PROSPECTUS SUPPLEMENT
(To Prospectus Dated February 12, 2001)
$263,000,000
NORTHEAST UTILITIES
SENIOR NOTES, SERIES A, DUE 2012
Interest on the Notes will accrue at a rate of 7.25% per year. We will pay
interest on the Notes semiannually in arrears on April 1 and October 1 of each
year, beginning October 1, 2002. The Notes will mature on April 1, 2012.
We may redeem some or all of the Notes at our option in the manner and at the
redemption prices which we describe under "Description of the Notes - Optional
Redemption" beginning on page S-5 of this prospectus supplement. There is no
sinking fund provision for the Notes.
The Notes are unsecured and rank equally with all of our other unsecured and
unsubordinated indebtedness.
There currently is no secondary market for the Notes and there can be no
assurance that a secondary market will develop.
--------------------
Per Note Total
-------- -----
Price to public(1)........................... $ 99.490% $ 261,658,700
Underwriting discounts and
commissions.................................. $ .650% $ 1,709,500
Proceeds, before expenses, to us............. $ 98.840% $ 259,949,200
(1) Does not include accrued interest, if any, from the date of original
issuance.
--------------------
The Securities and Exchange Commission and state securities regulators have not
approved or disapproved these securities, or determined if this prospectus
supplement or the accompanying prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
The underwriters expect to deliver the Notes through the book-entry facilities
of The Depository Trust Company against payment in New York, New York on or
about April 4, 2002.
--------------------
Barclays Capital
Goldman, Sachs & Co.
Morgan Stanley
TD Securities
April 1, 2002
No dealer, salesperson or other person is authorized to give any
information or to represent anything not contained in this prospectus supplement
or the accompanying prospectus. You must not rely on any unauthorized
information or representations. This prospectus supplement is an offer to sell
only the Notes offered hereby, but only under circumstances and in jurisdictions
where it is lawful to do so. The information contained in this prospectus
supplement and the accompanying prospectus is current only as of their
respective dates.
--------------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
Page
----
Forward-Looking Statements...................................................S-1
Northeast Utilities..........................................................S-1
Use of Proceeds..............................................................S-2
Selected Historical Consolidated Financial Information.......................S-2
Ratios of Consolidated Earnings to Fixed Charges.............................S-3
Description of the Notes.....................................................S-3
Underwriting.................................................................S-7
Legal Opinions...............................................................S-8
PROSPECTUS
Where You Can Find More Information.......................................... 1
Documents Incorporated by Reference.......................................... 1
Forward-Looking Statements................................................... 2
Northeast Utilities.......................................................... 2
Ratios of Earnings to Fixed Charges.......................................... 3
Use of Proceeds.............................................................. 3
Description of the Senior Notes.............................................. 3
Legal Opinions............................................................... 11
Experts .................................................................... 11
Plan of Distribution......................................................... 11
FORWARD-LOOKING STATEMENTS
We make statements in this prospectus supplement and in the documents
that are incorporated by reference in the accompanying prospectus that are
considered forward-looking statements within the meaning of the Securities Act
of 1933 and the Securities Exchange Act of 1934. Sometimes these statements will
contain words such as "believes," "expects," "intends," "plans" and other
similar words. These statements are not guarantees of our future performance and
are subject to risks, uncertainties and other important factors that could cause
our actual performance or achievements to be materially different from those we
project. These risks, uncertainties and factors include:
o general economic, business and regulatory conditions, including
economic disruptions caused by terrorist activities;
o energy supply and demand;
o competition;
o federal and state regulatory developments and changes in law;
o availability, terms and use of capital;
o environmental issues;
o weather; and
o industry restructuring.
Given these uncertainties, you should not place undue reliance on these
forward-looking statements. Please see the documents we incorporate by reference
for more information on these factors. These forward-looking statements
represent our estimates and assumptions only as of the date of this prospectus
supplement and the documents incorporated by reference in the accompanying
prospectus. Except to the extent required by the securities laws, we undertake
no obligation to publicly update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise. New factors
emerge from time to time and it is not possible for us to predict all of such
factors, nor can we assess the impact of each such factor on our business or the
extent to which any factor or combination of factors may cause actual results to
differ materially from those contained in any forward-looking statements.
NORTHEAST UTILITIES
Northeast Utilities is a holding company for a number of companies
comprising the Northeast Utilities system and is not itself an operating
company. Through The Connecticut Light and Power Company, Public Service Company
of New Hampshire, Western Massachusetts Electric Company and Yankee Gas Services
Company (each a direct or indirect wholly owned subsidiary of ours), we provide
retail electric service to approximately 1.8 million customers in Connecticut,
Massachusetts and New Hampshire and natural gas to 191,000 customers in
Connecticut. We also have a number of unregulated subsidiaries which provide
telecommunications, energy management and marketing and other energy related
services, and we are one of the largest competitive energy suppliers in New
England.
Our principal executive offices are located at 174 Brush Hill Avenue,
West Springfield, Massachusetts 01089, telephone number (413) 785-5871. Our
general business offices are located at 107 Selden Street, Berlin, Connecticut
06037, telephone number (860) 665-5000.
S-1
USE OF PROCEEDS
We estimate the net proceeds from the sale of the Notes after payment
of expenses will be approximately $259,699,200. We will use the proceeds of the
offering, plus additional cash on hand, to fund the defeasance of the entire
$263,000,000 in principal amount, plus interest accrued or accruing through
May 28, 2002, on our outstanding floating rate notes due February 28, 2003,
which have an interest rate of LIBOR plus 1.60% per year, or 3.50125% per year
as of the date of this prospectus supplement. The floating rate notes will be
called for redemption at the closing of the sale of the Notes. The redemption
price of the floating rate notes will be the principal amount thereof plus
interest accrued or accruing through May 28, 2002, the date of payment.
SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION
We have derived the summary selected historical consolidated financial
data set forth below for the years ended December 31, 1997, 1998, 1999, 2000 and
2001 from our financial statements audited by Arthur Andersen LLP, independent
public accountants. Our financial statements for the three-year period ended
December 31, 2001, the accompanying notes and the reports of Arthur Andersen LLP
on such financial statements are included in our Annual Report on Form 10-K for
the year ended December 31, 2001, which is incorporated by reference in the
accompanying prospectus.1
The following material, which is presented in this prospectus
supplement solely to furnish introductory information, is qualified by, and
should be considered in conjunction with, the more detailed information
appearing in the documents incorporated by reference.
Year Ended December 31,
------------------------------------------------------------------
(Dollar amounts in millions, except per share data)
2001 2000 1999 1998 1997
--------- --------- ------- --------- ---------
Operating revenues................................. $ 6,873.8 $ 5,876.6 4,471.3 $ 3,767.7 $ 3,834.8
Operating expenses................................. 6,334.6 5,181.8 3,945.9 3,460.6 3,631.4
Operating income................................... 539.2 694.8 525.4 307.1 203.4
Net income (loss) for common shares................ 243.5 (28.6) 34.2 (146.8) (130.0)
Total assets....................................... 10,241.4 10,217.1 9,688.1 10,387.4 10,414.4
Rate reduction bonds2.............................. 2,018.4 - - - -
Long-term debt, net of current portion............. 2,292.6 2,029.6 2,372.3 3,282.1 3,645.7
Preferred stock subject to mandatory
redemption, net of current portion.............. - 15.0 121.3 167.5 245.8
Common shareholders' equity........................ 2,117.6 2,218.6 2,083.3 2,047.4 2,170.1
Basic earnings (loss) per common share............. 1.80 (0.20) 0.26 (1.12) (1.01)
Fully diluted earnings (loss) per common share..... 1.79 (0.20) 0.26 (1.12) (1.01)
Cash dividends per common share.................... 0.45 0.40 0.10 - 0.25
Book value per share, as of December 31,........... 16.27 15.43 15.80 15.63 16.67
Average basic common shares outstanding ........... 135.6 141.5 131.4 130.5 129.6
--------
1 Our Board of Trustees selected Deloitte & Touche as our external
auditor beginning for the year 2002 after an extensive auditor selection
process. The selection of Deloitte & Touche will be submitted to our
shareholders for ratification at the annual meeting in May, 2002.
2 The rate reduction bonds are non-recourse to the Northeast Utilities
System or any of its subsidiaries.
S-2
December 31, 2001
-----------------
(Millions)
Actual % As Adjusted(1) %
---------- ---- ------------- ----
Capitalization:
Common shareholders' equity ............. $ 2,117.6 46.8% $ 2,116.9 46.8%
Preferred stock not subject to mandatory
redemption .............................. $ 116.2 2.6% $ 116.2 2.6%
Long-term debt .......................... $ 2,292.6 50.6% $ 2,292.6 50.6%
---------- ----------
Total capitalization .................. $ 4,526.4 $ 4,525.7
========== ==========
Notes payable to banks ..................... $ 290.5 290.5
Obligations under capital leases - current
portion ................................. $ 0.7 0.7
Long-term debt and preferred stock - current
portion ................................. $ 50.5 50.5
Obligations under capital leases ........... $ 16.8 16.8
----------
(1) Adjusted to give effect to the consummation of the offering of the Notes
and the application of the estimated proceeds therefrom, together with cash
on hand, to fund the defeasance of $263,000,000 in principal amount, plus
interest accrued or accruing through May 28, 2002, on our floating rate
notes due February 28, 2003. The adjustment reflects the write off of
approximately $662,000 in previously deferred offering expenses from the
issuance of our floating rate notes.
RATIOS OF CONSOLIDATED EARNINGS TO FIXED CHARGES
Our ratios of consolidated earnings to fixed charges for each of the
years ended December 31, 1997 through 2001 are as follows:
Year Ended December 31,
--------------------------------------------------------
2001 2000 1999 1998 1997
---- ---- ---- ---- ----
Ratio of Consolidated Earnings to
Fixed Charges (1)..... 2.51x 2.11x 1.50x 0.55x(2) 0.58x(2)
(1) For purposes of computing the ratios: (i) earnings consist of pretax income
from continuing operations, adjusted for income taxes, fixed charges,
distributed income of equity investees and minority interests; and (ii)
fixed charges consist of interest on long-term debt, amortized premiums,
discounts and capitalized expenses related to indebtedness, interest on
short-term debt, interest component of rental expenses and other interest.
(2) There was less than one-to-one coverage in 1997 and 1998. The amount of the
deficiency in earnings required for one-to-one coverage in years 1997 and
1998 was $123,367,000 and $132,970,000, respectively.
DESCRIPTION OF THE NOTES
The Notes are a separate series of the Senior Notes described in the
accompanying prospectus and will be issued under a separate Senior Note
Indenture, dated as of April 1, 2002, between us and The Bank of New York, as
trustee (the "Senior Note Indenture"), in the form described in the accompanying
prospectus. Our indenture, dated as of February 28, 2001, between us and The
Bank of New York, as trustee, is being satisfied and discharged concurrently
S-3
with the defeasance of the floating rate notes. You should read the accompanying
prospectus for a detailed summary of additional provisions of the Notes and of
the form of Senior Note Indenture under which the Notes are to be issued. The
description of the Notes below supplements the description of the Senior Notes
contained in the accompanying prospectus. If the descriptions are inconsistent,
this prospectus supplement controls. The following summary and the description
set forth in the accompanying prospectus do not purport to be complete and are
subject to, and qualified in their entirety by, all provisions of the Senior
Note Indenture. Capitalized terms used but not defined in this prospectus
supplement have the meanings given to them in the accompanying prospectus.
General
The Notes will constitute the first series of our Senior Notes issued
under our Senior Note Indenture. The Senior Note Indenture does not limit the
amount of Senior Notes that we may issue.
The Notes will initially be limited to $263,000,000 in aggregate
principal amount. The Notes will mature on April 1, 2012, the maturity date. The
Notes are not entitled to the benefit of any sinking fund, and may be redeemed
at our option only under the circumstances described in this prospectus
supplement under "- Optional Redemption." The Senior Note Indenture permits the
defeasance of the Notes upon satisfaction of the conditions described under
"Description of the Senior Notes - Defeasance" in the accompanying prospectus.
The Notes will constitute senior debt and will rank pari passu with all
our other unsecured and unsubordinated indebtedness. Because we are a holding
company that conducts all of our operations through our subsidiaries, our
ability to meet our obligations under the Notes is dependent on the earnings and
cash flows of those subsidiaries and the ability of those subsidiaries to pay
dividends to us, repurchase shares of their common stock from us or repay loans
or advances made by us to them. We are not allowed under applicable law to
borrow money from our subsidiaries. Dividends payable by certain of our
subsidiaries are restricted pursuant to the terms of the subsidiaries' long-term
debt agreements and regulatory requirements, but we do not believe these
restrictions should interfere with the repayment of the Notes. Holders of the
Notes will generally have a junior position to claims of any holders of
preferred stock and creditors of our subsidiaries, including trade creditors,
debtholders, secured creditors, taxing authorities and guarantee holders. In
addition to trade debt, our subsidiaries have ongoing corporate debt programs
used to finance their business activities. As of December 31, 2001, our
subsidiaries had approximately $2.54 billion of outstanding external debt for
borrowed money, which includes long-term debt and short-term debt but does not
include trade debt, capital leases, power purchase obligations, or rate
reduction bonds, and approximately $116.2 million of outstanding preferred
stock.
The Senior Note Indenture does not currently limit the amount of
indebtedness or preferred stock issuable by our subsidiaries. Please refer to
"Description of the Senior Notes - General" in the accompanying prospectus.
We will issue the Notes in fully registered form in denominations of
$1,000 and multiples thereof. The Bank of New York, the Trustee under the Senior
Note Indenture, will register transfers and exchanges of the Notes and will
serve as paying agent for the Notes. Principal on the Notes will be payable at
the Trustee's corporate trust office at 101 Barclay Street, New York, New York
10286. We will initially issue the Notes in global form. Please refer to "-
Global Securities" in this prospectus supplement and "Description of the Senior
Notes - Book-Entry Only System" in the accompanying prospectus.
Interest
The Notes will bear interest at 7.25% per year. We will pay interest
semiannually in arrears on April 1 and October 1 of each year (each, an
"Interest Payment Date"), beginning October 1, 2002, and on the maturity date.
Interest on the Notes for any period other than a complete interest payment
period will be computed on the basis of a 360 day year of twelve 30 day months
for the actual number of days elapsed. If an Interest Payment Date, the maturity
date of the Notes or any redemption date falls on a day that is not a business
day, the payment of principal and interest or premium, if any, will be made on
the next succeeding business day (without any interest or other payment in
respect of such delay).
S-4
Interest on the Notes will accrue from, and including, the date of
original issuance of the Notes to, and excluding, the first Interest Payment
Date and then from, and including, the immediately preceding Interest Payment
Date to which interest has been paid or duly provided for to, but excluding, the
next Interest Payment Date or the maturity date, as the case may be.
We will pay the interest payable for any Interest Payment Date to the
person in whose name the Note is registered at the close of business (1) on the
business day prior to each Interest Payment Date if the Note remains in
book-entry only form or (2) on the fifteenth calendar day before each Interest
Payment Date if the Note does not remain in book-entry only form.
When we use the term "business day," we mean any day except a Saturday,
a Sunday or a legal holiday in the City of New York on which banking
institutions are authorized or required by law, regulation or executive order to
close.
Limitation on Liens and Sale and Leaseback Transactions
The covenants set forth in the accompanying prospectus under
"Description of the Senior Notes - Limitation on Liens" and "- Sale and
Leaseback Transactions" have been made applicable to the Notes.
Optional Redemption
We may redeem the Notes in whole or in part at our option and at any
time. If we elect to redeem any of the Notes, we will do so at a redemption
price equal to:
o 100% of the principal amount of the Notes being redeemed, plus
o interest accrued to but excluding the date of redemption, plus
o a make-whole premium.
The "make-whole premium" will be an amount equal to the excess, if any,
of (i) the present value of all interest and principal payments scheduled to
become due after the date of the optional redemption by us in respect of the
Notes being redeemed (such present value to be determined on the basis of a
discount rate equal to the sum of (a) a treasury rate and (b) 25 basis points)
over (ii) the outstanding principal amount of the Notes being redeemed.
"Treasury rate" means the yield to maturity at the time of computation of U.S.
Treasury securities with a final maturity (as compiled and published in the most
recent Federal Reserve Statistical Release H.15 (519) which has become publicly
available in New York at least two business days prior to the redemption date
(or, if such Statistical Release is no longer published, any publicly available
source or similar market data)) most nearly equal to the remaining average life
on the redemption date of the Notes being redeemed; provided, however, that if
the period from the redemption date to the maturity date of the Notes is less
than one year, the weekly average yield on actively traded U.S. Treasury
securities adjusted to a constant maturity of one year will be used.
If less than all of the Notes are to be redeemed at any time, the
Trustee will select the Notes to be redeemed by a method that the Trustee deems
fair and appropriate. We will mail notice of the redemption, first-class postage
prepaid, to each holder of Notes to be redeemed at the holder's registered
address. Notice to the holders will be given at least 30 but not more than 60
days before the redemption date, unless a shorter period is satisfactory to the
Trustee. If any Note is to be redeemed in part only, the notice of redemption
that relates to that Note will state the portion of the principal amount of that
Note to be redeemed. In that case, we will issue a new Note in principal amount
equal to the unredeemed portion of the Note in the name of its holder after we
cancel the original Note. Notes or portions of Notes to be redeemed become due
on the redemption date, and interest will cease to accrue on those Notes or
portions of Notes on the redemption date.
Global Securities
When the Notes are initially issued, one or more global securities (the
"Global Securities") will represent the Notes. These Global Securities will have
an aggregate principal amount equal to that of the Notes they represent. Each
Global Security will be deposited with, or on behalf of, The Depository Trust
Company, as depositary (the "Depositary"), and registered in the name of Cede &
Co., a nominee of the Depositary. The Global Securities will bear legends
S-5
stating the restrictions on exchanges and registration of transfer referred to
below and any other matters provided for by the Senior Note Indenture. Please
refer to "Description of the Senior Notes - Book-Entry Only System" in the
accompanying prospectus.
The Global Securities may not be transferred except as a whole (1) by
the Depositary to a nominee of the Depositary or (2) by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or (3) by the
Depositary or any such nominee to a successor of the Depositary or a nominee of
such successor. If (1) the Depositary is at any time unwilling or unable to
continue as Depositary and a successor Depositary is not appointed by us within
ninety days or (2) there shall have occurred and be continuing after any
applicable grace periods an Event of Default under the Senior Note Indenture
with respect to the Notes represented by such Global Security, we will issue
certificated notes in definitive registered form in exchange for the Global
Securities representing the Notes. In addition, we may at any time and in our
sole discretion determine not to have any Notes in registered form represented
by one or more Global Securities and, in such event, will issue certificated
notes in definitive form in exchange for the Global Securities representing the
Notes. In any such instance, an owner of a beneficial interest in the Global
Securities will be entitled to physical delivery in definitive form of
certificated Notes represented by the Global Securities equal in principal
amount to such beneficial interest and to have such certificated notes
registered in its name.
Defeasance
We may defease the indebtedness on the Notes on the terms described
under "Description of the Senior Notes - Defeasance," beginning on page 9 in the
accompanying prospectus. In addition, we may defease the Notes within 60 days
prior to their redemption without delivering an opinion that the defeasance will
not cause the Holders of the Notes to recognize income, gain, loss or expense
for Federal income tax purposes. The purpose of this provision is to give us
more flexibility in timing a refinancing of the indebtedness represented by the
Notes. Such a defeasance would be treated as a taxable exchange for Federal
income tax purposes, as a result of which a Holder could recognize gain or loss,
and which could change the amounts, timing and character of any income, gain or
loss recognized on the Notes following defeasance.
Certain Notices
With respect to any Notes represented by a Global Security, notices to
be given to the holders of the Notes will be deemed to have been duly given to
the holders when given to the Depositary, or its nominee, in accordance with the
Depositary's policies and procedures. We believe that the Depositary's practice
is to inform its participants of any such notice it receives in accordance with
its policies and procedures. Persons who hold beneficial interests in the Notes
through the Depositary or its direct or indirect participants may wish to
consult with them about how notices and other communications relating to the
Notes may be given and received through the facilities of the Depositary.
Neither we nor the Trustee will have any responsibility with respect to those
policies and procedures or for any notices or other communications among the
Depositary, its direct and indirect participants and the beneficial owners of
the Notes in global form.
With respect to Notes not represented by a Global Security, other
notices to be given to the holders of the Notes will be deemed to have been duly
given to the holders upon the mailing of such notices to the holders at their
respective addresses as they appear on the security register maintained by us or
our agent as of the close of business the day before notice is given.
Neither the failure to give any notice nor any defect in any notice
given to a particular holder will affect the sufficiency of any notice given to
another holder.
S-6
UNDERWRITING
Subject to the terms and conditions set forth in the underwriting
agreement dated the date of this prospectus supplement between us and Barclays
Capital Inc., Goldman, Sachs & Co., Morgan Stanley & Co. Incorporated and TD
Securities (USA) Inc., as the underwriters, we have agreed to sell to the
underwriters, and the underwriters have agreed to purchase, severally and not
jointly, the Notes indicated in the following table:
Principal Amount of
Underwriters Notes
------------ -----
Barclays Capital Inc........................................ $157,799,999
Goldman, Sachs & Co......................................... $ 35,066,667
Morgan Stanley & Co. Incorporated........................... $ 35,066,667
TD Securities (USA) Inc..................................... $ 35,066,667
------------
Total ................................................... $263,000,000
============
In the underwriting agreement, the underwriters have agreed, subject to
the terms and conditions set forth therein, to purchase all of the Notes offered
hereby if any of the Notes are purchased. The underwriting agreement provides
that the obligations of the underwriters pursuant thereto are subject to certain
conditions. In the event of default by an underwriter, the underwriting
agreement provides that, in certain circumstances, the purchase commitment of
the non-defaulting underwriters may be increased or the underwriting agreement
may be terminated. The underwriters will sell the Notes to the public when and
if the underwriters buy the Notes from us.
The underwriters initially propose to offer part of the Notes directly
to the public at the public offering price set forth on the cover page hereof
and part to certain dealers at a price that represents a concession not in
excess of .40% of the principal amount of the Notes. Any underwriter may allow,
and any such dealers may reallow, a concession to certain other dealers not to
exceed .30% of the principal amount of the Notes. After the initial offering of
the Notes, the offering price and other selling terms may from time to time be
varied by the underwriters.
We do not plan to list the Notes on any securities exchange, and there
is no established trading market for the Notes. The underwriters have advised us
that they intend to make a market in the Notes. The underwriters are not
obligated to do so, however, and may discontinue their market making at any time
without notice. No assurance can be given as to the liquidity of the trading
market for the Notes.
In order to facilitate the offering of the Notes, the underwriters may
engage in transactions that stabilize, maintain or otherwise affect the price of
the Notes. Specifically, the underwriters may overallot in connection with the
offering, creating a short position in the Notes for their own account. In
addition, to cover overallotments or to stabilize the price of the Notes, the
underwriters may bid for, and purchase, Notes in the open market. Finally, the
underwriters may reclaim selling concessions allowed to an underwriter or a
dealer for distributing the Notes in the offering, if they repurchase previously
distributed Notes in transactions to cover syndicate short positions, in
stabilization transactions or otherwise. Any of these activities may stabilize
or maintain the market price for the Notes above independent market levels. The
underwriters are not required to engage in these activities and may end any of
these activities at any time.
We estimate that our expenses in connection with the offer and sale of
the Notes will be approximately $250,000.
We have agreed to indemnify the underwriters against, or contribute to
payments the underwriters may be required to make in respect of, certain
liabilities, including liabilities under the Securities Act of 1933.
The underwriters and certain of their affiliates have, from time to
time, performed various investment or commercial banking and financial advisory
services for us and our affiliates in the ordinary course of business.
S-7
LEGAL OPINIONS
Jeffrey C. Miller, our Assistant General Counsel, Day, Berry & Howard
LLP, CityPlace I, Hartford, Connecticut 06103-3499, our counsel, and Pillsbury
Winthrop LLP, One Battery Park Plaza, New York, New York 10004-1490, counsel for
the underwriters, will give legal opinions relating to the validity of the
Notes. As of March 19, 2002, Mr. Miller beneficially owned 13,765 of our common
shares.
S-8
PROSPECTUS
NORTHEAST UTILITIES
$600,000,000
SENIOR NOTES
------------
Northeast Utilities intends to offer from time to time in one or more series up
to $600,000,000 of debentures, notes or other types of senior unsecured debt
securities (the "Senior Notes").
When a particular series of Senior Notes is offered, we will prepare and issue a
supplement to this Prospectus setting forth the particular terms of the offered
Senior Notes (each such supplement, a "Prospectus Supplement"). You should read
this Prospectus and any Prospectus Supplement carefully before you make any
decision to invest in the Senior Notes.
------------
These securities have not been approved or disapproved by the Securities and
Exchange Commission or any state securities commission nor has any of these
organizations determined that this prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
We may offer the Senior Notes directly or through underwriters, agents or
dealers. Each Prospectus Supplement will provide the terms of the plan of
distribution relating to the respective series of Senior Notes. "Plan of
Distribution" below also provides more information on this topic.
The date of this Prospectus is February 12, 2001.
[THIS PAGE INTENTIONALLY LEFT BLANK]
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the Securities and Exchange Commission (the
"Commission") in Washington, D.C., a Registration Statement on Form S-3 under
the Securities Act of 1933, as amended (the "Securities Act"), with respect to
the securities offered in this Prospectus. We have not included certain portions
of the Registration Statement in this Prospectus as permitted by the
Commission's rules and regulations. For further information, you should refer to
the Registration Statement and its exhibits.
We are subject to the informational requirements of the Securities Act
of l934, as amended (the "Exchange Act"), and therefore we file annual,
quarterly and current reports, proxy statements and other information with the
Commission. You may read and copy the Registration Statement (with exhibits), as
well as the reports and other information filed by the Company with the
Commission, at the Commission's public reference facilities at its principal
offices at Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington, D.C.
20549 and its regional offices at Northwest Atrium Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511 and 7 World Trade Center, Suite
1300, New York, New York 10048. You may obtain information on the operation of
the Commission's public reference facilities by calling 1-800-SEC-0330.
Information filed by us is also available at the Commission's Internet site at
HTTP://WWW.SEC.GOV. You can also obtain these materials at set rates from the
Public Reference Section of the Commission at its principal office at Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549.
----------------------
You should rely only on the information incorporated by reference or
provided in this Prospectus and its supplement(s). We have not authorized anyone
to provide you with different information. You should not assume that the
information in this Prospectus or any prospectus supplement is accurate as of
any date other than the date on the front of those documents. This Prospectus
does not constitute an offer to sell or a solicitation of an offer to buy the
securities in any jurisdiction to any person to whom it is unlawful to make such
offer or solicitation in such jurisdiction.
----------------------
DOCUMENTS INCORPORATED BY REFERENCE
The Commission 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. Information incorporated by reference is
considered to be part of this Prospectus. Later information that we file with
the Commission will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings made
with the Commission under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
until we sell all the Senior Notes:
o Annual Report on Form 10-K for the year ended December 31, 1999;
o Quarterly Reports on Form 10-Q for the quarters ended March 31,
2000, June 30, 2000 and September 30, 2000; and
o Current Report on Form 8-K dated January 23, 2001.
We will provide to each person, including any beneficial owner of
Senior Notes, to whom a copy of this Prospectus is delivered, a copy of any or
all of the information that has been incorporated by reference in this
Prospectus but not delivered with this Prospectus. We will deliver this
information upon written or oral request and provide this information at no cost
to the requester. You should direct your requests to:
Randy A. Shoop
Northeast Utilities Service Company
107 Selden Street
Berlin, Connecticut 06037
(860) 665-3258
FORWARD-LOOKING STATEMENTS
We make statements in this Prospectus and the documents we incorporate
by reference that are considered forward-looking statements within the meaning
of the Securities Act and the Exchange Act. Sometimes these statements will
contain words such as "believes," "expects," "intends," "plans" and other
similar words. These statements are not guarantees of our future performance and
are subject to risks, uncertainties and other important factors that could cause
our actual performance or achievements to be materially different from those we
project. These risks, uncertainties and factors include:
o general economic, business and regulatory conditions;
o the impact of our proposed merger with Consolidated Edison, Inc.,
including any regulatory conditions imposed on the merger;
o energy supply and demand;
o competition;
o federal and state regulatory developments and changes in law;
o availability, terms and use of capital;
o nuclear and environmental issues;
o weather; and
o industry restructuring and cost recovery (including the potential
effect of stranded costs).
Given these uncertainties, you should not place undue reliance on these
forward-looking statements. Please see the documents we incorporate by reference
for more information on these factors. These forward-looking statements
represent our estimates and assumptions only as of the date of this Prospectus.
Except to the extent required by the securities laws, we undertake no obligation
to publicly update or revise any forward-looking statements, whether as a result
of new information, future events or otherwise. New factors emerge from time to
time and it is not possible for us to predict all of such factors, nor can we
assess the impact of each such factor on our business or the extent to which any
factor or combination of factors may cause actual results to differ materially
from those contained in any forward-looking statements.
NORTHEAST UTILITIES
Northeast Utilities (the "Company") is a holding company for a number
of companies comprising the Northeast Utilities system and is not itself an
operating company. Through The Connecticut Light and Power Company, Public
Service Company of New Hampshire, Western Massachusetts Electric Company and
Yankee Gas Services Company (each a direct or indirect wholly owned subsidiary
of ours), we provide retail electric service to approximately 1.77 million
customers in Connecticut, New Hampshire and western Massachusetts and natural
gas to approximately 185,000 customers in Connecticut. We also have a number of
unregulated subsidiaries which provide telecommunications, energy management and
marketing and other energy related services, and we are one of the largest
competitive energy suppliers in New England.
Our principal executive offices are located at 174 Brush Hill Avenue,
West Springfield, Massachusetts 01089, telephone number (413) 785-5871. Our
general business offices are located at 107 Selden Street, Berlin, Connecticut
06037, telephone number (860) 665-5000.
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RATIOS OF EARNINGS TO FIXED CHARGES
Our ratios of earnings to fixed charges for the twelve months ended
September 30, 2000 and for each of the years ended December 31, 1995 through
1999 are as follows:
Twelve Months Year Ended December 31,
Ended -------------------------------------
September 30, 2000 1999 1998 1997 1996 1995
------------------ ---- ----- ---- ---- ----
(unaudited)
Ratio of Earnings to Fixed Charges (1)...... 1.97 1.50 0.55 (2) 0.58 (2) 1.46 2.71
---------------------------
(1) For purposes of computing the ratios: (i) earnings consists of pretax
income from continuing operations, adjusted for income taxes, fixed
charges, distributed income of equity investees and minority interests; and
(ii) fixed charges consist of interest on long-term debt, amortized
premiums, discounts and capitalized expenses related to indebtedness,
interest on short-term debt, interest component of rental expenses, and
other interest.
(2) There is less than a one-to-one ratio in these years. The amount of the
deficiency in years 1997 and 1998 is $123,367,000 and $132,970,000
respectively.
USE OF PROCEEDS
The net proceeds from the sale of the Senior Notes will be used to
repay a portion of our long-term debt, all or a portion of our short-term
borrowings and for other general corporate purposes, subject to applicable
regulatory requirements. If we do not use the net proceeds immediately, we may
temporarily invest them in short-term, interest-bearing obligations.
DESCRIPTION OF THE SENIOR NOTES
General. The following description sets forth certain general terms and
provisions of the Senior Notes to which any Prospectus Supplement may relate.
The description does not purport to be complete and is subject to, and qualified
in its entirety by, all of the provisions of the Senior Note Indenture (as
defined below), which is incorporated herein by reference and the form of which
is an exhibit to the Registration Statement of which this Prospectus is a part.
The particular terms of the Senior Notes offered by any Prospectus Supplement
and the extent, if any, to which such general provisions may apply to the Senior
Notes so offered will be described therein. References to section numbers under
this caption are references to the section numbers of the Senior Note Indenture.
Capitalized terms not defined herein have the meanings given to them in the
Senior Note Indenture.
The Senior Notes will be issued under an indenture (the "Senior Note
Indenture"), the form of which is an exhibit to the Registration Statement,
between us and The Bank of New York, a New York banking corporation, as trustee
(the "Senior Note Trustee").
There is no requirement under the Senior Note Indenture that future
issues of our debt securities be issued under the Senior Note Indenture, and we
will be free to use other indentures or documentation, containing provisions
different from those included in the Senior Note Indenture or applicable to one
or more issues of Senior Notes, in connection with future issues of such other
debt securities.
The Senior Note Indenture does not limit the aggregate principal amount
of the Senior Notes that may be issued thereunder. The Senior Note Indenture
provides that the Senior Notes will be issued in one or more series as notes or
debentures. The Senior Notes may be issued at various times and may have
differing maturity dates and may bear interest at differing rates. The
Prospectus Supplement applicable to each issue of Senior Notes will specify:
o the designation and aggregate principal amount of such Senior
Notes;
o the date or dates on which such Senior Notes will mature;
o the interest rate or rates, or method of calculation of such rate
or rates, on such Senior Notes, and the date from which such
interest shall accrue;
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o the dates on which such interest will be payable or method by
which such dates are to be determined;
o the record dates for payments of interest;
o any redemption terms;
o the period or periods within which, the price or prices at which,
and the terms and conditions upon which, such Senior Notes may be
repaid, in whole or in part, at our option;
o the place or places, if any, in addition to or in the place of
our office or the office of the Senior Note Trustee, where the
principal of (and premium, if any) and interest, if any, on such
Senior Notes shall be payable and where notices to the Company
shall be sent; and
o other specific terms applicable to such Senior Notes. (Section
301)
Unless otherwise indicated in the applicable Prospectus Supplement, the Senior
Notes will be denominated in United States currency in minimum denominations of
$1,000 and integral multiples thereof. (Section 301)
Unless otherwise indicated in the applicable Prospectus Supplement or
as below described under "Limitation on Liens" and "Sale and Leaseback
Transactions", there are no provisions in the Senior Note Indenture or the
Senior Notes that require us to redeem, or permit the Holders of the Senior
Notes to cause a redemption of, the Senior Notes or that otherwise protect the
Holders of the Senior Notes in the event that we incur substantial additional
indebtedness, whether or not in connection with a change in control of us.
Because we are a holding company that conducts all of our operations
through our subsidiaries, our ability to meet our obligations under the Senior
Notes is dependent on the earnings and cash flows of those subsidiaries and the
ability of those subsidiaries to pay dividends to us, repurchase shares of their
common stock from us or repay loans or advances made by us to them. Our
subsidiaries are prohibited by the Public Utility Holding Company Act of 1935
from lending money to us, indemnifying our creditors or guaranteeing our
obligations. Holders of the Senior Notes will generally have a junior position
to claims of any holders of preferred stock and creditors of our subsidiaries,
including trade creditors, debtholders, secured creditors, taxing authorities
and guarantee holders. In addition to trade debt, our subsidiaries have ongoing
corporate debt programs used to finance their business activities. As of
September 30, 2000, our subsidiaries had approximately $3.13 billion of
outstanding debt for borrowed money, which includes long-term debt and
short-term debt but does not include trade debt, capital leases or power
purchase obligations, and approximately $151 million of outstanding preferred
stock. Unless otherwise specified in a Prospectus Supplement, the Supplemental
Indentures will not limit the amount of indebtedness or preferred stock issuable
by our subsidiaries.
Registration, Transfer, Exchange and Form. Senior Notes of any series
may be exchanged for other Senior Notes of the same series of any authorized
denominations and of a like aggregate principal amount and tenor. (Section 305)
Unless otherwise indicated in the applicable Prospectus Supplement,
Senior Notes may be presented for registration of transfer (duly endorsed or
accompanied by a duly executed written instrument of transfer) at the office or
agency maintained for such purpose with respect to any series of Senior Notes
and referred to in the applicable Prospectus Supplement, without service charge
and upon payment of any taxes and other governmental charges as described in the
Senior Note Indenture. (Section 305)
In the event of any redemption of Senior Notes of any series, we will
not be required to exchange, or register the transfer of, any Senior Notes of
such series selected, called or being called for redemption except, in the case
of any Senior Note to be redeemed in part, the portion thereof not to be so
redeemed. (Section 305)
Book-Entry Only System. Each series of Senior Notes may be issued in
the form of one or more global notes (the "Global Notes") representing all or
part of such series of Senior Notes and which will be deposited with or on
behalf of The Depository Trust Company as Depositary under the Senior Note
Indenture (the "Depositary") and registered in the name of the Depositary or
nominee of the Depositary. Certificated Senior Notes will not be exchangeable
for Global Notes and, except under the circumstances described below, the Global
Notes will not be exchangeable for certificated Senior Notes.
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The Depositary has advised us as follows: the Depositary 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 Exchange Act. The Depositary
holds securities that its participants ("Participants") deposit with the
Depositary. The Depositary 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.
Participants include securities brokers and dealers, banks, trust companies,
clearing corporations and certain other organizations. The Depositary is owned
by a number of its 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 Depository Trust Company 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 Participant, either directly
or indirectly. The Rules applicable to the Depositary and its Participants are
on file with the Commission.
Upon the issuance of the Global Notes in registered form, the
Depositary will credit, on its book-entry registration and transfer system, the
respective principal amounts of the Senior Notes represented by the Global Notes
to the accounts of Participants. The accounts to be credited shall be designated
by the underwriters or other purchasers of the Global Notes. Ownership of
beneficial interests in the Global Notes will be limited to Participants or
persons that may hold interests through Participants. Ownership of beneficial
interests by Participants in the Global Notes will be shown on, and the transfer
of that ownership interest will be effected only through, records maintained by
the Depositary or its nominee. Ownership of beneficial interests in the Global
Notes by persons that hold through Participants will be shown on, and the
transfer of that ownership interest within such Participant will be effected
only through, records maintained by such Participant. Owners of beneficial
interests in the Global Notes will not receive written confirmation from the
Depositary of their purchases, but they are expected to receive written
confirmation providing details of the transactions, as well as periodic
statements of their holdings, from the Participants through which they purchased
beneficial interests in the Global Notes. The laws of some jurisdictions require
that certain purchasers of securities take physical delivery of such securities
in definitive form. Such limits and such laws may impair the ability to transfer
beneficial interests in the Global Notes.
So long as the Depositary, or its nominee, is the registered owner of
the Global Notes, the Depositary or its nominee, as the case may be, will be
considered the sole owner or Holder of the Senior Notes represented by the
Global Notes for all purposes under the Senior Note Indenture. Except as set
forth below, owners of beneficial interests in the Global Notes will not be
entitled to have Senior Notes registered in their names, will not receive or be
entitled to receive physical delivery of the Senior Notes in definitive form and
will not be considered the owner or Holders thereof under the Senior Note
Indenture.
Payment of principal of, premium, if any, and any interest on the
Senior Notes will be made to the Depositary or its nominee, as the case may be,
as the registered owner or the Holder of the Global Notes representing the
Senior Notes. None of the Company, the Senior Note Trustee, any paying agent or
the registrar for the Senior Notes will have any responsibility or liability for
any aspect of the records relating to or payments made on account of beneficial
ownership interests in the Global Notes or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
We have been advised by the Depositary that, upon receipt of any
payment of principal, premium or interest in respect of the Global Notes, the
Depositary will credit immediately Participants' accounts with payments in
amounts proportionate to their respective beneficial interests in the principal
amount of the Global Notes as shown on the records of the Depositary. We also
expect that payments by Participants to owners of beneficial interests in the
Global Notes held through such Participants will be governed by standing
instructions and customary practices, as is now 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 Participants.
The Global Notes may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor of the Depositary or a nominee of such successor. If
(1) the Depositary is at any time unwilling or unable to continue as Depositary
and a successor Depositary is not appointed by us within ninety days or (2)
there shall have occurred and be continuing after any applicable grace periods
an Event of Default, we will issue certificated notes in definitive registered
form in exchange for the Global Notes representing the Senior Notes. In
addition, we may at any time and in our sole discretion determine not to have
any Senior Notes in registered form represented by one or more global notes and,
in such event, will issue certificated notes in definitive form in exchange for
the Global Notes representing the Senior Notes. In any such instance, an owner
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of a beneficial interest in the Global Notes will be entitled to physical
delivery in definitive form of certificated Senior Notes represented by the
Global Notes equal in principal amount to such beneficial interest and to have
such certificated notes registered in its name. (Section 311)
Paying Agents. We will maintain an office or agency where Senior Notes
may be presented or surrendered for payment. We will give prompt written notice
to the Senior Note Trustee of the location, and any change in the location, of
such office or agency. If at any time we shall fail to maintain any such
required office or agency or shall fail to furnish the Senior Note Trustee with
the address thereof, such presentations and surrenders may be made or served at
the corporate trust office of the Senior Note Trustee, and, in such event, the
Senior Note Trustee shall act as our agent to receive all such presentations and
surrenders. (Section 1002)
All monies paid by us to a paying agent for the payment of principal
of, interest or premium, if any, on any Senior Note which remains unclaimed at
the end of two years after any such principal, interest or premium shall have
become due and payable will be repaid to us at our request and the Holder of
such Senior Note will thereafter look only to us for payment thereof as an
unsecured general creditor. (Section 1003)
Consolidation, Merger, Conveyance, Sale or Transfer. Nothing contained
in the Senior Note Indenture prevents us from consolidating with or merging into
another corporation or conveying, selling or otherwise transferring our
properties and assets substantially as an entirety to any Person, provided that:
o the corporation formed by such consolidation or into which we are
merged or the Person which acquires by conveyance, sale or
transfer our properties and assets substantially as an entirety
is a corporation organized and existing under the laws of the
United States of America, any State thereof or the District of
Columbia and expressly assumes by an indenture supplemental
thereto, executed and delivered to the Senior Note Trustee, in
form satisfactory to the Senior Note Trustee, the due and
punctual payment of the principal of (and premium, if any) and
interest, if any, on all the Senior Notes and the performance of
every covenant of the Senior Note Indenture on our part to be
performed or observed; and
o immediately after giving effect to the transaction, no Event of
Default, and no event which, after notice or lapse of time or
both, would become an Event of Default, shall have occurred and
be continuing.
We shall also be required to deliver certificates and opinions stating that such
consolidation, merger, conveyance, sale or transfer comply with the Senior Note
Indenture and all relevant conditions precedant have been satisfied. (Section
801)
Limitation on Liens. Nothing contained in the Senior Note Indenture or
in the Senior Notes in any way restricts or prevents the Company or any of its
subsidiaries from incurring any indebtedness; provided that if this covenant is
made applicable to the Senior Notes of any particular series, the Company will
not issue, assume or guarantee (including any contingent obligation to purchase)
or permit to exist any notes, bonds, debentures or other evidences of
indebtedness for money borrowed ("Debt") secured by a mortgage, lien, pledge,
security interest or other encumbrance ("Lien") upon any property of the
Company, including the capital stock of any of its subsidiaries, without
effectively providing that the outstanding Senior Notes (together with, if the
Company so determines, any other indebtedness or obligation then existing or
thereafter created ranking equally with the Senior Notes) shall be secured
equally and ratably with (or prior to) such Debt so long as such Debt shall be
so secured (provided that for purposes of providing such equal and ratable
security, the principal amount of outstanding Senior Notes of any series will be
such portion of the principal amount as may be specified in the terms of such
series). This restriction will not, however, apply to
o Liens in existence on the date of the original issue of the
Senior Notes to which this restriction is made applicable,
including, without limitation, "stock forward" transactions.
o Liens created solely for the purpose of securing Debt incurred to
finance, refinance or refund the purchase price or cost
(including the cost of construction) of property acquired after
the date hereof (by purchase, construction or otherwise), or
Liens in favor of guarantors of obligations or Debt representing,
or incurred to finance, refinance or refund, such purchase price
or cost, provided that no such Lien shall extend to or cover any
property other than the property so acquired and improvements
thereon and provided further that such Liens are created no later
than 24 months after the purchase or construction;
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o Liens on any property or assets acquired from a corporation which
is merged with or into the Company, which Liens are not created
as a result of or in connection with or in anticipation of any
such merger (unless such Liens were created to secure or provide
for the payment of any part of the purchase price of such
corporation);
o any Lien on any property or assets existing at the time of
acquisition thereof and which is not created as a result of or in
connection with or in anticipation of such acquisition (unless
such Lien was created to secure or provide for the payment of any
part of the purchase price of such property or assets); or
o any extension, renewal or replacement of any Lien referred to in
the foregoing clauses, provided that the principal amount of Debt
so secured thereby shall not exceed the principal amount of Debt
so secured at the time of such extension, renewal or replacement,
and that such extension, renewal or replacement Lien shall be
limited to all or part of substantially the same property which
secured the Lien extended, renewed or replaced (plus improvements
on such property).
Notwithstanding the foregoing, the Company may issue or assume Debt secured by
Liens on cash of the Company which would otherwise be subject to the foregoing
restrictions in an aggregate principal amount which does not at the time of
issuance or assumption exceed $100 million. The following types of transactions
shall not be deemed to create Debt secured by Liens: Liens required by any
contract or statute in order to permit the Company to perform any contract or
subcontract made by it with or at the request of a governmental entity or any
department, agency or instrumentality thereof, or to secure partial, progress,
advance or any other payments to the Company by such governmental unit pursuant
to the provisions of any contract or statute; and share forwards with respect to
shares of the Company accounted for as equity transactions under applicable FASB
guidelines wherein the shares collateralize the forward repayment obligation.
(Section 1007)
Sale and Leaseback Transactions. If this covenant is made applicable to
the Senior Notes of any series, the Company will not enter into any Sale and
Leaseback Transaction unless either:
o the Company would be entitled pursuant to the "Limitation on
Liens" covenant above to create Debt secured by a Lien on the
property to be leased back in an amount equal to the Attributable
Value of such Sale and Leaseback Transaction without the Senior
Notes being effectively secured equally and ratably with (or
prior to) that Debt; or
o the Company, within 270 days after the sale or transfer of the
relevant assets shall have been made, applies, in the case of a
sale or transfer for cash, an amount equal to the net proceeds
from the sale or, in the case of a sale or transfer otherwise
than for cash, an amount equal to the fair market value of the
property so leased (as determined by any two trustees of the
Company) to:
o the retirement of long-term indebtedness of the Company
ranking prior to or on a parity with the Senior Notes or
o the investment in any property used in the ordinary course
of business by the Company.
"Attributable Value" means, as to any particular lease under which the
Company is at any time liable as lessee and at any date as of which the amount
thereof is to be determined, the amount equal to the greater of (i) the net
proceeds from the sale or transfer of the property leased pursuant to the Sale
and Leaseback Transaction or (ii) the net book value of the property, as
determined by the Company in accordance with generally accepted accounting
principles at the time of entering into the Sale and Leaseback Transaction, in
either case multiplied by a fraction, the numerator of which shall be equal to
the number of full years of the term of the lease that is part of the Sale and
Leaseback Transaction remaining at the time of determination and the denominator
of which shall be equal to the number of full years of the term, without regard,
in any case, to any renewal or extension options contained in the lease.
"Sale and Leaseback Transaction" means any transaction or series of
related transactions relating to property now owned or hereafter acquired by the
Company whereby the Company transfers the property to a person and the Company
leases it from that person for a period, including renewals, in excess of 36
months.
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Modification of the Senior Note Indenture. The Senior Note Indenture
contains provisions permitting us and the Senior Note Trustee, with the consent
of the Holders of a majority in principal amount of the outstanding Senior
Notes, of all series affected by the modification (voting as one class), to
modify the Senior Note Indenture or any supplemental indenture or the rights of
the Holders of the Senior Notes of such series; provided that no such
modification shall without the consent of the Holders of each outstanding Senior
Note affected thereby:
o change the date upon which the principal of or the interest on
any Senior Note is due and payable;
o reduce the principal amount thereof or the rate of interest
thereon or any premium payable upon the redemption thereof;
o change any place of payment where, or the currency in which, any
Senior Note or any premium or the interest thereon is payable;
o impair the right to institute suit for the enforcement of any
payment on or after the date such payment is due (or, in the case
of redemption, on or after the date fixed for such redemption);
o reduce the aforesaid percentage of Senior Notes, the consent of
the Holders of which is required for any modification of the
applicable supplemental indenture or for waiver by the Holders of
certain of their rights; or
o modify certain provisions of the Senior Note Indenture. (Section
902)
The Senior Note Indenture also contains provisions permitting us and
the Senior Note Trustee to amend the Senior Note Indenture in certain
circumstances without the consent of the Holders of any Senior Notes to evidence
the succession of another corporation to us, the replacement of the Senior Note
Trustee and for certain other purposes, including to cure any ambiguity or
defect, or correct any inconsistency, in the Senior Note Indenture, or to add or
change any other provisions with respect to matters or questions arising under
the Senior Note Indenture or the Senior Notes, provided such changes or
additions shall not adversely affect the interests of the Holders of any series
of the Senior Notes in any material respect, or involve a change requiring the
consent of the Holders of the Senior Notes described in the preceding paragraph.
(Section 901)
Events of Default. An Event of Default with respect to the Senior Notes
is defined in the Senior Note Indenture as being:
o failure to pay any interest on the Senior Notes and continuance
of such failure for 30 days;
o failure to pay the principal (or premium, if any), including the
payment of principal (or premium, if any) when due pursuant to
any redemption provision of the Senior Notes and continuance of
such failure for three days;
o failure to pay any sinking fund installment, if any, pursuant to
the terms of the Senior Notes, and continuance of such failure
for a period of three days;
o default in the performance, or breach, of any covenant or
warranty of ours in the Senior Note Indenture (other than certain
covenants or warranties a default in whose performance or whose
breach is specifically dealt with elsewhere in the Senior Note
Indenture or which has been expressly included in the Senior Note
Indenture solely for the benefit of any series of Senior Notes
other than that series) and continuance of such default or breach
for a period of 90 days after written notice is given to us by
the Senior Note Trustee or to us and the Senior Note Trustee by
the Holders of 33% or more in aggregate principal amount of the
outstanding Senior Notes; and
o certain events of bankruptcy, insolvency, reorganization,
receivership or liquidation involving us. (Section 501)
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We will be required to file with the Senior Note Trustee annually an officers'
certificate as to the existence or absence of default in performance of certain
covenants in the Senior Note Indenture. (Section 1008) The Senior Note Indenture
provides that the Senior Note Trustee may withhold notice to the Holders of the
Senior Notes of any default (except in payment of principal of (or premium, if
any), or interest, if any, on, the Senior Notes or in the payment of any sinking
fund installment with respect to the Senior Notes) if the Senior Note Trustee in
good faith determines that it is in the interest of the Holders of the Senior
Notes to do so. (Section 602) The Senior Note Indenture provides that, if an
Event of Default due to the default in payment of principal of (or premium, if
any) or interest on the Senior Notes or in the payment of any sinking fund
installment with respect to the Senior Notes, or due to the default in the
performance or breach of any covenant or warranty in the Senior Note Indenture
by us shall have happened and be continuing, either the Senior Note Trustee or
the Holders of 33% or more in aggregate principal amount of the outstanding
Senior Notes may declare the principal amount of all the Senior Notes to be due
and payable immediately, but if we shall cure all defaults and certain other
conditions are met, such declaration may be annulled and past defaults may be
waived by the Holders of a majority in aggregate principal amount of the Senior
Notes. If an Event of Default due to certain events of bankruptcy, insolvency or
reorganization has occurred and is continuing, the principal amount of all the
Senior Notes shall be immediately due and payable, without any act of either the
Senior Note Trustee or the Holders. (Sections 502 and 513)
Subject to the provisions of the Senior Note Indenture relating to the
duties of the Senior Note Trustee, the Senior Note Trustee will be under no
obligation to exercise any of its rights or powers under the Senior Note
Indenture at the request or direction of any of the Holders of the Senior Notes,
unless such Holders shall have offered to the Senior Note Trustee reasonable
indemnity. (Section 603)
Subject to such provision for indemnification, the Holders of a
majority in principal amount of the Senior Notes will have the right to direct
the time, method and place of conducting any proceeding for any remedy available
to the Senior Note Trustee, or exercising any trust or power conferred on the
Senior Note Trustee with respect to the Senior Notes, provided that the Senior
Note Trustee shall have the right to decline to follow any such direction if the
Senior Note Trustee shall determine that the action so directed conflicts with
any law or the provisions of the Senior Note Indenture or if the Senior Note
Trustee shall determine that such action would subject the Senior Note Trustee
to personal liability or expense for which reasonable indemnity has not been
provided. (Section 512)
Defeasance. We, at our option, (a) will be Discharged from any and all
obligations in respect of the Senior Notes (except for certain obligations to
register the transfer or exchange of Senior Notes, replace destroyed, stolen,
lost or mutilated Senior Notes, maintain paying agencies and hold moneys for
payment in trust) or (b) need not comply with certain covenants of the Senior
Note Indenture described under "-Consolidation, Merger, Conveyance, Sale or
Transfer" and "-Limitation of Liens" or to certain covenants relating to
corporate existence and maintenance of properties and insurance, in each case,
if:
o we irrevocably deposit with the Senior Note Trustee, in trust,
(a) money or (b) in certain cases,
- U.S. Government Obligations which through the payment of
interest and principal in respect thereof in accordance
with their terms will provide money; or
- a combination thereof, in each case sufficient to pay and
discharge
o the principal of (and premium, if any) and each
installment of principal (and premium, if any) and
interest, if any, on the outstanding Senior Notes
on the dates such payments are due, in accordance
with the terms of the Senior Notes, or to and
including the redemption date irrevocably
designated by us and
o any mandatory sinking fund payments applicable to
the Senior Notes on the day on which payments are
due and payable in accordance with the terms of the
Senior Note Indenture and of the Senior Notes;
o no Event of Default or event which with notice or lapse of time
would become an Event of Default shall have occurred and be
continuing on the date of such deposit;
o we deliver to the Senior Note Trustee an opinion of counsel to
the effect
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- that the Holders of the Senior Notes will not recognize
income, gain, loss or expense for Federal income tax
purposes as a result of such deposit and defeasance of
certain obligations;
- that such provision would not cause any outstanding Senior
Notes then listed on any national securities exchange to
be delisted as a result thereof; and
- that the defeasance trust is not, or is registered as, an
investment company under the Investment Company Act of
1940; and
o we have delivered to the Senior Note Trustee an officers'
certificate and an opinion of counsel, each stating that all
conditions precedent provided for in the Senior Note Indenture
relating to the satisfaction and discharge of the Senior Notes
have been complied with. (Sections 403 and 1009)
Discharged means, with respect to the Senior Notes of any series, the discharge
of the entire indebtedness represented by, and obligations of ours under, the
Senior Notes of such series and in the satisfaction of all the obligations of
ours under the Senior Note Indenture relating to the Senior Notes of such
series, except:
o the rights of Holders of the Senior Notes of such series to
receive, from the trust fund established pursuant to the Senior
Note Indenture, payment of the principal of and interest and
premium, if any, on the Senior Notes of such series when such
payments are due;
o our obligations with respect to the Senior Notes of such series
with respect to registration, transfer, exchange and maintenance
of a place of payment; and
o the rights, powers, trusts, duties, protections and immunities of
the Senior Note Trustee under the Senior Note Indenture. (Section
101)
U.S. Government Obligations means direct obligations of the United States for
the payment of which its full faith and credit is pledged, or obligations of a
person controlled or supervised by and acting as an agency or instrumentality of
the United States and the payment of which is unconditionally guaranteed by the
United States, and shall also include a depository receipt issued by a bank or
trust company as custodian with respect to any such U.S. Government Obligation
or a specific payment of interest on or principal of any such U.S. Government
Obligation held by such custodian for the account of a holder of a depository
receipt; provided that (except as required by law) such custodian is not
authorized to make any deduction from the amount payable to the holder of such
depository receipt from any amount received by the custodian in respect of the
U.S. Government Obligation or the specific payment of interest on or principal
of the U.S. Government Obligation evidenced by such depository receipt. (Section
101)
Resignation or Removal of Senior Note Trustee. The Senior Note Trustee
may resign at any time upon written notice to us, and such resignation will take
effect immediately upon the appointment of a successor Senior Note Trustee.
(Sections 610 and 611)
The Senior Note Trustee may be removed at any time by an instrument or
concurrent instruments in writing delivered to the Senior Note Trustee and us
and signed by the Holders, or their attorneys-in-fact, of at least a majority in
principal amount of the then outstanding Senior Notes. In addition, under
certain circumstances, we may remove the Senior Note Trustee upon notice to the
Holder of each Senior Note outstanding and the Senior Note Trustee, and
appointment of a successor Senior Note Trustee. (Section 610)
No Recourse Against Others. The Senior Note Indenture provides that no
recourse for the payment of the principal of or any premium or interest on any
Senior Note, or for any claim based thereon or otherwise in respect thereof, and
no recourse under or upon any obligation, covenant or agreement of ours,
contained in the Senior Note Indenture or in any supplemental indenture, or in
any Senior Note, or because of the creation of any indebtedness represented
thereby, will be had against any incorporator, stockholder, officer or director,
as such, past, present or future, of us or any successor corporation, either
directly or through us or any successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly understood that all such liability is
expressly waived and released as a condition of, and in consideration for, the
execution of the Senior Note Indenture and the issuance of the Senior Notes.
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(Section 114) Such waiver may not be effective to waive liabilities under the
Federal securities laws and we understand that it is the view of the Commission
that such a waiver is against public policy.
Concerning the Senior Note Trustee. The Senior Note Trustee under the
Senior Note Indenture, and affiliates of the Senior Note Trustee, are also
trustees under other indentures and trust agreements of affiliates of ours.
LEGAL OPINIONS
Legal opinions relating to the validity of the Senior Notes will be
given by Day, Berry & Howard LLP, CityPlace I, Hartford, Connecticut 06103-3499,
counsel for the Company, and Pillsbury Winthrop LLP, New York, New York
10004-1490, counsel for any underwriters, agents or dealers.
EXPERTS
The consolidated balance sheets and consolidated statements of
capitalization as of December 31, 1999 and 1998, and the consolidated statements
of income, comprehensive income, shareholders' equity, cash flows and income
taxes for each of the three years in the period ended December 31, 1999,
incorporated by reference in this Prospectus, have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their reports with
respect thereto, and are included herein in reliance upon the authority of said
firm as experts in accounting and auditing in giving said reports.
With respect to the unaudited interim financial information for the
quarters ended March 31, 2000, June 30, 2000 and September 30, 2000 incorporated
by reference in this Prospectus, Arthur Andersen LLP has applied limited
procedures in accordance with professional standards for a review of that
information. However, their separate report thereon states that they did not
audit and they do not express an opinion on that interim financial information.
Accordingly, the degree of reliance on their report on that information should
be restricted in light of the limited nature of the review procedures applied.
In addition, the accountants are not subject to the liability provisions of
Section 11 of the Securities Act for their report on the unaudited interim
financial information because that report is not a "report" or a "part" of the
registration statement prepared or certified by the accountants within the
meaning of Sections 7 and 11 of the Securities Act.
PLAN OF DISTRIBUTION
We may sell the Senior Notes offered hereby (i) through negotiation
with one or more underwriters; (ii) through one or more agents or dealers
designated from time to time; (iii) directly to purchasers; or (iv) through any
combination of the above. The distribution of the Senior Notes may be effected
from time to time in one or more transactions at a fixed price or prices which
may be changed, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices. A Prospectus
Supplement or a supplement thereto will describe the method of distribution of
the Senior Notes of any series.
If we use any underwriters in the sale of Senior Notes, we will enter
into an underwriting agreement, distribution agreement or similar agreement with
such underwriters prior to the time of sale, and the names of the underwriters
used in the transaction will be set forth in the Prospectus Supplement or a
supplement thereto relating to such sale. If an underwriting agreement is
executed, the Senior Notes 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 the sale. Unless otherwise indicated in
the Prospectus Supplement, the underwriting or purchase agreement will provide
that the underwriter or underwriters are obligated to purchase all of the Senior
Notes offered in the Prospectus Supplement if any are purchased.
If any of the Senior Notes are sold through agents designated by us
from time to time, the Prospectus Supplement or a supplement thereto will name
any such agent, set forth any commissions payable by us to any such agent and
the obligations of such agent with respect to the Senior Notes. Unless otherwise
indicated in the Prospectus Supplement or a supplement thereto, any such agent
will be acting on a best efforts basis for the period of its appointment.
Certain persons participating in an offering of the Senior Notes may
engage in transactions that stabilize, maintain or otherwise affect the price of
the Senior Notes. Specifically, the underwriters, if any, may overallot in
connection with the offering, and may bid for, and purchase, the Senior Notes in
the open market.
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The Senior Notes of any series, when first issued, will have no
established trading market. Any underwriters or agents to or through whom Senior
Notes are sold by us for public offering and sale may make a market in such
Senior Notes, but underwriters and agents will not be obligated to do so and may
discontinue any market making at any time without notice. No assurance can be
given as to the liquidity of the trading market for any Senior Notes.
In connection with the sale of the Senior Notes, any purchasers,
underwriters or agents may receive compensation from us or from purchasers in
the form of concessions or commissions. The underwriters will be, and any agents
and any dealers participating in the distribution of the Senior Notes may be,
deemed to be underwriters within the meaning of the Securities Act. The
agreement between us and any purchasers, underwriters or agents will contain
reciprocal covenants of indemnity, and will provide for contribution by us in
respect of our indemnity obligations, between us and the purchasers,
underwriters or agents against certain liabilities, including liabilities under
the Securities Act.
Certain of the underwriters or agents and their associates may engage
in transactions with, or perform services for, us and our affiliates in the
ordinary course of business.
Our Declaration of Trust provides that none of our shareholders shall
be held to any liability whatsoever for the payment of any sum of money, or for
damages or otherwise, under any contract, obligation or undertaking made,
entered into or issued by our trustees or by any officer, agent or
representative elected or appointed by our trustees and no such contract,
obligation or undertaking shall be enforceable against our trustees or any of
them in their or his individual capacities or capacity and all such contracts,
obligations and undertakings shall be enforceable only against our trustees as
such, and every person, firm, association, trust and corporation having any
claim or demand arising out of any such contract, obligation or undertaking
shall look only to the trust estate for the payment or satisfaction thereof.
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$263,000,000
Senior Notes, Series A, Due 2012
NORTHEAST UTILITIES
Prospectus Supplement
Barclays Capital
Goldman, Sachs & Co.
Morgan Stanley
TD Securities
Dealers will deliver a prospectus supplement and prospectus when acting as
underwriters of these securities and with respect to their unsold allotments or
subscriptions.