-----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, lf58DJAtp1YUZnnPmYRRb/bPUmKMY/RUgPNskHqCXizULlzaSfDV7f1BSe6h9LjG gKa+gIZ7IkNpaKZl0ho9Mw== 0000950162-95-000039.txt : 19950515 0000950162-95-000039.hdr.sgml : 19950515 ACCESSION NUMBER: 0000950162-95-000039 CONFORMED SUBMISSION TYPE: 424B2 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19950216 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SOUTHWESTERN PUBLIC SERVICE CO CENTRAL INDEX KEY: 0000092521 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 750575400 STATE OF INCORPORATION: NM FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 424B2 SEC ACT: 1933 Act SEC FILE NUMBER: 033-53171 FILM NUMBER: 95512158 BUSINESS ADDRESS: STREET 1: SPS TOWER STREET 2: TYLER AT SIXTH ST CITY: AMARILLO STATE: TX ZIP: 79101 BUSINESS PHONE: 8063782121 MAIL ADDRESS: STREET 1: PO BOX 1261 CITY: AMARILLO STATE: TX ZIP: 79170 424B2 1 PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED OCTOBER 21, 1994 PROSPECTUS SUPPLEMENT (To Prospectus Dated October 21, 1994) $70,000,000 Southwestern Public Service Company First Mortgage Bonds, 8 1/2% Series Due 2025 (Interest payable on February 15 and August 15) The First Mortgage Bonds, 8 1/2% Series Due 2025 (the "Offered Bonds") of Southwestern Public Service Company (the "Company") mature on February 15, 2025 and will be redeemable in whole or in part at the option of the Company, on at least 30 days' notice (a) on or after February 15, 2005, at the General Redemption Prices set forth herein and (b) at any time with the proceeds of property taken by the exercise of lawful governmental authority at the special redemption price of 100% of principal amount. The Offered Bonds will be issued and registered only in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York ("DTC"), as registered owner of all the Offered Bonds, to which principal and interest payments on the Offered Bonds will be made. Individual purchases will be made only in book-entry form (as described herein). Purchasers of such book-entry interests in the Offered Bonds will not receive physical delivery of bond certificates and must maintain an account with a broker, dealer or bank that participates in DTC's book-entry system. See "Certain Terms of the Offered Bonds Book-Entry System," herein. 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 COM- MISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PRO- SPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. Price to Underwriting Proceeds to Public* Commissions+ Company*++ Per Bond........ 99.95% .875% 99.075% Total........... $69,965,000 $612,500 $69,352,500 * Plus accrued interest, if any, from the date of issuance. + The Company has agreed to indemnify the Underwriter against certain civil liabilities, including liabilities under the Securities Act of 1933. See "Underwriting." ++ Before deducting expenses payable by the Company, estimated at $480,000. The Offered Bonds are being offered by the Underwriter as set forth under "Underwriting" herein. It is expected that the Offered Bonds will be delivered in book-entry form only, on or about February 22, 1995, through the facilities of The Depository Trust Company, against payment therefor in New York funds. Dillon, Read & Co. Inc. The date of this Prospectus Supplement is February 14, 1995. IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OF THE SECURITIES OFFERED HEREBY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. USE OF PROCEEDS The net proceeds from the sale of the Offered Bonds will be used to meet capital requirements which may include the repayment of commercial paper borrowings, a portion of which was incurred to finance, on a temporary basis, the repayment of various series of the Company's First Mortgage Bonds or for other general corporate purposes relating to the Company's utility construction program (principally transmission facilities). The Company's average commercial paper balance and interest rate for the period July 1, 1994 (the date of commencement of the commercial paper program) to November 30, 1994 were $21,400,000 and 4.62%, respectively. To the extent that the net proceeds from the sale of the Offered Bonds are not immediately so used, they will be temporarily invested in short-term, interest-bearing investments. CERTAIN FINANCIAL INFORMATION Set forth below is a summary of certain information concerning the results of operations of the Company. The information with respect to the fiscal years ended August 31, 1994 and 1993 was derived from the Company's financial statements contained in the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1994 which is incorporated herein by reference. The information with respect to the twelve months ended November 30, 1994 was derived from the Company's Quarterly Report on Form 10-Q for the quarter ended November 30, 1994 which is incorporated herein by reference. Such reports contain, in addition to such financial statements, the related management's discussion and analysis of financial condition and results of operations. Fiscal Year Twelve Months Ended August 31, Ended November 30, 1993 1994 1994 (unaudited) (Dollars in thousands) Operating revenues $809,753 $843,448 $827,594 Operating expenses 669,069 703,729 691,643 Operating income 140,684 139,719 135,951 Net earnings 105,254 102,168 97,291 Ratio of earnings to fixed charges 4.82 4.76 4.60 Capitalization at November 30, 1994 (unaudited) (In Thousands) Common stock, $1 par value, authorized - 100,000,000 shares; issued and outstanding -- 40,917,908 $ 40,918 Premium on capital stock 306,376 Retained earnings 346,323 __________ Common shareholders' equity 693,617 Preferred stock - redemption not required 72,680 Long-term debt 506,467 __________ Total capitalization $1,272,764 ========== CERTAIN TERMS OF THE OFFERED BONDS The Offered Bonds are to be issued and secured by the Indenture of Mortgage and Deed of Trust, dated August 1, 1946 (the "Original Indenture"), to Chemical Bank, as Trustee (the "Trustee"), as supplemented and amended and as to be supplemented and amended by the Supplemental Indenture to be dated February 15, 1995 (the Original Indenture as so supplemented and amended being herein called the "Mortgage"). The following description of the particular terms of the Offered Bonds supplements the description of the general terms and provisions of the bonds issued and to be issued under the Mortgage set forth in the Prospectus under "Description of New Bonds." Maturity and Interest Rate The Offered Bonds will mature on February 15, 2025 and will bear interest at the rate of 8 1/2% per annum, payable semiannually on August 15 and February 15 in each year, beginning August 15, 1995. The Offered Bonds will bear interest from the date of delivery and no accrued interest will be paid on the date of delivery. Redemption Provisions The Offered Bonds will be redeemable in whole or in part at the option of the Company, upon at least 30 and not more than 50 days' notice (a) on or after February 15, 2005 at the General Redemption Prices (expressed in percentages of principal amount) set forth below, and (b) at any time with proceeds of property taken by the exercise of lawful governmental authority, at a special redemption price of 100% of principal amount, together in each case with accrued interest to the date fixed for redemption:
General Redemption Prices General General If Redeemed During the 12 Redemption If Redeemed During the 12 Redemption Months Beginning February 15, Price Months Beginning February 15, Price 2005 . . . . . . . . . . . 104.225% 2011 . . . . . . . . . . . 101.690% 2006 . . . . . . . . . . . 103.802 2012 . . . . . . . . . . . 101.267 2007 . . . . . . . . . . . 103.380 2013 . . . . . . . . . . . 100.845 2008 . . . . . . . . . . . 102.957 2014 . . . . . . . . . . . 100.422 2009 . . . . . . . . . . . 102.535 2015 and 2010 . . . . . . . . . . . 102.112 thereafter . . . . . . . 100.000
(Mortgage, Articles 8 and 11, February 1949 Supplemental Indenture Sec. 3.01, Supplemental Indenture for the Offered Bonds Sec. 1.03). In the event the Company elects to redeem less than all the Offered Bonds, the selection of bonds to be redeemed shall be made by the Trustee by selecting the bonds to be redeemed by lot in any manner deemed by the Trustee to be fair and proper. Bonds held by the Company or an Affiliate shall be excluded in making the determination of bonds to be redeemed and each $1,000 principal amount of a bond shall be deemed a separate lot. Modification of the Maintenance Covenant The Company has reserved the right to amend the Mortgage without any consent or other action by holders of any series of Bonds created after July 15, 1992, including the Offered Bonds, the Original Indenture, and the Original Indenture as supplemented, as shall be necessary in order to amend or delete in its entirety the maintenance covenant set forth in the Mortgage, and such covenant as amended by the Supplemental Indentures. See "Description of New Bonds-Maintenance Covenant" and "Description of New Bonds-Modification of the Mortgage" in the Prospectus accompanying this Prospectus Supplement. Book-Entry System DTC will act as securities depository for the Offered Bonds. The Offered Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC's partnership nominee). One fully-registered Offered Bond (the "Global Bond") certificate will be issued for the Offered Bonds, in the aggregate principal amount of the issue, and will be deposited with DTC. The Company understands that 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 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" 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 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 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Offered Bonds on DTC's records. The ownership interest of each actual purchaser of each Offered Bond ("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 confirmations providing details of the transactions, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Offered Bonds 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 Offered Bonds, except in the event that use of the book-entry system for the Offered Bonds is discontinued. To facilitate subsequent transfers, all Offered Bonds deposited by Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co. The deposit of Offered Bonds 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 Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Offered Bonds 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 Bonds 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 Offered Bonds. 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 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Principal and interest payments on the Offered Bonds will be made to DTC. DTC has advised the Company and the Trustee that its present practice is, upon recept of any payment of principal or interest, to immediately credit the accounts of the Direct Participants with such payment in amounts proportionate to their respective holdings in principal amount of beneficial interests in the Global Bond as shown on the records of DTC. Payments by Direct and Indirect 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. DTC may discontinue providing its services as securities depository with respect to the Offered Bonds 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, Offered Bond certificates 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 depository). In that event, Offered Bond certificates will be printed and delivered. Beneficial Owners should consult with the Direct Participant or Indirect Participant from whom they purchased a book-entry interest to obtain information concerning the system maintained by such Direct Participant or Indirect Participant to record such interests, to make payments and to forward notices of redemption and of other information. The Company and Trustee have no responsibility or liability for any aspects of the records or notices relating to, or payments made on account of, book-entry interest ownership, or for maintaining, supervising or reviewing any records relating to that ownership. UNDERWRITING Subject to the terms and conditions set forth in the Purchase Agreement, the Company has agreed to sell to Dillon, Read & Co. Inc. (the "Underwriter"), and the Underwriter has agreed to purchase, all of the Offered Bonds. Under the terms and conditions of the Purchase Agreement, the Underwriter is committed to take and to pay for all of the Offered Bonds if any are taken. The Offered Bonds are being initially offered by the Underwriter for sale at the price set forth on the cover hereof under "Price to Public," or at such price less a concession of .500% of the principal amount of the Offered Bonds on sales to certain dealers. The Underwriter may allow, and such dealers may reallow, a concession not exceeding .250% of the principal amount of the Offered Bonds, on sales to certain other dealers. After the initial public offering, the offering prices, concessions and reallowances may be changed by the Underwriter. The offering of the Offered Bonds is made for delivery when, as and if accepted by the Underwriter and subject to prior sale and to withdrawal, cancellation or modification of the offer without notice. The Underwriter reserves the right to reject any order for the purchase of the Offered Bonds. The Company has agreed in the Purchase Agreement to indemnify the Underwriter against certain liabilities, including liabilities under the Securities Act of 1933, or to contribute to payments made or required to be made by the Underwriter with respect to such liabilities. The Underwriter has rendered certain financial advisory services and other related services to the Company. The Offered Bonds are not proposed to be listed on a securities exchange, and the Underwriter will not be obligated to make a market in the Offered Bonds. The Company cannot predict the activity of any trading in or the liquidity of the Offered Bonds. PROSPECTUS $200,000,000 Southwestern Public Service Company Cumulative Preferred Stock First Mortgage Bonds Southwestern Public Service Company (the "Company") intends from time to time to sell shares of its Cumulative Preferred Stock, $100 par value (the "New Preferred Stock"), and/or its First Mortgage Bonds (the "New Bonds," and collectively with the New Preferred Stock, the "Securities"), in one or more series, each on terms to be determined at the time or times of sale. The aggregate principal amount of the New Bonds and the par value of the New Preferred Stock to be sold will not exceed $200,000,000 and the total par value of New Preferred Stock to be sold will not exceed $40,000,000. All specific terms of the offering and sale of the Securities, including (i) the specific number of shares, designation, issue price, rate and terms of payment of dividends and redemption provisions and sinking fund terms, if any, liquidation preferences or other special rights, if any, of the New Preferred Stock, (ii) the specific designation, aggregate principal amount, maturity, rate and terms of payment of interest, redemption provisions and sinking fund terms, if any, of the New Bonds and (iii) other specific terms and any listing on a securities exchange of the Securities in respect of which this Prospectus is being delivered will be set forth in a Prospectus Supplement ("Prospectus Supplement"), together with the terms of offering of such Securities. The Securities will be offered as set forth under "Plan of Distribution". 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 October 21, 1994 AVAILABLE INFORMATION The Southwestern Public Service Company (the "Company") is subject to the informational requirements of the Securities Exchange Act of 1934 and in accordance therewith files reports and other information with the Securities and Exchange Commission which may be inspected and copied at the offices of the Commission, Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549; Northwestern Atrium Center, 500 West Madison Street, Chicago, Illinois 60601; and Seven World Trade Center, New York, New York 10048, and copies of such material can be obtained from the Public Reference Section of the Commission, Washington, D.C. 20549, at prescribed rates. Certain securities of the Company are listed on the New York, Midwest and Pacific Stock Exchanges. Reports, proxy and information statements, and other information concerning the Company can be inspected at such exchanges. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents filed by the Company with the Commission (File No. 1-3789) pursuant to the 1934 Act are incorporated herein by reference as of their respective dates of filing and shall be deemed to be a part hereof: 1. The Company's Annual Report on Form 10-K for the year ended August 31, 1993 (the "1993 Form 10-K"). 2. The Company's Quarterly Reports on Form 10-Q for the quarters ended November 30, 1993, February 28, 1994 and May 31, 1994 (the "Quarterly Reports"). 3. The Company's Current Report on Form 8-K dated September 9, 1993. All documents filed by the Company 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 this offering shall also be deemed to be incorporated by reference in this Prospectus and to be a part hereof from the date of filing of such documents. The Company hereby undertakes to provide without charge to each person, including any beneficial owner, to whom a copy of this Prospectus has been delivered, on the request of any such person, a copy of any or all documents referred to above which have been or may be incorporated by reference in this Prospectus (not including exhibits to such incorporated information that are not specifically incorporated by reference into such information). Requests for such copies should be directed to Secretary, Southwestern Public Service Company, SPS Tower, Tyler at Sixth, Amarillo, Texas 79101. THE COMPANY The Company, incorporated under the laws of the State of New Mexico in 1921, is principally engaged in the generation, transmission, distribution and sale of electric energy in portions of Texas, New Mexico, Oklahoma and Kansas. The electric properties comprise an interconnected system. A major portion of the Company's electric operating revenues is derived from operations in Texas. The principal executive offices of the Company are located at SPS Tower, Tyler at Sixth, Amarillo, Texas 79101 (Tel: 806-378-2121). USE OF PROCEEDS The proceeds from the sale of the Securities will be used as described in the Prospectus Supplement by which such Securities are offered. 2 EARNINGS RATIOS The Ratio of Earnings to Fixed Charges and the Ratio of Earnings to Combined Fixed Charges and Preferred Dividend Requirements for each of the periods indicated is as follows: Twelve Months Ended May 31, August 31, 1994 1993 1992 1991 1990 1989 Ratio of Earnings to Fixed Charges: 4.74 4.82 4.53 4.67 4.09 4.11 Combined Fixed Charges and Preferred Dividend Requirements: 3.97 4.01 3.63 3.79 3.36 3.38 The Ratios for future periods will be included in the Company's Reports on Form 10-K and 10-Q. Such Reports are incorporated by reference into this Prospectus at the time they are filed. DESCRIPTION OF NEW PREFERRED STOCK The following description of the New Preferred Stock sets forth certain general terms and provisions of the Company's Restated Articles of Incorporation (the "Articles") and the Company's Mortgage (see "Description of New Bonds") applicable to any series of New Preferred Stock. The definitive terms of any such series of New Preferred Stock are set forth in the Prospectus as amended and supplemented by the Prospectus Supplement by which such series of New Preferred Stock is offered. This Prospectus includes brief outlines of certain provisions contained in the Articles and such Mortgage and does not purport to be complete. Copies of instruments constituting the Articles and the Mortgage are Exhibits to the Registration Statement and reference is made thereto for further information including definitions of certain terms used herein. General The Company is authorized to issue 5,000,000 shares of Cumulative Preferred Stock, divided into 2,000,000 shares of Cumulative Preferred Stock having a par value of $100 per share (the "$100 Preferred Stock") and 3,000,000 shares of Cumulative Preferred Stock having a par value of $25 per share (the "$25 Preferred Stock," and collectively with the $100 Preferred Stock, the "Preferred Stock"), of which 496,800 shares of $100 Preferred Stock and 920,000 shares of $25 Preferred Stock are outstanding as of the date of this Prospectus. The New Preferred Stock will be shares having a par value of $100 per share and may be issued in one or more series with the specific number of shares, designation, the annual dividend rate or rates, redemption prices and terms; the respective amounts payable in case of liquidation and any other characteristics or restrictions (including sinking funds) not inconsistent with law or the Articles to be determined by the Board of Directors without any further action by the stockholders of the Company. All classes and series of Preferred Stock rank pari passu with each other as to dividends and assets. The New Preferred Stock will have the dividend rights, redemption and sinking fund provisions, liquidation rights and other terms set forth below unless otherwise provided for in a Prospectus Supplement relating to any 3 particular series of New Preferred Stock. Reference is made to the Prospectus Supplement relating to the particular series of New Preferred Stock offered thereby for specific terms, which may include one or more of the following: (i) the designation and number of shares offered; (ii) the initial public offering price; (iii) the dividend rate or rates, or the method of determining the dividend rate or rates and the dates from which dividends will be cumulative; (iv) any redemption or sinking fund provisions; (v) the liquidation provisions and (vi) any additional terms, preferences or rights. Dividend Rights Holders of Preferred Stock are entitled to receive, but only when and as declared by the Board of Directors, cumulative preferential cash dividends at the rate or rates per annum fixed for the respective series, payable quarterly on the first days of February, May, August and November in each year. Information with respect to the dividend rights of a particular series of New Preferred Stock will be set for the Prospectus Supplement by which such New Preferred Stock is to be offered. The Mortgage pursuant to which the Company's First Mortgage Bonds are issued contains a covenant limiting the amount of dividends that the Company may declare on any stock, including Preferred Stock. (See "Description of New Bonds -- Dividend Covenant.") Voting Rights Except as provided in the Articles or by statute, the Preferred Stock has no voting rights. At meetings of stockholders at which the holders of Preferred Stock have voting rights, each holder of $100 Preferred Stock (including the New Preferred Stock) is entitled to one vote per share and each holder of $25 Preferred Stock (including such New Preferred Stock) is entitled to one-quarter vote per share. Whenever dividends on the Preferred Stock are in arrears in an amount equal to four quarterly dividends, holders of Preferred Stock, voting as one class, have the right to elect a minimum majority of the Board of Directors until all accrued and unpaid dividends on the Preferred Stock are paid in full. The Articles provide that the Company may not, without the consent of the holders of two-thirds in aggregate par value of the Preferred Stock: (1) create or increase the authorized amount of any class of stock which shall rank prior to the Preferred Stock; (2) reclassify shares of junior stock wholly or partially into shares of stock ranking on a parity with or prior to the Preferred Stock; (3) sell all or substantially all of its property and assets to, or merge or consolidate into or with, any other corporation, if upon consummation thereof holders of the Company's Common Stock (the "Common Stock") hold less than 60% of the voting stock in the successor corporation; (4) make any distribution out of capital or capital surplus (other than dividends payable in junior stock) to holders of junior stock, or any purchase of junior stock, which would reduce the Common Stock Equity below 22% of Total Capitalization; (5) issue any Preferred Stock or any stock ranking on a parity therewith or prior thereto unless (i) the Consolidated Net Earnings for twelve consecutive calendar months within the fifteen immediately preceding calendar months are at least 1 1/2 times the sum of annual interest requirements on Funded Debt to be outstanding immediately after such issuance, plus annual dividend requirements on Preferred Stock and any stock ranking on a parity therewith or prior thereto, to be outstanding immediately after such issuance, and (ii) the Common Stock Equity (the definition of which contains certain adjustments), after giving effect to such issuance, is not less than the involuntary liquidation value of the Preferred Stock and any stock ranking on a parity therewith or prior thereto; (6) declare any dividends (other than dividends payable in junior stock) on, or acquire shares of, such junior stock unless after giving effect thereto the Common Stock Equity is at least equal to the involuntary liquidation value of the Preferred Stock and any stock ranking on a parity therewith or prior thereto; or (7) issue or assume any Restricted Indebtedness or issue any First Mortgage Bonds, or withdraw any funds representing proceeds from the sale of First Mortgage Bonds against property additions if, after giving effect thereto, the amount of Restricted Indebtedness thereafter outstanding would exceed 15% of Basic Capitalization. 4 Restricted Indebtedness is defined to mean (i) the amount of outstanding indebtedness issued or assumed by the Company maturing (except for obligations representing money borrowed) more than one year from the date of issue, excluding, however, among other things, indebtedness represented by outstanding First Mortgage Bonds, obligations of the Company under contracts made in the ordinary course of business for the purchase of materials or equipment and securities issued or assumed by the Company for the purpose of refunding any such excluded indebtedness, less (ii) the amount of First Mortgage Bonds which the Company would then be entitled to issue against property additions. Basic Capitalization is defined to mean the Company's Common Stock Equity plus the amount payable upon involuntary liquidation with respect to outstanding shares of stock ranking prior to the Company's Common Stock, plus outstanding First Mortgage Bonds, obligations of the Company under contracts made in the ordinary course of business for the purchase of materials or equipment and securities issued or assumed by the Company for the purpose of refunding any such indebtedness, and indebtedness referred to in (ii) of the preceding sentence. Based on the Company's financial results for the twelve months ended May 31, 1994, the Company could issue $450,000,000 additional par value of Preferred Stock under the restriction set forth in clause (5)(i) and $302,470,000 of additional Restricted Indebtedness under clause (7) of this paragraph. The terms of the Preferred Stock may not be adversely changed without the consent of two-thirds in aggregate par value of the Preferred Stock then outstanding and, if one or more but less than all of the shares thereof are so affected, two-thirds in aggregate par value of such affected series. Redemption and Sinking Fund Provisions Any provisions relating to the optional redemption by the Company of each series of New Preferred Stock will be as set forth in the Prospectus Supplement by which such New Preferred Stock is to be offered. Any provisions relating to a sinking fund of any series of the New Preferred Stock will be as set forth in the Prospectus Supplement by which such New Preferred Stock is to be offered. None of the Company's outstanding Cumulative Preferred Stock or First Mortgage Bonds are entitled to a sinking fund. No Preferred Stock or Common Stock may be purchased by the Company while dividends on the Preferred Stock are in arrears. The Company may not redeem or purchase any Preferred Stock or other shares ranking on a parity with the Preferred Stock as to assets and dividends, and may not set apart money for any such purpose, at any time when sinking fund payments with respect to any series of Preferred Stock have not been made. (See "Description of New Bonds - -- Dividend Covenant" for additional restrictions on the purchase of Preferred Stock.) Liquidation Rights In the event of liquidation, holders of Preferred Stock are entitled to receive, from assets available for distribution to stockholders, the preferential amount, in cash, fixed for the respective series. Provisions relating to the liquidation preference payable on each series of New Preferred Stock will be set forth in the applicable Prospectus Supplement by which such New Preferred Stock will be offered. Miscellaneous The New Preferred Stock will not have any conversion rights or preemptive or other subscription rights and, when issued, will be fully paid and nonassessable. The transfer agent and registrar for the New Preferred Stock will be Society National Bank, Cleveland, Ohio. 5 DESCRIPTION OF NEW BONDS General The New Bonds will be issued in one or more series under the Indenture of Mortgage and Deed of Trust, dated August 1, 1946, to Chemical Bank, as trustee (the "Bonds Trustee") as supplemented and amended and as it is to be supple- mented by a supplemental indenture for each series of New Bonds (such indenture, as so supplemented and amended, the "Mortgage"). This Prospectus includes brief outlines of certain provisions contained in the Mortgage and the Articles and does not purport to be complete. Copies of the instruments constituting the Mortgage and the Articles are Exhibits to the Registration Statement and reference is made thereto for further information including definitions of certain terms used herein. The principal, premium, if any, and interest on the New Bonds are payable at the principal corporate trust office of Chemical Bank in New York, New York unless the Prospectus Supplement provides otherwise. Each series of New Bonds will have a stated principal amount, maturing date(s), interest rate(s) and other specific terms as may be determined at the time of sale, all of which will be set forth in the Prospectus Supplement relating to such series. Interest, payable semiannually, at the rate set forth in such Prospectus Supplement will be paid to the persons in whose names the New Bonds are registered at the close of business on the record date set forth therein. Unless otherwise indicated in a Prospectus Supplement relating thereto, the New Bonds will be issuable only as fully registered bonds in denominations of $1,000 and integral multiples thereof, and will be exchangeable for other New Bonds of the same series in equal aggregate principal amounts without any service or other charge therefor by the Company, except for any applicable taxes or governmental charges. Unless otherwise indicated in a Prospectus Supplement, the covenants contained in the Mortgage and the New Bonds do not afford holders of the New Bonds special protection in the event of a highly leveraged transaction involving the Company that may adversely affect the holders of New Bonds. Optional Redemption Provisions The Prospectus Supplement for each series of New Bonds will indicate if such series is subject to redemption at the option of the Company prior to maturity. If so, the Prospectus Supplement will include the terms of such redemption, which will be made upon thirty days' notice and in the manner provided in the Mortgage. The provisions of this paragraph do not apply to redemptions pursuant to operation of any sinking fund (Mortgage, Articles 8 and 11). Sinking and Improvement Fund For each series of New Bonds for which the Company determines to provide a sinking and improvement fund, the terms of such fund will be described in the Prospectus Supplement relating to that series. Security Each series of New Bonds together with all other Bonds heretofore or hereafter issued under the Mortgage will be equally and ratably secured by the Mortgage, which constitutes, in the opinion of Hinkle, Cox, Eaton, Coffield & Hensley, counsel for the Company, a valid and direct first lien (subject to Permitted Encumbrances) on all the present properties (principally generating plants and transmission and distribution facilities) and franchises of the Company, other than Excepted Property, subject only to a reversionary interest in the site of the Company's generating plant near Borger, Texas, conditioned upon its continued use in the generation, transmission and distribution of electric energy, and to certain minor defects in the Company's title to the sites of certain of its transmission and distribution lines, substations and minor structures. Neither such reversionary interest nor such minor defects, in the opinion of such counsel, materially interferes with the use or operation of the Company's properties. The Mortgage contains provisions for subjecting to the lien thereof (subject to limitations contained in Article 15 in case of a merger or transfer or lease of the Company's assets) after-acquired property other than Excepted Property. After-acquired property may, subject to certain lim- itations, be subject to prior liens (Mortgage Section 9.15), but, if so subject, may not be included in Gross Bondable Additions or Net Bondable Additions under the Mortgage until the prior liens thereon have been paid or prepaid (Mortgage Section 4.01). Maintenance Covenant The Mortgage provides that the Company shall, on or before October 1 in each year, deposit with the Trustee cash equal to the excess of (i) 15% of operating revenues for the year ended the preceding May 31 (less the cost of utility services purchased for resale and a further sum equal to the cost of fuel used to generate electricity in excess of 2.90 mills per net kilowatt hour) with certain adjustments, over (ii) the amounts charged on its books for maintenance and repairs during such year. Instead of depositing cash, the Company may (a) deliver Bonds or certify that Bonds have been or are to be retired (with certain exceptions) or (b) certify Gross Bondable Additions. Cash so deposited may be withdrawn in the same manner as cash deposited on release of property, may be applied to the purchase of Bonds, or may be applied to the redemption of Bonds (Mortgage Section 9.06; Supplemental Indenture Section 1.02; Mortgage, Article 8). Cash, Bonds and Gross Bondable Additions used to satisfy the requirements of the Maintenance Covenant may be deducted from Retirements in computing Net Bondable Additions (Mortgage Section 4.01). Issuance of Additional Bonds The maximum principal amount of Bonds which may be outstanding under the Mortgage at any one time is $3,000,000,000. The Mortgage provides that Bonds may be issued from time to time against (1) 60% of Net Bondable Additions (Mortgage, Article 4), (2) Bonds retired or then to be retired (with certain exceptions) (Mortgage, Article 6) or (3) cash deposited with the Trustee for such purpose, which cash may be withdrawn from time to time against 60% of Net Bondable Additions (Mortgage, Article 5). With certain exceptions in the case of (2) above, no additional Bonds may be issued unless Net Earnings for 12 consecutive calendar months within the 15 immediately preceding calendar months, before interest and income and profits taxes, are at least twice the annual interest requirements on all Bonds outstanding and then to be issued and on all prior lien indebtedness. Based on the Company's financial results for the twelve months ended August 31, 1993, the Company could have issued approximately $343,600,000 principal amount of additional Bonds under this restriction. The available amount of Net Bondable Additions and Retired Bonds at August 31, 1993 was approximately $184,000,000 and $233,200,000 respectively. The Articles limit the amount of Restricted Indebtedness (which, as defined, includes short-term indebtedness for money borrowed and certain long- term indebtedness other than Bonds) which may be issued or assumed by the Company, without the consent of the holders of two-thirds of the aggregate par value of the Preferred Stock outstanding, under which limitation approximately $302,470,000 of additional Restricted Indebtedness could have been issued or assumed at May 31, 1994. Such limitation would prohibit the issuance of Bonds against property additions if, after giving effect to the use of the proceeds from such issuance, such Restricted Indebtedness limitation was not met. (See "Description of New Preferred Stock -- Voting Rights.") Dividend Covenant The Mortgage provides that the Company will not declare any dividends (other than dividends payable in its stock) upon any shares of its stock, or make any payment on account of the purchase, redemption or other retirement 7 of, or any distribution in respect of, any shares of its stock except to the extent that the sum of (1) $1,278,243.59, (2) Net Income of the Company, as defined, since June 1, 1946, and (3) net proceeds received by the Company from the issue since such date of any shares of its stock (but only up to an amount equal to the aggregate amount of all payments since such date on account of the acquisition of any shares of its stock), shall be greater than the aggregate amount of dividends declared on all classes of the Company's stock and of all payments made on account of the acquisition of, or distribution in respect of, any shares of its stock since such date (Mortgage Section 9.20). At August 31, 1993, approximately $946,000 of the Company's retained earnings of $341,608,000 was not available for any such purpose under this limitation. Modification of the Mortgage The Mortgage, the rights and obligations of the Company and the rights of the Bondholders may be modified with the consent of the holders of 66-2/3% of the Bonds, and, if less than all series of Bonds are affected, the consent of the holders of 66-2/3% of the Bonds of each series affected (Mortgage Section 19.06). No modification of the terms of payment of principal, interest or premium and no modification reducing the percentage required for modification is effective against any Bondholder without his consent. The Company has reserved the right to amend the Mortgage without any consent or other action by holders of any series of Bonds created after July 15, 1992, including the New Bonds, as shall be necessary in order to amend or delete in its entirety the maintenance covenant set forth in the Mortgage, and such covenant as amended by the Supplemental Indentures. (See "Description of New Bonds -- Maintenance Covenant.") Defaults An event of default is defined as: default in payment of principal of any Bond; default for 30 days in payment of interest upon any Bond or of sinking or improvement fund installments in respect of any Bond; default under other covenants for 60 days after notice to the Company by the Trustee or holders of 10% of the Bonds; failure to discharge final money judgments within 60 days; certain events in bankruptcy, insolvency, or reorganization; and certain assumptions of custody or control of the Company or its assets by governmental agencies. The Trustee may withhold notice of default (except in payment of principal, interest or sinking or improvement fund installments) if in its judgment it is in the interests of the Bondholders (Mortgage Section 13.01). Holders of a majority of the Bonds may require the Trustee to, and holders of 25% of the Bonds may, declare the principal and interest due and payable on default, but holders of a majority of the Bonds may annul such declaration if such default is cured (Mortgage Section 13.01). No Bondholder may enforce the Mortgage unless such holder shall have given the Trustee written notice of a default and unless the holders of a majority of the Bonds have requested the Trustee in writing to act and have offered the Trustee reasonable indemnity or security, if required, and the Trustee shall have failed to act for a period of 30 days (Mortgage Section 13.14). The foregoing does not affect the right of each Bondholder to enforce payment of principal and interest on the holder's Bond. Holders of a majority of the Bonds may direct the Trustee to take action in the event of default (Mortgage Sections 13.04, 13.19). The Trustee is not required to risk its funds or incur personal liability if there is reasonable ground for believing that repayment is not reasonably assured (Mortgage Section 16.02). Other than in connection with applications made under the Mortgage from time to time, periodic evidence is not required to be furnished as to absence of default or as to compliance with the terms of the Mortgage. 8 The Trustee Chemical Bank is the Trustee under the Mortgage. PLAN OF DISTRIBUTION The Company may sell the Securities in any of the following ways: (i) through underwriters or dealers; (ii) directly to one or more purchasers; or (iii) through agents. The applicable Prospectus Supplement will set forth the terms of the offering of any Securities, including the names of any underwriters or agents, the purchase price of such Securities 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 exchanges on which such Securities may be listed. If underwriters are used in the sale of the Securities, such Securities 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. Such Securities may be offered to the public either through underwriting syndicates represented by managing underwriters or by underwriters without a syndicate. Unless otherwise set forth in the applicable Prospectus Supplement, the obligations of the underwriters to purchase such Securities will be subject to certain conditions precedent, and the underwriters will be obligated to purchase all of such Securities if any of such Securities are purchased. 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 underwriters named in a Prospectus Supplement are deemed to be underwriters in connection with the Securities offered thereby. Securities also may be sold directly by the Company or through agents designated by the Company from time to time. Any agent involved in the offer or sale of Securities will be named and any commissions payable by the Company to such agent will be set forth in the applicable Prospectus Supplement. Unless otherwise indicated in the applicable Prospectus Supplement, any such agent will act on a best efforts basis for the period of its appointment. If so indicated in a Prospectus Supplement with respect to the New Bonds, the Company will authorize agents, underwriters or dealers to solicit offers by certain institutions to purchase such New Bonds from the Company at the public offering price set forth in the Prospectus Supplement pursuant to Delayed Delivery Contracts ("Contracts") providing for payment and delivery on the date or dates stated in the Prospectus Supplement. Each Contract will be for an amount not less than, and the aggregate amount of the New Bonds sold pursuant to the Contracts shall be not less nor more than, the respective amounts stated in the Prospectus Supplement. Institutions with whom the Contracts, when authorized, may be made include commercial and savings banks, insurance companies, pension funds, investment companies, educational and charitable institutions, and other institutions, but will in all cases be subject to the approval of the Company. The Contracts will not be subject to any conditions except (i) the purchase by an institution of the New Bonds covered by its Contract shall not at the time of delivery be prohibited under the laws of any jurisdiction in the United States to which such institution is subject, and (ii) if the New Bonds are being sold to underwriters, the Company shall have sold to such underwriters the total amount of the New Bonds less the amount thereof covered by the Contracts. The underwriters will not have any responsibility in respect of the validity or performance of the Contracts. If dealers are utilized in the sale of any Securities, the Company will sell such Securities to the dealers, as principal. Any dealer may then resell such Securities to the public at varying prices to be determined by such dealer at the time of resale. The name of any dealer and the terms of the transaction will be set forth in the Prospectus Supplement with respect to such Securities being offered thereby. 9 It has not been determined whether any of the Securities will be listed on a securities exchange. Underwriters will not be obligated to make a market in any of the Securities. The Company cannot predict the activity of trading in, or liquidity of, any of the Securities. Any underwriters, dealers or agents participating in the distribution of Securities may be deemed to be underwriters and any discounts or commissions received by them on the sale or resale of Securities may be deemed to be underwriting discounts and commissions under the Securities Act of 1933, as amended (the "Securities Act"). Agents and underwriters may be entitled under agreements entered into with the Company to indemnification by the Company against certain liabilities, including liabilities under the Securities Act, or to contribution with respect to payments that the agents, or underwriters may be required to make in respect thereof. Agents and underwriters may be customers of, engaged in transactions with, or perform services for, the Company or its affiliates in the ordinary course of business. LEGAL OPINIONS Certain legal matters in connection with the Securities are being passed upon for the Company by Hinkle, Cox, Eaton, Coffield & Hensley, Amarillo, Texas and Cahill Gordon & Reindel, a partnership including a professional corporation, New York, New York. Cahill Gordon & Reindel is not passing upon the incorporation of the Company and is relying upon the opinions of Hinkle, Cox, Eaton, Coffield & Hensley as to matters of New Mexico and Texas law; Rainey, Ross, Rice & Binns, Oklahoma City, Oklahoma as to matters of Oklahoma law; and Foulston & Siefkin, Topeka, Kansas as to matters of Kansas law. Gary W. Wolf, a partner in the law firm of Cahill Gordon & Reindel, is a director of the Company. EXPERTS The consolidated financial statements and schedules of Southwestern Public Service Company and subsidiaries as of August 31, 1993 and 1992 and for each of the years in the three-year period ended August 31, 1993 included in the Company's 1993 Form 10-K, which is incorporated herein by reference, are incorporated herein in reliance upon the report of KPMG Peat Marwick LLP, independent certified public accountants included in the 1993 Form 10-K, and upon the authority of that firm as experts in accounting and auditing. With respect to any unaudited interim financial information included in the Company's Quarterly Reports that are or will be incorporated herein by reference, Deloitte & Touche LLP ("Deloitte & Touche") applies limited procedures in accordance with professional standards for reviews of such information. As stated in any of its reports that are included in the Company's Quarterly Reports that are or will be incorporated herein by reference, Deloitte & Touche did not audit and did not express an opinion on such interim financial information. Accordingly, the degree of reliance on any of Deloitte & Touche's reports on such information should be restricted in light of the limited nature of the review procedures applied. Deloitte & Touche is not subject to the liability provisions of Section 11 of the Securities Act for any of its reports on such unaudited interim financial information because those reports are not "reports" or a "part" of the Registration Statement filed under the Securities Act with respect to the New Preferred Stock or the New Bonds prepared or certified by an accountant within the meaning of Sections 7 and 11 of the Securities Act. To the extent that a firm of certified public accountants audits and reports on the financial statements of the Company issued at future dates, and consents to the use of their report thereon, such financial statements also will be incorporated by reference herein in reliance upon their report and said authority. The statements and legal conclusions as to all matters of law in the Company's 1993 Form 10-K, the Quarterly Reports and this Prospectus (except as to matters of Kansas and Oklahoma law in such documents) have been reviewed by Hinkle, Cox, Eaton, Coffield & Hensley. Statements and legal conclusions as 10 to matters of Oklahoma law in such documents have been reviewed by Rainey, Ross, Rice & Binns. Statements and legal conclusions as to matters of Kansas law in such documents have been reviewed by Foulston & Siefkin. All such statements and legal conclusions are set forth in such documents and incorpo- rated by reference herein or set forth herein in reliance upon said firms, respectively, as experts. 11 No person is authorized to give any information or to make any representations other than those contained or incorporated by reference in this Prospectus Supplement and the Prospectus and, if given or made, such information or representations must not $70,000,000 be relied upon as having been authorized. This Prospectus Supplement and the Prospectus do not constitute an offer to sell or the solicitation of an offer to buy any securities other than the Offered Bonds to which this Prospectus Supplement relates. This Prospectus Supplement and the Southwestern Public Prospectus do not constitute an offer Service Company to sell or a solicitation of an offer to buy such securities in any circumstances in which such offer or solicitation is unlawful. Neither the delivery of this Prospectus Supplement or the Prospectus nor any sale made First Mortgage Bonds, hereunder shall, under any 8 1/2% Series Due 2025 circumstances, create any implication that there has been no change in the affairs of the Company since the date hereof or that the information contained or incorporated by reference herein is correct as of any time subsequent to the date of this Prospectus Supplement. PROSPECTUS SUPPLEMENT TABLE OF CONTENTS Page Dillon, Read & Co. Inc. Prospectus Supplement Use of Proceeds . . . . . . . S-2 Certain Financial Information S-2 Certain Terms of the Offered Bonds ........................ S-3 Underwriting . . . . . . . . S-6 Prospectus Available Information . . . . 2 Incorporation of Certain Documents by Reference 2 The Company . . . . . . . . . 2 Use of Proceeds . . . . . . . 2 Earnings Ratios . . . . . . . 3 Description of New Preferred Stock . . . . . . . . . . . 3 Description of New Bonds . . 6 Plan of Distribution . . . . 9 Legal Opinions . . . . . . . 10 Experts . . . . . . . . . . . 10 -----END PRIVACY-ENHANCED MESSAGE-----