-----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, ZjlkEStHzgFq1JwP7wglLduxOAk8bk5Jk5wBN+ZcKhGIngzN7Stuwyc0b6EbNDTH 06hIDbc3OMoneT53u7b51A== 0000950109-94-000455.txt : 19940316 0000950109-94-000455.hdr.sgml : 19940316 ACCESSION NUMBER: 0000950109-94-000455 CONFORMED SUBMISSION TYPE: 424B2 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19940315 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BALTIMORE GAS & ELECTRIC CO CENTRAL INDEX KEY: 0000009466 STANDARD INDUSTRIAL CLASSIFICATION: 4931 IRS NUMBER: 520280210 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B2 SEC ACT: 33 SEC FILE NUMBER: 033-50331 FILM NUMBER: 94516128 BUSINESS ADDRESS: STREET 1: GAS & ELECTRIC BLDG STREET 2: CHARLES CTR CITY: BALTIMORE STATE: MD ZIP: 21201 BUSINESS PHONE: 4107835920 424B2 1 PROSPECTUS SUPPLEMENT/PROSPECTUS RULE NO. 424(b)(2) REGISTRATION NO. 33-50331 PROSPECTUS SUPPLEMENT (TO PROSPECTUS DATED MARCH 9, 1994) $125,000,000 BALTIMORE GAS AND ELECTRIC COMPANY FLOATING RATE SERIES DUE APRIL 15, 1999 FIRST REFUNDING MORTGAGE BONDS ---------------- Interest on the New Bonds offered hereby (the "Offered Bonds") will accrue from, and begin on, March 21, 1994 and payments will be made quarterly on January 15, April 15, July 15, and October 15, beginning on July 15, 1994. The per annum rate of interest for each Interest Period will be reset quarterly as described herein based on the three month London interbank offered rate (LIBOR), plus .15%. The Offered Bonds will be redeemable at the option of the Company at 100% of principal amount, provided that, prior to April 15, 1996, the Offered Bonds shall not be redeemable for any reason. The First Refunding Mortgage Bonds are entitled to the benefit of a 1% annual sinking fund which may be satisfied by Bonds of any series including the Offered Bonds, subject to certain limitations. The Offered Bonds may not be redeemed for the sinking fund prior to August 1, 1996. See "Certain Terms of Offered Bonds" in this Prospectus Supplement and "Description of New Bonds" in the accompanying Prospectus for other important information about the Offered Bonds. The Offered Bonds will initially be represented by a global bond ("Book- Entry Bonds") registered in the name of a nominee of The Depository Trust Company, as Depositary, but may, under certain limited circumstances, be exchangeable for certificates issued in definitive form ("Definitive Bonds"). Beneficial interest in Book-Entry Bonds will trade in the Depositary's Same- Day Funds Settlement System, and secondary market trading activity in such interests will therefore settle in same-day funds. Beneficial interests in Book-Entry Bonds will be shown on, and transfers thereof will be effected only through, records maintained by the Depositary (with respect to its participants' interests) and its participants. See Book-Entry System in the accompanying Prospectus. ---------------- 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 OR THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. - ------------------------------------------------------------------------------- - -------------------------------------------------------------------------------
PRICE TO UNDERWRITING PROCEEDS TO PUBLIC(1) DISCOUNT COMPANY(1)(2) - -------------------------------------------------------------------------------- Per Bond................................ 100.00% .45% 99.55% - -------------------------------------------------------------------------------- Total................................... $125,000,000 $562,500 $124,437,500 - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
(1) Plus accrued interest, if any, from March 21, 1994 to date of delivery. (2) Before deduction of expenses payable by the Company, estimated at $400,000. ---------------- The Offered Bonds are subject to receipt and acceptance by the Underwriter named below (the "Underwriter"), to prior sale and to the Underwriter's right to reject any order in whole or in part and to withdraw, cancel or modify the offer without notice. It is expected that delivery of the global bond will be made through the facilities of The Depository Trust Company, on or about March 21, 1994. ---------------- LEHMAN BROTHERS MARCH 14, 1994 IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SECURITIES HEREBY OFFERED 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 A portion of the net proceeds from the sale of the Offered Bonds will be used to redeem all $28,638,000 principal amount of the 7% Series due 1998 First Refunding Mortgage Sinking Fund Bonds. For further information with respect to the use of proceeds see "Use of Proceeds" on page 3 of the accompanying Prospectus. CERTAIN TERMS OF OFFERED BONDS The Offered Bonds are to be issued under a Supplemental Indenture to be dated as of March 15, 1994. MATURITY AND INTEREST RATE The Offered Bonds are to mature April 15, 1999 and will bear interest at the rates per annum determined as described below. Interest shall be payable quarterly on January 15, April 15, July 15, and October 15 (the "Interest Payment Dates"), with the first interest payment accruing from March 21, 1994 and paid on July 15, 1994. The period commencing on an Interest Payment Date and ending on and excluding the next succeeding Interest Payment Date is called an "Interest Period," with the exception that the first Interest Period shall extend from March 21, 1994 to July 15, 1994, the first Interest Payment Date. Interest will be payable to the persons in whose names the Offered Bonds are registered at the close of business on the last day of the calendar month next preceding such Interest Payment Date. Payment of the principal of and interest on each global bond representing Book-Entry Bonds will be made on each Interest Payment Date or at maturity by the Trustee as paying agent by wire transfer of immediately available funds to a separate account of the Depositary or its nominee at the Federal Reserve Bank of New York, provided that, in the case of payments made at maturity of such global bond, the global bond is presented to the Trustee in time for the Trustee to make such payments in accordance with its normal procedures. Payments to beneficial owners of Book-Entry Bonds will be made through the Depositary and its participants. For further information on Book-Entry Bonds and a description of the payment of principal and interest on Definitive Bonds, see "DESCRIPTION OF NEW BONDS" in the accompanying Prospectus. The Offered Bonds will bear interest at an interest rate calculated based upon three month LIBOR plus .15%. LIBOR will be determined on the second London Business Day (as defined below) prior to the first day of each Interest Period (the "Interest Determination Date"). LIBOR will be determined by Bankers Trust Company acting as calculation agent (the "Calculation Agent") in accordance with the following provisions: (a) With respect to any Interest Determination Date, LIBOR will be determined on the basis of the offered rates for deposits of not less than $1,000,000 having the index maturity of three months, commencing on the second business day on which dealings in deposits in U.S. dollars are transacted in the London interbank market ("London Business Day") immediately following such Interest Determination Date, which appear on the Reuters Screen LIBO Page as of 11:00 A.M., London time, on that Interest Determination Date. If at least two such offered rates appear on the Reuters Screen LIBO Page, the rate for such Interest Determination Date will be the arithmetic mean of such offered rates as determined by the Calculation Agent. S-2 (b) With respect to an Interest Determination Date on which fewer than two offered rates for the three month index maturity appear on the Reuters Screen LIBO Page as described in (a) above, LIBOR will be determined on the basis of the rates at approximately 11:00 A.M., London time, on such Interest Determination Date at which deposits in U.S. dollars having the three month index maturity are offered to prime banks in the London interbank market by four major banks in the London interbank market selected by the Calculation Agent commencing on the second London Business Day immediately following such Interest Determination Date and in a principal amount not less than $1,000,000 that in the Calculation Agent's judgment is representative for a single transaction in such market at such time (a "Representative Amount"). The Calculation Agent will request the principal London office of each of such banks to provide a quotation of its rate. If at least two such quotations are provided, LIBOR for such Interest Determination Date will be the arithmetic mean of such quotations. If fewer than two quotations are provided, LIBOR for such Interest Determination Date will be the arithmetic mean of the rates quoted at approximately 11:00 A.M., New York City time, on such Interest Determination Date by three major banks in The City of New York, selected by the Calculation Agent, for loans in U.S. dollars to leading European banks having the three month index maturity commencing on the second London Business Day immediately following such Interest Determination Date and in a Representative Amount; provided, however, that if fewer than three banks selected as aforesaid by the Calculation Agent are quoting as mentioned in this sentence, the rate of interest in effect for the applicable period will be the same as the rate of interest in effect for the immediately preceding Interest Period. Upon the request of the holder of any Offered Bond, the Calculation Agent will provide the interest rate then in effect, and if different, the interest rate which will become effective as a result of a determination made on the most recent Interest Determination Date with respect to such Offered Bond. REDEMPTION PROVISIONS The Offered Bonds are to be redeemable, beginning on April 15, 1996, upon thirty days' notice, in the manner set forth in the Mortgage, in whole or in part, at the option of the Company, if redeemed otherwise than by the operation of the Sinking Fund, and beginning on August 1, 1996 if redeemed by the operation of the Sinking Fund, at 100% of principal amount, with interest accrued to the date of redemption. UNDERWRITING Subject to the terms and conditions of the Purchase Agreement between the Company and Lehman Brothers Inc. (the "Underwriter"), the Company has agreed to sell, and the Underwriter has agreed to purchase all of the Offered Bonds. The Purchase Agreement provides that the obligations of the Underwriter are subject to certain conditions. The nature of the Underwriter's obligations is such that it is committed to purchase all of the Offered Bonds if any are purchased. The Underwriter proposes to offer the Offered Bonds directly to the public at the public offering price set forth on the cover page of this Prospectus Supplement, and to certain dealers at such price, less a concession not in excess of .300% of the principal amount. Such dealers may reallow a concession not in excess of .200% of such principal amount to certain other dealers. After the initial public offering, the offering price and other selling terms may be changed. There is currently no trading market for the Offered Bonds. The Underwriter may, but is not obligated to, make a market in the Offered Bonds and no assurance is given that a market for the Offered Bonds will develop. The Company has agreed to indemnify the Underwriter against certain liabilities including liabilities under the Securities Act of 1933, as amended, and to contribute to payments that the Underwriter may be required to make in respect thereof. S-3 ----------------------------------------------------------- P R O S P E C T U S ----------------------------------------------------------- BALTIMORE GAS AND ELECTRIC COMPANY $250,000,000 FIRST REFUNDING MORTGAGE BONDS Baltimore Gas and Electric Company (the "Company") intends from time to time to sell up to $250,000,000 aggregate principal amount of its First Refunding Mortgage Bonds (the "New Bonds") on terms to be determined at the time of offering. The specific designation, aggregate principal amount, maturity, rate (or method of calculation) and time of payment of interest, redemption and sinking fund terms, other specific terms and any listing on a securities exchange of each series of the New Bonds in respect of which this Prospectus is being delivered will be set forth in a Prospectus Supplement (the "Prospectus Supplement"), together with the terms of offering of the New Bonds. The securities will be offered as set forth under "PLAN OF DISTRIBUTION." See "DESCRIPTION OF NEW BONDS" for other important information about the New Bonds. ------------ 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 March 9, 1994. AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934 (the "1934 Act") and in accordance therewith files reports and other information with the Securities and Exchange Commission (the "Commission"). Reports, proxy and information statements, and other information filed by the Company can be inspected and copied at the public reference facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549; and at certain of its Regional Offices at Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60621- 2511, and 75 Park Place, Room 1228, New York, New York 10007. Copies of such material can be obtained at prescribed rates from the Public Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549. Certain securities of the Company are listed on the New York, Chicago, Pacific and Philadelphia 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 under the 1934 Act (File No. 1-1910), are incorporated in this Prospectus by reference as of their respective dates of filing and shall be deemed to be a part hereof: (a) The Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1992, as amended by a Form 8 dated April 27, 1993 (the "1992 Form 10-K"). (b) The Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, 1993, June 30, 1993 and September 30, 1993. (c) The Company's Current Reports on Form 8-K filed January 29, 1993 and August 20, 1993. All documents filed by the Company pursuant to Section 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 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 THIS PROSPECTUS IS DELIVERED, ON THE REQUEST OF SUCH PERSON, A COPY OF ANY AND ALL OF THE DOCUMENTS REFERRED TO ABOVE WHICH HAVE BEEN OR MAY BE INCORPORATED IN THIS PROSPECTUS BY REFERENCE, OTHER THAN EXHIBITS TO SUCH DOCUMENTS, UNLESS THE EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE INTO THE INFORMATION THAT THE PROSPECTUS INCORPORATES. REQUESTS FOR SUCH COPIES SHOULD BE DIRECTED TO CHARLES W. SHIVERY, VICE PRESIDENT, BALTIMORE GAS AND ELECTRIC COMPANY, P.O. BOX 1475, BALTIMORE, MARYLAND 21203, (410) 234-5511. 2 THE COMPANY The Company, incorporated under the law of the State of Maryland on June 20, 1906, is a public utility primarily engaged in the business of producing, purchasing and selling electricity, and purchasing, transporting and selling natural gas within the State of Maryland. The Company is qualified to do business in the Commonwealth of Pennsylvania where it is participating in the ownership and operation of two electric generating plants and the District of Columbia where its federal affairs office is located. The Company also owns two-thirds of the outstanding capital stock, including one-half of the voting securities, of Safe Harbor Water Power Corporation, a hydroelectric producer on the Susquehanna River at Safe Harbor, Pennsylvania. BNG, Inc., a wholly owned subsidiary of the Company, invests in natural gas reserves. Other business of the Company includes the sale of gas and electric appliances. The Company's diversified business activities are consolidated under Constellation Holdings, Inc., a wholly owned subsidiary of the Company. Diversified business activities include power generation projects, financial investments, and real estate projects (including senior living facilities). The executive offices of the Company are located in the Gas and Electric Building, Charles Center, Baltimore, Maryland 21201; its mailing address is P. O. Box 1475, Baltimore, Maryland 21203; and its telephone number is (410) 234- 5000. USE OF PROCEEDS The net proceeds from the sale of the New Bonds offered hereby will be used to meet capital requirements or for other general corporate purposes relating to the Company's utility business which may include the repayment of commercial paper borrowings incurred primarily to finance, on a temporary basis, the Company's utility construction, other capital expenditures and operations. The Company's average commercial paper balance and interest rate for the twelve months ended January 31, 1994 were $7,523,000 and 3.23%, respectively. To the extent that the net proceeds from the sale of the New Bonds are not immediately so used, they will be temporarily invested in short-term, interest-bearing obligations. For further information with respect to the Company's utility construction, other capital expenditures and operations, reference is made to the information incorporated by reference herein. See "INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE." RATIO OF EARNINGS TO FIXED CHARGES The Ratio of Earnings to Fixed Charges for each of the periods indicated is as follows:
TWELVE MONTHS ENDED ------------------------------------------------------------------------------------------------------- DECEMBER 31, ------------------------------------------------------------------------------------------------------- 1993 1992 1991 1990 1989 ---- ---- ---- ---- ---- 3.00 2.65 2.27 1.78 3.02
The Ratio of Earnings to Fixed Charges for future periods will be included in the Company's Reports on Forms 10-Q and 10-K. Such Reports are incorporated by reference into this Prospectus at the time they are filed. DESCRIPTION OF NEW BONDS GENERAL The New Bonds will be issued in one or more series under and will be secured by an indenture between the Company and Bankers Trust Company, Trustee (the "Trustee"), dated February 1, 1919, as 3 supplemented and amended and as it is to be supplemented 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. Such outlines do not purport to be complete and are qualified in their entirety by express reference to the Mortgage, which is incorporated by reference as an Exhibit to the Registration Statement. The Mortgage may be inspected at the offices of the Corporate Trust and Agency Group of Bankers Trust Company, Four Albany Street, New York, New York 10015. Each series of New Bonds will have a stated principal amount, maturity date, interest rate(s) (or the method of determining such 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. New Bonds may be issued, as indicated in the applicable Prospectus Supplement, in definitive form ("Definitive Bonds") or may be represented by a permanent global Bond or Bonds ("Book-Entry Bonds") registered in the name of a depositary or its nominee (the "Depositary"). See "Book-Entry System" below. Interest, payable at the times and, at the rate(s) (or the method of determining such rate(s)) set forth in such Supplement (subject to certain exceptions provided in the Mortgage) will be paid to the persons in whose names the Definitive Bonds are registered at the close of business on the record date set forth therein and, at the option of the Company, may be paid by checks mailed to such persons at their registered addresses. The Definitive Bonds will be issued as registered bonds in denominations of $1,000 and multiples thereof, and will be exchangeable for other Definitive Bonds of the same series in equal aggregate principal amounts without charge to the holders except for any applicable tax or governmental charge. The Mortgage does not contain any covenant or other provision that specifically is intended to afford holders of the New Bonds special protection in the event of a highly leveraged transaction. BOOK-ENTRY SYSTEM The Depository Trust Company The Depository Trust Company, New York, New York ("DTC"), will act as securities depositary for the Book-Entry Bonds. The Book-Entry Bonds will be issued as a fully-registered security in the name of Cede & Co., DTC's partnership nominee. One fully-registered global certificate of the Book-Entry Bonds will be issued in principal amount equal to the aggregate principal amount for each series of the Book-Entry Bonds of like tenor and having the same date of issue and maturity, and will be deposited with DTC. 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, as amended. DTC holds securities that its participants (the "Participants") deposit with DTC. DTC also facilitates the settlement among Participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in Participants' accounts, thereby eliminating the need for physical movement of securities certificates. Direct Participants include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations ("Direct Participants"). DTC is 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. 4 Ownership of Bonds Purchases of the Book-Entry Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Book-Entry Bonds on DTC's records. The ownership interest of each actual purchaser of each Book-Entry Bond ("Beneficial Owner") is in turn to be recorded on the Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase, but Beneficial Owners are expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Book-Entry 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 the Book-Entry Bonds, except in the event that the use of the system for the Book-Entry Bonds is discontinued under the circumstances described below under "Discontinuance of Book-Entry Only System." To facilitate subsequent transfers, all Book-Entry Bonds deposited by Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co. The deposit of Book-Entry 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 Book-Entry Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Book-Entry 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 form time to time. Neither DTC nor Cede & Co. will consent or vote with respect to securities. 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 securities are credited on the record date (identified in a listing attached to the omnibus proxy). So long as a nominee of DTC is the registered owner of the Book-Entry Bonds, references herein to the Bondholders or the holders or owners of the Book-Entry Bonds shall mean DTC and shall not mean the Beneficial Owners of the Book-Entry Bonds. The Company and the Trustee will recognize DTC or its nominee as the holder of all of the Book-Entry Bonds for all purposes, including the payment of the principal or Redemption Price of and interest on the Book-Entry Bonds, as well as the giving of notices and any consent or direction required or permitted to be given to or on behalf of the Bondholders under the Indenture. Neither the Company nor the Trustee will have any responsibility or obligation to Participants or Beneficial Owners with respect to payments or notices to Participants or Beneficial Owners. Payments on and Redemption of Bonds So long as New Bonds are held by DTC under a book-entry system, principal and interest payments on the Book-Entry Bonds will be made to DTC. DTC's practice is to credit Direct Participant's accounts on the date on which such principal or interest is payable in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that it will not receive payment on such date. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as 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 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 Participants. 5 So long as New Bonds are held by DTC under a book-entry system, the Trustee will send any notice of redemption with respect to the Book-Entry Bonds only to Cede & Co. Any failure of DTC to advise any Direct Participant, or of any Direct Participant to notify any Indirect Participant or any Beneficial Owner, of any such notice and its content or effect will not affect the validity of the proceedings for the redemption of the Book-Entry Bonds. If fewer than all of the Book-Entry Bonds are selected for redemption, DTC's practice is to determine by lot the amount of the interest of each Direct Participant to be redeemed. Any such selection of Direct Participants to which any such partial redemption will be credited will not be governed by the Mortgage and will not be made by the Company or the Trustee. The Company and the Trustee cannot give any assurances that DTC or the Participants will distribute payments of the principal or Redemption Price of and interest on the Book-Entry Bonds paid to DTC or its nominee, as the registered owner of the Book-Entry Bonds, or any redemption or other notices, to the Beneficial Owners or that they will do so on a timely basis or that DTC will serve and act in the manner described in this Prospectus. DTC may charge the Participants a sum sufficient to cover any tax, fee or other governmental charge that may be imposed for every transfer and exchange of a beneficial interest in the Book-Entry Bonds, and the Participants may seek reimbursements therefor from the Beneficial Owners. Discontinuance of Book-Entry Only System If DTC is at any time unwilling or unable to continue as Depositary and a successor Depositary is not appointed by the Company within 90 days, the Company will issue Definitive Bonds in exchange for the Book-Entry Bonds represented by such fully-registered global certificate. In addition, the Company may at any time and in its sole discretion determine not to use DTC's book-entry system, and, in such event, will issue Definitive Bonds in exchange for the Book-Entry Bonds represented by such fully-registered global certificate. 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 the sinking fund described below. (For applicable provisions of the Mortgage, see original indenture, Article X, Section 2; supplemental indenture dated as of December 1, 1936, paragraph 4; supplemental indenture dated as of April 15, 1966, paragraph 3; and supplemental indenture relating to such series of New Bonds, paragraph 2.) SINKING FUND PROVISIONS The Prospectus Supplement for each series of New Bonds will indicate if such Bonds are to be redeemable for the Sinking Fund, and if so, the date (if any) prior to which no such redemption can be made and the applicable sinking fund redemption price. The Mortgage requires that (1) the Company create a Sinking Fund by payment to the Trustee annually on August 1 a sum equal to 1% of the largest amount of all first refunding mortgage bonds outstanding under the Mortgage ("Bonds") at any time during the preceding twelve months, and (2) the Trustee apply these payments to purchase Bonds (except for Bonds which have provisions excluding them from being purchased for the Sinking Fund) at the lowest obtainable prices. The Trustee may purchase Bonds for the Sinking Fund in the open market or through responses to invitations for sealed proposals, including from the Company, if such purchases are possible at or below the applicable redemption price. If not, the Trustee will acquire Bonds for the Sinking Fund directly through the redemption provisions to which Bonds are subject. 6 The lowest obtainable price cannot exceed the specified sinking fund redemption price or, if none, the applicable regular redemption price. In determining the lowest prices obtainable in the purchase of Bonds for the Sinking Fund and in selecting Bonds for redemption through the Sinking Fund, the Trustee may take into consideration the interest rates, dates of maturity, resultant yields to maturity and any other characteristics deemed relevant by the Trustee. Accordingly, Bonds, including New Bonds, subject to retirement by operation of the Sinking Fund may or may not, in fact, be so retired. The Company is also required to pay to the Trustee accrued interest on Bonds so purchased or redeemed to the dates of purchase or redemption. All Bonds so acquired are to be cancelled and no Bonds are to be issued under the Mortgage in place of them. (For applicable provisions of the Mortgage, see original indenture, Article X, Section 3; supplemental indenture dated as of December 1, 1920, paragraph 6; supplemental indenture dated as of April 1, 1946, paragraph 4; supplemental indenture dated as of July 15, 1964, paragraph 4; and the supplemental indenture relating to such series of New Bonds, paragraph 2.) SECURITY The New Bonds will be secured, equally and ratably with all other Bonds outstanding at any time under the Mortgage, (A) by a valid and direct first lien on all of the principal properties and franchises now owned or hereafter acquired by the Company subject (i) in the case of Pennsylvania real property, to a prior lien for Pennsylvania local real property taxes for the current year, which are not overdue, and (ii) to minor and unimportant encumbrances which do not materially interfere with the use of the properties by the Company; and (B) by a pledge of 100,000 shares of Class A stock and 100,000 shares of Class B stock of Safe Harbor Water Power Corporation and the common stock of other directly owned subsidiaries of the Company (but not stock of second level subsidiaries, i.e. subsidiaries of subsidiaries). With respect to substantially all of the personal property and fixtures owned by the Company, the lien of the Mortgage has been perfected as a security interest under the Maryland and Pennsylvania Uniform Commercial Codes. The Mortgage contains an after-acquired property clause. The lien upon after- acquired property (other than property in Pennsylvania and improvements to property now owned) may not become fully effective until such property is conveyed or delivered to the Trustee. It is the Company's practice when acquiring fee simple property in Maryland (not subject to a purchase money mortgage) to have the conveyance made to itself and the Trustee, and as to all other property, except securities and certain personal property, to record deeds or supplemental indentures from time to time conveying record title to such property to the Trustee. Securities acquired by the Company (except temporary investments intended to be reconverted into cash) are deposited with the Trustee with instruments of transfer in blank upon acquisition. So long as the Company is entitled or permitted to retain possession of the mortgaged property, the lien of the Mortgage ordinarily is not effective upon merchandise or other property acquired or produced for sale in the ordinary course of business, upon cash (other than cash deposited with the Trustee pursuant to certain provisions of the Mortgage) or securities not transferred or delivered to the Trustee, or upon income. (For applicable provisions of the Mortgage, see original indenture, granting clauses; Article III, Section 2; Article IV, Section 1; and Article X, Section 1.) ISSUE OF ADDITIONAL BONDS Subject to limitations imposed by any applicable law or any supplemental indenture with respect to any existing series, additional Bonds may be issued under the Mortgage as Bonds of any existing series or a new series, in a principal amount equal to: (a) the amount of cash deposited with the Trustee for such purpose (which may thereafter be withdrawn upon the same basis upon which additional Bonds may be issued); (b) 80% of the amount of actual expenditures for Additional Property as defined in the Mortgage (not in excess of the reasonable value of such property), including to a specified extent securities of subsidiaries, made within 7 three years prior to the request for issuance of such Bonds (and also in the case of Additional Property subject to Prior Charges as so defined, additional Bonds may be issued in an amount obtained by deducting the amount of Prior Charges from 80% of the sum of such expenditures and such Prior Charges); (c) the principal or par amounts of Prior Charges acquired, paid or refunded; and (d) the principal amount of Bonds previously authenticated under the Mortgage and paid or retired (except by operation of the Sinking Fund). At December 31, 1993, approximately $641,892,000 principal amount of Bonds was issuable under clause (b) above, and approximately $414,677,000 principal amount of Bonds was issuable under clause (d) above. (For applicable provisions of the Mortgage, see original indenture, Article I, Sections 3, 5, 6, 7, 8 and 9; supplemental indenture dated as of December 1, 1920, paragraph 4; supplemental indenture dated as of December 1, 1936, paragraph 3; supplemental indenture dated as of June 15, 1938, paragraph 3; and supplemental indenture dated as of December 19, 1949, paragraph 2.) EVENTS OF DEFAULT The Mortgage provides that the following constitute "events of default:" (a) default for 60 days in payment of any interest on any Bonds; (b) default in payment of the principal of any Bonds; (c) default in observance or performance of any other covenant or condition by the Company, and continuance of such default for a period of 60 days after written notice thereof to the Company; or (d) an order for appointment of a receiver of the Company, or of all or any part of the mortgaged property which, in the opinion of the Trustee, is prejudicial to the security of the Bonds or to the interests of the holders of the Bonds, or for the winding up or liquidation of the business and affairs of the Company, or adjudicating the Company a bankrupt, or corporate action taken on the part of the Company for any of the foregoing. The Trustee must give the holders of the Bonds notice of all defaults known to it within 90 days after the occurrence thereof (disregarding any period of grace), unless such defaults shall have been cured, but no such notice shall be given until at least 60 days after the occurrence of a default described in (a) or (c) above; provided that, except in the case of default in the payment of the principal of or interest on the Bonds, or in the payment of any sinking fund installment, the Trustee may withhold such notice so long as it determines that the withholding of such notice is in the interests of the holders of the Bonds. (For applicable provisions of the Mortgage, see original indenture, Article V, Section 2 and supplemental indenture dated as of January 1, 1941, Article XIII, Section 5.) ENFORCEMENT Upon the written request of the holders of not less than a majority in principal amount of the Bonds at the time outstanding, in case of any "event of default," as defined in the Mortgage (see above), it is the duty of the Trustee, upon being offered satisfactory security and indemnity against costs, expenses and liability, to take all needful steps for the protection and enforcement of its rights and the rights of the holders of Bonds and to exercise the powers of entry or sale conferred by the Mortgage, or to take appropriate judicial proceedings by action, suit or otherwise, as the Trustee shall deem most expedient in the interest of the holders of such Bonds. In case of a sale of the mortgaged property, whether under the power of sale or pursuant to judicial proceedings, the principal of all Bonds shall, if not previously due, immediately become due and payable. The holders of sixty-five percent in principal amount of the Bonds outstanding have the right to direct and to control any proceedings for any sale of the mortgaged property, or for the foreclosure of the Mortgage, or for the appointment of a receiver, or any other proceedings under the Mortgage; provided, however, that the Trustee shall have the right to refuse to comply with any direction or order of holders of the Bonds under this provision if in its judgement compliance therewith would be unjustly prejudicial to non- assenting holders. (For applicable provisions of the Mortgage, see original indenture, Article V, Sections 4, 5 and 6; and supplemental indenture dated April 1, 1946, paragraphs 10 and 11.) 8 THE TRUSTEE The Trustee is the registrar and paying agent under the Mortgage and will serve as calculation agent for Bonds with floating rates. Bankers Trust Company also serves as authenticating agent and registrar and paying agent for other securities of the Company and as Trustee for the Company's Employee Savings Plan. In addition, subsidiaries of the Company maintain normal banking relationships and have no outstanding loans, as of January 31, 1994, with Bankers Trust Company. Annually, the Company is required to furnish the Trustee with a certificate regarding its compliance with certain covenants of the Mortgage and an opinion of counsel regarding the recording and filing of the Mortgage and of each supplemental indenture. (For applicable provisions of the Mortgage, see supplemental indenture dated as of January 1, 1941, Article XII, Sections 1 and 9.) PLAN OF DISTRIBUTION The Company may sell any series of the New Bonds in any of the following ways: (i) through underwriters or dealers; (ii) directly to a limited number of purchasers or to a single purchaser; or (iii) through agents. The Prospectus Supplement with respect to the series of New Bonds being offered thereby will set forth the terms of the offering of such New Bonds, including the name or names of any underwriters, 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 and any discounts or concessions allowed or reallowed or paid to dealers and any securities exchanges on which such New Bonds may be listed. Only underwriters named in a Prospectus Supplement are deemed to be underwriters in connection with the New Bonds offered thereby. If underwriters are used in the sale of a series of New Bonds, such 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 either offered to the public through underwriting syndicates (any such syndicate may be represented by managing underwriters which may be designated by the Company), or directly by one or more underwriters acting alone. Unless otherwise set forth in the Prospectus Supplement, the obligations of the underwriters to purchase the New Bonds of the series offered thereby will be subject to certain conditions precedent, and the underwriters will be obligated to purchase all such New Bonds if any 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. New Bonds may be sold directly by the Company or through agents designated by the Company from time to time. The Prospectus Supplement with respect to any series of New Bonds sold in this manner will set forth the name of any agent involved in the offer or sale of such series of New Bonds as well as 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. If dealers are utilized in the sale of any series of New Bonds, the Company will sell such New Bonds to the dealers, as principal. Any dealer may then resell such New Bonds 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 New Bonds being offered thereby. It has not been determined whether any series of the New Bonds will be listed on a securities exchange. Underwriters will not be obligated to make a market in any series of New Bonds. The Company can not predict the activity of trading in, or liquidity of, any series of the New Bonds. 9 Agents, underwriters and dealers 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 the agents, underwriters or dealers may be required to make in respect thereof. Agents, underwriters and dealers may be customers of, engage in transactions with, or perform services for the Company in the ordinary course of business. LEGAL OPINIONS Certain legal matters in connection with the New Bonds will be passed upon for the Company by David A. Brune, Esq., General Counsel of the Company, or Susan Wolf, Esq., Associate General Counsel of the Company, and for the underwriters by Cahill Gordon & Reindel (a partnership including a professional corporation), New York, N.Y. Cahill Gordon & Reindel will not pass upon the incorporation of the Company, titles to properties of the Company or the lien of the Mortgage. Cahill Gordon & Reindel will rely upon the opinion of Mr. Brune or Miss Wolf as to matters of Maryland law and applicability of the Public Utility Holding Company Act of 1935. EXPERTS The consolidated balance sheets and statements of capitalization as of December 31, 1992 and 1991 and the consolidated statements of income, cash flows, common shareholders' equity and taxes for each of the three years in the period ended December 31, 1992, and the consolidated financial statement schedules listed in Item 14(a)(1) and (2) of the 1992 Form 10-K incorporated by reference in this Prospectus from the 1992 Form 10-K have been incorporated herein in reliance on the report of Coopers & Lybrand, independent accountants, given on the authority of that firm as experts in accounting and auditing. Such report includes explanatory paragraphs related to the recoverability of replacement energy costs and changes in accounting methods. 10 - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- NO DEALER, SALESMAN, OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY IN- FORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS INCLUDING ANY PROSPECTUS SUPPLEMENT IN CONNECTION WITH THE OFFER CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRE- SENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER, DEALER, OR AGENT. THIS PROSPECTUS DOES NOT CONSTITUTE AN OF- FER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THESE 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 NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. --------------- TABLE OF CONTENTS PROSPECTUS SUPPLEMENT
PAGE ---- Use of Proceeds............................................................ S-2 Certain Terms of Offered Bonds............................................. S-2 Underwriting............................................................... S-3
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 New Bonds.................................................... 3 Plan of Distribution........................................................ 9 Legal Opinions.............................................................. 10 Experts..................................................................... 10
- ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- $125,000,000 [LOGO OF BALTIMORE GAS AND ELECTRIC APPEARS HERE] FLOATING RATE SERIES DUE APRIL 15, 1999 FIRST REFUNDING MORTGAGE BONDS --------------- PROSPECTUS SUPPLEMENT MARCH 14, 1994 --------------- LEHMAN BROTHERS - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- -----END PRIVACY-ENHANCED MESSAGE-----