolidated capitalization of 35% (actual
ratio was 56% as of September 30, 2005).
The Companies are subject to the risks associated with the
geographic concentration of our business and lack of
interconnections that could result in service interruptions.
Our business is concentrated on the individual islands we serve
in the State of Hawaii. Our operations are more vulnerable to
service interruptions than are many U.S. mainland utilities
because none of our systems are interconnected with the systems
on the other islands we serve. Because of this lack of
interconnections, it is necessary to maintain higher generation
reserve margins than are typical for mainland utilities to help
ensure reliable service. Our reserve margin on Oahu is currently
below the level we would like to maintain and this condition
will likely continue and be exacerbated by projected load growth
until additional generation is brought on line, which is not
expected until 2009. Service interruptions, including in
particular extended interruptions that could result from a
natural disaster or terrorist activity or from unexpected
generation unit failures (including when other units are out of
service for scheduled maintenance), could adversely impact the
kilowatthour sales of some or all of the Companies. A lower
reserve margin also means that our generating units are being
more heavily utilized, which in turn could contribute to the
current and expected trend of increasing O&M costs for the
Companies.
Increasing competition and technological advances could cause
the Companies to lose customers or render our operations
obsolete.
The generation sector of the electric utility industry is
becoming increasingly competitive in Hawaii. Independent power
producers, including alternate energy providers, and customer
self-generation, with or without cogeneration, continue to be
competitive factors. In addition, new technological
developments, such as the commercial development of fuel cells
or distributed generation, may render our operations less
competitive or obsolete.
5
The PUC has opened new investigative dockets on distributed
generation (“DG”) and competitive bidding. The PUC
intends in the DG docket to determine the potential
benefits and impact of DG, including combined heat and power
(“CHP”) systems, on Hawaii’s electric
distribution systems and markets and to develop policies and a
framework for DG projects in Hawaii. The PUC intends in the
docket to address issues caused by DG projects relating to
interconnection matters, ownership and operation of projects
(including by electric utilities), rate design and effects on
the integrated resource planning process. The competitive
bidding docket is intended to evaluate competitive bidding as a
mechanism for acquiring or building new electric generating
capacity. The Companies cannot predict the ultimate outcome of
these investigations or of attempts that might be made by other
parties to seek legislative or regulatory action on their
competition proposals.
The Companies could suffer losses that are uninsured due to a
lack of insurance coverage or limitations on the insurance
coverage we do have.
In the ordinary course of business, we purchase insurance
coverages (e.g., property and liability coverages) to
protect against loss of or damage to our properties and against
claims made by third-parties and employees for property damage
or personal injuries. However, the protection provided by such
insurance is limited in significant respects and, in some
instances, there is no coverage. Certain of the insurance has
substantial deductibles or has limits on the maximum amounts
that may be recovered. For example:
|
|
|
|
• |
Our overhead and underground transmission and distribution
systems (with the exception of substation buildings and
contents) have an estimated replacement cost of approximately
$3 billion and are not insured against loss or damage
because the amount of transmission and distribution system
insurance available is limited and the premiums are cost
prohibitive. |
|
|
• |
We have no business interruption insurance as the premiums for
such insurance would be cost prohibitive, particularly since our
systems are not interconnected to other systems. |
If a hurricane or other uninsured catastrophic natural disaster
were to occur, and if the PUC were not to allow the affected
electric utility to recover from ratepayers restoration costs
and revenues lost from business interruption, the lost revenues
and repair expenses could result in a significant decrease in
our consolidated net income or in significant net losses for the
affected periods. Events like the September 11, 2001
terrorist attacks and financial failures of Enron and other
companies have resulted generally in a decreased availability of
insurance and higher deductibles, higher premiums and more
restrictive policy terms.
Increased federal and state environmental regulation will
require an increasing commitment of resources and funds and
could result in construction delays or penalties and fines for
non-compliance.
We are subject to federal and state environmental laws and
regulations relating to air quality, water quality, waste
management, natural resources and health and safety, which
regulate the operation of existing facilities, the construction
and operation of new facilities and the proper cleanup and
disposal of hazardous waste and toxic substances. Compliance
with these legal requirements requires the Companies to commit
significant resources and funds toward environmental monitoring,
installation of pollution control equipment and payment of
emission fees. These laws and regulations, among other things,
require that we obtain certain environmental permits in order to
construct or operate certain facilities, and obtaining such
permits can entail significant expense and cause substantial
construction delays. Also, these laws and regulations may be
amended from time to time, including amendments that increase
the burden and expense of compliance. For example, emission
and/or discharge limits may be tightened, more extensive
permitting requirements may be imposed and additional substances
may become regulated.
If we fail to comply with environmental laws and regulations,
even if caused by factors beyond our control, that failure may
result in civil or criminal penalties and fines. At the present
time, HECO
6
is a named party in an ongoing environmental investigation to
determine the nature and extent of actual or potential release
of hazardous substances, oil, pollutants or contaminants at or
near Honolulu Harbor and we cannot predict the ultimate cost or
outcome of that investigation.
The Companies could be subject to the risk of uninsured
losses in excess of our accruals for litigation matters.
The Companies are involved in routine litigation in the ordinary
course of their business, most of which is covered by insurance
(subject to policy limits and deductibles). However, other
litigation may arise that is not routine or involves claims that
may not be covered by insurance. For example, HECO is a
defendant in a suit, brought as a purported qui tam and class
action, which claims that the State of Hawaii and HECO’s
other customers have been overcharged for electricity as a
result of allegedly excessive prices charged under a power
purchase agreement between defendants HECO and AES Hawaii,
Inc. The complaint asserted that HECO’s payments to
AES Hawaii, Inc. for power have been “excessive”
by over $1 billion since September 1992, and that
approval of the power purchase agreement by the PUC in 1989 was
wrongfully obtained through alleged misrepresentations or
material omissions by the defendants of the estimated future
costs under the power purchase agreement compared to the costs
that would have been incurred if HECO-owned units had been
constructed instead. Although a final judgment dismissing this
complaint with prejudice was entered in HECO’s favor on
September 17, 2003, one of the plaintiffs has appealed from
this dismissal. On July 16, 2004, the Hawaii Supreme Court
retained jurisdiction over the appeal (rather than assign the
appeal to the Intermediate Court of Appeals) and the matter has
been fully briefed and is awaiting decision.
Because of the uncertainties associated with litigation, there
is a risk that litigation against the Companies, even if
vigorously defended, could result in costs of defense and
judgment or settlement amounts not covered by insurance and in
excess of reserves established in the Companies’ financial
statements.
Changes in accounting principles and estimates could affect
the reported amounts of the Companies’ assets, liabilities
and reserves or revenues and expenses.
The Companies’ financial statements are prepared in
accordance with accounting principles generally accepted in the
United States of America. Changes in these principles or our
application of existing accounting principles could materially
affect our consolidated financial position or results of
operations. Further, in preparing HECO’s consolidated
financial statements, management is required to make estimates
and assumptions that affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities
and the reported amounts of revenues and expenses. Actual
results could differ significantly from those estimates.
Material estimates that are particularly susceptible to
significant change include the amounts reported for utility
plant, regulatory assets and liabilities, pension and other
postretirement benefit obligations, current and deferred income
taxes, contingencies and litigation, variable interest entities
and electric utility revenues.
Our financial statements reflect assets and costs based on
cost-based rate-making regulations. Continued accounting in this
manner requires that certain criteria relating to the
recoverability of such costs through rates be met. If events or
circumstances should change so that the criteria are no longer
satisfied, our regulatory assets (amounting to approximately
$109.5 million as of September 30, 2005) may need to
be charged to expense, which could result in significant
reductions in our consolidated net income, and our regulatory
liabilities (amounting to $213.2 million as of
September 30, 2005) may need to be refunded to ratepayers.
Electric utility operations are significantly influenced by
weather conditions.
The Companies’ results of operations can be affected by
changes in the weather. Weather conditions directly influence
the demand for electricity. In addition, severe weather can be
7
destructive, causing outages, property damage and requiring us
to incur additional expenses that may not be recoverable.
Our utility operations depend heavily on third party
suppliers of fuel oil and purchased power.
We rely on fuel oil suppliers and shippers and independent power
producers to deliver fuel oil and power, respectively, in
accordance with contractual agreements. Approximately 79% of the
net energy generated or purchased by the Companies for the first
nine months of 2005 was generated from the burning of oil, and
purchases of power by the Companies provided about 39% of their
total net energy generated and purchased for the same period.
Failure or delay by oil suppliers and shippers to provide fuel
pursuant to existing contracts, or failure by a major
independent power producer to deliver the firm capacity
anticipated in its power purchase agreement, could disrupt our
ability to deliver electricity, particularly on Oahu where our
generation reserve margin is below our preferred level, and
require us to incur additional expenses to meet the needs of our
customers that may not be recoverable. In addition, as these
contractual agreements end, we may not be able to purchase fuel
and power on terms equivalent to the current contractual
agreements.
Electric generating facilities are subject to operational
risks that could result in unscheduled plant outages,
unanticipated and/or increased operation and maintenance
expenses and increased power purchase costs.
Operation of electric generating facilities involves certain
risks which can adversely affect energy output and efficiency
levels. Included among these risks are increased prices for fuel
and fuel transportation as existing contracts expire
(particularly if the PUC were to no longer permit the Companies
to pass such price increases through to customers through their
energy cost adjustment clauses), facility shutdowns or power
interruptions due to insufficient reserve margins or a breakdown
or failure of equipment or processes or interruptions in fuel
supply, inability to negotiate satisfactory collective
bargaining agreements when existing agreements expire or other
labor disputes, inability to comply with regulatory or permit
requirements, disruptions in delivery of electricity, operator
error and catastrophic events such as fires, explosions, floods
or other similar occurrences affecting our generating facilities
or transmission and distribution systems. As a result of load
growth on Oahu and other factors, there currently is an
increased risk to generation reliability. Generation reserve
margins are lower than considered desirable in light of our
circumstances. Existing units are running harder, resulting in
more frequent and more extensive maintenance, at times,
requiring temporary shut downs of these units. We have taken a
number of steps to mitigate the risk of outages, including
securing additional purchased power, adding distributed
generation at some of our substations and encouraging energy
conservation. The marginal costs of supplying growing demand,
however, is increasing because of our decreasing reserve margin
situation and the rate of this increase is not likely to lessen
until after we add our proposed new generating unit on Oahu in
2009.
The Companies may be adversely affected by new
legislation.
Congress and the Hawaii Legislature periodically consider
legislation that could have positive or negative effects on the
Companies and our customers. For example, Congress adopted the
Energy Policy Act of 2005 (the “2005 Act”), which will
provide $14.5 billion in tax incentives over a
10-year period designed
to boost conservation efforts, increase domestic energy
production and expand the use of alternative energy sources,
such as solar, wind, ethanol, biomass, hydropower and clean coal
technology. The incentives include tax credits and shorter
depreciable lives for many assets associated with energy
production and transmission. The primary impact of these
incentives on the Companies will be the reduction in the
depreciable tax life, from 20 years to 15 years, of
certain electric transmission equipment placed into service
after April 11, 2005. The 2005 Act also replaced the Public
Utility Holding Company Act of 1935 with the Public Utility
Holding Company Act of 2005. HECO will be a holding company
under the Public Utility Holding Company Act of 2005 and, under
the rules promulgated under that statute, will be subject to
certain books and records maintenance
8
and access requirements and accounting, record retention and
filing requirements unless a waiver is obtained from certain of
these requirements under a provision permitting such waivers for
single-state holding company systems. HECO currently intends to
seek such waiver, but there can be no assurance that it will be
obtained.
The 2001 Hawaii Legislature passed a law establishing
“renewable portfolio standard” (“RPS”) goals
for the Companies, on a consolidated basis, of 7% by
December 31, 2003, 8% by December 31, 2005 and 9% by
December 31, 2010. The law was amended in 2004 to require
electric utilities to meet a renewable portfolio standard of 8%
by December 31, 2005, 10% by December 31, 2010, 15% by
December 31, 2015 and 20% by December 31, 2020. It may
be difficult for the Companies to increase their renewables
percentage to these levels, and we cannot predict the
consequences of failure to do so.
The renewable standards law also required the PUC to develop and
implement a utility ratemaking structure, which may include
performance-based ratemaking, to provide incentives that
encourage Hawaii’s electric utilities to use cost-effective
renewable energy resources found in Hawaii to meet the RPS
goals, while allowing for deviation from the standards in the
event that the standards cannot be met in a cost-effective
manner or as a result of circumstances beyond the control of the
utility which could not have been reasonably anticipated or
ameliorated. In November 2004, the PUC initiated a process,
consisting of three sets of workshops (two sets of which have
been completed) that are intended to lead to the creation of a
document forming the basis of a set of rules to be adopted in a
rule-making process relating to electric utility rate design.
The Companies cannot predict the ultimate outcome of this
process.
Risks Relating to the Notes
Obligations under the Notes and the HECO guarantees will be
unsecured.
The obligations of each Company under its Notes will be
unsecured and will rank equally in right of payment with all
other unsecured and unsubordinated debt of that Company
outstanding from time to time. The obligations of HECO under its
guarantees of the HELCO Notes and the MECO Notes will also be
unsecured and will rank equally in right of payment with all
other unsecured and unsubordinated debt of HECO outstanding from
time to time. In the event of the bankruptcy, liquidation or
dissolution of any of the Companies, assets of that Company
would be available to pay obligations under that Company’s
Notes (or, with respect to HECO, under its guarantees)
pro rata with payments on obligations of equal rank. At
September 30, 2005, the principal portion of the unsecured,
unsubordinated obligations of HECO (exclusive of short-term
borrowings and contingent amounts under HECO’s guarantees
of the obligations of its subsidiaries and net of funds on
deposit with a trustee and unamortized discount), HELCO and MECO
that would have ranked equally with the HECO Notes and the HECO
guarantees, the HELCO Notes and the MECO Notes, respectively,
was approximately $448 million, $121 million and
$144 million.
Because HECO owns all of the common equity of HELCO and MECO,
the HECO Notes will be effectively subordinated to all existing
and future liabilities of HECO’s subsidiaries (which, to
the extent such existing liabilities constitute the principal
portion of the indebtedness of such subsidiaries (net of
unamortized discount), was equal to approximately
$285 million in the aggregate at September 30, 2005).
The Indentures (as defined in this prospectus) for the Notes and
the HECO guarantees do not limit the amount of secured or
unsecured debt that may be incurred by any of the Companies. The
Notes of each Company will rank junior to any future secured
debt incurred by that Company. As of the date of this
prospectus, none of the Companies had any secured debt
outstanding. The Companies anticipate that they will continue to
make substantial capital expenditures in the future. They also
might make acquisitions, some of which may be significant, and
the funding for which may be generated, in whole or in part,
from the incurrence of indebtedness. The incurrence of
9
indebtedness to fund capital expenditures or acquisitions, which
in each case could be secured and, therefore, senior to the
Notes, could result in a downgrading of HECO’s credit
rating and have an adverse effect upon the market value of the
Notes. Also, the provisions of the Indentures and the HECO
guarantees do not afford holders of the Notes protection in the
event of a highly leveraged or other transaction involving the
Companies, or in the event of a change in control, that may
adversely affect holders of the Notes. See “Description of
the Notes and Guarantees.”
There has been no prior market for the Notes.
The Notes constitute a new issue of securities with no
established trading market and there can be no guarantee that a
trading market for the Notes will develop or, if a trading
market for the Notes does develop, of the depth of that market
and the ability of holders to easily sell their Notes. The Notes
will not be listed on any securities exchange. In addition,
there can be no assurance about the market prices for the Notes.
Accordingly, the Notes that an investor purchases, whether in
this offering or in the secondary market, may trade at a
discount to the price that the investor paid for the Notes.
10
HAWAIIAN ELECTRIC COMPANY, INC. AND SUBSIDIARIES
HECO, a Hawaii corporation, was incorporated under the laws of
the Kingdom of Hawaii on October 13, 1891, and became a
wholly-owned subsidiary of Hawaiian Electric Industries, Inc., a
Hawaii corporation, as a result of a corporate reorganization
completed on July 1, 1983. HECO’s principal business
and executive offices are located at 900 Richards Street,
Honolulu, Hawaii 96813 and its telephone number is
(808) 543-7771.
HECO owns all of the common stock of MECO, acquired in 1968, and
HELCO, acquired in 1970. HELCO was incorporated under the laws
of the Republic of Hawaii on December 5, 1894, and its
principal business and executive offices are located at
1200 Kilauea Avenue, Hilo, Hawaii 96720, and its telephone
number is
(808) 935-1171.
MECO was incorporated under the laws of the Territory of Hawaii
on April 28, 1921, and its principal business and executive
offices are located at 210 West Kamehameha Avenue, Kahului,
Hawaii 96732, and its telephone number is
(808) 871-8461.
HECO, HELCO and MECO are regulated operating electric public
utilities engaged in the production, purchase, transmission,
distribution and sale of electricity on the islands of Oahu;
Hawaii; and Maui, Lanai and Molokai, respectively. These five
islands had a combined population on December 31, 2004
estimated at 1,202,000, or approximately 95 percent of the
State of Hawaii’s total population, and a service area of
approximately 5,766 square miles. The principal communities
served include Honolulu (on Oahu), Hilo and Kona (on Hawaii) and
Wailuku and Kahului (on Maui). The service areas also include
numerous suburban communities, resorts, U.S. Armed Forces
installations and agricultural operations.
The Companies provide the only electric public utility service
on the islands they serve. The following table sets forth the
number of electric customer accounts as of December 31,
2002, 2003 and 2004 and the related electric sales revenues by
Company for each of the years then ended:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2002 | |
|
2003 | |
|
2004 | |
|
|
| |
|
| |
|
| |
|
|
Customer | |
|
Electric Sales | |
|
Customer | |
|
Electric Sales | |
|
Customer | |
|
Electric Sales | |
|
|
Accounts | |
|
Revenues | |
|
Accounts | |
|
Revenues | |
|
Accounts | |
|
Revenues | |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
(Dollars in thousands) | |
HECO
|
|
|
283,161 |
|
|
$ |
865,608 |
|
|
|
286,677 |
|
|
$ |
960,717 |
|
|
|
288,456 |
|
|
$ |
1,050,388 |
|
HELCO
|
|
|
66,411 |
|
|
|
191,589 |
|
|
|
68,893 |
|
|
|
213,268 |
|
|
|
71,594 |
|
|
|
240,947 |
|
MECO
|
|
|
59,983 |
|
|
|
191,029 |
|
|
|
61,423 |
|
|
|
213,806 |
|
|
|
61,996 |
|
|
|
250,750 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
409,555 |
|
|
$ |
1,248,226 |
|
|
|
416,993 |
|
|
$ |
1,387,791 |
|
|
|
422,046 |
|
|
$ |
1,542,085 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues from the sale of electricity in 2004 were from the
following types of customers in the proportions shown:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HECO | |
|
HELCO | |
|
MECO | |
|
Total | |
|
|
| |
|
| |
|
| |
|
| |
Residential
|
|
|
32 |
% |
|
|
41 |
% |
|
|
37 |
% |
|
|
34 |
% |
Commercial
|
|
|
32 |
|
|
|
41 |
|
|
|
34 |
|
|
|
34 |
|
Large light and power
|
|
|
35 |
|
|
|
18 |
|
|
|
29 |
|
|
|
31 |
|
Other
|
|
|
1 |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100 |
% |
|
|
100 |
% |
|
|
100 |
% |
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Kilowatthour sales of HECO and its subsidiaries follow a
seasonal pattern, but they do not experience the extreme
seasonal variation like some electric utilities on the mainland.
The seasonal variation in sales is largely the result of
corresponding mild variations in weather. Sales tend to increase
in the warmer summer months, probably as a result of increased
demand for air conditioning and refrigeration. However, the
weather in Hawaii is generally temperate, and Hawaii does not
experience the wide range of fluctuations in temperature and
humidity seen in the hot summers and cold winters in some parts
of the mainland.
HECO and its subsidiaries derived approximately 10%, 10% and 9%
of their operating revenues from the sale of electricity to
various federal government agencies in 2004, 2003 and 2002,
respectively.
11
SELECTED CONSOLIDATED FINANCIAL INFORMATION
The following selected consolidated financial information should
be read in conjunction with HECO’s consolidated financial
statements and the notes thereto, selected financial data,
“Management’s Discussion and Analysis of Financial
Condition and Results of Operations” and “Quantitative
and Qualitative Disclosures about Market Risk” included in
the documents incorporated by reference in this prospectus. The
consolidated Income Statement and Operating Data for each of the
years in the three-year period ended December 31, 2004 are
derived from, and are qualified by reference to, the audited
consolidated financial statements included in the documents
incorporated by reference in this prospectus. The consolidated
Income Statement and Operating Data for the nine-month periods
ended September 30, 2005 and 2004, and the Capitalization
Data as of September 30, 2005, are derived from unaudited
consolidated financial statements incorporated by reference in
this prospectus, which, in the opinion of management, include
all material adjustments necessary for a fair presentation of
HECO’s consolidated financial position as of
September 30, 2005 and results of operations for the
nine-month periods ended September 30, 2005 and 2004. The
results of operations for the nine-month period ended
September 30, 2005 may not necessarily be indicative of the
results to be expected for the full calendar year. The
historical results are not necessarily indicative of the results
of operations to be expected in the future.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended | |
|
|
Years Ended December 31, | |
|
September 30, | |
|
|
| |
|
| |
|
|
2002 | |
|
2003 | |
|
2004 | |
|
2004 | |
|
2005 | |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
(Dollars in thousands) | |
Income Statement Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Revenues
|
|
$ |
1,252,929 |
|
|
$ |
1,393,038 |
|
|
$ |
1,546,875 |
|
|
$ |
1,124,103 |
|
|
$ |
1,292,374 |
|
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fuel Oil
|
|
|
310,595 |
|
|
|
388,560 |
|
|
|
483,423 |
|
|
|
340,166 |
|
|
|
447,064 |
|
|
Purchased Power
|
|
|
326,455 |
|
|
|
368,076 |
|
|
|
398,836 |
|
|
|
292,491 |
|
|
|
329,671 |
|
|
Other Operating Expenses
|
|
|
480,722 |
|
|
|
511,564 |
|
|
|
543,324 |
|
|
|
394,620 |
|
|
|
430,336 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating Expenses
|
|
|
1,117,772 |
|
|
|
1,268,200 |
|
|
|
1,425,583 |
|
|
|
1,027,277 |
|
|
|
1,207,071 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income
|
|
$ |
135,157 |
|
|
$ |
124,838 |
|
|
$ |
121,292 |
|
|
$ |
96,826 |
|
|
$ |
85,303 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for Equity Funds Used
During Construction
|
|
$ |
3,954 |
|
|
$ |
4,267 |
|
|
$ |
5,794 |
|
|
$ |
5,056 |
|
|
$ |
3,675 |
|
Income Before Interest and Other
Charges(1)
|
|
$ |
142,252 |
|
|
$ |
131,008 |
|
|
$ |
130,218 |
|
|
$ |
104,768 |
|
|
$ |
91,789 |
|
Allowance for Borrowed Funds Used
During Construction
|
|
$ |
1,855 |
|
|
$ |
1,914 |
|
|
$ |
2,542 |
|
|
$ |
2,236 |
|
|
$ |
1,460 |
|
Income Before Preferred Stock
Dividends of HECO(2)
|
|
$ |
91,285 |
|
|
$ |
79,991 |
|
|
$ |
82,257 |
|
|
$ |
68,743 |
|
|
$ |
55,426 |
|
Net Income for Common Stock
|
|
$ |
90,205 |
|
|
$ |
78,911 |
|
|
$ |
81,177 |
|
|
$ |
67,933 |
|
|
$ |
54,616 |
|
Operating Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Fuel Oil Cost Per Barrel
|
|
$ |
29.10 |
|
|
$ |
36.23 |
|
|
$ |
42.67 |
|
|
$ |
40.38 |
|
|
$ |
52.85 |
|
Kilowatthour Sales (Millions)
|
|
|
9,544 |
|
|
|
9,775 |
|
|
|
10,063 |
|
|
|
7,516 |
|
|
|
7,538 |
|
12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of September 30, 2005 | |
|
|
| |
|
|
Actual | |
|
As Adjusted (3) | |
|
|
| |
|
| |
|
|
(Dollars in thousands) | |
Capitalization Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-Term Borrowings(4)
|
|
$ |
125,001 |
|
|
|
6 |
% |
|
$ |
— |
|
|
|
— |
% |
Long-Term Debt, Net(5)
|
|
|
765,009 |
|
|
|
39 |
|
|
|
930,009 |
|
|
|
46 |
|
Preferred Stock Without Mandatory
Redemption Requirements
|
|
|
34,293 |
|
|
|
2 |
|
|
|
34,293 |
|
|
|
2 |
|
Common Stock Equity
|
|
|
1,038,013 |
|
|
|
53 |
|
|
|
1,038,013 |
|
|
|
52 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Capitalization
|
|
$ |
1,962,316 |
|
|
|
100 |
% |
|
$ |
2,002,315 |
|
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Income Before Interest and Other Charges includes Operating
Income plus the Allowance for Equity Funds Used During
Construction and nonoperating income. |
|
(2) |
Income Before Preferred Stock Dividends of HECO includes Income
Before Interest and Other Charges, less interest (reduced by
Allowance for Borrowed Funds Used During Construction),
amortization of net bond premium and expense, preferred stock
dividends of HELCO and MECO and, prior to January 1, 2004,
distributions on the preferred securities of HECO’s trust
subsidiaries. |
|
(3) |
Adjusted to reflect the issuance and sale of the Notes and the
application of the net proceeds therefrom. See “Use of
Proceeds.” |
|
(4) |
Inter-company borrowings have been eliminated in consolidation. |
|
(5) |
Comprised of (i) $713 million (net) of unsecured and
unsubordinated indebtedness of the Companies for borrowings of
the proceeds of special purpose revenue bonds sold for the
benefit of the Companies by the Department of Budget and Finance
of the State of Hawaii and (ii) $52 million of
subordinated indebtedness of the Companies for borrowings of the
proceeds of the sale of trust preferred securities by HECO
Capital Trust III. |
13
SELECTED CONSOLIDATING FINANCIAL INFORMATION
The following table summarizes certain financial information for
the Companies on a consolidated basis (“HECO
Consolidated”) and for HELCO and MECO, individually, as of
and for the periods indicated. None of the information in the
table is audited, except that the financial information for HECO
Consolidated as of December 31, 2004 is derived from the
audited financial statements of HECO for the year ended
December 31, 2004 that are incorporated by reference in
this prospectus.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HECO Consolidated | |
|
HELCO | |
|
MECO | |
|
|
| |
|
| |
|
| |
|
|
December 31, | |
|
September 30, | |
|
December 31, | |
|
September 30, | |
|
December 31, | |
|
September 30, | |
|
|
2004 | |
|
2005 | |
|
2004 | |
|
2005 | |
|
2004 | |
|
2005 | |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
(In thousands) | |
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets
|
|
$ |
384,544 |
|
|
$ |
430,083 |
|
|
$ |
58,978 |
|
|
$ |
63,816 |
|
|
$ |
65,976 |
|
|
$ |
77,660 |
|
Noncurrent Assets
|
|
|
2,495,071 |
|
|
|
2,568,662 |
|
|
|
500,985 |
|
|
|
517,705 |
|
|
|
427,873 |
|
|
|
433,255 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
2,879,615 |
|
|
$ |
2,998,745 |
|
|
$ |
559,963 |
|
|
$ |
581,521 |
|
|
$ |
493,849 |
|
|
$ |
510,915 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock Equity
|
|
$ |
1,017,104 |
|
|
$ |
1,038,013 |
|
|
$ |
186,505 |
|
|
$ |
190,694 |
|
|
$ |
189,413 |
|
|
$ |
194,445 |
|
Preferred Stock Without Mandatory
Redemption Requirements
|
|
|
34,293 |
|
|
|
34,293 |
|
|
|
7,000 |
|
|
|
7,000 |
|
|
|
5,000 |
|
|
|
5,000 |
|
Current Liabilities
|
|
|
334,227 |
|
|
|
377,887 |
|
|
|
77,186 |
|
|
|
87,047 |
|
|
|
39,524 |
|
|
|
44,549 |
|
Noncurrent Liabilities
|
|
|
1,493,991 |
|
|
|
1,548,552 |
|
|
|
289,272 |
|
|
|
296,780 |
|
|
|
259,912 |
|
|
|
266,921 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
2,879,615 |
|
|
$ |
2,998,745 |
|
|
$ |
559,963 |
|
|
$ |
581,521 |
|
|
$ |
493,849 |
|
|
$ |
510,915 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HECO Consolidated | |
|
HELCO | |
|
MECO | |
|
|
| |
|
| |
|
| |
|
|
Nine Months Ended | |
|
Nine Months Ended | |
|
Nine Months Ended | |
|
|
September 30, | |
|
September 30, | |
|
September 30, | |
|
|
| |
|
| |
|
| |
|
|
2004 | |
|
2005 | |
|
2004 | |
|
2005 | |
|
2004 | |
|
2005 | |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
(In thousands) | |
Income Statement Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Revenues
|
|
$ |
1,124,103 |
|
|
$ |
1,292,374 |
|
|
$ |
175,186 |
|
|
$ |
211,860 |
|
|
$ |
184,206 |
|
|
$ |
216,391 |
|
Operating Income
|
|
$ |
96,826 |
|
|
$ |
85,303 |
|
|
$ |
16,486 |
|
|
$ |
17,364 |
|
|
$ |
23,203 |
|
|
$ |
20,924 |
|
Net Income for Common Stock
|
|
$ |
67,933 |
|
|
$ |
54,616 |
|
|
$ |
10,068 |
|
|
$ |
10,726 |
|
|
$ |
15,770 |
|
|
$ |
14,578 |
|
14
CAPITAL EXPENDITURE PROGRAMS AND FINANCING REQUIREMENTS
Capital Expenditure Programs
Capital expenditures include the costs of projects which are
required to meet expected load growth, to improve reliability
and to replace and upgrade existing equipment. Gross capital
expenditures requiring the use of cash totaled approximately
$212 million in 2004, of which $133 million was
attributable to HECO, $49 million to HELCO and
$30 million to MECO. Approximately 48% of the 2004 gross
capital expenditures was for transmission and distribution
projects and approximately 42% was for generation projects, with
the balance for general plant and other. Cash contributions in
aid of construction received in 2004 totaled $9 million.
For the first nine months of 2005, gross capital expenditures
requiring the use of cash totaled approximately $92 million
for HECO, $37 million for HELCO and $23 million for
MECO.
The Companies’ current consolidated forecast of net capital
expenditures, which excludes from gross capital expenditures the
allowance for funds used during construction (“AFUDC”)
and capital expenditures funded by third-party contributions in
aid of construction, for the five-year period 2006 through 2010,
is currently estimated to total approximately $0.8 billion.
Approximately 50% of gross capital expenditures forecast for
this period, including AFUDC and third-party contributions in
aid of construction, is for transmission and distribution
projects, with 42% for generation projects and the remaining 8%
for general plant and other. These estimates do not include
expenditures, which could be material, that would be required to
comply with cooling water intake structure regulations adopted
by the EPA in 2004, or the proposed Clear Skies Bill, if adopted
by Congress.
Capital expenditure estimates and the timing of construction
projects are reviewed periodically by management and may change
significantly as a result of many considerations, including
changes in economic conditions, changes in forecasts of
kilowatthour sales and peak load, the availability of purchased
power and changes in expectations concerning the construction
and ownership of future generating units, the availability of
generating sites and transmission and distribution corridors,
the ability to obtain adequate and timely rate increases,
escalation in construction costs, the impacts of demand side
management programs, the effects of opposition to proposed
construction projects and requirements of environmental and
other regulatory and permitting authorities.
Financing Requirements
The Companies’ consolidated financing requirements for the
years 2006 through 2010, primarily for net capital expenditures,
are currently estimated to total approximately
$0.8 billion. HECO’s consolidated internal sources
(primarily consolidated cash flows from operations comprised
mainly of net income, adjusted for noncash income and expense
items such as depreciation, amortization and deferred taxes, and
changes in working capital), after the payment of common stock
and preferred stock dividends, are currently not expected to
provide sufficient cash to meet consolidated financing
requirements and to reduce the level of short-term borrowings.
Debt financing is expected to be required to fund this shortfall
and any unanticipated expenditures not included in the 2006
through 2010 forecast, such as increases in the costs of or an
acceleration of the construction of capital projects, unbudgeted
acquisitions or investments in new businesses and significant
increases in contributions to retirement benefit plans.
The Companies participate in pension and other postretirement
benefit plans. Funding for the qualified pension plans is based
upon actuarially determined contributions that consider the
amount deductible for income tax purposes and the funding
requirements of the Employee Retirement Income Security Act of
1974, as amended (“ERISA”). Although the Companies
were not required to make any contributions to the pension plans
to meet minimum funding requirements pursuant to ERISA for 2005,
2004 or 2003, they did make voluntary contributions in those
years. With respect to the postretirement benefits plans, the
Company’s policy is to comply with directives from the PUC
to fund the costs. Additional contributions to the retirement
benefit plans may be required, or may be
15
made even if not required, and such contributions could be in
amounts substantially in excess of the amounts currently
included in the Companies’ forecast of their consolidated
financing requirements for the period 2006 through 2010.
The PUC must approve issuances of long-term debt for HECO, HELCO
and MECO and an application has been filed requesting that the
PUC approve the issuance of the Notes.
WHERE YOU CAN FIND MORE INFORMATION
The Companies have filed a registration statement with the SEC.
This prospectus is part of the registration statement, but the
registration statement also contains additional information and
exhibits. HECO also files annual, quarterly and current reports
and other information with the SEC. You may read and copy the
registration statement and any document that HECO files at the
SEC’s public reference room at 100 F Street, N.E.,
Washington, D.C. 20549. You can call the SEC’s
toll-free telephone number at
1-800-SEC-0330 for
further information on the public reference room. The SEC
maintains a web site at www.sec.gov that contains
reports, proxy and information statements and other information
regarding companies (such as HECO) that file documents with the
SEC electronically. The documents can be found by searching the
EDGAR Archives at the SEC’s web site. HECO’s SEC
filings, and other information on the Companies, may also be
obtained on the Internet at www.hei.com, the web site for
Hawaiian Electric Industries, Inc., the parent company of HECO,
but information contained on this web site does not constitute
part of this prospectus.
The SEC allows HECO to “incorporate by reference” the
information that it files with the SEC, which means that HECO
can disclose important information to you by referring you to
those documents. The information incorporated by reference is
considered to be part of this prospectus and should be read with
the same care. Later information that HECO files with the SEC
will automatically update and supersede information in this
prospectus or an earlier filed document. HECO has filed with the
SEC (File No. 1-4955) and incorporates by reference the
documents below:
|
|
|
|
• |
Annual Report on
Form 10-K for the
year ended December 31, 2004. |
|
|
• |
Quarterly Reports on
Form 10-Q for the
quarters ended March 31, 2005, June 30, 2005 and
September 30, 2005. |
|
|
• |
Current Reports on
Form 8-K filed
January 6, 2005, January 18, 2005, January 25,
2005, February 2, 2005, February 8, 2005,
April 26, 2005, May 12, 2005, May 19, 2005,
July 26, 2005, September 19, 2005, September 29,
2005, November 1, 2005, November 8, 2005,
November 9, 2005, December 14, 2005 and
January 20, 2006. |
|
|
• |
Any future filings made by HECO with the SEC under
Sections 13(a), 13(c), 14 and 15 of the Securities Exchange
Act of 1934 (the “Exchange Act”) if the filings are
made prior to the time that all of the Notes are sold in this
offering. |
You may request a free copy of these filings by writing or
telephoning us at the following address:
Hawaiian Electric Company, Inc.
Attn: Treasurer
P.O. Box 2750
Honolulu, Hawaii 96840
Telephone: 808-543-7893
HELCO and MECO are not required to provide separate financial
statements and other separate disclosures since all of their
voting capital stock is owned, and their registered securities
have been fully and unconditionally guaranteed, by HECO. The
financial statements of HELCO and MECO will continue to be
consolidated into HECO’s financial statements. HECO’s
financial statements will also continue to include, in
accordance with Rule 3-10(i) of
Regulation S-X, a
16
footnote providing consolidating financial information, with
separate columns for (i) HECO, (ii) HELCO,
(iii) MECO, (iv) any other subsidiary of HECO,
(v) consolidating adjustments and (vi) total
consolidated amounts, but may omit item (iv) so long as
HECO’s subsidiaries other than HELCO and MECO are minor
subsidiaries.
You should read and rely only on the information incorporated by
reference or provided in this prospectus. HECO has not, and the
underwriters have not, authorized any other person to provide
you with different information. HECO and the underwriters are
not making an offer of these securities in any jurisdiction
where the offer is not permitted. You should assume that the
information appearing in this prospectus or in the documents
incorporated by reference is accurate only as of the date of
those documents. The business, financial condition, results of
operations and prospects of the Companies may have changed since
those dates.
FORWARD-LOOKING STATEMENTS
This prospectus, which includes the documents incorporated by
reference, contains “forward-looking statements” as
that term is defined in the Private Securities Litigation Reform
Act of 1995. The safe harbor provisions of the Exchange Act and
the Securities Act of 1933 apply to forward-looking statements
made by the Companies. Forward-looking statements, which include
statements that are predictive in nature, depend upon or refer
to future events or conditions, and usually include words such
as “expects”, “anticipates”,
“intends”, “plans”, “believes”,
“predicts”, “estimates” or similar
expressions. In addition, any statements concerning future
financial performance (including future revenues, earnings or
losses or growth rates), ongoing business strategies or
prospects and possible future actions, which may be provided by
management, are also forward-looking statements.
Forward-looking statements are based on current expectations and
projections about future events and are subject to risks and
uncertainties about HECO and its subsidiaries, the performance
of the industry in which they do business and economic and
market factors, among other things. These factors include the
risks and uncertainties identified in this prospectus (including
under “Risk Factors”) and in the incorporated
documents. Forward-looking statements are not guarantees of
future performance and the actual results that the Companies
achieve may differ materially. In addition, forward-looking
statements speak only as of the date of the document in which
they are made and, except for its ongoing obligations to
disclose material information under the federal securities laws,
HECO assumes no obligation to update these statements.
USE OF PROCEEDS
The net proceeds from the sale of the HECO Notes will be
approximately
$ million
after the deduction of underwriting discounts and HECO’s
expenses. It is anticipated that the net proceeds from the sale
of the HECO Notes will be used by HECO for capital expenditures
and/or to repay short-term borrowings (including borrowings from
affiliates) incurred for capital expenditures or to refinance
short-term borrowings used for capital expenditures. As of
December 31, 2005, the short-term indebtedness of HECO
consisted of approximately $136.2 million of commercial
paper and $5.3 million of borrowings from MECO. Such
commercial paper bears interest at rates ranging from 4.40% to
4.51% and had maturities ranging from 13 days to
20 days. The borrowings from MECO bear interest at rates
equal to the average of the effective
7-day Treasury
Repurchase rate quoted by Merrill Lynch, Pierce,
Fenner & Smith Incorporated on each Friday during the
month, calculated in arrears after the end of each month and
applied to the fluctuating balances during the month (computed
on the basis of a
365-day year, actual
days). The rate for borrowings in the month of December 2005 was
3.94% and the borrowings as of December 31, 2005 had
maturities of up to 339 days, subject to HECO’s right
to prepay such borrowings, in whole or in part, at any time.
The net proceeds from the sale of the HELCO Notes will be
approximately
$ million
after the deduction of underwriting discounts and HELCO’s
expenses. It is anticipated that the net
17
proceeds from the sale of the HELCO Notes will be used by HELCO
for capital expenditures and/or to repay short-term borrowings
from HECO incurred for capital expenditures or to refinance
short-term borrowings used for capital expenditures. As of
December 31, 2005, the short-term indebtedness of HELCO,
consisting of borrowings from HECO, totaled approximately
$49.7 million. Interest on such borrowings is calculated in
arrears after the end of each month and applied to the
fluctuating balances during the month, at rates equal to
HECO’s effective weighted-average rate on short-term
external borrowings. If HECO has no external borrowings, HELCO
is charged a rate equal to the average of the effective rate for
30-day dealer-placed
commercial paper quoted by the Wall Street Journal on each
Friday during the month, plus fifteen basis points (.15%). The
rate for borrowings during the month of December 2005 was 4.42%
and HELCO’s borrowings as of December 31, 2005 had
maturities of up to 339 days, subject to HELCO’s right
to prepay such borrowings, in whole or in part, at any time.
The net proceeds from the sale of the MECO Notes will be
approximately
$ million
after the deduction of underwriting discounts and MECO’s
expenses. It is anticipated that the net proceeds from the sale
of the MECO Notes will be used by MECO for capital expenditures.
DESCRIPTION OF THE NOTES AND GUARANTEES
General
The aggregate principal amounts and Stated Maturities of, and
the interest rates borne by, the respective Notes of each of the
Companies offered hereby are set forth on the cover page of this
prospectus.
The Notes will be issued by each of the Companies as an
individual series under their respective separate indentures,
each dated as of March 1, 2006, (each, respectively, an
“Indenture” and, collectively, the
“Indentures”), between each of the Companies, as
issuer, and Wells Fargo Bank, National Association, as trustee
(“Trustee”). The Notes and all other series of debt
securities hereafter issued under the Indentures are
collectively referred to as the “Indenture
Securities.” HECO will be a party, in its capacity as
guarantor, to the Indentures of HELCO and MECO. Other than the
provisions relating to HECO’s guarantees in the Indentures
of HELCO and MECO, the Indentures contain substantially similar
provisions. Unless otherwise stated, the following summaries of
the Notes, Indenture Securities and the Indentures apply
separately to each Indenture and to the Notes and Indenture
Securities issued thereunder. References to the
“Company” herein are to HECO, HELCO and MECO, as the
case may be, as the issuer of Notes under its respective
Indenture. Words capitalized and not otherwise defined herein
have the meanings given to them in the Indentures. The summaries
herein concerning the Notes, the Guarantees and the Indentures
do not purport to be complete and are qualified in their
entirety by express reference to the Notes, the Guarantees and
the Indentures. A copy of the form of each Indenture is filed as
an exhibit to the registration statement of which this
prospectus is a part. Wherever particular provisions of the
Indentures or terms defined therein are referred to, such
provisions or definitions are incorporated by reference as a
part of the statements made herein and such statements are
qualified in their entirety by such reference.
The Indentures provide that, in addition to the Notes,
additional debt securities may be issued thereunder, without
limitation as to aggregate principal amount. The Indentures do
not limit the amount of other debt, secured or unsecured, which
may be issued by each Company and each Company anticipates
incurring additional debt in connection with its respective
capital expenditure programs, principally in the form of loans
of the proceeds from the sale of special purpose revenue bonds,
short-term borrowings and/or the sale of additional Indenture
Securities under their respective Indentures. The Notes of each
Company will be senior unsecured obligations of that Company and
will rank equally with all of its other unsecured and
unsubordinated debt outstanding from time to
18
time. The HECO guarantees will be senior unsecured obligations
of HECO and will rank equally with all of its other unsecured
and unsubordinated debt outstanding from time to time, including
the HECO Notes.
Each of the Companies also has the ability to issue secured
debt, subject to certain restrictions in agreements between HECO
and insurers of special purpose revenue bonds issued for the
benefit of the Companies. The Notes of each Company will rank
junior to any future secured debt incurred by that Company. As
of the date of this prospectus, none of the Companies had any
secured debt outstanding.
Each Note will mature on the date stated on the face of the Note
(each such date being a “Stated Maturity”).
“Business Day” with respect to each Note means any
day, other than a Saturday or Sunday, which is not a day on
which banking institutions or trust companies in the State of
New York or the city in which is located any office or agency
maintained for the payment of principal of or interest on such
Note are authorized or required by law, regulation or executive
order to remain closed. “Maturity” with respect to
each Note means the date on which the principal of such Note
becomes due and payable as provided in the respective Indenture,
whether at the Stated Maturity, by declaration of acceleration,
upon call for redemption or otherwise.
The Company and the Trustee, or the agents of either, may treat
the Person in whose name the Note is registered as the absolute
owner of such Note for all purposes and any notice to the
contrary shall have no effect on the Company, the Trustee or the
agents of either.
Payment of Principal and Interest
Each Note shall be dated as of the date of its authentication
and, unless otherwise provided, shall bear interest, calculated
on the basis of a
360-day year consisting
of twelve 30-day
months, from its Original Issue Date (defined below) or from the
most recent Interest Payment Date to which interest has been
paid, whichever is later, at the rate per annum stated on the
face thereof until the principal amount thereof is paid or made
available for payment. Notwithstanding the foregoing, each Note
authenticated after the Regular Record Date (as defined below)
for any Interest Payment Date but before such Interest Payment
Date shall bear interest from such Interest Payment Date, unless
the date of first authentication of Notes of the same interest
rate and maturity (the “Original Issue Date”) is after
such Regular Record Date but before such Interest Payment Date
in which case such Note shall bear interest from such Original
Issue Date. Interest on each Note will be payable semiannually
in arrears on each September 1 and March 1, beginning
on September 1, 2006, and at Maturity (each, an
“Interest Payment Date”).
Payments of interest on the Notes (other than interest payable
at Maturity) will be made to the holders of such Notes (which,
in the case of Global Notes representing book-entry notes, will
be a nominee of the Depositary, as hereinafter defined) as of
the Regular Record Date for each Interest Payment Date
commencing with the first Interest Payment Date following the
Original Issue Date; provided, however, that if the Original
Issue Date of a Note is after a Regular Record Date and before
the corresponding Interest Payment Date, interest for the period
from and including such Original Issue Date for such a Note to
but excluding the second Interest Payment Date following the
Original Issue Date will be paid on such second Interest Payment
Date to the Holder of such a Note on the Regular Record Date
immediately preceding such second Interest Payment Date
following the Original Issue Date; provided, further, that if
any interest payable is not punctually paid, then such interest
shall be paid to the Holder of the Notes on a special record
date fixed by the Trustee, which shall be not more than
15 days and not less than 10 days prior to the date
the Company proposes to pay such interest, and not less than
20 days after receipt by the Trustee of notice of the
proposed payment in accordance with the Indenture. Payments of
interest on Notes (other than interest payable at Maturity) will
be made by wire transfer to the Depositary so long as the Notes
are in book-entry form, or by check mailed to the registered
holders of such Notes, in the event such Notes are issued in
certificated form in the future. See “Book-Entry
Notes.”
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The principal of the Notes and interest thereon payable at
Maturity (whether at Stated Maturity or otherwise) will be paid
upon surrender thereof at the office of the Trustee in New York,
New York. All payments of principal of and interest on the Notes
shall be made in United States dollars. The Companies may change
the place of payment of the Notes, may appoint one or more
paying agents (including the Companies) and remove any paying
agents, all in their discretion. In the event the Company shall
serve as its own paying agent with respect to any Notes, it
shall, on or before the due date of the principal of or
interest, if any, on such Notes, segregate and hold an amount
equal to such principal or interest in trust for the Persons
entitled thereto. Any money deposited with the Trustee or a
paying agent or held by the Company in trust for the payment of
the principal of or interest on any Note that remains unclaimed
for two years must be paid to the Company or, if held by the
Company, be discharged from the trust; provided that the Trustee
or the Company may notify the relevant Holder entitled to the
unclaimed money in accordance with the Indenture. Thereafter,
such Holder shall become an unsecured general creditor of the
Company.
If, with respect to any Note, any Interest Payment Date or
Stated Maturity is not a Business Day, payment of amounts due on
such Note on such date may be made on the next succeeding
Business Day, and, if such payment is made or duly provided for
on such Business Day, no interest shall accrue on such amounts
for the period from and after such Interest Payment Date or
Stated Maturity, as the case may be, to such Business Day. To
the extent lawful, overdue installments of principal and
interest shall bear interest at a rate
of % per annum.
The “Regular Record Date” with respect to any Interest
Payment Date will be the fifteenth day (whether or not a
Business Day) next preceding an Interest Payment Date.
Guarantees by HECO
HECO will fully and unconditionally guarantee the due and
punctual payment of the principal of and interest on the HELCO
Notes and the MECO Notes, when and as the same shall become due
and payable, whether at the Stated Maturity, by declaration of
acceleration or otherwise.
Optional Redemption; No Sinking Fund
Each of the Companies, at its option, may redeem prior to Stated
Maturity its Notes, in whole or in part, on any Business Day on
or
after ,
20 , at a redemption price
of %
of the principal amount of the Notes being redeemed, together
with interest accrued on the Notes being redeemed to the
redemption date. Notice of each such redemption must be given
not more than 60 nor less than 30 days prior to the date
set for redemption.
None of the Notes are entitled to the benefit of a sinking fund
or contain provisions for the repayment thereof at the option of
the Holder.
Book-Entry Notes
Except as described below, the Notes will be issued in whole or
in part in the form of one or more Global Securities (each a
“Global Security”) that will be deposited with, or on
behalf of, The Depository Trust Company, New York, New York
(“DTC”) or such other Depositary as is designated by
the Companies (DTC and any other such depositary being
hereinafter referred to as the “Depositary”), and
registered in the name of the Depositary or its nominee. Upon
issuance, all book-entry notes issued by one of the Companies
and having the same Original Issue Date, Stated Maturity,
interest rate and Interest Payment Dates will be represented by
one or more Global Securities. Book-entry notes will not be
exchangeable for notes in certificated form and, except under
circumstances described below, will not otherwise be issuable in
certificated form.
So long as the Depositary for a Global Security, or its nominee,
is the registered owner of such Global Security, such Depositary
or such nominee, as the case may be, will be considered the sole
owner or holder of the Notes represented by such Global Security
for all purposes under the
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Indentures. Except as provided below, owners of beneficial
interests in a Global Security will not be entitled to have
Notes represented by such Global Security registered in their
names, will not receive or be entitled to receive physical
delivery of Notes in certificated form and will not be listed as
the owners or holders thereof on the Securities Register
maintained under the Indentures.
If the Depositary is unwilling or unable to continue as
depositary, or if the Depositary is no longer eligible or in
good standing to serve in that capacity, and if a successor
depositary is not appointed by the Companies within 90 days
after the Companies receive such notice or become aware of such
ineligibility, the Companies will issue individual notes in
certificated form in exchange for the Global Security or Global
Securities representing the corresponding Notes. The Companies
may also at any time and in their sole discretion determine not
to have any Notes represented by one or more Global Securities
and, in such event, will issue individual definitive Notes in
certificated form in exchange for the Global Securities
representing the corresponding Notes. In addition, as soon as
reasonably practicable after an Event of Default, the Companies
are required to issue individual Notes in certificated form. In
any such instance, an owner of a Note represented by a Global
Security will be entitled to physical delivery of individual
notes in certificated form equal in the principal amount of such
Note and to have such Notes in certificated form registered in
its name. Individual Notes in certificated form so issued will
be issued as registered Notes in denominations, unless otherwise
specified by the Companies, of $1,000 or any larger amount that
is an integral multiple of $1,000 thereof.
The following describes certain aspects of the book-entry system:
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1. DTC will act as securities
depositary for the Global Securities. The Global Securities will
be issued only as fully-registered securities registered in the
name of Cede & Co. (DTC’s partnership nominee).
One or more fully-registered Global Securities will be issued
for each issue of the Notes having the same Original Issue Date
and terms, representing in the aggregate the aggregate principal
amount of such issue, and will be deposited with DTC or a
custodian. |
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2. DTC is a limited-purpose trust
company organized under the New York Banking Law, a
“banking organization” within the meaning of the New
York Banking Law, a member of the Federal Reserve Board, 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
Exchange Act. DTC holds securities that its participants
(“Participants”) deposit with DTC. DTC also
facilitates the settlement among Participants of securities
transactions, such as transfers and pledges, in deposited
securities through electronic computerized book-entry changes in
Participants’ accounts, thereby eliminating the need for
physical movement of securities certificates. Direct
participants include securities brokers and dealers, banks,
trust companies, clearing corporations and certain other
organizations (“Direct Participants”). DTC is 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, Government Securities
Clearing Corporation, MBS Clearing Corporation, and Emerging
Markets Clearing Corporation (each of which is also a subsidiary
of DTCC), as well as by the New York Stock Exchange, Inc., the
American Stock Exchange, Inc. and the National Association of
Securities Dealers, Inc. Access to the DTC system is also
available to others such as securities brokers and dealers,
banks, trust companies and clearing corporations that clear
through or maintain custodial relationships with Direct
Participants, either directly or indirectly (“Indirect
Participants”). The rules applicable to DTC and its
Participants are on file with the SEC. More information about
DTC can be found at www.dtcc.com. |
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3. Purchases of Notes under the DTC
system must be made by or through Direct Participants, which
will receive a credit for the Notes on DTC’s records. The
ownership interest of each actual purchaser of each Note
(“Beneficial Owner”) is in turn to be recorded on the |
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Direct and Indirect Participants’ records. Beneficial
Owners will not receive written confirmation from DTC of their
purchase, but Beneficial Owners are expected to receive written
confirmations providing details of the transaction, as well as
periodic statements of their holdings, from the Direct or
Indirect Participant that purchased the Notes. Transfers of
ownership interests in the Notes are to be accomplished by
entries made on the books of Participants acting on behalf of
Beneficial Owners. Beneficial Owners will not receive
certificates representing their ownership interests in Notes,
except in the event that use of the book-entry system for the
Notes is discontinued. The laws of some states may require that
certain purchasers of securities take physical delivery of such
securities in definitive form. Such laws may impair the ability
to transfer beneficial interests in the global certificate
representing the Notes. |
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4. To facilitate subsequent
transfers, all Global Securities deposited by Participants with
DTC are registered in the name of DTC’s partnership
nominee, Cede & Co., or such other name as may be
requested by an authorized representative of DTC. The deposit of
Global Securities with DTC and their registration in the name of
Cede & Co. effect no change in beneficial ownership of
the Notes. DTC has no knowledge of the actual Beneficial Owners
of the Notes. DTC’s records reflect only the identity of
the Direct Participants to whose accounts such Notes are
credited, which may or may not be the Beneficial Owners. The
Participants will remain responsible for keeping account of
their holdings on behalf of their customers. |
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5. 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, and the voting
rights of Direct Participants, Indirect Participants and
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 will be sent to
Cede & Co. as the registered holder of the Notes. If
less than all of the Notes are being redeemed, DTC will
determine the amount of the interest of each Direct Participant
to be redeemed in accordance with its procedures. |
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6. Neither DTC nor Cede &
Co. will consent or vote with respect to the Notes. Under its
usual procedures, DTC mails an Omnibus Proxy to the company
involved as soon as possible after the record date. The Omnibus
Proxy assigns Cede & Co.’s consenting or voting
rights to those Direct Participants to whose accounts the Notes
are credited on the record date (identified in a listing
attached to the Omnibus Proxy). |
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7. Principal and interest payments
on the Notes will be made to Cede & Co. or such other
nominee as may be requested by an authorized representative of
DTC. DTC’s practice is to credit Direct Participants’
accounts on the date on which interest is payable in accordance
with their respective holdings shown on DTC’s records
unless DTC has reason to believe that it will not receive
payment on such date. Payments by Participants to Beneficial
Owners will be governed by standing instructions and customary
practices, as in the case of securities held for the accounts of
customers in bearer form or registered in “street
name”, and will be the responsibility of such Participant
and not of DTC (nor its nominee), the Trustee or the Companies,
subject to any statutory or regulatory requirements as may be in
effect from time to time. Payment of principal and interest to
DTC is the responsibility of the Trustee, 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. |
The Companies, the Trust and the underwriters will have no
responsibilities or obligations to any Participant or to any
Beneficial Owner with respect to (i) the accuracy of any
records maintained by DTC, its nominee or any Participant,
(ii) the payment by DTC or any Participant of any amount
with respect to the Notes, (iii) any notice which is
permitted or required to be given to Participants or Beneficial
Owners or (iv) any consent given or other action taken by
DTC or its nominee as registered owner of the Notes.
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The information in this section concerning DTC and DTC’s
book-entry system has been obtained from sources (including DTC)
that the Companies and the underwriters believe to be reliable,
but the Companies and the underwriters assume no responsibility
for the accuracy thereof.
The underwriters are Direct Participants of DTC.
None of the Companies, the Trustee, the Underwriters or any
agent for payment or registration of transfer or exchange of any
Global Security will have any responsibility or liability for
the performance by DTC or its Participants of their respective
obligations as described herein or under the rules and
procedures governing their respective operations or for any
aspect of the records relating to or payments made on account of
beneficial interests in such Global Security or for maintaining,
supervising or reviewing any records relating to such beneficial
interests.
Transfer, Exchange and Replacement of Notes
The following description concerning transfer, exchange and
replacement of Notes will apply in the event use of the
book-entry system is discontinued and Notes are delivered in
certificated form to the beneficial owners thereof.
The transfer of Notes may be registered, and Notes may be
exchanged for other Notes of authorized denominations and of
like tenor and aggregate principal amount, through the corporate
trust office of the Trustee in New York, New York. Each of the
Companies may from time to time change the place for
registration of transfer of its Notes, may appoint one or more
additional security registrars or transfer agents (including the
Companies) and may remove any security registrar or transfer
agent, all in its discretion. No service charge will be made for
any transfer or exchange of the Notes, but the person requesting
registration of such transfer or exchange may be required to pay
a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
The transfer of any Note may be registered only upon the books
of registry kept by the Trustee and only upon surrender of such
Note to the Trustee, duly endorsed or accompanied by a written
instrument of transfer duly executed by the registered owner or
its duly authorized agent in such form as shall be satisfactory
to the Trustee and the Company issuing the Note. In the event
any Note is mutilated and surrendered to the Trustee, or if any
Note is lost, stolen, or destroyed, the Trustee shall
authenticate and deliver a new Note of like tenor upon
satisfaction of the requirements set forth in the Indenture.
Among other things, if a Note is destroyed, lost or stolen, as a
condition to the issuance of a new Note, the Company and the
Trustee must receive evidence to their satisfaction of the
ownership of, and of the destruction, loss or theft of, the Note
and such security or indemnity as they may reasonably require.
The Company may also charge the holder for taxes and other
governmental charges related to the issuance of a new Note and
any other reasonable expenses connected therewith, including the
fees and expenses of the Trustee.
The manner of transferring ownership interests in the Notes
while the Notes are in the book-entry system is described above
under “Book-Entry Notes.”
Events of Default
The following constitute Events of Default under the respective
Indenture of each of the Companies with respect to each series
of Notes from time to time outstanding thereunder:
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(a) failure to pay any interest on any Indenture Security
of such series (either by such Company or, with respect to the
HELCO Indenture and the MECO Indenture, by HECO under its
guarantee) within 30 days after the same becomes due and
payable; |
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(b) failure to pay any principal of or premium, if any, on
any Indenture Security of such series (either by such Company
or, with respect to the HELCO Indenture and the MECO Indenture,
by HECO under its guarantee) within three Business Days after
the same becomes due and payable; |
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(c) failure to perform or breach of any covenant or
warranty of the Company in its respective Indenture (other than
a default in or breach of a covenant or warranty of the Company
which is dealt with elsewhere in the “Event of
Default” section of its Indenture or which was expressly
included in its Indenture solely for the benefit of one or more
series of Indenture Securities other than the Notes), for
60 days after written notice to the Company by the Trustee,
or to the Company and the Trustee by the Holders of at least 33%
in principal amount of the Indenture Securities of such series
outstanding under the Indenture as provided in the Indenture,
unless the failure to perform or breach is not reasonably
susceptible of being cured or corrected within such
60-day period, in which
case such failure or breach shall not constitute an Event of
Default if the Company institutes corrective action within such
60-day period and
diligently pursues it to completion within 150 days of such
notice; |
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(d) certain events of or related to bankruptcy, insolvency
or reorganization of the Company; or |
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(e) any other Event of Default specified with respect to
Indenture Securities of such series. |
Remedies
If an Event of Default with respect to any series of Indenture
Securities occurs and is continuing, then either the Trustee or
the Holders of not less than 33% in principal amount of the
outstanding Indenture Securities of such series may declare the
principal amount (or if the Indenture Securities of such series
are discount notes or similar Indenture Securities, such portion
of the principal amount as may be specified with respect to such
series) of all of the Indenture Securities of such series to be
due and payable immediately, provided, however, that upon the
occurrence of an event of or related to bankruptcy, insolvency
or reorganization of the Company which constitutes an Event of
Default, all the outstanding Indenture Securities shall become
immediately due and payable without any action by the Trustee or
any Holder, and provided, further, that if an Event of Default
occurs and is continuing with respect to more than one series of
Indenture Securities, the Trustee or the Holders of not less
than 33% in aggregate principal amount of the outstanding
Indenture Securities of all such series, considered as one
class, may make such declaration of acceleration and not the
Holders of the Indenture Securities of any one of such series.
At any time after the declaration of acceleration with respect
to the Indenture Securities of any series has been made and
before a judgment or decree for payment of the money due has
been obtained by the Trustee as provided in the respective
Indenture, the Event or Events of Default giving rise to such
declaration of acceleration will, without further act, be deemed
to have been waived, and such declaration and its consequences
will, without further act, be deemed to have been rescinded and
annulled, if
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(a) the Company (or HECO with respect to the HELCO
Indenture and the MECO Indenture) has paid or deposited with the
Trustee a sum sufficient to pay: (1) all overdue interest
on all Indenture Securities of such series; (2) the
principal of and premium, if any, on any Indenture Securities of
such series which have become due otherwise than by such
declaration of acceleration and interest thereon at the rate or
rates prescribed therefor in such Indenture Securities;
(3) interest upon overdue interest at the rate or rates
prescribed therefor in such Indenture Securities, to the extent
that payment of such interest is lawful; and (4) all
amounts due to the Trustee under the Indenture; and |
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(b) any other Event or Events of Default with respect to
the Indenture Securities of such series, other than the
nonpayment of the principal of the Indenture Securities of such
series which has become due solely by such declaration of
acceleration, have been cured or waived as provided in the
respective Indenture. |
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If an Event of Default with respect to the Indenture Securities
of any series occurs and is continuing, the Holders of a
majority in principal amount of the outstanding Indenture
Securities of such series will have the right to direct the
time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee, with respect to the Indenture
Securities of such series; provided, however, that if an Event
of Default occurs and is continuing with respect to more than
one series of Indenture Securities, the Holders of a majority in
aggregate principal amount of the outstanding Indenture
Securities of all such series, considered as one class, will
have the right to make such direction, and not the Holders of
the Indenture Securities of any one of such series; and
provided, further, that (a) such direction will not be in
conflict with any rule of law or with the respective Indenture
and shall not involve the Trustee in a risk of personal
liability in circumstances where reasonable indemnity would not,
in the Trustee’s sole discretion, be adequate, (b) the
Trustee may take any other action it deems proper which is not
inconsistent with such direction, and (c) the Trustee shall
not be obligated to take any action unduly prejudicial to
Holders not joining in such direction. The right of a Holder of
any Indenture Security of such series to institute a proceeding
with respect to the respective Indenture is subject to certain
conditions precedent which may prevent the Holder from
instituting a proceeding, but each Holder has an absolute right
to receive payment of principal and interest when due and to
institute suit for the enforcement of any such payment. Each
Indenture provides that a court may in its discretion require a
Holder instituting suit for enforcement of any right or remedy
under the Indenture, or against the Trustee, to file an
undertaking to pay the costs of such suit and in certain
circumstances to assess costs of suit, including reasonable
attorneys’ fees, against such a Holder, provided, however,
that this provision does not apply to suits instituted by one or
more Holders holding in aggregate more than 10% in aggregate
principal amount of the Outstanding Securities of all series in
respect of which such suit is brought or by Holders seeking to
enforce payment after Maturity. The respective Indenture
provides that the Trustee, within 90 days after the
occurrence of any default thereunder with respect to the
Indenture Securities of a series, is required to give the
Holders of the Indenture Securities of such series notice of any
default known to it, unless cured or waived; provided, however,
that, except in the case of a default in the payment of
principal of or interest, if any, on any Indenture Securities of
such series, the Trustee may withhold such notice if the Trustee
determines in good faith that it is in the interest of such
Holders to do so; and provided, further, that in the case of an
Event of Default of the character specified above in
clause (c) under “Events of Default,” no such
notice shall be given to such Holders until at least
75 days after the occurrence thereof.
If, upon a demand for payment by the Trustee following a failure
to pay the principal of or interest, on the Notes in accordance
with the Indenture, the Company (or HECO with respect to the
HELCO Indenture and the MECO Indenture) shall fail to pay such
principal or interest, or if an Event of Default shall have
occurred and be continuing, the Trustee may institute a judicial
proceeding for collection of the sums due and unpaid.
Furthermore, the Trustee has the power to file a proof of claim
in the event of a bankruptcy, insolvency, reorganization or the
like with respect to the Company (or with respect to HECO under
its guarantee in the HELCO Indenture and the MECO Indenture).
Covenants: Maintenance of Property, Preservation of Rights;
Consolidation or Merger
Each Company has agreed to cause, and to use reasonable efforts
to cause with respect to property owned in common with others,
all its properties used or useful in the conduct of its business
to be maintained and kept in good condition, repair and working
order, ordinary wear and tear excepted, and to cause, and to use
reasonable efforts to cause with respect to property owned in
common with others, to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as, in
the judgment of the Company, may be necessary so that the
business carried on in connection therewith may be properly
conducted, provided, however, that the foregoing shall not
prevent the Company from discontinuing, or causing the
discontinuance of, the
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operation and maintenance of any of its properties if such
discontinuance is, in the judgment of the Company, desirable in
the conduct of its business.
Subject to the provisions described in the next paragraph, each
Company has agreed to do or cause to be done all things
necessary to preserve and keep in full force and effect its
corporate existence and rights (charter and statutory) and
franchises necessary or desirable in the conduct of its
business; provided, however, that the Company shall not be
required to preserve any such right or franchise if, in the
judgment of the Company, (a) preservation thereof is no
longer desirable in the conduct of the business of the Company
and (b) the loss thereof does not adversely affect the
interests of the Holders in any material respect.
Each Company has also agreed that it will not consolidate with
or merge into any other corporation or corporations or convey,
transfer or lease its properties and assets substantially as an
entirety to any Person or Persons unless (a) the
corporation or corporations formed by such consolidation or into
which the Company is merged or the Person or Persons which
acquires by conveyance or transfer, or which leases, the
properties and assets of the Company substantially as an
entirety, is organized and existing under the laws of the United
States of America, any State thereof or the District of
Columbia, and expressly assumes, by supplemental indenture in
form satisfactory to the Trustee, the due and punctual payment
of the principal of and interest, if any, on all the outstanding
Indenture Securities and the performance of all of the covenants
of the Company under its respective Indenture,
(b) immediately after giving effect to such transaction
(and treating any indebtedness for borrowed money which becomes
an obligation of the Company as a result of such transaction as
having been incurred by the Company at the time of such
transaction) no Event of Default, and no event which after
notice or lapse of time or both would become an Event of
Default, will have occurred and be continuing, and (c) the
Company will have delivered to the Trustee an Officers’
Certificate and an Opinion of Counsel as provided in its
respective Indenture.
Each Company has agreed to furnish annually to the Trustee a
certificate as to whether the Company is in default of any of
its obligations under the Indenture and whether an Event of
Default has occurred and is continuing and, if so, specifying
the nature and status of the default or Event of Default.
Modification and Waiver
Without the consent of any Holders of Indenture Securities, each
Company (and HECO with respect to the HELCO Indenture and the
MECO Indenture) and the Trustee may enter into one or more
supplemental indentures for any of the following purposes:
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(a) to evidence the succession of another Person to the
Company (or HECO with respect to the HELCO Indenture and the
MECO Indenture) and the assumption by any such successor of the
covenants of the Company in its respective Indenture and the
Indenture Securities or the covenants of HECO under its
guarantee; or |
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(b) to add to the covenants of the Company (or HECO with
respect to the HELCO Indenture and the MECO Indenture) for the
benefit of the Holders of all or any series of outstanding
Indenture Securities, or any tranche thereof, or to surrender
any right or power conferred upon the Company (or HECO with
respect to the HELCO Indenture and the MECO Indenture) by its
respective Indenture; or |
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(c) to add any additional Event of Default with respect to
all or any series of outstanding Indenture Securities or any
tranche thereof; or |
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(d) to change or eliminate any provision of the Indenture
or to add any new provision to the Indenture, provided that if
such change, elimination or addition will adversely affect the
interests of the Holders of Indenture Securities of any series
or tranche thereof in any material respect, such change,
elimination or addition will become effective with respect to
such series |
26
|
|
|
or tranche only when there is no Indenture Security of such
series or tranche remaining outstanding under the respective
Indenture; or |
|
|
(e) to provide collateral security for the Indenture
Securities of any series or tranche thereof; or |
|
|
(f) to establish the form or terms of Indenture Securities
of any series or tranche thereof as permitted by the respective
Indenture; or |
|
|
(g) to evidence and provide for the acceptance of
appointment of a successor Trustee under the respective
Indenture with respect to the Indenture Securities of one or
more series and to add to or change any of the provisions of the
respective Indenture as shall be necessary to provide for or to
facilitate the administration of the trusts under the Indenture
by more than one trustee; or |
|
|
(h) to add to or change any of the provisions of the
respective Indenture to permit or facilitate the issuance of
Indenture Securities in bearer, form, registrable or not
registrable as to principal, and with or without interest
coupons, or to permit or facilitate the utilization of a
noncertificated system of registration for any series of
Indenture Securities; or |
|
|
(i) to change any place where (1) the principal of and
interest, if any, on Indenture Securities of any series, or any
tranche thereof, shall be payable, (2) any Indenture
Securities of any series, or any tranche thereof, may be
surrendered for registration of transfer, (3) any Indenture
Securities of any series, or any tranche thereof, may be
surrendered for exchange and (4) notices and demands to or
upon the Company in respect of the Indenture Securities of any
series, or any tranche thereof, and the respective Indenture may
be served; or |
|
|
(j) to cure any ambiguity, to correct any defect or
inconsistency or to make any other provisions with respect to
matters or questions arising under the respective Indenture,
provided such provisions shall not adversely affect the
interests of the Holders of Indenture Securities of any series
or tranche thereof in any material respect. |
Without limiting the generality of the foregoing, if the Trust
Indenture Act of 1939, as amended (the “Trust Indenture
Act”), is amended after the date of the respective
Indenture to require changes to the respective Indenture or the
incorporation therein of additional provisions or permit changes
to, or the elimination of, provisions which, at the date of the
Indenture or at any time thereafter, are required by the Trust
Indenture Act to be contained in the Indenture, the Company (and
HECO with respect to the HELCO Indenture and the MECO Indenture)
and the Trustee may, without the consent of any Holders, enter
into one or more supplemental indentures to effect or reflect
any such change, incorporation or elimination.
The consent of the Holders of not less than a majority in
principal amount of the Indenture Securities of all series then
outstanding under the respective Indenture, considered as one
class, is required for the purpose of adding any provisions to,
or changing in any manner or eliminating any of the provisions
of, the Indenture pursuant to an indenture or supplemental
indenture in any respect other than as set forth above;
provided, however, that if less than all of the series of
Indenture Securities outstanding under the Indenture are
directly affected by a supplemental indenture, then the consent
only of the Holders of a majority in aggregate principal amount
of the outstanding Indenture Securities of all series so
directly affected, considered as one class, will be required,
and provided, further, that if the Indenture Securities of any
series shall have been issued in more than one tranche and
if the proposed supplemental indenture shall directly affect the
rights of the Holders of Indenture Securities of one or more,
but less than all, of such tranches, then the consent only of
the Holders of a majority in aggregate principal amount of the
Indenture Securities outstanding of all tranches so directly
affected, considered as one class, shall be required; and
provided, further, that no such supplemental indenture will,
without the consent of the Holder of each Indenture Security
outstanding under the Indenture of each such series directly
affected thereby, (a) change the Stated Maturity of the
principal of, or any installment of principal of or interest on,
any Indenture Security, or
27
reduce the principal thereof or the rate of interest thereon or
the method of calculating such rate or the amount of any
installment of interest thereon, or reduce the amount of
principal payable upon acceleration of a discount note, or
change the coin or currency (or other property) in which that
Indenture Security or any premium or interest thereon is
payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Stated Maturity
thereof (or in the case of redemption on or after the redemption
date), (b) reduce the percentage in principal amount of the
Indenture Securities outstanding under such series or tranche
required to consent to any supplemental indenture or waiver
under the Indenture or to reduce the requirements for quorum and
voting, (c) modify certain of the provisions in the
respective Indenture relating to supplemental indentures,
waivers of certain covenants and waivers of past defaults, or
(d) with respect to the HELCO Indenture and the MECO
Indenture, change HECO’s payment obligations under its
related guarantee.
A supplemental indenture which changes or eliminates any
covenant or other provision of the respective Indenture which
has expressly been included solely for the benefit of one or
more particular series of Indenture Securities, or of one or
more tranches thereof, or which modifies the rights of the
Holders of Indenture Securities of such series or tranches with
respect to such covenant or other provision, shall be deemed not
to affect the rights under the respective Indenture of the
Holders of Indenture Securities of any other series or tranche.
The Holders of a majority of the aggregate principal amount of
Indenture Securities outstanding of all series and tranches may
waive certain provisions of the Indenture, including the
requirements that the Company (i) maintain a payment office
or agency in the Borough of Manhattan, City of New York and in
each Place of Payment, (ii) preserve its corporate
existence and all rights and franchises, (iii) maintain and
repair all properties useful in the conduct of its business,
(iv) deliver a written statement to the Trustee within
120 days after each fiscal year certifying that the Company
is not in default of its obligations under the Indenture and
that no Event of Default has occurred and is continuing and
(v) not merge with other companies or transfer
substantially all its assets. The Holders of a majority of the
aggregate principal amount of Indenture Securities outstanding
of each series may waive, on behalf of the Holders of Indenture
Securities of such series, any past defaults, except for a
default in the payment of principal of or interest on such
series.
Satisfaction and Discharge
The Indenture Securities of any series, or any portion of the
principal amount thereof, will be deemed to have been paid for
purposes of the respective Indenture (except as to any surviving
rights of registration of transfer or exchange expressly
provided for in the Indenture), and the entire indebtedness of
the Company in respect thereof will be deemed to have been
satisfied and discharged, if there shall have been irrevocably
deposited with the Trustee, in trust (a) money in an amount
which will be sufficient, or (b) in the case of a deposit
made prior to the Maturity of the Notes, Government Obligations
(as defined below), which do not contain provisions permitting
the redemption or other prepayment thereof at the option of the
issuer thereof, the principal of and the interest on which when
due, without any regard to reinvestment thereof, will provide
monies which, together with the money, if any, deposited with or
held by the Trustee, will be sufficient, or (c) a
combination of (a) and (b) which will be sufficient,
to pay when due the principal of and premium, if any, and
interest, if any, due and to become due on the Notes prior to
the Maturity thereof. For this purpose, Government Obligations
include direct obligations of, or obligations unconditionally
guaranteed by, the United States of America entitled to the
benefit of the full faith and credit thereof and, subject to
certain conditions, certificates, depositary receipts or other
instruments which evidence a direct ownership interest in such
obligations or in any specific interest or principal payments
due in respect thereof.
As a condition to defeasing the Notes as described above prior
to Maturity, the Company is obligated to deliver specified
certificates and opinions, including either a private Internal
Revenue
28
Service ruling or, if based on a change in law since the
Original Issue Date, a legal opinion to the effect that the
defeasance of the Notes will be tax free to the Holders of the
Notes to be defeased.
Concerning the Trustee
The Trustee is Wells Fargo Bank, National Association. Wells
Fargo Securities, LLC, an affiliate of Wells Fargo Bank,
National Association, is one of the underwriters for this
offering. HECO had undrawn lines of credit with Wells Fargo
Bank, National Association in the amount of $25 million as
of December 31, 2005.
Governing Law
Each of the Indentures, the Notes and the guarantees of HECO
will be governed by the laws of the State of New York.
29
UNDERWRITING
Each of the Companies and the underwriters for the offering
named below have entered into an underwriting agreement with
respect to the Notes. Subject to certain conditions, each
underwriter has severally agreed to purchase the respective
principal amount of the HECO Notes, the HELCO Notes and the MECO
Notes set forth opposite its name in the following table:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal | |
|
Principal | |
|
Principal | |
|
|
Amount of | |
|
Amount of | |
|
Amount of | |
Underwriters |
|
HECO Notes | |
|
HELCO Notes | |
|
MECO Notes | |
|
|
| |
|
| |
|
| |
Goldman, Sachs &
Co.
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
A.G. Edwards & Sons,
Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
Lehman Brothers Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
Merrill Lynch, Pierce,
Fenner & Smith
Incorporated
|
|
|
|
|
|
|
|
|
|
|
|
|
Wells Fargo Securities, LLC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$ |
100,000,000 |
|
|
$ |
50,000,000 |
|
|
$ |
15,000,000 |
|
|
|
|
|
|
|
|
|
|
|
The underwriters are committed to take and pay for all of the
Notes being offered, if any are taken.
Notes sold by the underwriters to the public will initially be
offered at the initial public offering prices set forth on the
cover of this prospectus. Any Notes sold by the underwriters to
securities dealers may be sold at a discount from the initial
public offering price of up
to %
of the principal amount of Notes. Any such securities dealers
may resell any Notes purchased from the underwriters to certain
other brokers or dealers at a discount from the initial public
offering price of up
to %
of the principal amount of Notes. If all the Notes are not sold
at the initial offering price, the underwriters may change the
offering price and the other selling terms.
The Notes are a new issue of securities with no established
trading market. We have been advised by the underwriters that
the underwriters intend to make a market in the Notes but are
not obligated to do so and may discontinue market making at any
time without notice. No assurance can be given as to the
liquidity of the trading market for the Notes.
In connection with the offering, the underwriters may purchase
and sell Notes in the open market. These transactions may
include short sales, stabilizing transactions and purchases to
cover positions created by short sales. Short sales involve the
sale by the underwriters of a greater number of Notes than they
are required to purchase in the offering. Stabilizing
transactions consist of certain bids or purchases made for the
purpose of preventing or retarding a decline in the market price
of the Notes while the offering is in progress.
The underwriters also may impose a penalty bid. This occurs when
a particular underwriter repays to the underwriters a portion of
the underwriting discount received by it because the other
underwriters have repurchased Notes sold by or for the account
of such underwriter in stabilizing or short covering
transactions.
These activities by the underwriters may stabilize, maintain or
otherwise affect the market prices of the Notes. As a result,
the prices of the Notes may be higher than the prices that
otherwise might exist in the open market. If these activities
are commenced, they may be discontinued by the underwriters at
any time. These transactions may be effected in the
over-the-counter market
or otherwise.
In relation to each Member State of the European Economic Area
which has implemented the Prospectus Directive (each, a Relevant
Member State), each underwriter has represented and agreed that
with effect from and including the date on which the Prospectus
Directive is implemented in that Relevant Member State (the
Relevant Implementation Date) it has not made and will not
30
make an offer of Notes to the public in that Relevant Member
State prior to the publication of a prospectus in relation to
the Notes which has been approved by the competent authority in
that Relevant Member State or, where appropriate, approved in
another Relevant Member State and notified to the competent
authority in that Relevant Member State, all in accordance with
the Prospectus Directive, except that it may, with effect from
and including the Relevant Implementation Date, make an offer of
Notes to the public in that Relevant Member State at any time:
(a) to legal entities which are authorised or regulated to
operate in the financial markets or, if not so authorised or
regulated, whose corporate purpose is solely to invest in
securities;
(b) to any legal entity which has two or more of
(1) an average of at least 250 employees during the last
financial year, (2) a total balance sheet of more than
€43,000,000, and
(3) an annual net turnover of more than
€50,000,000, as shown
in its last annual or consolidated accounts; or
(c) in any other circumstances which do not require the
publication by the Companies of a prospectus pursuant to
Article 3 of the Prospectus Directive.
For the purposes of this provision, the expression an
“offer of Notes to the public” in relation to any
Notes in any Relevant Member State means the communication in
any form and by any means of sufficient information on the terms
of the offer and the Notes to be offered so as to enable an
investor to decide to purchase or subscribe the Notes, as the
same may be varied in that Member State by any measure
implementing the Prospectus Directive in that Member State and
the expression Prospectus Directive means Directive 2003/71/ EC
and includes any relevant implementing measure in each Relevant
Member State.
Each underwriter has represented and agreed that: (i) it
has only communicated or caused to be communicated and will only
communicate or cause to be communicated an invitation or
inducement to engage in investment activity (within the meaning
of Section 21 of the FSMA) received by it in connection
with the issue or sale of the Notes in circumstances in which
Section 21(1) of the FSMA does not apply to the Companies
and (ii) it has complied and will comply with all
applicable provisions of the FSMA with respect to anything done
by it in relation to the Notes in, from or otherwise involving
the United Kingdom.
The Notes may not be offered or sold by means of any document
other than to persons whose ordinary business is to buy or sell
shares or debentures, whether as principal or agent, or in
circumstances which do not constitute an offer to the public
within the meaning of the Companies Ordinance (Cap. 32) of
Hong Kong, and no advertisement, invitation or document relating
to the Notes may be issued, whether in Hong Kong or elsewhere,
which is directed at, or the contents of which are likely to be
accessed or read by, the public in Hong Kong (except if
permitted to do so under the securities laws of Hong Kong) other
than with respect to Notes which are or are intended to be
disposed of only to persons outside Hong Kong or only to
“professional investors” within the meaning of the
Securities and Futures Ordinance (Cap. 571) of Hong Kong and any
rules made thereunder.
The Notes have not been and will not be registered under the
Securities and Exchange Law of Japan (the Securities and
Exchange Law) and each underwriter has agreed that it will not
offer or sell any Notes, directly or indirectly, in Japan or to,
or for the benefit of, any resident of Japan (which term as used
herein means any person resident in Japan, including any
corporation or other entity organized under the laws of Japan),
or to others for re-offering or resale, directly or indirectly,
in Japan or to a resident of Japan, except pursuant to an
exemption from the registration requirements of, and otherwise
in compliance with, the Securities and Exchange Law and any
other applicable laws, regulations and ministerial guidelines of
Japan.
This prospectus has not been registered as a prospectus with the
Monetary Authority of Singapore. Accordingly, this prospectus
and any other document or material in connection with the offer
or sale, or invitation for subscription or purchase, of the
Notes may not be circulated or distributed, nor may the Notes be
offered or sold, or be made the subject of an invitation for
31
subscription or purchase, whether directly or indirectly, to
persons in Singapore other than (i) to an institutional
investor under Section 274 of the Securities and Futures
Act, Chapter 289 of Singapore (the “SFA”),
(ii) to a relevant person, or any person pursuant to
Section 275(1A), and in accordance with the conditions,
specified in Section 275 of the SFA or (iii) otherwise
pursuant to, and in accordance with the conditions of, any other
applicable provision of the SFA.
Where the Notes are subscribed or purchased under
Section 275 by a relevant person which is: (a) a
corporation (which is not an accredited investor) the sole
business of which is to hold investments and the entire share
capital of which is owned by one or more individuals, each of
whom is an accredited investor; or (b) a trust (where the
trustee is not an accredited investor) whose sole purpose is to
hold investments and each beneficiary is an accredited investor,
shares, debentures and units of shares and debentures of that
corporation or the beneficiaries’ rights and interest in
that trust shall not be transferable for 6 months after
that corporation or that trust has acquired the Notes under
Section 275 except: (1) to an institutional investor
under Section 274 of the SFA or to a relevant person, or
any person pursuant to Section 275(1A), and in accordance
with the conditions, specified in Section 275 of the SFA;
(2) where no consideration is given for the transfer; or
(3) by operation of law.
We estimate that our share of the total expenses of the
offering, excluding underwriting discounts, will be
approximately $375,000.
We have agreed to indemnify the several underwriters against
certain liabilities, including liabilities under the Securities
Act of 1933.
Certain of the underwriters and their respective affiliates
have, from time to time, performed, and may in the future
perform, various financial advisory and investment and
commercial banking services for the Companies and their
affiliates, for which they received or will receive customary
fees and reimbursement of expenses. Wells Fargo Securities, LLC,
one of the underwriters, is an affiliate of the Trustee.
VALIDITY OF THE NOTES AND GUARANTEES
The validity of the Notes and the HECO guarantees will be passed
upon for the Companies by Goodsill Anderson Quinn &
Stifel, a Limited Liability Law Partnership LLP, Honolulu,
Hawaii. Certain legal matters will be passed upon for the
underwriters by Pillsbury Winthrop Shaw Pittman LLP, New York,
New York. Goodsill Anderson Quinn & Stifel LLP will
rely as to all matters of New York law upon the opinion of
Pillsbury Winthrop Shaw Pittman LLP, and Pillsbury Winthrop Shaw
Pittman LLP will rely as to all matters of Hawaii law upon the
opinion of Goodsill Anderson Quinn & Stifel LLP.
EXPERTS
The consolidated financial statements and schedule of HECO and
its subsidiaries as of December 31, 2004 and 2003 and for
each of the years in the three-year period ended
December 31, 2004, and management’s assessment of the
effectiveness of internal control over financial reporting as of
December 31, 2004, have been included in HECO’s Annual
Report on
Form 10-K for the
year ended December 31, 2004, which is incorporated by
reference herein and in the registration statement of which this
prospectus is a part, in reliance upon the reports of KPMG LLP,
independent registered public accounting firm, incorporated by
reference herein, and upon the authority of said firm as experts
in accounting and auditing. The audit reports covering the
December 31, 2004 and 2003 consolidated financial
statements and schedule refer to a change in the method of
accounting for the consolidation of variable interest entities.
32
No dealer, salesperson or
other person is authorized to give any information or to
represent anything not contained in this prospectus. You must
not rely on any unauthorized information or representations.
This prospectus is an offer to sell only the Notes offered
hereby, but only under circumstances and in jurisdictions where
it is lawful to do so. The information contained in this
prospectus is current only as of its date.
TABLE OF CONTENTS
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1 |
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3 |
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11 |
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12 |
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14 |
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15 |
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16 |
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17 |
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17 |
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18 |
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30 |
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32 |
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32 |
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Until ,
200 , all dealers that effect
transactions in the HELCO Notes or the MECO Notes, whether or
not participating in this offering, may be required to deliver a
prospectus. This is in addition to the obligation of dealers to
deliver a prospectus when acting as underwriters and with
respect to their unsold allotments or subscriptions.
$100,000,000
Hawaiian Electric
Company, Inc.
% Notes
due 2036
$50,000,000
Hawaii Electric
Light Company, Inc.
% Notes
due 2036
Fully and Unconditionally
Guaranteed by
Hawaiian Electric Company, Inc.
$15,000,000
Maui Electric
Company, Limited
% Notes
due 2036
Fully and Unconditionally
Guaranteed by
Hawaiian Electric Company, Inc.
PROSPECTUS
Goldman, Sachs & Co.
A.G. Edwards
Lehman Brothers
Merrill Lynch & Co.
Wells Fargo Securities
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
|
|
Item 14. |
Other Expenses of Issuances and Distribution* |
|
|
|
|
|
|
Filing fee for registration
statement
|
|
$ |
17,655 |
|
Legal fees and expenses
|
|
|
120,000 |
|
Fees of rating agencies
|
|
|
125,000 |
|
Accounting fees and expenses
|
|
|
65,000 |
|
Printing and engraving expenses
|
|
|
30,000 |
|
Trustee fees and expenses**
|
|
|
2,000 |
|
Blue sky fees and expenses
|
|
|
7,500 |
|
Other
|
|
|
7,845 |
|
|
|
|
|
|
Total
|
|
$ |
375,000 |
|
|
|
|
|
|
|
* |
All amounts other than the SEC filing fee are estimated. |
|
** |
Does not include annual service fee. |
|
|
Item 15. |
Indemnification of Directors and Officers |
The respective Articles of Incorporation of HECO, HELCO and
MECO, as amended, provide that HECO, HELCO and MECO, as the case
may be and subject to certain exceptions, shall indemnify any
person against expenses (including attorneys’ fees),
judgments, fines and amounts paid in settlement actually and
reasonably incurred in connection with any threatened, pending
or completed action, suit or proceeding to which such person is
a party or is threatened to be made a party by reason of being
or having been a director, officer, employee or agent of HECO,
HELCO and MECO, provided that such person acted in good faith
and in a manner the person reasonably believed to be in or not
opposed to the best interests of such Company, and, with respect
to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful. With respect to an action
brought by or in the right of HECO, HELCO and MECO, as the case
may be, in which such person is adjudged to be liable for
negligence or misconduct in the performance of that
person’s duty to such Company, indemnification may be made
only to the extent deemed fair and reasonable in view of all the
circumstances of the case by the court in which the action was
brought or any other court having jurisdiction. A similar
indemnity in the Restated Articles of Incorporation of Hawaiian
Electric Industries, Inc. (“HEI”), HECO’s parent
corporation, is extended to persons serving at the request of
HEI as a director, officer, employee or agent of another
enterprise, which could include each of the Companies. The
indemnification provisions in the Articles of Incorporation were
authorized at the time of their adoption by the applicable
provisions of the Hawaii Revised Statutes, and substantially
similar authorizing provisions are currently set forth in
Section 414-242 of the Hawaii Revised Statutes.
At HEI’s annual meeting of stockholders held on
April 18,1989, the stockholders adopted a proposal
authorizing HEI to enter into written indemnity agreements with
its officers and directors, including in their capacities as
officers and directors of subsidiaries of HEI. Pursuant to such
authority, HEI has entered into agreements of indemnity with
certain of its officers and directors, some of whom serve as
directors and officers of the Companies. The agreements provide
for advancement of expenses and for mandatory indemnification to
the fullest extent authorized or permitted by law, which could
among other things protect officers and directors of the
Companies from certain liabilities under the Securities Act of
1933. Indemnification under the agreements may be provided
without a prior determination that an officer or director acted
in good faith or in the best interests of HEI, and without prior
court approval provide for indemnification against expenses
(including attorneys’ fees), judgments, fines and
settlement amounts in connection with any action by or in the
right of HEI.
II-1
Under a directors’ and officers’ liability insurance
policy, directors and officers are insured against certain
liabilities, including certain liabilities under the Securities
Act of 1933.
Reference is made to Section 10 of the Underwriting
Agreement, which indemnifies the directors and officers of HECO,
HELCO and MECO against certain liabilities, including certain
liabilities under the Securities Act of 1933.
|
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† 1 |
|
|
—
|
|
Form of Underwriting Agreement
|
|
† 4 |
(a) |
|
—
|
|
Form of Indenture, dated as of
March 1, 2006, between HECO and Wells Fargo Bank, National
Association, as Trustee
|
|
† 4 |
(b) |
|
—
|
|
Form of Indenture, dated as of
March 1, 2006, among HELCO, HECO, as guarantor, and Wells
Fargo Bank, National Association, as Trustee
|
|
† 4 |
(c) |
|
—
|
|
Form of Indenture, dated as of
March 1, 2006, among MECO, HECO, as guarantor, and Wells
Fargo Bank, National Association, as Trustee
|
|
† 4 |
(d) |
|
—
|
|
Form of Officers’ Certificate
Pursuant to the HECO Indenture (including form of HECO Note)
|
|
† 4 |
(e) |
|
—
|
|
Form of Officers’ Certificate
Pursuant to the HELCO Indenture (including form of HELCO Note)
|
|
† 4 |
(f) |
|
—
|
|
Form of Officers’ Certificate
Pursuant to the MECO Indenture (including form of MECO Note)
|
|
† 5 |
(a) |
|
—
|
|
Opinion of Goodsill Anderson
Quinn & Stifel LLP
|
|
† 5 |
(b) |
|
—
|
|
Opinion of Pillsbury Winthrop Shaw
Pittman LLP
|
* |
12 |
|
|
—
|
|
Computation of Ratio of Earnings to
Fixed Charges
|
* |
23 |
(a) |
|
—
|
|
Consent of KPMG LLP
|
|
†23 |
(b) |
|
—
|
|
Consent of Goodsill Anderson
Quinn & Stifel LLP (to be included in Exhibit 5(a))
|
|
†23 |
(c) |
|
—
|
|
Consent of Pillsbury Winthrop Shaw
Pittman LLP (to be included in Exhibit 5(b))
|
* |
24 |
(a) |
|
—
|
|
Power of Attorney for HECO
|
* |
24 |
(b) |
|
—
|
|
Power of Attorney for HELCO
|
* |
24 |
(c) |
|
—
|
|
Power of Attorney for MECO
|
* |
25 |
(a) |
|
—
|
|
Statement of Eligibility under the
Trust Indenture Act of 1939, as amended, of Wells Fargo Bank,
National Association, as Trustee under the HECO Indenture
|
* |
25 |
(b) |
|
—
|
|
Statement of Eligibility under the
Trust Indenture Act of 1939, as amended, of Wells Fargo Bank,
National Association, as Trustee under the HELCO Indenture
|
* |
25 |
(c) |
|
—
|
|
Statement of Eligibility under the
Trust Indenture Act of 1939, as amended, of Wells Fargo Bank,
National Association, as Trustee under the MECO Indenture
|
|
|
* |
Filed with this registration statement. |
|
|
† |
To be filed by pre-effective amendment to this registration
statement. |
Each of the undersigned registrants hereby undertakes that, for
purposes of determining any liability under the Securities Act
of 1933, each filing of HECO’s annual report pursuant to
Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Each of the undersigned registrants hereby undertakes that:
|
|
|
(1) For purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of
prospectus filed as part of this Registration Statement in
reliance upon Rule 430A and contained in the form of
prospectus filed by the registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities
Act shall be deemed to be part of this Registration Statement as
of the time it was declared effective. |
II-2
|
|
|
(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that
contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof. |
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of any of the Companies pursuant to the
provisions described under Item 15 above, or otherwise,
each of the Companies has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is therefore
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by any of the
Companies of expenses incurred or paid by a director, officer or
controlling person of any of the Companies in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the respective Company will, unless
in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933
and will be governed by the final adjudication of such issue.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each
Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on
Form S-3,
reasonably believes that the securities rating requirement
contained in Transaction Requirement B.2 of
Form S-3 will be
met by the time of the sale of the securities registered
hereunder, and has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly
authorized, in the City and County of Honolulu, State of Hawaii,
on the 20th day of January, 2006.
|
|
|
HAWAIIAN ELECTRIC COMPANY, INC. |
|
HAWAII ELECTRIC LIGHT COMPANY, INC. |
|
MAUI ELECTRIC COMPANY, LIMITED |
|
|
|
|
By |
/s/ Tayne S.Y. Sekimura
|
|
|
|
|
|
Tayne S.Y. Sekimura |
|
Financial Vice President |
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following
persons in their capacities with Hawaiian Electric Company, Inc.
and on the dates indicated.
|
|
|
|
|
|
|
Signatures |
|
Title |
|
Date |
|
|
|
|
|
|
Robert
F. Clarke*
Robert F.
Clarke |
|
Chairman
|
|
January 20, 2006
|
|
T.
Michael May*
T.
Michael May |
|
President and Chief
Executive Officer and Director
(Principal Executive Officer)
|
|
January 20, 2006
|
|
Tayne
S.Y. Sekimura*
Tayne S.Y.
Sekimura |
|
Financial Vice President
(Principal Financial Officer)
|
|
January 20, 2006
|
|
Patsy
H. Nanbu*
Patsy H. Nanbu |
|
Controller
(Principal Accounting Officer)
|
|
January 20, 2006
|
|
Thomas
B. Fargo*
Thomas B. Fargo |
|
Director
|
|
January 20, 2006
|
|
Timothy
E. Johns*
Timothy E.
Johns |
|
Director
|
|
January 20, 2006
|
|
A.
Maurice Myers*
A.
Maurice Myers |
|
Director
|
|
January 20, 2006
|
|
David
M. Nakada*
David M. Nakada |
|
Director
|
|
January 20, 2006
|
II-4
|
|
|
|
|
|
|
Signatures |
|
Title |
|
Date |
|
|
|
|
|
|
Diane
J. Plotts*
Diane J. Plotts |
|
Director
|
|
January 20, 2006
|
|
Crystal
K. Rose*
Crystal K. Rose |
|
Director
|
|
January 20, 2006
|
|
James
K. Scott*
James K. Scott |
|
Director
|
|
January 20, 2006
|
|
Anne
M. Takabuki*
Anne M.
Takabuki |
|
Director
|
|
January 20, 2006
|
|
Kelvin
H. Taketa*
Kelvin H.
Taketa |
|
Director
|
|
January 20, 2006
|
|
Barry
K. Taniguchi*
Barry K.
Taniguchi |
|
Director
|
|
January 20, 2006
|
|
Jeffrey
N. Watanabe*
Jeffrey N.
Watanabe |
|
Director
|
|
January 20, 2006
|
|
*By
|
|
/s/
Tayne S.Y. Sekimura
Tayne S.Y.
Sekimura
For herself and as
Attorney-in-fact
for the above mentioned
officers and directors
|
|
|
|
|
II-5
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following
persons in their capacities with Hawaii Electric Light Company,
Inc. and on the dates indicated.
|
|
|
|
|
|
|
Signatures |
|
Title |
|
Date |
|
|
|
|
|
|
T.
Michael May*
T.
Michael May |
|
Chairman
|
|
January 20, 2006
|
|
Robert
F. Clarke*
Robert F.
Clarke |
|
Director
|
|
January 20, 2006
|
|
Warren
H. W. Lee*
Warren H. W.
Lee |
|
President and Director
(Principal Executive Officer)
|
|
January 20, 2006
|
|
Tayne
S.Y. Sekimura*
Tayne S.Y.
Sekimura |
|
Financial Vice President
(Principal Financial Officer and Principal Accounting Officer)
|
|
January 20, 2006
|
|
*By
|
|
/s/
Tayne S.Y. Sekimura
Tayne S.Y.
Sekimura
For herself and as
Attorney-in-fact
for the above mentioned
officers and directors
|
|
|
|
|
II-6
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following
persons in their capacities with Maui Electric Company, Limited
and on the dates indicated.
|
|
|
|
|
|
|
Signatures |
|
Title |
|
Date |
|
|
|
|
|
|
T.
Michael May*
T.
Michael May |
|
Chairman
|
|
January 20, 2006
|
|
Robert
F. Clarke*
Robert F.
Clarke |
|
Director
|
|
January 20, 2006
|
|
Edward
L. Reinhardt*
Edward L.
Reinhardt |
|
President and Director
(Principal Executive Officer)
|
|
January 20, 2006
|
|
Tayne
S.Y. Sekimura*
Tayne S.Y.
Sekimura |
|
Financial Vice President
(Principal Financial Officer
and Principal Accounting Officer)
|
|
January 20, 2006
|
|
*By |
|
/s/
Tayne S.Y. Sekimura
Tayne S.Y.
Sekimura
For herself and as
Attorney-in-fact
for the above mentioned
officers and directors
|
|
|
|
|
II-7
Exhibits
|
|
|
|
|
|
|
† |
1 |
|
|
—
|
|
Form of Underwriting Agreement
|
† |
4 |
(a) |
|
—
|
|
Form of Indenture, dated as of
March 1, 2006, between HECO and Wells Fargo Bank, National
Association, as Trustee
|
† |
4 |
(b) |
|
—
|
|
Form of Indenture, dated as of
March 1, 2006, among HELCO, HECO, as guarantor, and Wells
Fargo Bank, National Association, as Trustee
|
† |
4 |
(c) |
|
—
|
|
Form of Indenture, dated as of
March 1, 2006, among MECO, HECO, as guarantor, and Wells
Fargo Bank, National Association, as Trustee
|
† |
4 |
(d) |
|
—
|
|
Form of Officers’ Certificate
Pursuant to the HECO Indenture (including form of HECO Note)
|
† |
4 |
(e) |
|
—
|
|
Form of Officers’ Certificate
Pursuant to the HELCO Indenture (including form of HELCO Note)
|
† |
4 |
(f) |
|
—
|
|
Form of Officers’ Certificate
Pursuant to the MECO Indenture (including form of MECO Note)
|
† |
5 |
(a) |
|
—
|
|
Opinion of Goodsill Anderson
Quinn & Stifel LLP
|
† |
5 |
(b) |
|
—
|
|
Opinion of Pillsbury Winthrop Shaw
Pittman LLP
|
* |
12 |
|
|
—
|
|
Computation of Ratio of Earnings to
Fixed Charges
|
* |
23 |
(a) |
|
—
|
|
Consent of KPMG LLP
|
† |
23 |
(b) |
|
—
|
|
Consent of Goodsill Anderson
Quinn & Stifel LLP (to be included in Exhibit 5(a))
|
† |
23 |
(c) |
|
—
|
|
Consent of Pillsbury Winthrop Shaw
Pittman LLP (to be included in Exhibit 5(b))
|
* |
24 |
(a) |
|
—
|
|
Power of Attorney for HECO
|
* |
24 |
(b) |
|
—
|
|
Power of Attorney for HELCO
|
* |
24 |
(c) |
|
—
|
|
Power of Attorney for MECO
|
* |
25 |
(a) |
|
—
|
|
Statement of Eligibility under the
Trust Indenture Act of 1939, as amended, of Wells Fargo Bank,
National Association, as Trustee under the HECO Indenture
|
* |
25 |
(b) |
|
—
|
|
Statement of Eligibility under the
Trust Indenture Act of 1939, as amended, of Wells Fargo Bank,
National Association, as Trustee under the HELCO Indenture
|
* |
25 |
(c) |
|
—
|
|
Statement of Eligibility under the
Trust Indenture Act of 1939, as amended, of Wells Fargo Bank,
National Association, as Trustee under the MECO Indenture
|
|
|
* |
Filed with this registration statement. |
|
|
† |
To be filed by pre-effective amendment to this registration
statement. |
II-8