Obligation ATEP Texas Inc 6.65% ( US0010EPAF55 ) en USD

ATEP Texas Inc

100 % ▼

Etats-unis

US0010EPAF55 ( en USD )

6.65% par an ( paiement semestriel )

14/02/2033

Prospectus brochure de l'obligation AEP Texas Inc US0010EPAF55 en USD 6.65%, échéance 14/02/2033

1 000 USD

275 000 000 USD

0010EPAF5

A- ( Qualité moyenne supérieure )

Baa2 ( Qualité moyenne inférieure )

15/02/2026 ( Dans 103 jours )

AEP Texas Inc. est une filiale d'American Electric Power (AEP) qui fournit de l'électricité à plus de 1,5 million de clients dans le Texas.

L'Obligation émise par ATEP Texas Inc ( Etats-unis ) , en USD, avec le code ISIN US0010EPAF55, paye un coupon de 6.65% par an.
Le paiement des coupons est semestriel et la maturité de l'Obligation est le 14/02/2033

L'Obligation émise par ATEP Texas Inc ( Etats-unis ) , en USD, avec le code ISIN US0010EPAF55, a été notée Baa2 ( Qualité moyenne inférieure ) par l'agence de notation Moody's.

L'Obligation émise par ATEP Texas Inc ( Etats-unis ) , en USD, avec le code ISIN US0010EPAF55, a été notée A- ( Qualité moyenne supérieure ) par l'agence de notation Standard & Poor's ( S&P ).

file://///Appsrv1/ljs/Tamara/exch%20AEP%20Texas%20Central%205.5%25,%206.65%25,%203%25%20and%20fltg%20rt%20Nts.txt
<DOCUMENT>
<TYPE>424B3
<SEQUENCE>1
<FILENAME>l02678ae424b3.txt
<DESCRIPTION>AEP TEXAS CENTRAL COMPANY
<TEXT>
<PAGE>
Filed pursuant to Rule 424(b)(3)
Registration No. 333-107205
PROSPECTUS
$800,000,000
AEP TEXAS CENTRAL COMPANY
(A TEXAS CORPORATION)
$275,000,000 5.50% SENIOR NOTES, SERIES D DUE 2013
$275,000,000 6.65% SENIOR NOTES, SERIES E DUE 2033
$150,000,000 3.00% SENIOR NOTES, SERIES F DUE 2005
$100,000,000 FLOATING RATE NOTES, SERIES B DUE 2005
Offer to exchange all of its outstanding 5.50% Senior Notes, Series A due 2013
(the 2013 Notes) for an equal amount of 5.50% Senior Notes, Series D due 2013,
which has been registered under the Securities Act of 1933, (the 2013 Exchange
Notes); to exchange all of its outstanding 6.65% Senior Notes, Series B due 2033
(the 2033 Notes) for an equal amount of 6.65% Senior Notes, Series E due 2033
(the 2033 Exchange Notes), which has been registered under the Securities Act of
1933; to exchange all of its outstanding 3.00% Senior Notes, Series C due 2005
(the 2005 Notes) for an equal amount of 3.00% Senior Notes, Series F due 2005
(the 2005 Exchange Notes), which has been registered under the Securities Act of
1933; and to exchange all of its outstanding Floating Rate Notes, Series A due
2005 (the Floating Notes--together with the 2013 Notes, the 2033 Notes and the
2005 Notes--the Notes) for an equal amount of Floating Rate Notes, Series B due
2005 (the Floating Exchange Notes--together with the 2013 Exchange Notes, the
2033 Exchange Notes and the 2005 Exchange Notes--the Exchange Notes), which has
been registered under the Securities Act of 1933.
THE EXCHANGE OFFER
- We will exchange all outstanding Notes that are validly tendered and
not validly withdrawn for an equal principal amount of Exchange Notes
file://///Appsrv1/ljs/Tamara/exch%20AEP%20Texas%20...%25,%206.65%25,%203%25%20and%20fltg%20rt%20Nts.txt (1 of 111)10/6/03 11:07:44 AM

file://///Appsrv1/ljs/Tamara/exch%20AEP%20Texas%20Central%205.5%25,%206.65%25,%203%25%20and%20fltg%20rt%20Nts.txt
that are freely tradeable, except in limited circumstances described
below.
- You may withdraw tenders of outstanding Notes at any time prior to the
expiration of the exchange offer.
- The exchange offer expires at 5:00 p.m., New York City time, on
September 18, 2003, unless extended. We do not currently intend to
extend the expiration date.
- The exchange of outstanding Notes for Exchange Notes in the exchange
offer will not be a taxable event for U.S. federal income tax purposes.
- We will not receive any proceeds from the exchange offer.
THE EXCHANGE NOTES
- The Exchange Notes are being offered in order to satisfy certain of our
obligations under the registration rights agreement entered into in
connection with the placement of the outstanding Notes.
- The terms of the Exchange Notes to be issued in the exchange offer are
substantially identical to the outstanding Notes, except that the
Exchange Notes will be freely tradeable, except in limited
circumstances described below.
RESALES OF EXCHANGE NOTES
- The Exchange Notes may be sold in the over-the-counter market, in
negotiated transactions or through a combination of such methods. We do
not plan to list the Exchange Notes on a national market.
If you are a broker-dealer and you receive Exchange Notes for your own account,
you must acknowledge that you will deliver a prospectus in connection with any
resale of such Exchange Notes. By making such acknowledgement, you will not be
deemed to admit that you are an "underwriter" under the Securities Act of 1933.
Broker-dealers may use this prospectus in connection with any resale of Exchange
Notes received in exchange for outstanding Notes where the outstanding Notes
were acquired by the broker-dealer as a result of market-making activities or
trading activities. We have agreed to make this prospectus, and any amendment or
supplement thereto, available to any such broker-dealer for use in connection
with any resale of any Exchange Notes for a period of the lesser of 90 days
after the consummation of the exchange offer and the date on which all
file://///Appsrv1/ljs/Tamara/exch%20AEP%20Texas%20...%25,%206.65%25,%203%25%20and%20fltg%20rt%20Nts.txt (2 of 111)10/6/03 11:07:44 AM

file://///Appsrv1/ljs/Tamara/exch%20AEP%20Texas%20Central%205.5%25,%206.65%25,%203%25%20and%20fltg%20rt%20Nts.txt
broker-dealers have sold all Exchange Notes held by them (unless such exchange
offer period is extended). A broker-dealer may not participate in the exchange
offer with respect to outstanding Notes acquired other than as a result of
market-making activities or trading activities. See PLAN OF DISTRIBUTION.
If you are an affiliate of AEP Texas Central Company or are engaged in, or
intend to engage in, or have an agreement or understanding to participate in, a
distribution of the Exchange Notes, you cannot rely on the applicable
interpretations of the Securities and Exchange Commission and you must comply
with the registration requirements of the Securities Act of 1933 in connection
with any resale transaction.
YOU SHOULD CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE 10 OF
THIS
PROSPECTUS BEFORE PARTICIPATING IN THE EXCHANGE OFFER.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR
DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY
IS A
CRIMINAL OFFENSE.
The date of this prospectus is August 19, 2003.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
About This Prospectus.................................. i
Special Note Regarding
Forward-Looking Statements.......................... i
Where You Can Find More Information.................... 1
Prospectus Summary..................................... 2
Risk Factors........................................... 10
Ratio of Earnings to Fixed Charges..................... 20
Use of Proceeds........................................ 20
Selected Historical Consolidated Financial
file://///Appsrv1/ljs/Tamara/exch%20AEP%20Texas%20...%25,%206.65%25,%203%25%20and%20fltg%20rt%20Nts.txt (3 of 111)10/6/03 11:07:44 AM

file://///Appsrv1/ljs/Tamara/exch%20AEP%20Texas%20Central%205.5%25,%206.65%25,%203%25%20and%20fltg%20rt%20Nts.txt
Information......................................... 22
AEP Texas Central Company.............................. 31
The Exchange Offer..................................... 37
Description of the Exchange Notes...................... 47
Exchange Offers and Registration Rights................ 54
Certain United States Federal Income Tax
Consequences........................................ 57
Ratings................................................ 59
Plan of Distribution................................... 59
Legal.Matters.......................................... 60
Experts................................................ 60
</TABLE>
ABOUT THIS PROSPECTUS
In this prospectus, the terms "we," "our," "us," "Company" and "Texas
Central" mean AEP Texas Central Company including, unless the context otherwise
requires or as expressly stated, our subsidiaries. Unless the context otherwise
requires, "notes" refers to the outstanding Notes and the Exchange Notes.
You should rely only on the information contained in this document.
Neither Texas Central nor the exchange agent has authorized anyone to provide
you with information different from that contained in this document. We are not
offering to exchange, or soliciting any offers to exchange, securities pursuant
to the exchange offer in any jurisdiction in which those offers or exchanges
would not be permitted. The information contained in this document is accurate
only as of the date of this document regardless of the time of delivery of this
document or the time of any exchange of securities in the exchange offer.
This document incorporates important business and financial information
about us from documents filed with the Securities and Exchange Commission that
have not been included in or delivered with this document. This information is
available without charge upon written or oral request. See WHERE YOU CAN FIND
MORE INFORMATION beginning on page 1.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the documents it incorporates by reference contain
statements that are not historical fact and constitute "forward-looking
statements." When we use words like "believes," "expects," "anticipates,"
"intends," "plans," "estimates," "may," "should" or similar expressions, or when
we discuss our strategy or plans, we are making forward-looking statements.
Forward-looking statements are not guarantees of performance. They involve
file://///Appsrv1/ljs/Tamara/exch%20AEP%20Texas%20...%25,%206.65%25,%203%25%20and%20fltg%20rt%20Nts.txt (4 of 111)10/6/03 11:07:44 AM

file://///Appsrv1/ljs/Tamara/exch%20AEP%20Texas%20Central%205.5%25,%206.65%25,%203%25%20and%20fltg%20rt%20Nts.txt
risks, uncertainties and assumptions. Our future results may differ materially
from those expressed in these forward-looking statements. Although Texas Central
believes that in making any such forward-looking statements its expectations are
based on reasonable assumptions, such forward-looking statements involve
uncertainties and are qualified in their entirety by reference to the following
important factors, among others, that could cause Texas Central's actual results
to differ materially from those projected in such forward-looking statements:
i
<PAGE>
- Implementation of legislation passed by the Texas legislature to
restructure the electric utility industry in Texas, including the
determination of stranded costs for generation-related assets;
- Abnormal weather conditions;
- Available sources of fuels;
- The speed and degree to which competition is implemented in our
markets;
- New legislation and government regulation, oversight and/or
investigation of the energy sector or its participants;
- Our ability to successfully control our costs;
- Availability of generating capacity;
- The economic climate and growth in our service territory and changes in
market demand and demographic patterns;
- Inflationary trends;
- Changes in electricity and gas market prices;
- Changes in interest rates;
- Liquidity in the banking, capital and wholesale power markets;
- Actions of rating agencies;
file://///Appsrv1/ljs/Tamara/exch%20AEP%20Texas%20...%25,%206.65%25,%203%25%20and%20fltg%20rt%20Nts.txt (5 of 111)10/6/03 11:07:44 AM

file://///Appsrv1/ljs/Tamara/exch%20AEP%20Texas%20Central%205.5%25,%206.65%25,%203%25%20and%20fltg%20rt%20Nts.txt
- Changes in technology, including the increased use of distributed
generation within our transmission and distribution service territory;
and
- Other risks and unforeseen events.
YOU ARE CAUTIONED NOT TO RELY UNDULY ON ANY FORWARD-LOOKING
STATEMENTS.
THESE RISKS AND UNCERTAINTIES ARE DISCUSSED IN MORE DETAIL UNDER RISK
FACTORS AND TEXAS CENTRAL INCLUDED HEREIN AND "BUSINESS" AND
"MANAGEMENT'S
DISCUSSION AND ANALYSIS" IN OUR ANNUAL REPORT ON FORM 10-K FOR THE YEAR
ENDED DECEMBER 31, 2002, IN OUR QUARTERLY REPORTS ON FORM 10-Q FOR THE
PERIODS ENDED MARCH 31, 2003 AND JUNE 30, 2003, OUR CURRENT REPORT ON FORM
8-K DATED MAY 14, 2003, AND OTHER DOCUMENTS ON FILE WITH THE SEC. YOU MAY
OBTAIN COPIES OF THESE DOCUMENTS AS DESCRIBED UNDER WHERE YOU CAN FIND
MORE
INFORMATION.
ii
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports and other information
with the SEC. You may read and copy any document we file at the SEC's Public
Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call
the SEC at 1-800-SEC-0330 for further information on the Public Reference Room.
You may also examine our SEC filings through the SEC's web site at
http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and later information that we file
with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings made
with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Securities
Exchange Act of 1934 until we sell all the Notes.
- Annual Report on Form 10-K for the year ended December 31, 2002
(as updated by the Company's Current Report on Form 8-K dated May
file://///Appsrv1/ljs/Tamara/exch%20AEP%20Texas%20...%25,%206.65%25,%203%25%20and%20fltg%20rt%20Nts.txt (6 of 111)10/6/03 11:07:44 AM

file://///Appsrv1/ljs/Tamara/exch%20AEP%20Texas%20Central%205.5%25,%206.65%25,%203%25%20and%20fltg%20rt%20Nts.txt
14, 2003);
- Quarterly Reports on Form 10-Q for the quarters ended March 31,
2003 and June 30, 2003; and
- Current Report on Form 8-K dated May 14, 2003.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Mr. R. Todd Rimmer
American Electric Power Service Corporation
1 Riverside Plaza
Columbus, Ohio 43215
614-716-1000
You should rely only on the information incorporated by reference or
provided in this prospectus. We have not authorized anyone else to provide you
with different information. We are not making an offer of these Notes in any
state where the offer is not permitted. You should not assume that the
information in this prospectus or any supplement is accurate as of any date
other than the date on the front of those documents.
ANY REQUEST FOR DOCUMENTS SHOULD BE MADE NO LATER THAN SEPTEMBER
11,
2003 TO ENSURE TIMELY DELIVERY OF SUCH DOCUMENTS PRIOR TO THE EXPIRATION
DATE OF
THE EXCHANGE OFFER. IN THE EVENT THAT WE EXTEND THE EXCHANGE OFFER, YOU
MUST
SUBMIT YOUR REQUEST AT LEAST FIVE BUSINESS DAYS BEFORE THE EXPIRATION
DATE, AS
EXTENDED. If you request any such documents from us, we will mail them to you by
first class mail, or another equally prompt means, within one business day after
we receive your request.
1
<PAGE>
PROSPECTUS SUMMARY
This summary highlights selected information contained elsewhere in
this prospectus and does not contain all of the information you need to
file://///Appsrv1/ljs/Tamara/exch%20AEP%20Texas%20...%25,%206.65%25,%203%25%20and%20fltg%20rt%20Nts.txt (7 of 111)10/6/03 11:07:44 AM

file://///Appsrv1/ljs/Tamara/exch%20AEP%20Texas%20Central%205.5%25,%206.65%25,%203%25%20and%20fltg%20rt%20Nts.txt
consider. You should read carefully this entire prospectus.
AEP TEXAS CENTRAL COMPANY
OVERVIEW
AEP Texas Central Company (Texas Central), formerly Central Power and
Light Company, is a wholly owned subsidiary of American Electric Power Company,
Inc. (AEP), engaged in the transmission and distribution of electricity in its
service territory located in southern Texas and in the generation and sale of
electricity in the Electric Reliability Council of Texas (ERCOT). ERCOT is an
intrastate network of retail customers, investor and municipally owned electric
utilities, rural electric cooperatives, river authorities, independent
generators, power marketers and retail electric providers (REPs). The entire
service territory of Texas Central is located in ERCOT. ERCOT's control area
consists of much but not all of the State of Texas.
The State of Texas enacted electricity restructuring legislation Senate
Bill 7 (SB7), which requires the legal separation of generation and
retail-related assets from transmission and distribution assets. In May 2000,
Texas Central and certain affiliates filed a business separation plan with the
Public Utility Commission of Texas (PUCT), which, after certain revisions, was
subsequently approved by the PUCT and, unless revised by Texas Central, will be
implemented upon final regulatory approval by the SEC, which remains pending.
Currently, Texas Central's operations are:
- ELECTRIC DISTRIBUTION - Through REPs owned by third parties, Texas
Central provides distribution service to approximately 700,000
retail customers in southern Texas. Texas Central's service
territory includes 44 counties and covers approximately 44,000
square miles. Distribution services are provided under tariffs
approved by the PUCT.
- ELECTRIC TRANSMISSION - Texas Central's electric transmission
business provides non-discriminatory wholesale open access
transmission service in ERCOT. ERCOT is an independent system
operator wholly within the State of Texas and subject to the
jurisdiction of the PUCT. Texas Central charges for the use of its
transmission system to deliver power under tariffs approved by the
Federal Energy Regulatory Commission (FERC) consistent with the
transmission rules of the PUCT.
file://///Appsrv1/ljs/Tamara/exch%20AEP%20Texas%20...%25,%206.65%25,%203%25%20and%20fltg%20rt%20Nts.txt (8 of 111)10/6/03 11:07:44 AM

file://///Appsrv1/ljs/Tamara/exch%20AEP%20Texas%20Central%205.5%25,%206.65%25,%203%25%20and%20fltg%20rt%20Nts.txt
- ELECTRIC GENERATION -Texas Central owns 4,497 MW of generating
capability including 630 MW of nuclear generation, 686 MW of
coal-fired generation, 6 MW of hydro generation and 3,175 MW of
natural gas-fired generation. A number of Texas Central's
generation assets are jointly owned with third parties. In October
2002, AEP mothballed four gas-fired generation plants with a
combined capacity of 1,721 MW; however, one unit was returned to
service in July 2003. Texas Central intends to sell all of its
generation assets in order to measure their market value for
purposes of determining stranded costs, as described under AEP
TEXAS CENTRAL COMPANY - Stranded Cost Component.
Texas Central is subject to regulation by the SEC under the Public
Utility Holding Company Act of 1935 (1935 Act) as a utility owned by an electric
holding company registered under the 1935 Act. Texas Central's transmission and
distribution rates and services are regulated by the PUCT and the FERC. In
addition, Texas Central is also subject to regulation by various federal, state
and local governmental agencies.
TEXAS RESTRUCTURING
Signed into law in June of 1999, SB7 substantially amended the
regulatory structure governing electric utilities in Texas in order to allow
retail electric competition for all customers. SB7 gave Texas customers the
opportunity to choose their REP beginning January 1, 2002, provided a "price to
beat" for residential and small commercial customers and required each utility
to legally separate into a REP, a power generation company, and a transmission
and distribution utility. Under SB7, neither the power generation company nor
the REP is subject to
2
<PAGE>
traditional cost of service regulation. The transmission and distribution
utility remains subject to traditional utility rate regulation by the FERC and
the PUCT.
Under SB7, a REP obtains its electricity from power generation
companies, exempt wholesale generators and other generating entities and
provides services at generally unregulated rates, except that the prices that
may be charged to residential and small commercial customers by REPs affiliated
with a utility within the affiliated utility's service area are set by the PUCT
file://///Appsrv1/ljs/Tamara/exch%20AEP%20Texas%20...%25,%206.65%25,%203%25%20and%20fltg%20rt%20Nts.txt (9 of 111)10/6/03 11:07:44 AM

file://///Appsrv1/ljs/Tamara/exch%20AEP%20Texas%20Central%205.5%25,%206.65%25,%203%25%20and%20fltg%20rt%20Nts.txt
until certain conditions in SB7 are met. This set price is referred to as the
"price to beat" rate (PTB).
The PTB rate was required to be offered by an affiliate REP to all
residential and small commercial customers (with a peak usage of less than 1,000
KW) effective January l, 2002. The initial PTB was a rate 6% below bundled rates
in effect on January 1, 1999 adjusted for any changes in fuel costs as of
December 31, 2001. The PTB must be offered to residential and small commercial
customers until January 1, 2007. Customers with a peak usage of more than 1,000
KW are not eligible for PTB rates.
Under SB7, transmission and distribution utilities in Texas whose
generation assets were unbundled pursuant to Texas electric restructuring law
may recover generation-related regulatory assets and generation-related stranded
costs. Recoverable regulatory assets consist of the Texas jurisdictional amount
of regulatory assets and liabilities in the audited financial statements as of
December 31, 1998, and net stranded costs consist of the positive excess of the
net regulated book value of generation assets over the market value of those
assets, taking specified factors into account. For more information on stranded
costs and regulatory asset recovery, see AEP TEXAS CENTRAL COMPANY - Regulatory
Assets and Stranded Costs Recovery.
While customer choice in the non-ERCOT portion of Texas has been
delayed either by legislative mandate or order of the PUCT, customer choice in
ERCOT has demonstrated some success. As of June 2003, well over 900,000
customers have switched to competitive REPs. In the large commercial and
industrial markets, more that 50% of these customers are purchasing their power
under a competitive contract.
TEXAS CENTRAL RESTRUCTURING
SB7 required each Texas utility to submit a plan to legally separate
its business activities into an affiliated REP, a power generation company and a
transmission and distribution utility. Pursuant to SB7, Texas Central and
certain affiliates filed a business separation plan (the Business Separation
Plan) which, after certain revisions, was approved by the PUCT in February 2002.
The Business Separation Plan will be implemented, unless revised by Texas
Central, upon final regulatory approval by the SEC which is currently pending.
The Business Separation Plan provides for the legal transfer of Texas Central's
generation-related assets to an affiliate, the formation of various REPs,
including Mutual Energy CPL, L.P. (Mutual Energy), and the establishment of
Texas Central as the transmission and distribution utility. Mutual Energy was
sold in December 2002 to Centrica plc (Centrica). Texas Central intends to sell
file://///Appsrv1/ljs/Tamara/exch%20AEP%20Texas%2...25,%206.65%25,%203%25%20and%20fltg%20rt%20Nts.txt (10 of 111)10/6/03 11:07:44 AM

Document Outline

Local Disk
- #1">file://///Appsrv1/ljs/Tamara/exch%20AEP%20Texas%20Central%205.5%25,%206.65%25,%203%25%20and%20fltg%20rt%20Nts.txt