-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, hi3vymuEexu68XcZqXo7DMYkx/IDnLmuqzy6dlhkLsSPEYOGmmws9zRvH9O+CqlO 3NrcBlpddkWJyIrRbRWDfA== 0000950124-95-001669.txt : 19950607 0000950124-95-001669.hdr.sgml : 19950607 ACCESSION NUMBER: 0000950124-95-001669 CONFORMED SUBMISSION TYPE: 424B2 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19950606 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MICHIGAN CONSOLIDATED GAS CO /MI/ CENTRAL INDEX KEY: 0000065632 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS DISTRIBUTION [4924] IRS NUMBER: 380478040 STATE OF INCORPORATION: MI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B2 SEC ACT: 1933 Act SEC FILE NUMBER: 033-59093 FILM NUMBER: 95545322 BUSINESS ADDRESS: STREET 1: 500 GRISWOLD ST CITY: DETROIT STATE: MI ZIP: 48226 BUSINESS PHONE: 3139652430 424B2 1 424B2 1 Pursuant to Rule 424(b)(2) Registration No. 33-59093 PROSPECTUS SUPPLEMENT - ------------------------------------ (TO PROSPECTUS DATED MAY 31, 1995) $150,000,000 MICHIGAN CONSOLIDATED GAS COMPANY FIRST MORTGAGE BONDS DESIGNATED AS SECURED MEDIUM-TERM NOTES, SERIES B DUE NINE MONTHS OR MORE FROM DATE OF ISSUE ------------------------ Michigan Consolidated Gas Company ("MichCon" or the "Company") may from time to time offer up to $150,000,000 aggregate initial offering price of a new series of its First Mortgage Bonds designated as Secured Medium-Term Notes, Series B (the "Offered Notes"), subject to reduction as a result of the sale of other securities as described in the accompanying Prospectus. Each Offered Note will mature on any day nine months or more from its date of issue. Each Offered Note may also be subject to redemption prior to its Stated Maturity at the option of the Company or pursuant to a sinking fund, or repayment prior to its Stated Maturity at the option of the holder of the Offered Notes (the "Holder"), in each case as set forth in a pricing supplement to this Prospectus Supplement (a "Pricing Supplement"). (continued on next page) ------------------------ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT, ANY PRICING SUPPLEMENT HERETO OR THE ACCOMPANYING PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------- AGENTS' PRICE TO DISCOUNTS AND PROCEEDS TO PUBLIC(1) COMMISSIONS(2) COMPANY(2)(3)(4) - --------------------------------------------------------------------------------------------------------- Per Offered Note................... 100% .125% - .750% 99.875% - 99.250% - --------------------------------------------------------------------------------------------------------- $149,812,500 - Total.............................. $150,000,000 $187,500 - $1,125,000 $148,875,000 - --------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------
(1) Unless otherwise specified in the applicable Pricing Supplement, the price to the public will be 100% of the principal amount. (2) The Company will pay to Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated; A.G. Edwards & Sons, Inc.; First Chicago Capital Markets, Inc. or Lehman Brothers, Lehman Brothers Inc. (including its affiliate, Lehman Government Securities Inc.) (each, an "Agent" and collectively, the "Agents") a commission ranging from .125% to .750% of the principal amount of any Offered Note, depending upon its Stated Maturity, sold through such Agent. Commissions with respect to Offered Notes with Stated Maturities in excess of 30 years will be agreed upon by the Company and the respective Agent at the time of sale. The Company may sell Offered Notes at a discount to each Agent for its own account or for resale to one or more investors or other purchasers at varying prices related to prevailing market prices at the time of the resale as determined by such Agents, or if so specified in an applicable Pricing Supplement, for resale at a fixed public offering price. In addition, the Agents may offer the Offered Notes purchased by them as principal to other dealers. Unless otherwise specified in an applicable Pricing Supplement, any Offered Note purchased by an Agent as principal will be purchased at 100% of the principal amount thereof less a percentage equal to the commission applicable to an agency sale of an Offered Note of identical Stated Maturity. (3) Before deducting estimated expenses of $375,000 payable by the Company. (4) The Company has agreed to indemnify the Agents against, and to provide contribution with respect to, certain liabilities, including liabilities under the Securities Act of 1933, as amended. See "Plan of Distribution." ------------------------ The Offered Notes will be offered on a continuous basis by the Company through the Agents who have agreed to use reasonable efforts to solicit offers to purchase the Offered Notes. The Company may sell Offered Notes to investors on its own behalf. Unless otherwise specified in an applicable Pricing Supplement, the Offered Notes will not be listed on any securities exchange and there can be no assurance that the Offered Notes will be sold or that there will be any secondary market for any of the Offered Notes. The Company reserves the right to withdraw, cancel or modify the offer made hereby without notice. The Company or an Agent may reject any offer to purchase Offered Notes, whether or not solicited, in whole or in part. See "Plan of Distribution." ------------------------ MERRILL LYNCH & CO. A.G. EDWARDS & SONS, INC. FIRST CHICAGO CAPITAL MARKETS, INC. LEHMAN BROTHERS ------------------------ The date of this Prospectus Supplement is June 6, 1995. 2 (continued from previous page) Each Offered Note will bear interest at a fixed rate as selected by the purchaser and agreed to by the Company, or selected by the Company and agreed to by the purchaser. Unless otherwise indicated in the applicable Pricing Supplement, interest on each Offered Note will be payable semiannually in arrears on each February 1 and August 1 and on the Maturity Date. The Offered Notes may also be issued with original issue discount, and such Offered Notes may or may not pay any interest. See "Description of the Offered Notes". The interest rate, Issue Price, Stated Maturity, redemption provisions, provisions for the repayment by the Company of any Offered Note at the option of the Holder and certain other terms with respect to each Offered Note will be established by the Company at the time of issuance of such Offered Note and set forth in the applicable Pricing Supplement. Each Offered Note will be represented by a global Offered Note ("Global Note") registered in the name of a nominee of The Depository Trust Company, as Depositary (such an Offered Note, so represented, being called a "Book-Entry Note") as set forth in the applicable Pricing Supplement. Beneficial interests in Global Notes representing Book-Entry Notes will be shown on, and transfers thereof will be effected only through, records maintained by the Depositary and its participants. Book-Entry Notes will not be issuable as a certificate issued in definitive form (a "Certificated Note") except under the circumstances described herein. See "Description of the New Bonds -- Book-Entry Notes" located in the Prospectus and "Description of the Offered Notes -- Book-Entry Notes" located in this Prospectus Supplement. S-2 3 IN CONNECTION WITH THE OFFERING OF OFFERED NOTES, THE AGENTS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE OFFERED NOTES OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. USE OF PROCEEDS Proceeds from the sale of the Offered Notes, in respect of which this Prospectus Supplement is being delivered, will be used to repay short-term debt, fund capital expenditures and for general corporate purposes. RATIO OF EARNINGS TO FIXED CHARGES The following table sets forth MichCon's ratio of earnings to fixed charges for the periods indicated.
TWELVE MONTHS YEAR ENDED DECEMBER 31, ENDED ------------------------------------ MARCH 31, 1995 1994 1993 1992 1991 1990 -------------- ---- ---- ---- ---- ---- Ratio of Earnings to Fixed Charges(1)(2)......... 2.77 3.26 3.58 2.99 2.53 2.37
- ------------------------- (1) The Company is a guarantor of certain other debt. Fixed charges related to such debt, deemed to be immaterial, have been excluded in computing the above ratios. (2) For the purpose of computing these ratios, earnings consists of net income plus income taxes and fixed charges. Fixed charges consist of total interest, amortization of debt discount, premium and expense and the estimated portion of interest implicit in rentals. DESCRIPTION OF THE OFFERED NOTES The following description of the particular terms of the Offered Notes supplements, and to the extent inconsistent therewith replaces, the description of the general terms and provisions of the Offered Notes set forth under "Description of the New Bonds" in the accompanying Prospectus, to which description reference is hereby made. Unless otherwise specified in an applicable Pricing Supplement, the following description of the Offered Notes shall apply. The Offered Notes will be issued as part of a new series of the Company's First Mortgage Bonds designated Secured Medium-Term Notes, Series B, under the Twenty-ninth Supplemental Indenture dated as of July 15, 1989 providing for the restatement of the Indenture of Mortgage and Deed of Trust dated as of March 1, 1944, as supplemented, which became effective on April 1, 1994 (the "Indenture") as supplemented by the Thirty-third Supplemental Indenture dated as of May 1, 1995 relating to the Offered Notes. GENERAL The Offered Notes will be issued as a series of debt securities under the Indenture. The Offered Notes will be limited to $150,000,000 aggregate initial offering price, subject to reduction as a result of the sale of other securities as described in the accompanying Prospectus. The Offered Notes will be issued in fully registered form only, without coupons. Except as set forth herein under "Book-Entry Notes" or in any Pricing Supplement relating to specific Offered Notes, the Offered Notes will not be issuable as Certificated Notes. Unless otherwise specified in an applicable Pricing Supplement, the authorized denominations of Offered Notes will be $1,000 and any larger amount that is an integral multiple of $1,000. Each Offered Note will mature on any day nine months or more from its date of issue, as selected by the purchaser and agreed to by the Company, or selected by the Company and agreed to by the purchaser. Each Offered Note may also be subject to redemption at the option of the Company or to repayment by the S-3 4 Company at the option of the Holder prior to its Stated Maturity (as defined below). The Offered Notes may also be issued with original issue discount ("Original Issue Discount Notes") and such Offered Notes may or may not bear any interest. The Pricing Supplement relating to an Offered Note will describe the following terms: (i) the price (which may be expressed as a percentage of the aggregate principal amount thereof at which such Offered Note will be issued (the "Issue Price")); (ii) the date on which such Offered Note will be issued (the "Original Issue Date"); (iii) the date on which such Offered Note will mature (the "Stated Maturity"); (iv) the rate per annum at which such Offered Note will bear interest, if any, and the Interest Payment Dates; (v) whether such Offered Note may be redeemed at the option of the Company prior to Stated Maturity as described under "Redemption" below and, if so, the provisions relating to such redemption; (vi) any sinking fund or other mandatory redemption provisions applicable to such Offered Note; (vii) any provisions for the repayment by the Company of such Offered Note at the option of the Holder; and (viii) any other terms of such Offered Note not inconsistent with the provisions of the Indenture under which such Offered Note will be issued. The Indenture does not contain any debt covenants or provisions which would afford Holders protection in the event of a highly leveraged transaction. The term "Business Day" as used herein shall mean any day other than a Saturday or Sunday or a day on which the offices of the Trustee in the Borough of Manhattan, The City and State of New York, are authorized or required to be closed pursuant to authorization of law. PAYMENT OF PRINCIPAL AND INTEREST Payments of interest on the Offered Notes (other than interest payable at Stated Maturity or upon earlier redemption or repayment, the Stated Maturity or such prior date, as the case may be, is herein referred to as the "Maturity Date") will be made, except as provided below, by check mailed, or wire transfer, to the Holders of such Offered 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 Record Date (as defined below) with respect to each Interest Payment Date; provided, however, that if the Original Issue Date of an Offered Note is after a Record Date and before the corresponding Interest Payment Date, interest for the period from and including the Original Issue Date for such Offered Note to but excluding such Interest Payment Date will be paid on the next succeeding Interest Payment Date to the Holder of such Offered Note on the related Record Date. Unless otherwise specified in the applicable Pricing Supplement, the principal of the Offered Notes and any premium and interest thereon payable at the Maturity Date will be paid upon surrender thereof at the principal corporate trust office of Citibank, N.A. in New York, New York. Payment of interest due on the Maturity Date will be made to the person to whom payment of the principal and premium, if any, shall be made. If any Interest Payment Date or the Maturity Date falls on a day that is not a Business Day, the required payment of principal, premium, if any, and/or interest will be made on the next succeeding Business Day as if made on the date such payment was due, and no interest will accrue on such payment for the period from and after such Interest Payment Date or the Maturity Date, as the case may be, to the date of such payment on the next succeeding Business Day. Unless otherwise specified in the applicable Pricing Supplement, if the principal of any Original Issue Discount Note is declared to be due and payable immediately as described in the accompanying Prospectus under "Description of the New Bonds -- Default and Notice Thereof to Bondholders", the amount of principal due and payable with respect to such Offered Note shall be limited to the sum of the aggregate stated principal amount at maturity of such Offered Note multiplied by the Issue Price (expressed as a percentage of the aggregate principal amount) plus the original issue discount accrued from the date of issue to the date of declaration, which accrual shall be calculated using the "interest method" (computed in accordance with generally accepted accounting principles) in effect on the date of declaration. S-4 5 The "Record Date" with respect to any Interest Payment Date shall mean the last business day which is more than ten (10) calendar days prior to such Interest Payment Date. Each Offered Note will bear interest from its Original Issue Date at the rate per annum stated on the face thereof until the principal amount thereof is paid or duly made available for payment. Unless otherwise set forth in the applicable Pricing Supplement, interest on each Offered Note will be payable semiannually in arrears on each February 1 and August 1 (each such date, an "Interest Payment Date") and on the Maturity Date. Interest payments in respect of the Offered Notes will equal the amount of interest accrued from and including the immediately preceding Interest Payment Date in respect of which interest has been paid or duly made available for payment (or from and including the Original Issue Date, if no interest has been paid with respect to the applicable Offered Note) to but excluding the related Interest Payment Date or the Maturity Date, as the case may be. Interest on Offered Notes will be computed on the basis of a 360-day year of twelve 30-day months. REDEMPTION Unless otherwise specified in the applicable Pricing Supplement, the Offered Notes will not be subject to any sinking fund. The Offered Notes will be redeemable at the option of the Company prior to Stated Maturity only if an Initial Redemption Date is specified in the applicable Pricing Supplement. If so specified, the Offered Notes will be subject to redemption at the option of the Company on any date on and after the applicable Initial Redemption Date in whole or from time to time in part in increments of $1,000 or the minimum denomination specified in such Pricing Supplement (provided that any remaining principal amount thereof shall be at least $1,000 or such minimum denomination), at the applicable Redemption Price (as defined below) on notice given not less than 30 nor more than 60 days prior to the date of redemption and in accordance with the provisions of the Indenture. "Redemption Price", with respect to an Offered Note, means an amount equal to the sum of (i) the Initial Redemption Percentage specified in such Pricing Supplement (as adjusted by the Annual Redemption Percentage Reduction, if applicable) multiplied by the unpaid principal amount of the portion to be redeemed plus (ii) accrued interest to the date of redemption. The Initial Redemption Percentage, if any, applicable to an Offered Note shall decline at each anniversary of the Initial Redemption Date by an amount equal to the applicable Annual Redemption Percentage Reduction, if any, until the Redemption Price is equal to 100% of the unpaid principal amount thereof or the portion thereof to be redeemed. REPAYMENT If so specified in the applicable Pricing Supplement, the Offered Notes will be repayable by the Company in whole or in part at the option of the Holders thereof on their respective Repayment Dates specified in such Pricing Supplement. If no Repayment Date is specified with respect to an Offered Note, such Offered Note will not be repayable at the option of the Holder thereof prior to Stated Maturity. Any repayment in part will be in increments of $1,000 or the minimum denomination specified in the applicable Pricing Supplement (provided that any remaining principal amount thereof shall be at least $1,000 or such minimum denomination). Unless otherwise specified in the applicable Pricing Supplement, the repayment price for any Offered Note to be repaid means an amount equal to the sum of (i) 100% of the unpaid principal amount thereof or the portion thereof plus (ii) accrued interest to the date of repayment. For any Offered Note to be repaid, such Offered Note must be received, together with the form thereon entitled "Option to Elect Repayment" duly completed, by the Trustee at its Corporate Trust Office (or such other address of which the Company shall from time to time notify the Holders) not less than 30 nor more than 60 days prior to the date of repayment. Exercise of such repayment option by the Holder will be irrevocable. While the Book-Entry Notes are represented by the Global Notes held by or on behalf of the Depositary, and registered in the name of the Depositary or the Depositary's nominee, the option for repayment may be exercised by the applicable Participant that has an account with the Depositary, on behalf of the beneficial owners of the Global Note or Notes representing such Book-Entry Notes, by delivering a written notice substantially similar to the above mentioned form to the Trustee at its Corporate Trust Office (or such other address of which the Company shall from time to time notify the Holders), not less than 30 nor more than 60 S-5 6 days prior to the date of repayment. Notices of elections from Participants on behalf of beneficial owners of the Global Note or Notes representing such Book-Entry Notes to exercise their option to have such Book-Entry Notes repaid must be received by the Trustee by 5:00 P.M., New York City time, on the last day for giving such notice. In order to ensure that a notice is received by the Trustee on a particular day, the beneficial owner of the Global Note or Notes representing such Book-Entry Notes must so direct the applicable Participant before such Participant's deadline for accepting instructions for that day. Different firms may have different deadlines for accepting instructions from their customers. Accordingly, beneficial owners of the Global Note or Notes representing Book-Entry Notes should consult the Participants through which they own their interest therein for the respective deadlines for such Participants. All notices shall be executed by a duly authorized officer of such Participant (with signature guaranteed) and shall be irrevocable. In addition, beneficial owners of the Global Note or Notes representing Book-Entry Notes shall effect delivery at the time such notices of election are given to the Depositary by causing the applicable Participant to transfer such beneficial owner's interest in the Global Note or Notes representing such Book-Entry Notes, on the Depositary's records, to the Trustee. See "Book-Entry Notes". BOOK-ENTRY NOTES Except under the circumstances described below, the Offered Notes will be issued in whole or in part in the form of one or more Global Notes that will be deposited with, or on behalf of, the Depository Trust Company, New York, New York ("DTC"), or such other depositary as may be subsequently designated (the "Depositary"), and registered in the name of the Depositary. Upon issuance, all Book-Entry Notes having the same Original Issue Date, interest rate, redemption provisions, provisions for repayment or purchase by the Company at the option of the Holder and Stated Maturity will be represented by one or more Global Notes. Except as set forth below, Book-Entry Notes represented by a Global Note will not be exchangeable for Certificated Notes and will not otherwise be issuable as Certificated Notes. So long as the Depositary, or its nominee, is the registered owner of a Global Note, such Depositary or such nominee, as the case may be, will be considered the sole holder of the individual Book-Entry Notes represented by such Global Note for all purposes under the Indenture. Payments of principal of and premium, if any, and any interest on individual Book-Entry Notes represented by a Global Note will be made to the Depositary or its nominee, as the case may be, as the Holder of such Global Note. Except as set forth below, owners of beneficial interests in a Global Note will not be entitled to have any of the individual Book-Entry Notes represented by such Global Note registered in their names, will not receive or be entitled to receive physical delivery of any such Book-Entry Notes and will not be considered the Holders thereof under the Indenture, including, without limitation, for purposes of consenting to any amendment thereof or supplement thereto. The following is based on information furnished by DTC: DTC will act as securities depository for the Global Securities representing the Offered Notes. The Offered Notes will be issued as fully-registered securities registered in the name of Cede & Co. (DTC's partnership nominee). The Offered Notes will be issued as one or more fully-registered Global Securities certificate(s) in the aggregate principal amount of such issue, and will be deposited with DTC. DTC is a limited-purpose trust company under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. 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 ("Direct Participants") include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is owned by a number of its Direct Participants and by the New York Stock S-6 7 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, and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). The Rules applicable to DTC and its Participants are on file with the Securities and Exchange Commission. Purchases of Offered Notes under the DTC system must be made by or through Direct Participants, which will receive a credit for the Offered Notes on DTC's records. The ownership interest of each actual purchaser of each Offered Note ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase, but Beneficial Owners are expected to receive written confirmation providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participants through which the Beneficial Owner entered into the transaction. Transfers of beneficial ownership interest in the Offered 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 beneficial ownership interest in the Offered Notes, except in the event that use of the book-entry system for the Offered Notes is discontinued. To facilitate subsequent transfers, all the Offered Notes deposited by Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co. The deposit of Offered Notes with DTC and their registration in the name of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Offered Notes; DTC's records reflect only the identity of the Direct Participants to whose accounts such Offered Notes are credited, which may or may not be the Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Redemption notices shall be sent to Cede & Co. If less than all of the Offered Notes within an issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Neither DTC nor Cede & Co. will consent or vote with respect to the Offered Notes. Under its usual procedures, DTC mails an "Omnibus Proxy" to the Company as soon as possible after the record date. The "Omnibus Proxy" assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Offered Notes are credited on the record date (identified in a listing attached to the "Omnibus Proxy"). Principal and interest payments on the Offered Notes will be made to DTC. DTC's practice is to credit Direct Participants' accounts on the payable date(s) in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that it will not receive payment on the payable date. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with 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, the Trustee, or the Company, 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 Company or the Trustee, disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants. A Beneficial Owner shall give notice to elect to have its Book-Entry Notes repaid by the Company, through its Participant, to the Trustee and shall effect delivery of such Book-Entry Notes by causing the Direct Participant to transfer the Participant's interest in the Global Note or Notes representing such S-7 8 Book-Entry Notes, on the Depositary's records, to the Trustee. The requirement for physical delivery of Book-Entry Notes in connection with a demand for repayment will be deemed satisfied when the ownership rights in the Global Note or Notes representing such Book-Entry Notes are transferred by Direct Participants on the Depositary's records. The Depositary may discontinue providing its services as securities depository with respect to the Book-Entry Notes at any time by giving reasonable notice to the Company or the Trustee. Under such circumstances, in the event that a successor securities depository is not obtained, Certificated Notes are required to be printed and delivered. The Company may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depositary). In that event, Certificated Notes will be printed and delivered. The information provided under this caption concerning DTC and DTC's book-entry system has been obtained from sources that the Company believes to be reliable, but the Company takes no responsibility for the accuracy thereof. NONE OF THE COMPANY, THE INDENTURE TRUSTEE OR ANY AGENT FOR PAYMENT ON OR REGISTRATION OF TRANSFER OR EXCHANGE OF SUCH OFFERED NOTES WILL HAVE ANY RESPONSIBILITY OR LIABILITY FOR ANY ASPECT OF THE RECORDS RELATING TO OR PAYMENTS MADE ON ACCOUNT OF BENEFICIAL INTERESTS IN SUCH GLOBAL NOTE OR FOR MAINTAINING, SUPERVISING OR REVIEWING ANY RECORDS RELATING TO SUCH BENEFICIAL INTEREST. CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES The following summary describes certain United States federal income tax consequences of the ownership of Offered Notes as of the date hereof. Except where noted, it deals only with Offered Notes held as capital assets by initial purchasers and does not deal with special situations, such as those of dealers in securities, financial institutions, individual retirement or other tax-deferred accounts, tax-exempt organizations, insurance companies, persons who hold Offered Notes as a hedge against currency risk, persons who hold Offered Notes as part of a straddle with other investments or who have otherwise hedged the risk of ownership of the Offered Notes, or United States Holders (as defined below) whose "functional currency" is not the U.S. dollar. Persons considering the purchase, ownership or disposition of Offered Notes should consult their own tax advisors concerning the federal income tax consequences in light of their particular situations as well as any consequences arising under the laws of any other taxing jurisdiction, Furthermore, the discussion below is based upon provisions of the Internal Revenue Code of 1986, as amended (the "Code"), and regulations, rulings and judicial decisions thereunder as of the date hereof, and such authorities may be repealed, revoked or modified so as to result in federal income tax consequences different from those discussed below. UNITED STATES HOLDERS As used herein, a "United States Holder" of an Offered Note means a holder that is a citizen or resident of the United States, a corporation, partnership or other entity created or organized in or under the laws of the Untied States or any political subdivision thereof, or an estate or trust the income of which is subject to United States federal income taxation regardless of its source. A "Non-United States Holder" is a holder that is not a United States Holder. PAYMENTS OF INTEREST. Except as set forth below, interest on an Offered Note will generally be taxable to a United States Holder as ordinary income at the time it is paid or accrued in accordance with the holder's method of accounting for federal income tax purposes. ORIGINAL ISSUE DISCOUNT. An Offered Note will be treated as having been issued with "original issue discount" ("OID") if the excess of its "stated redemption price at maturity" over its "issue price" (for these purposes the first price at which a substantial amount of the Offered Notes is sold to the public) equals or S-8 9 exceeds a de minimis amount (0.25 percent of the stated redemption price at maturity multiplied by the number of complete years to maturity). (Offered Notes issued with OID shall be referred to as "OID Notes.") For this purpose, "stated redemption price at maturity" means the sum of all payments under the Offered Notes other than "qualified stated interest" payments. In general, "qualified stated interest" includes stated interest that is unconditionally payable at least annually at a single fixed rate. Unless the Offered Notes are issued with stated interest that is entirely qualified stated interest, all payments or portions of payments that do not constitute qualified stated interest would constitute a portion of the stated redemption price at maturity of the Offered Notes. Any such Offered Notes may therefore possess OID subject to the consequences described herein, even if the issue price of the Offered Notes equals (or exceeds) the principal amount of such Notes. United States Holders are required to include OID in income in advance of the receipt of some or all of the related cash payments. For OID Notes having a term in excess of one year, OID will be included in income currently as interest as it accrues over the life of the Offered Note under a formula based upon the compounding of interest at a rate that provides for a constant yield to maturity. Under this formula, United States Holders must include in income increasingly greater amounts of OID in each successive accrual period. The Company is required to report the amount of OID accrued on Offered Notes held of record by persons other than corporations and other exempt holders; however, the amount reported by the Company may not equal the amount of OID required to be included in income by a holder that is not an initial purchaser of the Offered Notes or who does not purchase the Offered Notes at their issue price. In the event that the Company determines to issue Offered Notes that are OID Notes (including certain Offered Notes not denominated in U.S. dollars or providing for contingent payments), and the federal income tax consequences of such features would be material to United States Holders, notice thereof and additional information will be provided in the appropriate supplement hereto. SHORT-TERM NOTES. In the case of Offered Notes with a maturity of one year or less ("Short-Term Notes"), all payments (including all stated interest however calculated) will be included in the stated redemption price at maturity, thus, United States Holders will be taxable on OID in lieu of stated interest. Accrual method United Stated Holders and certain other United States Holders, including banks and dealers in securities, are required to include OID on a Short-Term Note in income as it accrues either on a straight line basis or, if the holder so elects, under the constant yield method. In general, individuals and other cash method United States Holder's are not required to include OID in income as it accrues unless they elect to do so. In the case of an individual or cash method holder who does not elect to include OID on a Short-Term Note in income as it accrues, however, any gain realized on the disposition of a Short-Term Note will be treated as ordinary income to the extent of the OID accrued on a straight-line basis (or, if elected, on a constant yield basis). Furthermore, such a non-electing holder will be required to defer deductions for a portion of the holder's interest expenses with respect to any indebtedness incurred or maintained to purchase or carry such Short-Term Notes, in an amount not exceeding the deferred interest income, until the deferred interest income is realized. In the case of a holder who includes OID on a Short-Term Note in income as it accrues, the amount so included will be added to the holder's tax basis in the Short-Term Note. Accrual method United States Holders (including holders that are not initial purchasers) may elect to include all interest that accrues on an Offered Note by using the constant yield method. For this purpose, "interest" includes both OID (including OID on Short-Term Notes and de minimis OID) and stated interest (as such may be adjusted by amortization of premium and acquisition premium, see "Amortization of Premium" below). If the holder so elects with respect to an Offered Note that has been purchased at a premium (as opposed to merely an acquisition premium), this election is also treated as an election under the amortizable bond premium provisions, described below, and the electing holder will be required to amortize bond premium currently for all his other debt instruments with amortizable bond premium. This election is to be made in the taxable year in which the holder acquired the Offered Note and may not be revoked without the consent of the Internal Revenue Service ("IRS"). S-9 10 AMORTIZATION OF PREMIUM. An offered Note may be considered to have been issued at a "premium" to the extent that the United States Holder's tax basis in the Offered Note immediately after purchase exceeds its principal amount. A holder generally may elect to amortize the premium over the remaining term of the Offered Note on a constant yield method. The amount amortized in any year will be treated as a reduction of the holder's interest income from the Offered Note. Premium on an Offered Note held by a holder that does not make such an election will decrease the gain or increase the loss otherwise recognized on disposition of the Offered Note. An Offered Note purchased for an amount that exceeds its issue price but not the principal amount of the Offered Note will be issued with "acquisition premium." In that event, the amount of OID otherwise includable on the Offered Note would be reduced over the term of the Offered Note through amortization of the acquisition premium. Alternatively, a United States Holder may elect to compute OID accruals by using his purchase price, rather than the issue price, together with the constant yield method for accruing the discount. Such an election may not be revoked unless approved by the IRS. SALES, EXCHANGE AND RETIREMENT OF OFFERED NOTES. Upon the sale, exchange or retirement of an Offered Note, a United States Holder will recognize gain or loss equal to the difference between the amount realized upon the sale, exchange or retirement and the adjusted tax basis of the Offered Note. A United States Holder's tax basis in an Offered Note will, in general, equal the United States Holder's cost for the Offered Note, increased by OID included in income and reduced by any amortized premium and any cash payments on the Offered Note other than qualified stated interest payments. Except with respect to certain Short-Term Notes, as described in "Short-Term Notes" above, such gain or loss will be capital gain or loss and will be long-term capital gain or loss if the Offered Note had been held for more than one year at the time of disposition. Net capital gains of individuals are, under certain circumstances, taxed at lower rates than items of ordinary income. A United States Holder's ability to offset capital losses against ordinary income is limited. NON-UNITED STATES HOLDERS Non-United States Holders will not be subject to United States federal income taxes, including withholding taxes, on the interest income (including any OID) on, or gain from the sale or disposition of any Offered Note provided that: (i) the interest income or gain is not effectively connected with the conduct by the Non-United States Holder of a trade or business within the United States; (ii) the Non-United States Holder is not a controlled foreign corporation related to the Company through stock ownership; (iii) with respect to any gain, the Non-United States Holder, if an individual, is not present in the United States for 183 days or more during the taxable year and (iv) the Non-United States Holder provides the correct certification of his status (which may generally be satisfied by providing an Internal Revenue Service Form W-8 certifying that the beneficial owner is not a United States Holder and providing the name and address of the beneficial owner). An individual holder of an Offered Note who is not a citizen or resident of the United States at the time of the holder's death will not be subject to United States federal estate tax as a result of the holder's death, as long as any interest received on the Offered Note, if received by the holder at the time of the holder's death, would not be effectively connected with the conduct of a trade or business by such individual in the United States. BACKUP WITHHOLDING In general, if a non-corporate holder fails to furnish a correct taxpayer identification number or certification of foreign or other exempt status, fails to report dividend and interest income in full, or fails to certify that such holder has provided a correct taxpayer identification number and is not subject to backup withholding, a 31 percent federal backup withholding tax may be withheld on amounts paid to the holder. An individual's taxpayer identification number is his or her social security number. The backup withholding tax is not an additional tax and may be credited against a holder's regular federal income tax liability or refunded by the Internal Revenue Service where applicable. S-10 11 THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES TO THEM OF THE OWNERSHIP AND DISPOSITION OF THE NOTES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED STATES OR OTHER TAX LAWS. PLAN OF DISTRIBUTION The Offered Notes are being offered on a continuous basis by the Company through Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated; A.G. Edwards & Sons, Inc.; First Chicago Capital Markets, Inc. and Lehman Brothers, Lehman Brothers Inc. (including its affiliate, Lehman Government Securities Inc.) (the "Agents"), each of whom has agreed to use reasonable efforts to solicit offers to purchase the Offered Notes. The Company will pay each Agent a commission ranging from .125% to .750% of the principal amount of each Offered Note sold through such Agent, depending upon the Stated Maturity of the Offered Note. Commissions with respect to Offered Notes with Stated Maturities in excess of 30 years that are sold through an Agent will be negotiated between the Company and such Agent at the time of sale. The Company may sell Offered Notes to any of the Agents, as principal, at a discount for resale to investors and other purchasers at varying prices related to prevailing market prices at the time of resale, to be determined by such Agent, or, if so agreed, at a fixed public offering price. In addition, the Agents may offer the Offered Notes they have purchased as principal to other dealers. The Agents may sell Offered Notes to any dealer at a discount and, unless otherwise specified in the applicable Pricing Supplement, such discount allowed to any dealer will not be in excess of the discount to be received by such Agent from the Company. Unless otherwise indicated in the applicable Pricing Supplement, any Offered Note sold to an Agent as principal will be purchased by each Agent at a price equal to 100% of the principal amount thereof less a percentage of the principal amount equal to the commission applicable in any agency sale of an Offered Note of identical maturity, and may be resold by the Agent to investors and other purchasers, as described above. After the initial public offering of the Offered Notes, the public offering price (in the case of Offered Notes to be resold at a fixed public offering price), concession and discount may be changed. The Company has reserved the right to appoint additional agents to solicit offers to purchase the Offered Notes. The Company may also sell the Offered Notes directly to investors on its behalf. In the case of sales made directly by the Company no commission will be payable. The Company has agreed to reimburse the Agents for certain expenses. The Company will have the sole right to accept offers to purchase Offered Notes and may, in its absolute discretion, reject any proposed purchase of Offered Notes in whole or in part. Each Agent will have the right, in its discretion reasonably exercised, to reject any offer to purchase Offered Notes received by it in whole or in part. No Offered Note will have an established trading market when issued. The Offered Notes will not be listed on any securities exchange. The Agents may make a market in the Offered Notes, but the Agents are not obligated to do so and may discontinue any market-making at any time without notice. There can be no assurance of a secondary market for any Offered Notes, or that the Offered Notes will be sold. Each Agent, whether acting as agent or principal, may be deemed to be an "underwriter" within the meaning of the Securities Act of 1933, as amended (the "Securities Act"). The Company has agreed to indemnify the Agents against certain liabilities, including liabilities under the Securities Act, or to contribute to payments that the Agents may be required to make in respect thereof. S-11 12 PROSPECTUS MICHIGAN CONSOLIDATED GAS COMPANY FIRST MORTGAGE BONDS ------------------------ Michigan Consolidated Gas Company ("MichCon" or the "Company") from time to time may offer, in an aggregate principal amount not to exceed $150,000,000, its First Mortgage Bonds (the "New Bonds"). The New Bonds will be issued in one or more series under one or more future supplemental indentures or as may be created pursuant to resolutions of the Board of Directors of the Company. In addition, the New Bonds may be offered with the same or various maturities, and at prices and terms to be determined at the time of sale. Certain terms of the New Bonds including, where applicable, the specific designation, aggregate principal amount, interest rate, interest payment dates, maturity, public offering price, any redemption terms or other specific terms of each series of New Bonds in respect of which this Prospectus is being delivered will be set forth in an accompanying Prospectus Supplement or Supplements (a "Prospectus Supplement"). MichCon may sell the New Bonds to or through underwriters, through dealers, directly to one or more institutional purchasers or through agents. See "Plan of Distribution". Underwriters may include Merrill Lynch & Co. (Merrill Lynch, Pierce, Fenner & Smith Incorporated) or such other underwriter or underwriters as may be designated by MichCon, or an underwriting syndicate represented by one or more of such firms. Such firms may also act as agents. The Prospectus Supplement will set forth the names of such underwriters, dealers or agents, if any, any applicable commissions or discounts and the proceeds to MichCon from such sale. ------------------------ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ------------------------ The date of this Prospectus is May 31, 1995. 13 AVAILABLE INFORMATION MichCon is subject to the informational requirements of the Securities Exchange Act of 1934, as amended, (the "1934 Act") and in accordance therewith files reports, proxy statements and other information with the Securities and Exchange Commission (the "SEC"). Such reports, proxy statements and other information can be inspected and copied at the SEC's Public Reference Room; Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, as well as the following Regional Offices of the SEC: 7 World Trade Center, Suite 1300, New York, New York 10048 and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of such material can be obtained from the Public Reference Section of the SEC at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. In addition, certain MichCon securities are listed on the New York Stock Exchange where reports, proxy statements and other information concerning MichCon may be inspected. This Prospectus does not contain all information set forth in the Registration Statement and Exhibits thereto which the Company has filed with the SEC under the Securities Act of 1933 and to which reference is hereby made. ------------------------- INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE There are hereby incorporated by reference in this Prospectus and made a part hereof the following documents heretofore filed with the SEC pursuant to the 1934 Act: 1. The Company's Annual Report on Form 10-K for the year ended December 31, 1994. 2. The Company's Report on Form 8-K, dated March 14, 1995. 3. The Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1995. All documents filed by MichCon pursuant to Sections 13(a), 13(c), 14 or 15(d) of the 1934 Act after the date of this Prospectus and prior to the termination of the offering of the securities offered hereby shall be deemed to be incorporated by reference in this Prospectus. Any statement contained herein or in a document incorporated or deemed to be incorporated by reference in this Prospectus shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained in this Prospectus or in any other subsequently filed document which also is or is deemed to be incorporated by reference in this Prospectus modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. MichCon hereby undertakes to provide without charge to each person to whom a copy of this Prospectus has been delivered, on the written or oral request of any such person, a copy of any or all of the documents referred to above which have been or may be incorporated by reference in this Prospectus, other than exhibits to such documents. Requests for such copies should be directed to: Investor Relations, MCN Corporation, 500 Griswold Street, Detroit, Michigan 48226; telephone 1-800-548-4655. NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR THE PROSPECTUS SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE REGISTERED SECURITIES TO WHICH IT RELATES OR AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS OR THE PROSPECTUS SUPPLEMENT NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THEREOF OR THAT THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE. 2 14 THE COMPANY MichCon is a Michigan corporation that was organized in 1898 and, with its predecessors, has been in business for nearly 150 years. The Company is engaged in the natural gas distribution and transmission business in the State of Michigan and serves more than 1.1 million customers. MichCon is a wholly-owned subsidiary of MCN Corporation, a Michigan corporation. At December 31, 1994, MichCon and its subsidiaries employed 3,273 persons. The mailing address of MichCon's principal executive office is 500 Griswold Street, Detroit, Michigan 48226, and its telephone number is (313) 965-2430. USE OF PROCEEDS Except as otherwise stated in the applicable Prospectus Supplement, net proceeds from the sale of the New Bonds offered hereby will be used for the acquisition of property; the construction, completion, extension or improvement of facilities; working capital requirements; the improvement or maintenance of service; the discharge or lawful retirement of short or long-term debt and borrowings made or expected to be made; and for other corporate purposes. Specific allocations of proceeds for such purposes have not been made at this time. Funds may be borrowed in anticipation of future requirements. RATIO OF EARNINGS TO FIXED CHARGES The following table sets forth MichCon's earnings to fixed charges for the periods indicated.
TWELVE MONTHS YEAR ENDED DECEMBER 31, ENDED ------------------------------------ MARCH 31, 1995 1994 1993 1992 1991 1990 -------------- ---- ---- ---- ---- ---- Ratio of Earnings to Fixed Charges(1) and (2).... 2.77 3.26 3.58 2.99 2.53 2.37
- ------------------------- (1) The Company is a guarantor of certain other debt. Fixed charges related to such debt, deemed to be immaterial, have been excluded in computing the above ratios. (2) For the purpose of computing these ratios, earnings consists of net income plus income taxes and fixed charges. Fixed charges consist of total interest, amortization of debt discount, premium and expense and the estimated portion of interest implicit in rentals. DESCRIPTION OF THE NEW BONDS The following description sets forth certain general terms and provisions of the New Bonds to which any Prospectus Supplement will relate. The particular terms of the New Bonds offered by any Prospectus Supplement will be described in such Prospectus Supplement. The statements made herein are a summary only, do not purport to be complete, and are subject to the detailed provisions of the Twenty-ninth Supplemental Indenture dated as of July 15, 1989 providing for the restatement of the Indenture of Mortgage and Deed of Trust dated as of March 1, 1944 which became effective on April 1, 1994 upon the retirement of all bonds issued prior to March 1, 1987 and upon the filing of the required certificates with the Trustee by the Company (the "Indenture"). The bonds of all series issued, or which may be issued, under the Indenture are hereinafter referred to as the "Bonds". This summary incorporates by reference certain Articles and Sections of the Indenture and the supplemental indentures referred to below and is qualified in its entirety by such reference. Terms defined in the Indenture and supplemental indentures are used in this summary without definition. GENERAL The New Bonds will constitute one or more new series of Bonds under the Indenture, under which 4 series are currently outstanding. The Trustees under the Indenture are Citibank, N.A., New York, N.Y. (the "Trustee") and Robert T. Kirchner (collectively, the "Trustees"). 3 15 The New Bonds will be offered on a continuing basis and will mature nine months or more from the Issue Date (hereinafter defined) as selected by the purchaser and agreed to by MichCon. Each New Bond will bear interest at a fixed or variable rate selected by the purchaser and agreed to by MichCon. Reference is made to the applicable Prospectus Supplement for the following terms of the New Bonds (1) the specific designation and series of such New Bonds; (2) the purchase price of such New Bonds (the "Issue Price"), which may be expressed as a percentage of the principal amount at which such New Bonds will be issued; (3) the date on which such New Bonds will be issued (the "Issue Date"); (4) the date or dates on which the principal of such New Bonds will be payable (the "Maturity Date"); (5) the rate(s) per annum at which such New Bonds will bear interest (the "Interest Rate") if any, or the method of determination of such rate; (6) the date from which any such interest shall accrue; (7) the terms of redemption, if any; and (8) any other terms of such New Bonds not inconsistent with the provisions of the Indenture. The New Bonds will be issued as fully registered bonds without coupons. If so provided in the Prospectus Supplement, the Company may provide for the issuance of uncertificated bonds in addition to or in place of certificated bonds. The New Bonds will be exchangeable by holders for New Bonds of the same aggregate principal amount, but of different authorized denomination or denominations, which have the same Issue Date, Maturity Date, Interest Rate, and redemption provisions, if any. Such exchanges are to be made without service charge (other than any stamp tax or other governmental charge.) SECURITY AND PRIORITY The Indenture constitutes a first mortgage lien (subject to exceptions and reservations set forth therein, to "permissible encumbrances", and to various matters specified under "Business; Franchises" and "Properties" in MichCon's Form 10-K) upon substantially all of the fixed property and franchises of MichCon, consisting principally of gas distribution and transmission lines and systems, underground storage fields and buildings, including property of the character initially mortgaged which has been or may be acquired by MichCon subsequent to the execution and delivery of the Indenture. It prohibits creation of prior liens upon the mortgaged property, other than "permissible encumbrances", but, within specified limitations in certain cases, property may be acquired subject to preexisting liens or purchase money and other liens created at the time or in connection with the acquisition of such property. The property excepted from the lien of the Indenture consists principally of cash (unless deposited with the Trustee under the Indenture), accounts receivable, gas stored in reservoirs except to the extent specially pledged, materials and supplies, securities, vehicles and leases. (Granting Clauses, Part II, Article I and Section 5.08, 5.10 and 5.11.) The New Bonds will rank equally and ratably (except as to sinking fund and other analogous funds established for the exclusive benefit of a particular series) with all Bonds, regardless of series, from time to time issued and outstanding under the Indenture. RELEASE OF PROPERTY Unless an event of default shall have occurred and be continuing, the Company is entitled to possess, use and enjoy all the property and appurtenances, franchise and rights conveyed by the Indenture. Subject to various limitations and requirements, the Company may obtain a release of any part of the mortgaged property, except prior lien bonds, upon receipt by the Trustee of cash, as adjusted, equal to the consideration, if any, received or to be received from the sale, surrender or other disposition of the property to be released or the then fair value thereof (which ever shall be greater). (Article VII.) ISSUANCE OF ADDITIONAL BONDS Additional Bonds may be issued under the Indenture in principal amounts (unlimited except as provided by law) equal to: (1) 70% of the cost or fair value to the Company, whichever is less, of unbonded net property additions made after December 31, 1943 (subject to deductions in certain cases, if such net property additions secure prior lien bonds); and 4 16 (2) the sum of the principal amount of Bonds previously issued under the Indenture, and of prior lien bonds theretofore deducted under the Indenture, which have been retired or are then being retired and have not theretofore been bonded; and (3) the amount of cash deposited with the Trustee for such purpose. Bonds may be issued on the basis of net property additions which include substantially all utility property subject to the Indenture (Part II, Article III) or deposit of cash only if net earnings available for interest and depreciation (before deduction for income taxes) for any specified 12 consecutive calendar months within the preceding 15 months equal 2 1/2 times annual interest charges on the Bonds and any prior lien bonds. Such earnings requirement need not be met where Bonds are to be issued against Bonds or prior lien bonds which have been or are being retired as described in (2) above if the Bonds to be issued bear interest at a lower rate than the Bonds or prior lien bonds which have been or are to be retired, or if the proceeds from the Bonds to be issued are used to refund Bonds or prior lien bonds which have been retired within two years prior to such issuance unless additional Bonds requiring an earnings certificate have been issued in the period between the retirement of the retired Bonds and the issuance of the New Bonds. As of December 31, 1994, MichCon had approximately $796 million of unbonded net property additions, which would entitle it to issue approximately $557 million principal amount of additional Bonds on the basis of unbonded net property additions as discussed under (1) in the second preceding paragraph, and had further additional capacity to issue $145 million principal amount of New Bonds on the basis of Bonds previously issued under the Indenture, which have been retired and have not theretofore been bonded as discussed under (2) in the second preceding paragraph. The New Bonds will be issued upon the basis of 70% of the cost or fair value of unbonded net property additions as discussed under (1) in the second preceding paragraph, upon the basis of retired Bonds, as discussed under (2) in the second preceding paragraph and/or cash deposited with the Trustee for such purpose, as discussed under (3) in the second preceding paragraph. WITHDRAWAL OF CERTAIN CASH Cash deposited with the Trustee as a basis for the issuance of additional Bonds may be withdrawn by MichCon in amounts described in (1) and (2) under "Issuance of Additional Bonds". (Part II, Section 8.01.) DEFEASANCE The Company may require the discharge of the Indenture or treat a series of Bonds as no longer outstanding thereunder if: (1) the Company deposits with the Trustee monies or certain obligations of the United States of America or certain securities which are guaranteed by, or backed by obligations of, the United States of America, in an amount sufficient to pay, when due, the principal, premium if any, and any interest due and to become due; and (2) the Company delivers an opinion of counsel to the effect that registration is not required under the Investment Company Act of 1940, applicable laws are not violated, and such discharge will not result in a taxable event with respect to the Bonds the payment of which is being provided for. In such event, the obligation of the Company duly and punctually to pay and cause to be paid the principal, premium, if any, and interest in respect of such Bonds shall be completely discharged. Thereafter, the holders of such Bonds shall be entitled to payment only out of funds on deposit with the Trustee as aforesaid for their payment. (Part II, Article XVI.) MODIFICATION OF INDENTURE In general, modifications or alterations of the Indenture and indentures supplemental thereto and of the rights or obligations of the Company and of the bondholders, as well as waivers of compliance with the Indenture or indentures supplemental thereto, may be made with the consent of holders of 60% of the Bonds, or, if less than all series of Bonds are adversely affected, the consent of the holders of 60% of the Bonds adversely affected. No such modification, alteration or waiver may be made which will (1) permit the extension of the time or times of payment of the principal of, or the interest or the premium (if any) on, any Bond, or a reduction in the rate of interest thereon, or otherwise affect the terms of payment of the principal of, or the interest or the premium (if any) on, any Bond, or affect the right of any bondholder to institute suit 5 17 for the enforcement of any such payment on or after the due date thereof, (2) otherwise than as permitted by the Indenture, permit the creation of any lien ranking prior or equal to the lien of the Indenture with respect to any of the mortgaged properties or (3) permit the reduction of the percentage of Bonds required for the making of any such modification, alteration or waiver. (Part II, Article XIV.) CONCERNING THE TRUSTEES The Trustee (Citibank, N.A.) has acted as paying agent on the outstanding Bonds and will act in the same capacity with respect to the New Bonds. It is also a depositary of funds of the Company. Robert T. Kirchner is Individual Trustee. Mr. Kirchner is an Officer of Citibank, N.A. DEFAULT AND NOTICE THEREOF TO BONDHOLDERS The Indenture provides that, in case of an event of default as defined therein, the Trustee or the holders of not less than 25% in principal amount of the Bonds may declare the principal and all accrued and unpaid interest of all Bonds, if not already due, to be immediately due and payable. The Trustee, upon request of the holders of a majority in principal amount of the outstanding Bonds, shall waive such default and rescind any such declaration if such default is cured. The holders of a majority in principal amount of the Bonds shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustees and of exercising any power or trust conferred upon the Trustees, but under certain circumstances, the Trustees may decline to follow such directions or to exercise certain of their powers. Bondholders have no right to enforce any remedy under the Indenture unless the Trustees have first had a reasonable opportunity to do so following notice of default to the Trustee and request by the holders of 25% in principal amount of the Bonds for action by the Trustees with offer of indemnity satisfactory to the Trustees against cost, expenses and liabilities that may be incurred thereby, but this provision does not impair the absolute right of any bondholder to enforce payment of the principal of and interest on his Bond when due. (Part II, Article IX.) The Indenture provides that the following shall constitute events of default: failure to pay any installment of interest on any Bond when due and payable, and continuance of such failure for 60 days; failure to pay the principal of any Bond when due and payable, whether at maturity, in connection with any sinking fund payment, or otherwise; failure to pay any installment of interest on any prior lien bonds, and continuance of such failure for the period of grace, if any, specified in the prior lien securing such bonds; failure to pay any installment applied to the purchase or redemption of any Bond, and continuance of such failure for 60 days; failure to pay the principal of any prior lien bond when due and payable, whether at maturity or otherwise; failure on the part of the Company to perform or observe any other covenant, agreement or condition contained in the Indenture or any indenture supplemental thereto or in the Bonds or any prior lien bonds, continuance of such failure for 90 days after written notice to the Company by the Trustee or by the holders of not less than 25% in principal amount of the Bonds; and insolvency or bankruptcy, receivership or similar proceedings initiated by the Company, or initiated against the Company and not dismissed or stayed within 45 days; and failure to renew or extend its corporate charter upon or prior to the expiration of such under the provision of its Articles of Incorporation or of law. The Indenture provides that the Trustees shall give to the bondholders notice of the happening of a default known to them within 90 days after the occurrence thereof (disregarding any period of grace in the defaults referred to above) unless such default shall have been cured, but except in case of default in the payment of principal, premium, if any, or interest on the Bonds or in the payment of any sinking fund installment, the Trustees may withhold such notice if and so long as the board of directors, the executive committee or a trust committee of directors or responsible officers of the Trustee in good faith determine that the withholding of such notice is in the interest of the bondholders. (Part II, Sections 9.01 and 12.03.) BOOK-ENTRY NOTES The New Bonds may be issued in whole or in part in the form of one or more Global Securities (a "Global Note" or "Book-Entry Note") registered in the name of such depositary as will be specified in the 6 18 Prospectus Supplement (the "Depositary"). Upon issuance, all Book-Entry Notes having the same Issue Date, Maturity Date, Interest Rate and redemption provisions will be represented by a single Global Note. Each Global Note will be deposited with, or on behalf of, the Depositary. Book-Entry Notes will not be exchangeable for certificated New Bonds and will not otherwise be issuable as certificated New Bonds unless the use of the book-entry system is discontinued. Unless and until it is exchanged in whole or in part for the individual New Bonds represented thereby, a Global Note may not be transferred except as a whole by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor of the Depositary or a nominee of such successor. LEGAL OPINIONS The legality of the New Bonds offered hereby will be passed upon for the Company by Susan K. McNish, General Counsel and Secretary of MichCon and for the Underwriters by LeBoeuf, Lamb, Greene & MacRae, L.L.P., a limited liability partnership including professional corporations, 125 West 55th Street, New York, New York 10019-5389. LeBoeuf, Lamb, Greene & MacRae, L.L.P. from time to time renders legal service to MichCon. EXPERTS The consolidated financial statements and related financial statement schedule incorporated in this prospectus by reference from MichCon's Annual Report on Form 10-K for the year ended December 31, 1994 have been audited by Deloitte & Touche LLP, independent auditors, as stated in their report, which is incorporated herein by reference (which report expresses an unqualified opinion and includes an explanatory paragraph relating to MichCon's adoption of Statement of Financial Accounting Standards No. 106, "Employers' Accounting For Postretirement Benefits Other Than Pensions"), and have been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. PLAN OF DISTRIBUTION The Company may sell any series of the New Bonds (i) through underwriters; (ii) through dealers; (iii) directly to one or more institutional purchasers; or (iv) through agents. A Prospectus Supplement will set forth the terms of the offering of the New Bonds offered thereby, including the name or names of any underwriters, dealers, purchasers or agents, the purchase price of such New Bonds and the proceeds to the Company from such sale, any underwriting discounts and other items constituting underwriters' compensation, any initial public offering price, any discounts or concessions allowed or reallowed or paid to dealers and any securities exchange on which such New Bonds may be listed. Any initial public offering price and any discounts or concessions allowed or reallowed or paid to dealers may be changed from time to time. Only firms named in the Prospectus Supplement or a related pricing supplement, if applicable, will be deemed to be underwriters, dealers or agents in connection with the New Bonds offered thereby, and if any of the firms expressly referred to below is not named in such Prospectus Supplement or a related pricing supplement, then such firm will not be a party to the underwriting or distribution agreement in respect of such New Bonds, will not be purchasing any such New Bonds from the Company and will have no direct or indirect participation in the underwriting or other distribution of such New Bonds, although it may participate in the distribution of such New Bonds under circumstances entitling it to a dealer's commission. If underwriters are used in the sale, the New Bonds will be acquired by the underwriters for their own account and may be resold from time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. The New Bonds may be offered to the public either through underwriting syndicates represented by one or more managing underwriters (which may include Merrill Lynch & Co. (Merrill Lynch, Pierce, Fenner & Smith Incorporated), or such other underwriter or underwriters as may be designated by the Company) or directly by one or more underwriters. Unless otherwise set forth in the Prospectus Supplement, the obligations of the underwriters to 7 19 purchase the New Bonds offered thereby will be subject to certain conditions precedent, and the underwriters will be obligated to purchase all of such New Bonds if any are purchased. New Bonds may be sold directly by the Company or through any firm designated by the Company, from time to time. The Prospectus Supplement will set forth the name of any agent involved in the offer or sale of the New Bonds in respect of which the Prospectus Supplement is delivered and any commissions payable by the Company to such agent. Unless otherwise indicated in the Prospectus Supplement, any such agent will be acting on a best efforts basis for the period of its appointment. Underwriters, dealers and agents may be entitled under agreements entered into with the Company, to indemnification by the Company against certain civil liabilities, including liabilities under the Securities Act of 1933, or to contribution with respect to payments which such underwriters, dealers or agents may be required to make in respect thereof. Underwriters, dealers and agents may engage in transactions with or perform services for the Company in the ordinary course of business. 8 20 - ------------------------------------------------------ - ------------------------------------------------------ NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT, THE APPLICABLE PRICING SUPPLEMENT OR THE PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS SUPPLEMENT, THE APPLICABLE PRICING SUPPLEMENT AND THE PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER, AGENT OR DEALER. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT, THE APPLICABLE PRICING SUPPLEMENT OR THE PROSPECTUS NOR ANY SALE MADE HEREUNDER AND THEREUNDER SHALL UNDER ANY CIRCUMSTANCE CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. THIS PROSPECTUS SUPPLEMENT, THE APPLICABLE PRICING SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY STATE IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. ------------------------ TABLE OF CONTENTS PROSPECTUS SUPPLEMENT
PAGE ---- Use of Proceeds....................... S-3 Ratio of Earnings to Fixed Charges.... S-3 Description of the Offered Notes...... S-3 Certain United States Federal Income Tax Consequences.................... S-8 Plan of Distribution.................. S-11 PROSPECTUS Available Information................. 2 Incorporation of Certain Documents by Reference........................... 2 The Company........................... 3 Use of Proceeds....................... 3 Ratio of Earnings to Fixed Charges.... 3 Description of the New Bonds.......... 3 Legal Opinions........................ 7 Experts............................... 7 Plan of Distribution.................. 7
- ------------------------------------------------------ - ------------------------------------------------------ - ------------------------------------------------------ - ------------------------------------------------------ $150,000,000 MICHIGAN CONSOLIDATED GAS COMPANY FIRST MORTGAGE BONDS DESIGNATED AS SECURED MEDIUM-TERM NOTES, SERIES B --------------------------- PROSPECTUS SUPPLEMENT --------------------------- MERRILL LYNCH & CO. A.G. EDWARDS & SONS, INC. FIRST CHICAGO CAPITAL MARKETS, INC. LEHMAN BROTHERS JUNE 6, 1995 - ------------------------------------------------------ - ------------------------------------------------------ -----END PRIVACY-ENHANCED MESSAGE-----