Eversource 1999 Annual Report Download - page 39

(a) Each of these series is subject to certain refunding limitations
for the first five years after issuance. Redemption prices reduce
in future years.
(b) Changes in Preferred Stock Subject to Mandatory Redemption:
(Millions of Dollars)
Balance at December 31, 1997 $276.0
Reacquisitions and Retirements (62.2)
Balance at December 31, 1998 213.8
Reacquisitions and Retirements (46.3)
Balance at December 31, 1999 $167.5
The minimum sinking fund requirements of the series subject
each year to mandatory redemption aggregate $46.3 million
each year in 2000 and 2001, $21.3 million in 2002, $7.7 million
in 2003 and $5.3 million in 2004. In case of default on sinking
fund payments, no payments may be made on any junior stock
by way of dividends or otherwise (other than in shares of junior
stock) so long as the default continues. If a subsidiary is in arrears
in the payment of dividends on any outstanding shares of pre-
ferred stock, the subsidiary is prohibited from redeeming or
purchasing less than all of the outstanding preferred stock.
(c) Long-term debt maturities and cash sinking fund require-
ments, excluding fees and interest due for spent nuclear fuel
disposal costs, on debt outstanding at December 31, 1999, for
the years 2000 through 2004 are $457.1 million, $314 mil-
lion, $374.6 million, $25.6 million, and $25.5 million, respectively.
Essentially all utility plant of CL&P, PSNH, WMECO, and
NAEC, is subject to the liens of each company’s respective first
mortgage bond indenture. NAEC’s first mortgage bonds are
also secured by payments made to NAEC by PSNH under the
terms of two life-of-unit, full cost recovery contracts.
CL&P and WMECO have secured $369.3 million of pollu-
tion control notes with second mortgage liens on Millstone 1,
junior to the liens of their respective first mortgage bond indentures.
CL&P has $62 million of tax-exempt Pollution Control
Revenue Bonds (PCRBs) with bond insurance secured by the first
mortgage bonds and a liquidity facility.
Concurrent with the issuance of PSNH’s Series A and B first
mortgage bonds, PSNH entered into financing arrangements
with the Business Finance Authority (BFA) of the state of New
Hampshire. Pursuant to these arrangements, the BFA issued
seven series of PCRBs and loaned the proceeds to PSNH. At
December 31, 1999 and 1998, $516.5 million of the PCRBs
were outstanding. PSNH’s obligation to repay each series of
PCRBs is secured by the first mortgage bonds. Each such series
of first mortgage bonds contains similar terms and provisions
as the applicable series of PCRBs. For financial reporting pur-
poses, these bonds would not be considered outstanding unless
PSNH failed to meet its obligations under the PCRBs.
(d) The average effective interest rates on the variable-rate pollution
control notes ranged from 2.2 percent to 6.1 percent for 1999
and 3.1 percent to 5.6 percent for 1998.
During 1998, $535 million of adjustable-rate debt was con-
verted to fixed-rate debt at rates ranging from 5.85 percent to
6.0 percent.
(e) Interest rate swaps effectively fix the interest rate of NAEC’s
$200 million variable-rate bank note at interest rates ranging
from 5.81 percent to 6.07 percent.
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NOTES TO CONSOLIDATED STATEMENTS OF CAPITALIZATION