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Filed Pursuant to Rule 424(b)(2)
Registration No. 33-62549
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED OCTOBER 3, 1995
$75,000,000
Portland General Electric Company
8 1/4% Quarterly Income Debt Securities* (QUIDS(sm))
(Junior Subordinated Deferrable Interest Debentures, Series A)
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Interest on the 8 1/4% Junior Subordinated Deferrable Interest Debentures,
Series A (the "Series A Junior Subordinated Debentures") is payable quarterly
in arrears on March 31, June 30, September 30 and December 31 of each year
commencing December 31, 1995. The Series A Junior Subordinated Debentures will
mature on December 31, 2035. The Series A Junior Subordinated Debentures will
be redeemable at the option of Portland General Electric Company, an Oregon
corporation ("PGE" or the "Company"), in whole or in part, on or after
October 10, 2000 at a redemption price equal to 100% of the principal amount
to be redeemed plus any accrued and unpaid interest to the redemption date.
The Series A Junior Subordinated Debentures will be issued in the form of
one or more global certificates registered in the name of The Depository Trust
Company ("DTC"), as securities depository, or its nominee. Except as described
herein, purchasers of the Series A Junior Subordinated Debentures will not
receive certificates representing their ownership interests therein, and such
interests will be shown on, and transfers thereof will be effected only through,
records maintained by DTC and its participants. The authorized denominations of
the Series A Junior Subordinated Debentures are $25 and integral multiples
thereof. See "Description of the Series A Junior Subordinated Debentures".
The obligations of PGE under the Series A Junior Subordinated Debentures
are subordinate and junior in right of payment to Senior Indebtedness (as
defined in the accompanying Prospectus) of PGE. At June 30, 1995, Senior
Indebtedness of PGE aggregated approximately $2,000,000,000.
The Series A Junior Subordinated Debentures have been approved for listing,
subject to notice of issuance, on the New York Stock Exchange (the "NYSE") under
the symbol "PGB".
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SEE "RISK FACTORS" BEGINNING ON PAGE S-3 HEREOF FOR CERTAIN INFORMATION
RELEVANT TO AN INVESTMENT IN THE SERIES A JUNIOR SUBORDINATED DEBENTURES,
INCLUDING THE PERIOD AND CIRCUMSTANCES DURING AND UNDER WHICH PAYMENT OF
INTEREST ON THE SERIES A JUNIOR SUBORDINATED DEBENTURES MAY BE DEFERRED AND
CERTAIN RELATED FEDERAL INCOME TAX CONSEQUENCES.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS TO WHICH IT RELATES. ANY
REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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INITIAL PUBLIC UNDERWRITING PROCEEDS TO
OFFERING PRICE DISCOUNT(1) COMPANY(2)
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Per Series A Junior Subordinated Debenture............ 100.00% 3.15% 96.85%
Total................................................. $75,000,000 $2,362,500 $72,637,500
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(1) PGE has agreed to indemnify the Underwriters against certain liabilities,
including liabilities under the Securities Act of 1933, as amended.
(2) Before deducting estimated expenses of $257,000 payable by PGE.
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The Series A Junior Subordinated Debentures offered hereby are offered
severally by the Underwriters, as specified herein, subject to receipt and
acceptance by them and subject to their right to reject any order in whole or in
part. It is expected that the Series A Junior Subordinated Debentures will be
ready for delivery in book-entry form only through the facilities of DTC in New
York, New York, on or about October 10, 1995.
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* QUIDS is a service mark of Goldman, Sachs & Co.
GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
SMITH BARNEY INC.
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The date of this Prospectus Supplement is October 3, 1995.
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IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SECURITIES
OFFERED HEREBY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN THE
OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
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PORTLAND GENERAL ELECTRIC COMPANY
PGE, incorporated in Oregon in 1930, has principal offices located at 121
SW Salmon Street, Portland, Oregon 97204 (telephone number 503-464-8000). The
Company is an electric utility engaged in the generation, purchase,
transmission, distribution and sale of electricity primarily in the State of
Oregon. The Company's service area is 3,170 square miles, including 54
incorporated cities of which Portland and Salem are the largest, within a State
approved service area allocation of 4,070 square miles. A portion of the City of
Portland is serviced by another Oregon utility. The Company estimates that the
population of its service area at December 31, 1994 was approximately 1.35
million, constituting approximately 45% of the State's population. At June 30,
1995, the Company served more than 540,000 customers.
The Company is a wholly owned subsidiary of Portland General Corporation
("Portland General"), an electric utility holding company exempt from the
application of the Public Utility Holding Company Act of 1935 except Section
9(a)(2) relating to the acquisition of securities of other public utility
companies.
RISK FACTORS
Prospective purchasers of Series A Junior Subordinated Debentures should
carefully review the information contained elsewhere in this Prospectus
Supplement and in the accompanying Prospectus and should particularly consider
the following matters:
RIGHT OF PGE TO DEFER PAYMENT OF INTEREST
So long as PGE shall not be in default in the payment of interest on the
Series A Junior Subordinated Debentures, PGE shall have the right under the
Junior Indenture (as defined below), upon prior notice by public announcement
given in accordance with NYSE rules at any time during the term of the Series A
Junior Subordinated Debentures, to extend the interest payment period at any
time and from time to time for a period not exceeding 20 consecutive calendar
quarters (each such extended period, an "Extension Period"). No interest shall
be due and payable during an Extension Period, but on the interest payment date
occurring at the end of each Extension Period PGE shall pay to the holders of
record on the record date for such interest payment date (regardless of who the
holders of record may have been on other dates during the Extension Period) all
accrued and unpaid interest on the Series A Junior Subordinated Debentures,
together with interest thereon, compounded quarterly at the rate of interest on
the Series A Junior Subordinated Debentures. In the event that PGE exercises
such right to extend, PGE may not declare or pay dividends on, or redeem,
purchase or acquire, any shares of its capital stock until deferred interest on
the Series A Junior Subordinated Debentures is paid in full, subject to certain
exceptions described herein. See "DESCRIPTION OF DEBT SECURITIES -- Junior
Subordinated Debentures -- Certain Covenants" in the accompanying Prospectus.
Upon the termination of any Extension Period and the payment of all
interest then due, PGE may commence a new Extension Period. After prior notice
given by public announcement in accordance with NYSE rules, PGE may also prepay
at any time all or a portion of the interest accrued during an Extension Period.
Consequently, there could be multiple Extension Periods of varying lengths
throughout the term of the Series A Junior Subordinated Debentures. See
"DESCRIPTION OF THE SERIES A JUNIOR SUBORDINATED DEBENTURES -- Option to Extend
Interest Payment Period".
NO CASH PAYMENTS DURING EXTENSION PERIOD TO PAY ACCRUED TAX LIABILITY
In the event an Extension Period occurs, holders of the Series A Junior
Subordinated Debentures would continue, under the original issue discount rules,
to accrue income on the Series A Junior Subordinated Debentures for United
States federal income tax purposes. As a
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result, a holder that is subject to United States federal income tax ordinarily
would include such amounts in gross income in advance of the receipt of cash. A
holder that disposes of its Series A Junior Subordinated Debentures prior to the
record date for payment of interest at the end of an Extension Period will not
receive cash from PGE related to such interest because such interest will be
paid to the holder of record on such record date, regardless of who the holders
of record may have been on other dates during the Extension Period. The extent
to which such a holder will receive a return on the Series A Junior Subordinated
Debentures for the period it held such Series A Junior Subordinated Debentures
will depend on the market for the Series A Junior Subordinated Debentures at the
time of such disposition. See "Differences In Timing and Amount Between Interest
Payments and Taxable Income" below, and "CERTAIN FEDERAL INCOME TAX
CONSIDERATIONS -- United States Holders".
CERTAIN TRADING CHARACTERISTICS
The Series A Junior Subordinated Debentures are expected to trade as equity
securities on the NYSE. Accordingly, the Series A Junior Subordinated Debentures
are expected to trade "flat"; thus, purchasers of Series A Junior Subordinated
Debentures will not pay and sellers will not receive any accrued and unpaid
interest thereon that is not included in the trading price. However, for United
States federal income tax purposes, interest on the Series A Junior Subordinated
Debentures is included in income as it accrues, rather than when it is paid. See
"CERTAIN FEDERAL INCOME TAX CONSIDERATIONS -- United States Holders".
DIFFERENCES IN TIMING AND AMOUNT BETWEEN INTEREST PAYMENTS AND TAXABLE INCOME
Because the original issue discount rules apply to the Series A Junior
Subordinated Debentures, even if an Extension Period does not occur there may be
differences in timing and amount between the recognition of gross income and the
interest payable with respect to a Series A Junior Subordinated Debenture. An
owner of a Series A Junior Subordinated Debenture that does not use a calendar
year for tax accounting may be required to include in income in each tax year an
amount of original issue discount corresponding to a portion of the interest
payable during such owner's next succeeding tax year. An owner that disposes of
Series A Junior Subordinated Debentures may be required to include in income
original issue discount corresponding to interest payable after the disposition.
See "CERTAIN FEDERAL INCOME TAX CONSIDERATIONS -- United States Holders".
POTENTIAL MARKET VOLATILITY DURING EXTENSION PERIOD
As described above, PGE has the right to extend an interest payment period
from time to time for a period not exceeding 20 consecutive calendar quarters.
In the event PGE determines to extend an interest payment period, or in the
event PGE thereafter extends an Extension Period or prepays interest accrued
during an Extension Period as described above, the market price of the Series A
Junior Subordinated Debentures is likely to be adversely affected. In addition,
as a result of such rights, the market price of the Series A Junior Subordinated
Debentures may be more volatile than other debt instruments with original issue
discount that do not have such rights. A holder that disposes of its Series A
Junior Subordinated Debentures during an Extension Period, therefore, may not
receive the same return on its investment as a holder that continues to hold its
Series A Junior Subordinated Debentures. See "DESCRIPTION OF THE SERIES A JUNIOR
SUBORDINATED DEBENTURES -- Option to Extend Interest Payment Period".
SUBORDINATION OF SERIES A JUNIOR SUBORDINATED DEBENTURES
The Series A Junior Subordinated Debentures are senior to preferred stock
and to the Common Stock of PGE but will be unsecured obligations of PGE and
subordinate to all existing and future Senior Indebtedness of PGE. On June 30,
1995, approximately $2,000,000,000 of such Senior Indebtedness was outstanding.
There are no terms of the Series A Junior Subordinated Debentures
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that limit PGE's ability to incur additional indebtedness, including
indebtedness that would rank senior to the Series A Junior Subordinated
Debentures. The Junior Indenture does not contain any cross-defaults to any
other indebtedness of PGE or Portland General and, therefore, a default with
respect to, or the acceleration of, any such other indebtedness will not
constitute an Event of Default (as defined in the Junior Indenture) with respect
to the Series A Junior Subordinated Debentures. See "DESCRIPTION OF DEBT
SECURITIES -- Junior Subordinated Debentures -- Subordination" in the
accompanying Prospectus.
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SUMMARY FINANCIAL INFORMATION
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PERCENTAGES)
The following summary financial information for each of the three years in
the period ended December 31, 1994 and the six months ended June 30, 1995 has
been derived from the consolidated financial statements of PGE for the
respective periods. The consolidated financial statements for the three-year
period ended December 31, 1994 have been audited by Arthur Andersen LLP,
independent auditors, and the reports of Arthur Andersen LLP are incorporated in
the accompanying Prospectus by reference. This summary financial information is
qualified in its entirety by and should be read in conjunction with the detailed
financial statements and related notes thereto included in the documents
incorporated by reference in the Prospectus.
YEAR ENDED DECEMBER 31 TWELVE MONTHS
---------------------------------- ENDED
JUNE 30,
1992 1993 1994 1995
-------- -------- -------- --------------
(UNAUDITED)
Statement of Income Data:
Operating Revenue..................... $880,098 $944,531 $958,955 $956,877
Net Operating Income.................. 160,037 154,200 153,208 167,806
Net Income............................ 105,562 99,744 106,118 81,831(a)
JUNE 30, 1995
(UNAUDITED)
---------------------------------------
ACTUAL AS ADJUSTED(B) %
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Capitalization
Long-Term Debt
First Mortgage Bonds................................ $ 681,208 $ 681,208 37.1%
Pollution Control Bonds and Other................... 193,436 193,436 10.5%
Junior Subordinated Debentures...................... -- 75,000 4.1%
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Total....................................... 874,644 949,644 51.7%
Cumulative Preferred Stock (net of sinking fund
requirements)
Subject to Mandatory Redemption..................... 40,000 40,000 2.2%
Not Subject to Mandatory Redemption................. 69,704 -- --
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Total....................................... 109,704 40,000 2.2%
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Common Stock Equity................................... 844,870 844,870 46.1%
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Total Capitalization........................ $1,829,218 $1,834,514 100.0%
========== ============ =====
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(a) Includes a $36,708,000 charge for Trojan disallowance.
(b) Adjusted to give effect of the sale of the Series A Junior Subordinated
Debentures and the application of the net proceeds to retire certain
outstanding preferred stock not subject to mandatory redemption. See "USE OF
PROCEEDS".
USE OF PROCEEDS
Approximately $71 million of the proceeds from the sale of the Series A
Junior Subordinated Debentures will be used by PGE to retire certain outstanding
preferred stock not subject to mandatory redemption, including accrued but
unpaid dividends and redemption premium. The remainder of the proceeds will be
used to repay short-term borrowings and for other corporate purposes.
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DESCRIPTION OF THE SERIES A JUNIOR SUBORDINATED DEBENTURES
The following description of the Series A Junior Subordinated Debentures
supplements and should be read in conjunction with the description of the
general terms and provisions of the Junior Subordinated Debentures set forth in
the accompanying Prospectus under the caption "DESCRIPTION OF DEBT
SECURITIES -- Junior Subordinated Debentures". The following description does
not purport to be complete and is qualified in its entirety by reference to the
description in the accompanying Prospectus and to the Indenture, dated as of
September 1, 1995 between PGE and The Bank of New York, as Trustee (the "Junior
Trustee"), as supplemented by the First Supplemental Indenture thereto (such
Indenture, as so supplemented, is hereinafter referred to as the "Junior
Indenture").
GENERAL
The Series A Junior Subordinated Debentures will be issued as a series of
unsecured Junior Subordinated Debentures under the Junior Indenture. The Series
A Junior Subordinated Debentures will be limited in aggregate principal amount
to $75 million.
The entire principal amount of the Series A Junior Subordinated Debentures
will become due and payable, together with any accrued and unpaid interest
thereon, on December 31, 2035.
The Series A Junior Subordinated Debentures will initially be issued as a
Global Security (as defined below). As described herein, in certain limited
circumstances Series A Junior Subordinated Debentures may be issued in
certificated form in exchange for a Global Security. See "Book-Entry and
Settlement" below. In the event that Series A Junior Subordinated Debentures are
issued in certificated form, such Series A Junior Subordinated Debentures will
be in denominations of $25 and integral multiples thereof and may be transferred
or exchanged at the offices described below.
Payments on Series A Junior Subordinated Debentures issued as a Global
Security will be made to DTC, as the depository for the Series A Junior
Subordinated Debentures. In the event Series A Junior Subordinated Debentures
are issued in certificated form, principal of and premium, if any, and interest
on the Series A Junior Subordinated Debentures will be payable, the transfer of
Series A Junior Subordinated Debentures will be registrable and Series A Junior
Subordinated Debentures will be exchangeable for Series A Junior Subordinated
Debentures of other denominations of a like aggregate principal amount at the
corporate trust office of the Junior Trustee in The City of New York; provided,
that payment of interest may be made at the option of PGE by check mailed to the
address of the persons entitled thereto.
OPTIONAL REDEMPTION
PGE shall have the right to redeem the Series A Junior Subordinated
Debentures, in whole or in part, from time to time, on or after October 10,
2000, upon not less than 30 nor more than 60 days' notice, at a redemption price
equal to 100% of the principal amount to be redeemed plus any accrued and unpaid
interest to the redemption date.
INTEREST
The Series A Junior Subordinated Debentures will mature on December 31,
2035 and will bear interest at an annual rate of 8 1/4% from and including the
date of original issuance, payable quarterly in arrears on March 31, June 30,
September 30 and December 31 of each year (each an "Interest Payment Date")
commencing December 31, 1995, provided that, so long as PGE shall not be in
default in the payment of interest on the Series A Junior Subordinated
Debentures. PGE shall have the right, upon prior notice by public announcement
given in accordance with NYSE rules at any time during the term of the Series A
Junior Subordinated Debentures, to extend the interest payment period from time
to time for a period not exceeding 20 consecutive calendar quarters. Interest
will continue to accrue on the Series A Junior Subordinated Debentures during an
Extension Period and
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will compound quarterly, at the rate specified for the Series A Junior
Subordinated Debentures. See "Option to Extend Interest Payment Period" below.
The amount of interest payable for any period will be computed on the basis
of a 360-day year of twelve 30-day months and, for any period shorter than a
full calendar month, on the basis of the actual number of days elapsed in such
period. In the event that any date on which interest is payable on the Series A
Junior Subordinated Debentures is not a Business Day (as defined below), then
payment of the interest payable on such date will be made on the next succeeding
day which is a Business Day (and without any interest or other payment in
respect of any such delay), except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date. A "Business Day" shall mean any day other than a day on which
banking institutions in The City of New York are authorized to close. (Section
1.04 of the First Supplemental Indenture)
Interest payable on any Series A Junior Subordinated Debenture that is
punctually paid or duly provided for on any Interest Payment Date shall be paid
to the person in whose name such Series A Junior Subordinated Debenture is
registered, subject to certain exceptions, at the close of business on the
Business Day next preceding such Interest Payment Date (each a "Record Date").
In the event the Series A Junior Subordinated Debentures shall not continue to
remain in book-entry-only form, PGE shall have the right to select record dates
which shall be any Business Day prior to, but not more than 15 days preceding,
an Interest Payment Date. (Section 1.03 of the First Supplemental Indenture)
OPTION TO EXTEND INTEREST PAYMENT PERIOD
So long as PGE shall not be in default in the payment of interest on the
Series A Junior Subordinated Debentures, PGE shall have the right, upon prior
notice by public announcement given in accordance with NYSE rules at any time
during the term of the Series A Junior Subordinated Debentures, prior to an
Interest Payment Date as provided below, to extend the interest payment period
from time to time to another Interest Payment Date by one or more quarterly
periods, not to exceed 20 consecutive calendar quarters from the last Interest
Payment Date to which interest was paid in full. No interest shall be due and
payable during an Extension Period, but on the Interest Payment Date occurring
at the end of each Extension Period PGE shall pay to the holders of record on
the Record Date for such Interest Payment Date (regardless of who the holders of
record may have been on other dates during such Extension Period) all accrued
and unpaid interest on the Series A Junior Subordinated Debentures, together
with interest thereon. Interest will continue to accrue on the Series A Junior
Subordinated Debentures during an Extension Period and will compound quarterly,
at the rate of interest specified for the Series A Junior Subordinated
Debentures. Prior to the termination of any Extension Period, PGE may pay all or
any portion of the interest accrued on the Series A Junior Subordinated
Debentures on any Interest Payment Date to holders of record on the Record Date
for such Interest Payment Date or may from time to time further extend such
Extension Period, provided that any such Extension Period, together with all
such previous and further extensions thereof, may not exceed 20 consecutive
calendar quarters. If PGE shall elect to pay all of the interest accrued on the
Series A Junior Subordinated Debentures on an Interest Payment Date during an
Extension Period, such Extension Period shall automatically terminate on such
Interest Payment Date. Upon the termination of an Extension Period and the
payment of all amounts of interest then due, PGE may commence a new Extension
Period, subject to the above requirements. Consequently, there could be multiple
Extension Periods of varying lengths throughout the term of the Series A Junior
Subordinated Debentures. (Section 3.01 of the First Supplemental Indenture)
If PGE exercises its right to extend any interest payment period, there
will be certain restrictions on PGE's right to declare or pay dividends on, or
redeem, purchase or acquire, any shares of PGE's capital stock as described
under "DESCRIPTION OF DEBT SECURITIES -- Junior Subordinated
Debentures -- Certain Covenants of PGE" in the accompanying Prospectus.
Therefore, under
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current circumstances, PGE believes that an extension of an interest payment
period on the Series A Junior Subordinated Debentures is unlikely.
PGE shall give holders of the Series A Junior Subordinated Debentures prior
notice of (i) PGE's election to initiate an Extension Period and the duration
thereof, (ii) PGE's election to extend an Extension Period beyond the Interest
Payment Date on which such Extension Period is then scheduled to terminate and
the duration of such extension and (iii) PGE's election to make a full or
partial payment of interest accrued on the Series A Junior Subordinated
Debentures on any Interest Payment Date during an Extension Period and the
amount of such payment. In no event shall such notice be given less than 10
Business Days prior to the applicable Interest Payment Date. (Section 3.02 of
the First Supplemental Indenture)
BOOK-ENTRY AND SETTLEMENT
The Series A Junior Subordinated Debentures will be issued in the form of
one or more global certificates (each, a "Global Security") registered in the
name of a nominee of DTC. Except under the limited circumstances described
below, Series A Junior Subordinated Debentures represented by the Global
Security will not be exchangeable for and will not otherwise be issuable as
Series A Junior Subordinated Debentures in certificated form. The Global
Securities described above may not be transferred except by DTC to a nominee of
DTC or by a nominee of DTC to DTC or another nominee of DTC or to a successor
depository or its nominee. (Section 1.02 of the First Supplemental Indenture)
Except as provided below, owners of beneficial interests in such a Global
Security will not be entitled to receive physical delivery of Series A Junior
Subordinated Debentures in certificated form and will not be considered the
holders (as defined in the Junior Indenture) thereof for any purpose under the
Junior Indenture and no Global Security representing Series A Junior
Subordinated Debentures shall be exchangeable except for another Global Security
of like denomination and tenor to be registered in the name of DTC or its
nominee or to a successor depository or its nominee. Accordingly, each
Beneficial Owner (as defined below) must rely on the procedures of DTC and, if
such person is not a Participant (as defined below), on the procedures of the
Participant through which such person owns its interest to exercise any rights
of a holder under the Junior Indenture.
The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
laws may impair the marketability of beneficial interests in such a Global
Security.
DTC. DTC will act as securities depository for the Series A Junior
Subordinated Debentures. The Series A Junior Subordinated Debentures will be
issued only as fully-registered securities registered in the name of Cede & Co.
(DTC's nominee). One or more fully-registered Global Securities will be issued,
representing in the aggregate the total number of Series A Junior Subordinated
Debentures and will be deposited with DTC.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). DTC holds securities that its
participants ("Participants") deposit with DTC. DTC also facilitates the
settlement among Participants of securities transactions, such as transfers and
pledges in deposited securities through electronic computerized book-entry
changes in Participants' accounts, thereby eliminating the need for physical
movement of securities certificates. Direct Participants include securities
brokers and dealers, banks, trust companies, clearing corporations and certain
other organizations ("Direct Participants"). DTC is owned by a number of its
Direct Participants and by the New York Stock Exchange, Inc., the American Stock
Exchange, Inc. and the National Association of Securities
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Dealers, Inc. Access to the DTC system is also available to others such as
securities brokers and dealers, banks and trust companies that clear through or
maintain a custodial relationship with a Direct Participant, either directly or
indirectly ("Indirect Participants"). The rules applicable to DTC and its
Participants are on file with the Securities and Exchange Commission.
Purchases of Series A Junior Subordinated Debentures within the DTC system
must be made by or through Direct Participants, which will receive a credit for
the Series A Junior Subordinated Debentures on DTC's records. The ownership
interest of each actual purchaser of each Series A Junior Subordinated Debenture
("Beneficial Owner") is in turn to be recorded on the Direct and Indirect
Participants' records. Beneficial Owners will not receive written confirmation
from DTC of their purchases, but Beneficial Owners are expected to receive
written confirmations providing details of the transactions, as well as periodic
statements of their holdings, from the Direct or Indirect Participants through
which the Beneficial Owners purchased Series A Junior Subordinated Debentures.
Transfers of ownership interests in the Series A Junior Subordinated Debentures
are to be accomplished by entries made on the books of Participants acting on
behalf of Beneficial Owners. Beneficial Owners will not receive certificates
representing their ownership interests in Series A Junior Subordinated
Debentures except in the event that use of the book-entry system for the Series
A Junior Subordinated Debentures is discontinued.
DTC has no knowledge of the actual Beneficial Owners of the Series A Junior
Subordinated Debentures; DTC's records reflect only the identity of the Direct
Participants to whose accounts such Series A Junior Subordinated Debentures are
credited, which may or may not be the Beneficial Owners. The Participants will
remain responsible for keeping account of their holdings on behalf of their
customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. If less than all of the
Series A Junior Subordinated Debentures are being redeemed, DTC's practice is to
determine by lot the amount of the interest of each Direct Participant in such
series to be redeemed.
Interest payments on the Series A Junior Subordinated Debentures will be
made to DTC. DTC's practice is to credit Direct Participants' accounts on the
relevant payment date in accordance with their respective holdings shown on
DTC's records unless DTC has reason to believe that it will not receive payments
on such payment date. Payments by Participants to Beneficial Owners will be
governed by standing instructions and customary practices and will be the
responsibility of such Participant and not of DTC or PGE, subject to any
statutory or regulatory requirements as may be in effect from time to time.
Payment of interest to DTC is the responsibility of PGE, disbursement of such
payments to Direct Participants is the responsibility of DTC, and disbursement
of such payments to the Beneficial Owners is the responsibility of Direct and
Indirect Participants.
DTC may discontinue providing its services as securities depository with
respect to the Series A Junior Subordinated Debentures at any time by giving
reasonable notice to PGE. Under such circumstances, in the event that a
successor securities depository is not obtained, Series A Junior Subordinated
Debenture certificates are required to be printed and delivered. Additionally,
PGE may decide to discontinue use of the system of book-entry transfers through
DTC (or a successor depository). In that event, certificates for the Series A
Junior Subordinated Debentures will be printed and delivered. In each of the
above circumstances, PGE will appoint a paying agent with respect to the Series
A Junior Subordinated Debentures.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources (including DTC) that PGE believes to be reliable,
but neither PGE nor the Underwriters take any responsibility for the accuracy
thereof.
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Neither PGE, the Junior Trustee, the Underwriters, any paying agent nor any
other agent of PGE, the Junior Trustee or the Underwriters will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in a Global Security
for Series A Junior Subordinated Debentures or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
DISCONTINUANCE OF DTC SERVICES. A Global Security shall be exchangeable
for Series A Junior Subordinated Debentures registered in the names of persons
other than DTC or its nominee only if (i) DTC notifies PGE that it is unwilling
or unable to continue as a depository for such Global Security, or if at any
time DTC ceases to be a clearing agency registered under the Exchange Act at a
time when DTC is required to be so registered to act as such depository and, in
either case, no successor depository shall have been appointed, (ii) PGE in its
sole discretion determines that such Global Security shall be so exchangeable or
(iii) there shall have occurred an Event of Default with respect to such Series
A Junior Subordinated Debentures. Any Global Security that is exchangeable
pursuant to the preceding sentence shall be exchangeable for Series A Junior
Subordinated Debentures registered in such names as DTC shall direct. It is
expected that such instructions will be based upon directions received by DTC
from its Participants with respect to ownership of beneficial interests in such
Global Security.
REGISTRAR AND TRANSFER AGENT
So long as the Series A Junior Subordinated Debentures remain in
book-entry-only form, the Junior Trustee will act as registrar and transfer
agent for the Series A Junior Subordinated Debentures. See "General" above.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
GENERAL
This section is a summary of certain United States federal income tax
considerations that may be relevant to prospective purchasers of Series A Junior
Subordinated Debentures and represents the opinion of Morgan, Lewis & Bockius
LLP, special tax counsel to PGE, insofar as it relates to matters of law and
legal conclusions. This section is based upon current provisions of the Internal
Revenue Code of 1986, as amended (the "Code"), existing and proposed regulations
thereunder and current administrative rulings and court decisions, all of which
are subject to change (perhaps with retroactive effect). Subsequent changes may
cause tax consequences to vary substantially from the consequences described
below.
No attempt has been made in the following discussion to comment on all
United States federal income tax matters affecting purchasers of Series A Junior
Subordinated Debentures. Moreover, except as specified below, the discussion
focuses on holders of Series A Junior Subordinated Debentures who are individual
citizens or residents of the United States and who hold the Series A Junior
Subordinated Debentures as capital assets. The discussion has only limited
application to corporations, estates, trusts and non-resident aliens. The
discussion does not deal with Beneficial Owners that are subject to special tax
rules, such as dealers in securities or currencies, financial institutions, life
insurance companies, tax-exempt entities, persons holding Series A Junior
Subordinated Debentures as part of a hedging or conversion transaction or a
straddle or persons whose "functional currency" is not the dollar. Additionally,
the discussion addresses only the tax treatment of Beneficial Owners that
purchase Series A Junior Subordinated Debentures in this offering; it does not
address the tax treatment of Beneficial Owners that purchase Series A Junior
Subordinated Debentures in the secondary market.
EACH PROSPECTIVE PURCHASER OF SERIES A JUNIOR SUBORDINATED DEBENTURES IS
ADVISED TO CONSULT, AND SHOULD DEPEND ON, HIS OR HER OWN TAX ADVISOR IN
ANALYZING THE FEDERAL, STATE, LOCAL
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AND FOREIGN TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF
SERIES A JUNIOR SUBORDINATED DEBENTURES.
UNITED STATES HOLDERS
For purposes of this discussion, a United States Holder is a Beneficial
Owner that is (i) a citizen or resident of the United States, (ii) a domestic
corporation or (iii) otherwise subject to United States federal income taxation
on a net income basis in respect of the Series A Junior Subordinated Debentures.
Because the interest payment period is extendable by PGE, the Series A
Junior Subordinated Debentures will be considered to be issued with "original
issue discount" ("OID") pursuant to Code Sections 1271 et. seq. and the Treasury
Regulations promulgated thereunder. Therefore, interest on the Series A Junior
Subordinated Debentures will be included in the income of a United States Holder
as it accrues, rather than when it is paid, regardless of the United States
Holder's regular method of accounting for tax purposes. As a result, during any
Extension Period, a United States Holder generally would be required to include
OID in income but would not receive cash with respect to the Series A Junior
Subordinated Debentures sufficient to pay tax thereon. In addition, because OID
accrues daily but interest on the Series A Junior Subordinated Debentures is
paid quarterly, United States Holders may be required to include OID equivalent
to interest in income for taxable years prior to the year in which the interest
is actually paid. For calendar year taxpayers that hold a Series A Junior
Subordinated Debenture for the entire year, however, OID recognized in income
should match interest received in the absence of an Extension Period.
A United States Holder generally will recognize gain or loss on the sale or
retirement of a Series A Junior Subordinated Debenture equal to the difference
between the amount realized from the sale or retirement and the United States
Holder's tax basis in the Series A Junior Subordinated Debenture. Such gain or
loss will be long-term capital gain or loss if the Series A Junior Subordinated
Debenture has been held for more than one year. A United States Holder's tax
basis in a Series A Junior Subordinated Debenture generally will equal the
amount paid for it, increased by OID includible in income and decreased by
payments made with respect to the Series A Junior Subordinated Debenture.
UNITED STATES ALIEN HOLDERS
For purposes of the following discussion, a "United States Alien Holder" is
any Beneficial Owner that is a nonresident alien individual or a foreign
corporation, in each case not subject to United States federal income tax on a
net income basis in respect of a Series A Junior Subordinated Debenture.
Under current United States federal income tax law, subject to the
discussion of backup withholding tax below, payments by PGE or any of its paying
agents on a Series A Junior Subordinated Debenture to a United States Alien
Holder, and gain realized by a United States Alien Holder on the sale or
exchange of a Series A Junior Subordinated Debenture, will not be subject to
withholding of United States federal income tax, provided that (a) the
Beneficial Owner of the Series A Junior Subordinated Debenture does not actually
or constructively own 10% or more of the total combined voting power of all
classes of capital stock of PGE entitled to vote, (b) the Beneficial Owner of
the Series A Junior Subordinated Debenture is not a controlled foreign
corporation that is related to PGE through stock ownership and (c) either (x)
the Beneficial Owner certifies to PGE or its agent (or other applicable
withholding agent), under penalties of perjury, that it is not a United States
person and provides its name and address or (y) the holder of the Series A
Junior Subordinated Debenture is a securities clearing organization, bank or
other financial institution that holds customers' securities in the ordinary
course of its trade or business (a "financial institution"), and such holder
certifies to PGE or its agent (or other applicable withholding agent) under
penalties of perjury that such statement has been received from the Beneficial
Owner by it or by a financial
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institution between it and the Beneficial Owner and furnishes PGE or its agent
(or other applicable withholding agent) with a copy thereof.
BACKUP WITHHOLDING AND INFORMATION REPORTING
In general, with respect to non-corporate United States Holders,
information reporting requirements will apply to payments of principal of and
interest (including OID) on a Series A Junior Subordinated Debenture and to the
proceeds from the sale of a Series A Junior Subordinated Debenture prior to
maturity, and "backup withholding tax" at a rate of 31% will apply to such
payments if the United States Holder fails to provide an accurate taxpayer
identification number or to certify as to no loss of exemption from backup
withholding tax or to otherwise comply with applicable backup withholding tax
rules.
Information reporting and backup withholding tax will not apply to payments
of principal and interest (including OID) made by PGE or a paying agent to a
United States Alien Holder on a Series A Junior Subordinated Debenture if the
certification described in clause (c) under "United States Alien Holders" above
is received, provided that the payor does not have actual knowledge that the
holder is a United States person.
Payments of the proceeds from the sale by a United States Alien Holder of a
Series A Junior Subordinated Debenture made to or through a foreign office of a
broker generally will not be subject to information reporting or backup
withholding tax, except that, if the broker is a United States person, a
controlled foreign corporation for United States tax purposes or a foreign
person 50% or more of whose gross income is effectively connected with a United
States trade or business for a specified three-year period, information
reporting may apply to such payments. Payments of the proceeds from the sale of
a Series A Junior Subordinated Debenture to or through the United States office
of a broker is subject to information reporting and backup withholding tax
unless the beneficial owner certifies as to its non-United States status or
otherwise establishes an exemption from information reporting and backup
withholding tax.
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UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting
Agreement, PGE has agreed to sell to each of the Underwriters named below (the
"Underwriters"), and each of the Underwriters, for whom Goldman, Sachs & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated and Smith Barney Inc. are
acting as Representatives, has severally agreed to purchase, the principal
amount of the Series A Junior Subordinated Debentures set forth opposite its
name below:
PRINCIPAL AMOUNT OF
SERIES A JUNIOR
UNDERWRITER SUBORDINATED DEBENTURES
-------------------------------------------------------------- -----------------------
Goldman, Sachs & Co. ......................................... $17,167,500
Merrill Lynch, Pierce, Fenner & Smith Incorporated............ 17,166,250
Smith Barney Inc. ............................................ 17,166,250
Robert W. Baird & Co. Incorporated............................ 500,000
J.C. Bradford & Co. .......................................... 500,000
Alex. Brown & Sons Incorporated............................... 1,125,000
Crowell, Weedon & Co. ........................................ 500,000
Dain Bosworth Incorporated.................................... 500,000
Dillon, Read & Co. Inc. ...................................... 1,125,000
Doft & Co., Inc............................................... 500,000
A.G. Edwards & Sons, Inc. .................................... 1,125,000
Everen Securities, Inc. ...................................... 1,125,000
Fahnestock & Co. Inc. ........................................ 500,000
Interstate/Johnson Lane Corporation........................... 500,000
Janney Montgomery Scott Inc. ................................. 500,000
Kennedy, Cabot & Co. ......................................... 500,000
Legg Mason Wood Walker, Incorporated.......................... 500,000
McDonald & Company Securities, Inc. .......................... 500,000
McGinn, Smith & Co., Inc. .................................... 500,000
Morgan Keegan & Company, Inc. ................................ 500,000
The Ohio Company.............................................. 500,000
Olde Discount Corporation..................................... 500,000
Oppenheimer & Co., Inc. ...................................... 1,125,000
Pacific Crest Securities...................................... 500,000
PaineWebber Incorporated...................................... 1,125,000
Piper Jaffray Inc. ........................................... 500,000
Prudential Securities Incorporated............................ 1,125,000
Ragen MacKenzie Incorporated.................................. 500,000
Rauscher Pierce Refsnes, Inc. ................................ 500,000
Redwood Securities Group, Inc. ............................... 500,000
The Robinson-Humphrey Company, Inc. .......................... 500,000
Roney & Co. .................................................. 500,000
SBC Capital Markets Inc. ..................................... 1,125,000
Sutro & Co. Incorporated...................................... 500,000
Trilon International Inc. .................................... 500,000
Tucker Anthony Incorporated................................... 500,000
U.S. Clearing Corp. .......................................... 500,000
Van Kasper & Company.......................................... 500,000
Wedbush Morgan Securities..................................... 500,000
Wheat, First Securities, Inc. ................................ 500,000
-----------------------
Total............................................ $75,000,000
====================
Under the terms and conditions of the Underwriting Agreement, the
Underwriters are committed to take and pay for all of the Series A Junior
Subordinated Debentures, if any are taken.
The Underwriters propose to offer the Series A Junior Subordinated
Debentures in part directly to the public at the initial public offering price
set forth on the cover page of this Prospectus
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Supplement and in part to certain securities dealers at such price less a
concession of 2.0% of the principal amount of the Series A Junior Subordinated
Debentures. The Underwriters may allow, and such dealers may reallow, a
concession not to exceed 1.2% of the principal amount of the Series A Junior
Subordinated Debentures to certain brokers and dealers. After the Series A
Junior Subordinated Debentures are released for sale to the public, the offering
price and other selling terms may from time to time be varied by the
Underwriters.
PGE has agreed, during the period beginning from the date of the
Underwriting Agreement and continuing to and including 30 days after the closing
date, not to offer, sell, contract to sell or otherwise dispose of any Series A
Junior Subordinated Debentures or any other securities of PGE that are
substantially similar to the Series A Junior Subordinated Debentures for cash,
without the prior written consent of the Representatives.
The Series A Junior Subordinated Debentures are a new issue of securities
with no established trading market. Application has been made to list the Series
A Junior Subordinated Debentures on the NYSE. PGE has been advised by the
Representatives of the Underwriters that the Representatives intend to make a
market in the Series A Junior Subordinated Debentures but are not obligated to
do so and may discontinue market making at any time without notice. No assurance
can be given as to the liquidity of the trading market for the Series A Junior
Subordinated Debentures.
PGE has agreed to indemnify the several Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as amended,
or to contribute to payments the Underwriters may be required to make in respect
thereof.
Certain of the Underwriters engage in transactions with, and from time to
time have performed services for Portland General and PGE in the ordinary course
of business.
LEGAL MATTERS
The validity of the Junior Indenture and the Series A Junior Subordinated
Debentures will be passed upon on behalf of PGE by Steven F. McCarrel, Esq.,
Deputy General Counsel of Portland General and Assistant Secretary of Portland
General and PGE and on behalf of the Underwriters by Morgan, Lewis & Bockius
LLP, New York, New York. Statements as to United States taxation in this
Prospectus Supplement under the caption "Certain Federal Income Tax
Considerations" have been passed upon by Morgan, Lewis & Bockius LLP, as special
tax counsel to PGE, and are stated herein on their authority.
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PROSPECTUS
PORTLAND GENERAL ELECTRIC COMPANY
DEBT SECURITIES
------------------------
Portland General Electric Company, an Oregon corporation ("PGE" or the
"Company"), may offer and sell, from time to time or all at one time, in one
or more series, together or separately, in amounts, at prices and on terms
to be determined at the time of the offering, secured and unsecured debt
securities ("Debt Securities") consisting of: (i) secured first mortgage bonds,
including medium term notes ("First Mortgage Bonds"), and (ii) unsecured debt
securities, which may be either Senior Unsecured Debt Securities or Junior
Subordinated Debentures ("Unsecured Debt Securities"). Senior Unsecured Debt
Securities will be unsecured and will rank on a parity with all other unsecured
and unsubordinated indebtedness of the Company but will be junior to all first
mortgage bonds, including the First Mortgage Bonds. Junior Subordinated
Debentures will be unsecured and subordinate and junior in right of payment
to all Senior Indebtedness (as defined herein) of the Company.
The specific terms of the offering and sale of the Debt Securities,
including (a) the specific designation, the aggregate principal amount, the
maturity, the rate (which may be fixed, floating, or adjustable), the time of
payment of interest, any redemption or sinking fund provisions, the extent of
any subordination and any other rights and restrictions of each series of the
Debt Securities; and (b) the initial public offering price, listing on any
securities exchange, and the agents, dealers, or underwriters, if any, to be
utilized in connection with the sale of each series of the Debt Securities, will
be set forth in an accompanying Prospectus Supplement. If so specified in the
applicable Prospectus Supplement, the Debt Securities or a series thereof may be
issued in whole or in part in the form of one or more temporary or permanent
global securities. The Company reserves the sole right to accept and, together
with its agents from time to time, to reject in whole or in part any proposed
purchase of Debt Securities to be made directly or through agents.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
The Debt Securities may be sold directly by the Company or through agents,
underwriters, or dealers designated from time to time. If any agents of the
Company or any underwriters are involved in the sale of the Debt Securities or
any series thereof in respect of which this Prospectus is being delivered, the
names of such agents or underwriters and any applicable discounts or commissions
with respect to the Debt Securities or any such series thereof so sold will also
be set forth in the Prospectus Supplement.
------------------------
THE DATE OF THIS PROSPECTUS IS OCTOBER 3, 1995
17
AVAILABLE INFORMATION
The Company and its parent, Portland General Corporation ("Portland
General"), are subject to the information requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and in accordance therewith file
reports and other information with the Securities and Exchange Commission (the
"Commission"). Reports, proxy statements and other information concerning the
Company and Portland General can be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the Commission's Regional Offices at 7 World
Trade Center, Suite 1300, New York, New York 10048; and 500 West Madison, Suite
1400, Chicago, Illinois 60661-2511. Copies of such material can be obtained upon
written request addressed to the Commission, Public Reference Section, 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. In addition, reports,
proxy statements and other information concerning the Company and Portland
General may be inspected at the offices of both the New York Stock Exchange, 20
Broad Street, New York, New York 10005 and The Pacific Stock Exchange, 301 Pine
Street, San Francisco, California 94104, on which Portland General Common Stock
and certain of the Company's securities are listed.
The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits thereto, referred to as
the "Registration Statement") under the Securities Act of 1933 (the "Securities
Act"). This Prospectus does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. For further information, reference
is hereby made to the Registration Statement.
------------------------
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, filed with the Securities and Exchange Commission
by the Company, are incorporated in this Prospectus by reference as of their
respective dates of filing:
1. Annual Report on Form 10-K for the year ended December 31, 1994.
2. Quarterly Reports on Form 10-Q for the quarters ended March 31, 1995 and
June 30, 1995.
3. Current Report on Form 8-K dated August 16, 1995.
All reports filed by the Company pursuant to Sections 13, 14, or 15(d) of
the Securities Exchange Act of 1934 subsequent to the date of this Prospectus
and prior to the termination of the offering or offerings hereunder shall be
deemed to be incorporated by reference in this Prospectus and to be part hereof
from the date of the filing of such reports. The documents enumerated above or
subsequently filed by the Company pursuant to Section 13 of the Securities
Exchange Act of 1934 prior to the filing with the Commission of the Company's
most recent annual report on Form 10-K shall not be incorporated by reference in
this Prospectus or be a part hereof from and after the filing of such annual
report on Form 10-K.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to each person to
whom a copy of this Prospectus has been delivered, on the written or oral
request of any such person, a copy of any or all of the documents referred to
above which have been or may be incorporated in this Prospectus by reference,
other than exhibits to such documents. Requests for such copies should be
directed to Steven N. Elliott, Assistant Treasurer, Portland General Electric
Company, 121 S.W. Salmon Street, Portland, Oregon 97204 (telephone number:
503/464-8917).
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PORTLAND GENERAL ELECTRIC COMPANY
Portland General Electric Company, incorporated in Oregon in 1930, has
principal offices located at 121 S.W. Salmon Street, Portland, Oregon 97204
(telephone number: 503/464-8000). The Company is an electric utility engaged in
the generation, purchase, transmission, distribution and sale of electricity
primarily in the State of Oregon. The Company's service area is 3,170 square
miles, including 54 incorporated cities of which Portland and Salem are the
largest, within a State approved service area allocation of 4,070 square miles.
A portion of the City of Portland is serviced by another Oregon utility. The
Company estimates that the population of its service area at December 31, 1994
was approximately 1.35 million, constituting approximately 45% of the State's
population. At June 30, 1995, the Company served more than 640,000 customers.
The Company is a wholly owned subsidiary of Portland General Corporation
("Portland General"), an electric utility holding company exempt from the
application of the Public Utility Holding Company Act of 1935 except Section
9(a)(2) relating to the acquisition of securities of other public utility
companies.
USE OF PROCEEDS
Unless otherwise indicated in a Prospectus Supplement, the net proceeds
from the sale of the Debt Securities will be used by PGE for refunding fixed and
variable rate securities, reducing short-term debt and other corporate purposes,
including its construction program.
RATIO OF EARNINGS TO FIXED CHARGES
In computing the ratio of earnings to combined fixed charges (i) earnings
have been based on income from continuing operations before income taxes and
fixed charges (exclusive of interest capitalized), and (ii) fixed charges
consist of interest and amortization of debt discount and expense (including
amounts capitalized) and the estimated interest portion of rents.
TWELVE
MONTHS YEARS ENDED DECEMBER 31
ENDED --------------------------------
JUNE 30, 1995 1994 1993 1992 1991 1990
------------- ---- ---- ---- ---- ----
Ratio of Earnings to Fixed Charges (unaudited)....... 2.60 3.14 3.13 3.08 2.31 3.12
DESCRIPTION OF DEBT SECURITIES
JUNIOR SUBORDINATED DEBENTURES
Junior Subordinated Debentures may be issued from time to time in one or
more series under an indenture, dated as of September 1, 1995 (the "Junior
Indenture"), between PGE and The Bank of New York, as Trustee (the "Junior
Trustee"), a form of which is filed as an exhibit to the Registration Statement
of which this Prospectus is a part. The following summary does not purport to be
complete and is subject in all respects to the provisions of, and is qualified
in its entirety by reference to, the Junior Indenture, to which reference is
hereby made for a full description of such provisions, including the definition
of certain terms used and for other information regarding the Junior
Subordinated Debentures. Whenever particular provisions or defined terms in the
Junior Indenture are referred to herein, such provisions or defined terms are
incorporated by reference herein. Numerical references used herein are
references to the Junior Indenture unless otherwise noted. The particular terms
of the Junior Subordinated Debentures offered by any Prospectus Supplement and
the extent, if any, to which the general provisions described herein may apply
to such Junior Subordinated Debentures will be described in the Prospectus
Supplement relating to such Junior Subordinated Debentures.
GENERAL
The Junior Subordinated Debentures will be unsecured, subordinated
obligations of PGE. The Junior Indenture does not limit the aggregate principal
amount of Junior Subordinated Debentures which may be issued thereunder and
provides that the Junior Subordinated Debentures may be issued thereunder from
time
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to time in one or more series pursuant to an indenture supplemental to the
Junior Indenture. (Section 2.01) The aggregate principal amount of Junior
Subordinated Debentures of any series will be set forth in the Prospectus
Supplement for such series.
Reference is made to the Prospectus Supplement which will accompany this
Prospectus for the following terms of each particular series of Junior
Subordinated Debentures being offered thereby: (i) title of such series of
Junior Subordinated Debentures; (ii) the aggregate principal amount of such
Junior Subordinated Debentures; (iii) the date or dates on which the principal
of such series of Junior Subordinated Debentures is payable; (iv) the rate or
rates, if any, at which such series of Junior Subordinated Debentures will bear
interest or the method of determination of such rate or rates, the date or dates
from which such interest shall accrue, the date or dates on which such interest
will be payable or the manner of determination of such interest payment dates
and the record dates for the interest payable on any such interest payment
dates; (v) the right, if any, to extend the interest payment periods and the
duration of such extension; (vi) the place where the principal of, premium, if
any, and interest on such series of Junior Subordinated Debentures will be
payable; (vii) the period or periods, if any, within which, the price or prices
at which and the terms and conditions upon which such series of Junior
Subordinated Debentures may be redeemed, in whole or in part, at the option of
PGE; (viii) the obligation, if any, of PGE to redeem or purchase such series of
Junior Subordinated Debentures pursuant to any sinking fund or analogous
provisions or at the option of the holder thereof, and the terms and conditions
upon which such series of Junior Subordinated Debentures shall be redeemed or
purchased, in whole or part, pursuant to such obligations; (ix) the
denominations in which such series of Junior Subordinated Debentures shall be
issuable; (x) any other terms of the Junior Subordinated Debentures of such
series; and (xi) whether the Junior Subordinated Debentures of such series are
issuable as a global security, and in such case, the identity of the depository.
(Section 2.01)
The Junior Indenture does not contain any provisions that afford holders of
Junior Subordinated Debentures protection in the event of a highly leveraged
transaction involving PGE.
SUBORDINATION
The Junior Indenture provides that the Junior Subordinated Debentures are
subordinate and junior in right of payment to all Senior Indebtedness (as
defined below) of PGE as provided in the Junior Indenture. No payment of
principal of (including redemption and sinking fund payments), premium, if any,
or interest on, the Junior Subordinated Debentures may be made if any Senior
Indebtedness is not paid when due, any applicable grace period with respect to
such default has ended and such default has not been cured or waived, or if the
maturity of any Senior Indebtedness has been accelerated because of a default.
Upon any payment or distribution of assets of PGE to creditors upon any
dissolution, winding up, liquidation or reorganization, whether voluntary or
involuntary or in bankruptcy, insolvency, receivership or other proceedings, all
principal of, and premium, if any, and interest due or to become due on, all
Senior Indebtedness must be paid in full before the holders of the Junior
Subordinated Debentures are entitled to receive or retain any payment. Subject
to the prior payment of all Senior Indebtedness, the rights of the holders of
the Junior Subordinated Debentures will be subrogated, in certain instances, to
the rights of the holders of Senior Indebtedness to receive payments or
distributions applicable to Senior Indebtedness until all amounts owing on the
Junior Subordinated Debentures are paid in full. (Sections 14.01 to 14.05)
The term "Senior Indebtedness" shall mean the principal of, and premium, if
any, and interest on and any other payment or obligations due pursuant to any of
the following, whether outstanding at the date of execution of the Junior
Indenture or thereafter incurred, created or assumed: (a) all indebtedness of
PGE for money borrowed, (b) all indebtedness evidenced by notes, debentures,
bonds, securities, or other similar instruments issued by PGE, (c) all capital
lease obligations of PGE, (d) all obligations of PGE issued or assumed as the
deferred purchase price of property, all conditional sales obligations of PGE
and all obligations of PGE under any title retention agreement (excluding trade
accounts payable arising in the ordinary course of business), (e) obligations of
PGE for the reimbursement of any obligor on any letter of credit, banker's
acceptance, security purchase facility, surety bond or similar credit
transaction entered into in the ordinary course of business of PGE, (f) all
indebtedness and obligations of others of the kinds described in the clauses (a)
through (e), assumed by or guaranteed in, any manner by PGE in effect guaranteed
by PGE through an
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agreement to purchase, contingent or otherwise, and (g) all renewals, extensions
or refundings of indebtedness of the kinds described in clauses (a) through (f)
unless, in the case of any particular indebtedness, obligation, renewal,
extension or refunding, the instrument creating or evidencing the same or the
assumption or guarantee of the same expressly provides that such indebtedness,
obligation, renewal, extension or refunding is not superior in right of payment
to or is pari passu with the Debentures. Such Senior Indebtedness shall continue
to be Senior Indebtedness and entitled to the benefits of the subordination
provisions set forth in Article Fourteen of the Junior Indenture irrespective of
any amendment, modification or waiver of any term of such Senior Indebtedness.
The Junior Indenture does not limit the aggregate amount of Senior
Indebtedness which may be issued. As of June 30, 1995, Senior Indebtedness of
PGE aggregated approximately $2,000,000,000.
As the Junior Subordinated Debentures will be issued by PGE, the Junior
Subordinated Debentures effectively will be subordinate to all obligations of
PGE's subsidiaries, and the rights of PGE's creditors, including holders of the
Junior Subordinated Debentures, to participate in the assets of such
subsidiaries upon liquidation or reorganization will be junior to the rights of
the holders of all preferred stock, indebtedness and other liabilities of such
subsidiaries, which may include trade payables, obligations to banks under
credit facilities, guarantees, pledges, support arrangements, bonds, capital
leases, notes and other obligations. Nothing in the Junior Indenture limits the
right of PGE to create subsidiaries or limits the right of any PGE subsidiary to
incur indebtedness.
CERTAIN COVENANTS
If there shall have occurred any event that would, with the giving of
notice or the passage of time, or both, constitute an Event of Default under the
Junior Indenture, as described under "Events of Default" below, or if PGE
exercises its option to extend the interest payment period described in clause
(v) under "General" above, PGE will not, until all defaulted interest on the
Junior Subordinated Debentures and all interest accrued on the Junior
Subordinated Debentures during any such extended interest payment period and all
principal and premium, if any, then due and payable on the Junior Subordinated
Debentures shall have been paid in full, (i) declare, set aside or pay any
dividend or distribution on any capital stock of PGE, including its Common
Stock, except for dividends or distribution in shares of its capital stock or in
rights to acquire shares of its capital stock, or (ii) repurchase, redeem or
otherwise acquire, or make any sinking fund payment for the purchase or
redemption of, any shares of its capital stock (except by conversion into or
exchange for shares of its capital stock and except for a redemption, purchase
or other acquisition of shares of its capital stock made for the purpose of an
employee incentive plan or benefit plan of PGE or any of its subsidiaries);
provided, however, that any moneys deposited in any sinking fund and not in
violation of this provision may thereafter be applied to the purchase or
redemption of such preferred stock in accordance with the terms of such sinking
fund without regard to the restrictions contained in this provision. (Section
4.06)
FORM, EXCHANGE, REGISTRATION AND TRANSFER
Junior Subordinated Debentures of each series will be issued in registered
form and will be either certificated or represented by one or more global
securities. If not represented by one or more global securities, Junior
Subordinated Debentures may be presented for registration of transfer (with the
form of transfer endorsed thereon duly executed) or exchange, at the office of
the Debenture Registrar or at the office of any transfer agent designated by PGE
for such purpose with respect to any series of Junior Subordinated Debentures
and referred to in an applicable Prospectus Supplement, without service charge
and upon payment of any taxes and other governmental charges as described in the
Junior Indenture. Such transfer or exchange will be effected upon the Debenture
Registrar or such transfer agent, as the case may be, being satisfied with the
document of title and identity of the person making the request. PGE has
appointed the Junior Trustee as Debenture Registrar with respect to the Junior
Subordinated Debentures. (Section 2.05) If a Prospectus Supplement refers to any
transfer agents (in addition to the Debenture Registrar) initially designated by
PGE with respect to any series of Junior Subordinated Debentures, PGE may at any
time rescind the designation of any such transfer agent or approve a change in
the location through which any such transfer agent acts, except that PGE will be
required to maintain a transfer agent in each place where Junior Subordinated
Debentures of
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such series may be presented for payment. (Section 4.02) PGE may at any time
designate additional transfer agents with respect to any series of Junior
Subordinated Debentures.
In the event of any redemption in part, PGE shall not be required to (i)
issue, register the transfer of or exchange any Junior Subordinated Debenture
during a period beginning at the opening of business 15 days before any
selection for redemption of Junior Subordinated Debentures of like tenor and of
the series of which such Junior Subordinated Debenture is a part, and ending at
the close of business on the earliest date in which the relevant notice of
redemption is deemed to have been given to all holders of Junior Subordinated
Debentures of like tenor and of such series to be redeemed and (ii) register the
transfer of or exchange any Junior Subordinated Debentures so selected for
redemption, in whole or in part, except the unredeemed portion of any Junior
Subordinated Debenture being redeemed in part. (Section 2.05)
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal and premium (if any) on any Junior Subordinated Debenture will be
made only against surrender to the Paying Agent of such Junior Subordinated
Debenture. Unless otherwise indicated in an applicable Prospectus Supplement,
principal of, premium, if any, and interest on Junior Subordinated Debentures
will be payable, subject to any applicable laws and regulations, at the office
of such Paying Agent or Paying Agents as PGE may designate from time to time,
except that at the option of PGE payment of any interest may be made by check
mailed to the address of the person entitled thereto as such address shall
appear in the Debenture Register with respect to such Junior Subordinated
Debentures. Unless otherwise indicated in an applicable Prospectus Supplement,
payment of interest on a Junior Subordinated Debenture on any Interest Payment
Date will be made to the person in whose name such Junior Subordinated Debenture
(or Predecessor Debenture) is registered at the close of business on the Regular
Record Date for such interest payment. (Section 2.03)
The Junior Trustee will act as Paying Agent with respect to the Junior
Subordinated Debentures. PGE may at any time designate additional Paying Agents
or rescind the designation of any Paying Agents or approve a change in the
office through which any Paying Agent acts, except that PGE will be required to
maintain a Paying Agent in each place where Junior Subordinated Debentures of
each series may be presented for payment. (Section 4.02)
All moneys paid by PGE to a Paying Agent for the payment of the principal
of, premium, if any, or interest on any Junior Subordinated Debenture of any
series which remain unclaimed at the end of two years after such principal,
premium, if any, or interest shall have become due and payable will be repaid to
PGE and the holder of such Junior Subordinated Debenture will thereafter look
only to PGE for payment thereof. (Section 11.06)
GLOBAL DEBENTURES
If any Junior Subordinated Debentures of a series are represented by one or
more global securities, the applicable Prospectus Supplement will describe the
circumstances, if any, under which beneficial owners of interests in any such
global security may exchange such interests for Junior Subordinated Debentures
of such series and of like tenor and principal amount in any authorized form and
denomination. Principal of, premium, if any, and interest on such global
security will be payable in the manner described in the applicable Prospectus
Supplement. (Section 2.11)
The specific terms of the depository arrangement with respect to any
portion of a series of Junior Subordinated Debentures to be represented by a
global security will be described in the applicable Prospectus Supplement.
AGREED TAX TREATMENT
The Junior Indenture provides that each holder of a Junior Subordinated
Debenture, each person that acquires a beneficial ownership interest in a Junior
Subordinated Debenture and PGE agree that for United
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States federal, state and local tax purposes it is intended that such Junior
Subordinated Debenture constitutes indebtedness. (Section 13.12)
MODIFICATION OF THE JUNIOR INDENTURE
The Junior Indenture contains provisions permitting PGE and the Junior
Trustee, with the consent of the holders of not less than a majority in
principal amount of the Junior Subordinated Debentures of each series which are
affected by the modification, to modify the Junior Indenture or any supplemental
indenture affecting that series or the rights of the holders of that series of
Junior Subordinated Debentures; provided, that no such modification may, without
the consent of the holder of each outstanding Junior Subordinated Debenture then
outstanding and affected thereby, (i) extend the fixed maturity of any Junior
Subordinated Debentures of any series, or reduce the principal amount thereof,
or reduce the rate or extend the time of payment of any interest thereon, or
reduce any premium payable upon the redemption thereof, or (ii) reduce the
percentage of Junior Subordinated Debentures, the holders of which are required
to consent to any such supplemental indenture. (Section 9.02)
The Junior Indenture contains provisions permitting PGE and the Junior
Trustee to execute, without the consent of any holder of Junior Subordinated
Debentures, any supplemental indenture for certain other usual purposes
including creating any new series of Junior Subordinated Debentures. (Sections
2.01, 9.01, and 10.01)
EVENTS OF DEFAULT
The Junior Indenture provides that any one or more of the following
described events, which has occurred and is continuing, constitutes an "Event of
Default" with respect to each series of Junior Subordinated Debentures: (i)
failure for 10 days to pay interest on the Junior Subordinated Debentures of
that series when due; (ii) failure to pay principal of or premium, if any, on
the Junior Subordinated Debentures of that series when due whether at maturity,
upon redemption or otherwise, or to make any sinking fund payment with respect
to that series; (iii) failure to observe or perform any other covenant (other
than those specifically relating to another series) contained in the Junior
Indenture for 90 days after written notice; or (iv) certain events of
bankruptcy, insolvency or reorganization of PGE. (Section 6.01)
The holders of a majority in aggregate outstanding principal amount of any
series of Junior Subordinated Debentures have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Junior Trustee for that series. (Section 6.06) The Junior Trustee or the holders
of not less than 25% in aggregate outstanding principal amount of any particular
series of Junior Subordinated Debentures may declare the principal due and
payable immediately upon an Event of Default with respect to such series, but
the holders of a majority in aggregate outstanding principal amount of such
series may annul such declaration and waive such Event of Default if it has been
cured and a sum sufficient to pay all matured installments of interest and
principal and any premium has been deposited with the Junior Trustee. (Section
6.01)
The holders of a majority in aggregate outstanding principal amount of all
series of Junior Subordinated Debentures affected thereby may, on behalf of the
holders of all Junior Subordinated Debentures of such series, waive any past
default, except a default in the payment of principal, premium, if any, or
interest. (Section 6.06) PGE is required to file annually with the Junior
Trustee a certificate as to whether or not PGE is in compliance with all the
conditions and covenants under the Junior Indenture. (Section 5.03)
CONSOLIDATION, MERGER AND SALE
The Junior Indenture does not contain any covenant which restricts PGE's
ability to merge or consolidate with or into any other corporation, sell or
convey all or substantially all of its assets to any person, firm or corporation
or otherwise engage in restructuring transactions. (Section 10.01)
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DEFEASANCE AND DISCHARGE
Under the terms of the Junior Indenture, PGE will be discharged from any
and all obligations in respect of the Junior Subordinated Debentures of any
series (except in each case for certain obligations to register the transfer or
exchange of Junior Subordinated Debentures, replace stolen, lost or mutilated
Junior Subordinated Debentures, maintain paying agencies and hold moneys for
payment in trust) if PGE deposits with the Junior Trustee, in trust, moneys or
Government Obligations, in an amount sufficient to pay all the principal of, and
interest on, the Junior Subordinated Debentures of such series on the dates such
payments are due in accordance with the terms of such Junior Subordinated
Debentures and, if, among other things, such Junior Subordinated Debentures are
neither due and payable nor to be called for redemption within one year, PGE
delivers to the Trustee an Opinion of Counsel to the effect that the holders of
Junior Subordinated Debentures of such series will not recognize income, gain or
loss for federal income tax purposes as a result of such deposit and discharge
and will be subject to federal income tax on the same amount and in the same
manner and at the same times as would have been the case if such deposit and
discharge had not occurred. In addition, if PGE delivers to the Trustee an
Opinion of Counsel (in lieu of the Opinion of Counsel referred to above) to the
effect that PGE has received from, or there has been published by, the United
States Internal Revenue Service a ruling, or there has been a change in tax law,
in either case to the effect that holders of the Junior Subordinated Debentures
will not recognize gain or loss for federal income tax purposes as a result of
such deposit, defeasance, and discharge and will be subject to federal income
tax on the same amount, in the same manner and at the same times as would have
been the case if such deposit, defeasance and discharge were not to occur, and
such deposit will not result in PGE, the Junior Trustee or the trust resulting
from the defeasance being deemed an "investment company" under the Investment
Company Act of 1940, as amended, then, PGE will be deemed to have paid and
discharged the entire indebtedness and holders of Junior Subordinated Debentures
of such series would be able to look only to the trust fund for payment of
principal, premium, if any, and interest on the Junior Subordinated Debentures
of such series. (Sections 11.01, 11.02, and 11.03)
GOVERNING LAW
The Junior Indenture and the Junior Subordinated Debentures will be
governed by and construed in accordance with, the laws of the State of New York.
(Section 13.04)
INFORMATION CONCERNING THE TRUSTEE
The Junior Trustee, prior to default, undertakes to perform only such
duties as are specifically set forth in the Junior Indenture and, after default,
shall exercise the same degree of care as a prudent individual would exercise in
the conduct of his or her own affairs. (Section 7.01) Subject to such provision,
the Junior Trustee is under no obligation to exercise any of the powers vested
in it by the Junior Indenture at the request of any holder of Junior
Subordinated Debentures, unless offered reasonable indemnity by such holder
against the costs, expenses and liabilities which might be incurred thereby.
(Section 7.02) The Junior Trustee is not required to expend or risk its own
funds or otherwise incur personal financial liability in the performance of its
duties if the Junior Trustee reasonably believes that repayment or adequate
indemnity is not reasonably assured to it. (Section 7.01)
MISCELLANEOUS
PGE will have the right at all times to assign any of its rights or
obligations under the Junior Indenture to Portland General or a direct or
indirect wholly owned subsidiary of Portland General or PGE; provided, that, in
the event of any such assignment, PGE will remain liable for all such
obligations. Subject to the foregoing, the Junior Indenture will be binding upon
and inure to the benefit of the parties thereto and their respective successors
and assigns. The Junior Indenture provides that it may not otherwise be assigned
by the parties thereto. (Section 13.11)
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FIRST MORTGAGE BONDS
First Mortgage Bonds are to be issued under the Indenture of Mortgage and
Deed of Trust, dated July 1, 1945 (the "Original Indenture"), made by PGE to The
Marine Midland Trust Company of New York (now Marine Midland Bank), as Trustee
("Trustee"), as supplemented by forty-five supplemental indentures (the
"Supplemental Indentures") heretofore executed by PGE and as to be supplemented
by one or more additional supplemental indentures to be dated the first day of
the month or months of issuance of each series of the First Mortgage Bonds, all
of which are collectively referred to as the "Mortgage".
The statements herein concerning the First Mortgage Bonds and the Mortgage
are an outline and do not purport to be complete. They make use of defined terms
and are qualified in their entirety by reference to the Mortgage, which is filed
as an exhibit to the Registration Statement of which this Prospectus forms a
part. References herein are to sections and articles of the Original Indenture
unless otherwise indicated. References to the New Supplementals are to the
drafts of the form of New Supplemental Indenture and the form of New MTN
Supplemental Indenture, respectively (collectively the "New Supplementals"),
which are filed as exhibits to the Registration Statement of which this
Prospectus forms a part.
A Prospectus Supplement will set forth any variation in the terms and
provisions of the First Mortgage Bonds from those described in this Prospectus.
FORM, DENOMINATIONS AND EXCHANGEABILITY
The First Mortgage Bonds are issuable in fully registered form in
denominations of $1,000, or such other amounts as may be authorized by PGE, or
any amount in excess thereof that is a multiple of $1,000. (New Supplementals
Section 1.01)
The First Mortgage Bonds will be transferable or exchangeable for First
Mortgage Bonds of other authorized denominations without any service charge at
the office of the Trustee in New York, N.Y. (Sections 2.06 and 2.10; New
Supplementals Section 1.01)
INTEREST AND PAYMENT
Reference is made to the Prospectus Supplement for the interest rate or
rates (which may be either fixed or variable) and/or the method of determination
of such rate or rates, of the First Mortgage Bonds, the date or dates on which
such interest is payable and the office or agency in the Borough of Manhattan,
City and State of New York at which interest will be payable.
SECURITY AND PRIORITY; BONDABLE PUBLIC UTILITY PROPERTY
In the opinion of PGE's counsel, the First Mortgage Bonds are to be
secured, equally with all other bonds heretofore or hereafter issued under the
Mortgage, by a direct first lien on PGE's interests in substantially all of its
property (except cash, securities, contracts and accounts receivable, motor
vehicles, materials and supplies, fuel, certain minerals and mineral rights and
certain other assets) now owned or hereafter acquired by PGE; subject, however,
to certain permitted encumbrances and to various exceptions, reservations,
reversions, easements and minor irregularities and deficiencies in title, which,
in the opinion of such counsel, will not interfere with their proper operation
and development. Until such time as the amendment discussed below becomes
effective, the lien of the Mortgage does not extend to properties located
outside of Oregon or contiguous states (principally PGE's interest in the
Colstrip units located in Montana).
The Mortgage permits the acquisition of property subject to prior liens.
However, no property subject to prior liens (other than liens securing the
unpaid purchase price of equipment or machinery) may be acquired (a) if at the
date of acquisition thereof the principal amount of indebtedness secured by such
prior liens, together with all other prior lien indebtedness of PGE, exceeds 10%
of the aggregate principal amount of bonds outstanding under the Mortgage, or
(b) if at the date of acquisition thereof the principal amount of indebtedness
secured by such prior liens exceeds 60% of the cost of such property to PGE, or
(c) in certain cases of property used by another in a business similar to that
of PGE, unless the net earnings of such property meet certain tests. (Section
8.11)
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The term "bondable public utility property", as presently defined in the
Mortgage, means specified types of tangible property, including property then in
the process of construction, now owned or hereafter acquired by PGE and
subjected to the lien of the Original Indenture as the same has been or may be
in the future supplemented, modified or amended, which is located in the State
of Oregon or in any state contiguous thereto. (Section 1.10A) When the holders
of 75% in principal amount of bonds of all series then outstanding, including
the holders of not less than 60% in principal amount of the bonds then
outstanding of each series which is affected by such amendment, shall have
consented thereto, the term "bondable public utility property" will be amended
to mean the same types of tangible property now owned or hereafter acquired by
PGE and subjected to the lien of the Original Indenture as the same has been or
may be in the future supplemented, modified or amended, which is located in the
States of Oregon, Washington, California, Arizona, New Mexico, Idaho, Montana,
Wyoming, Utah, Nevada and Alaska. Each holder of a First Mortgage Bond, by his
acceptance of such First Mortgage Bond, shall thereby consent to such amendment;
no further vote or consent of holders of the First Mortgage Bonds shall be
required to permit such amendment to become effective; and in determining
whether the holders of not less than 75% of principal amount of bonds
outstanding at the time such amendment becomes effective have consented thereto,
the holders of all First Mortgage Bonds then outstanding shall be deemed to have
so consented. (New Supplementals Section 1.08 and 1.07) Similar provisions are
contained in all recent Supplemental Indentures under which new series of bonds
have been issued. Similar provisions amending the definition of "bondable public
utility property" to include all of the states named above (other than Alaska)
are included in certain prior Supplemental Indentures, as well as in the New
Supplementals.
PGE has covenanted, among other things, to not issue bonds under the
Mortgage in any manner other than in accordance with the Mortgage, to keep the
Mortgage a first priority lien on the Trust Estate and, except as permitted by
the Mortgage, to not suffer any act or thing whereby the Trust Estate might or
could be impaired. (Article EIGHT) Neither the Original Indenture nor the
Supplemental Indentures contain any provisions that afford holders of bonds
special protection in the event of a highly leveraged transaction by PGE,
however the bonds would continue to be entitled to the benefit of a first
priority lien on the Trust Estate as described above. Any special provisions
applicable to the First Mortgage Bonds will be set forth in the New
Supplementals and described in a Prospectus Supplement with respect to the First
Mortgage Bonds.
REDEMPTION AND PURCHASE OF BONDS
Reference is made to the Prospectus Supplement for the terms and conditions
under which the First Mortgage Bonds, or any series of the First Mortgage Bonds
if there shall be more than one series, may be redeemed or purchased at the
option of PGE. The First Mortgage Bonds will be redeemable at any time at 100%
of the principal amount thereof, together with interest accrued to the date of
redemption, by use of proceeds from the sale or disposition substantially as an
entirety of PGE's electric properties at Portland, Oregon. (Section 7.01)
Cash deposited under any provision of the Mortgage (with certain
exceptions) may be applied to the purchase of the First Mortgage Bonds or any
series of the First Mortgage Bonds if there shall be more than one series.
(Section 7.05)
SINKING FUND PROVISIONS
If a Prospectus Supplement with respect to all of the First Mortgage Bonds
offered as a single series, or to any separate series of the First Mortgage
Bonds if there shall be more than one series, states that there will be a
sinking fund for the benefit of such series, then so long as any First Mortgage
Bonds of such series shall be outstanding, PGE will be required to deposit with
the Trustee in each year (except the year of maturity) commencing with such year
as shall be set forth in such Prospectus Supplement, cash sufficient to redeem
on the first day of the month of issuance of the first of the First Mortgage
Bonds of such series, at the Special Redemption Price, First Mortgage Bonds
equal to the percentage set forth in such Prospectus Supplement of the aggregate
principal amount of First Mortgage Bonds of such series theretofore issued,
after deducting from such aggregate principal amount (but only if such
deductions would aggregate $500,000 or more) the sum of (1) the aggregate
principal amount of First Mortgage Bonds of such series theretofore redeemed out
of the
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proceeds of property released from the lien of the Mortgage and (2) First
Mortgage Bonds of such series theretofore redeemed and retired and made the
basis for the withdrawal of such proceeds or certified in lieu of the deposit of
cash upon the release or taking of property. If so set forth in such Prospectus
Supplement, credit against such cash required to be deposited may be taken at
PGE's election in an amount equal to the principal amount of First Mortgage
Bonds of such series (i) delivered to the Trustee, (ii) at any time theretofore
redeemed at the option of PGE at the Regular Redemption Price, and/or (iii)
redeemed at the Special Redemption Price in anticipation of any sinking fund
payment at any time during the twelve months preceding the payment date
therefor. If so set forth in such Prospectus Supplement, PGE may also satisfy
all or any part of any sinking fund payment by certifying to the Trustee
available additions in an amount equal to 166 2/3% of the portion of the sinking
fund payment being so satisfied. If so set forth in such Prospectus Supplement,
cash so deposited to satisfy all or any part of any sinking fund payment shall
be used by the Trustee for the redemption of First Mortgage Bonds of such series
and PGE is required to pay all accrued interest and expenses with respect to any
First Mortgage Bonds of such series so redeemed. If sinking fund payments for
the First Mortgage Bonds of any series may be satisfied in whole or in part by
delivering to the Trustee First Mortgage Bonds of such series acquired by PGE
through purchase in the open market or otherwise, by redemption and/or by
certifying available additions, there will be no assurance that any of the First
Mortgage Bonds of any series will ever be called for redemption through
operation of the sinking fund therefor. In the event that less than all of the
First Mortgage Bonds of any series then outstanding were to be redeemed, the
selection would be made by the Trustee by lot in any manner deemed by the
Trustee to be proper. (Section 9.03)
REPLACEMENT FUND
PGE is required, on or before May 1 in each year, to pay to the Trustee an
amount in cash and/or deliver bonds of any series in principal amount equal to
the amount by which the minimum provision for depreciation upon bondable public
utility property (see below) for the preceding calendar year exceeds property
additions (as specified below) and, in the event of any deficiency in property
additions, the sum of certain other credits described below, which are optional.
Credit must be taken in an amount equal to the aggregate amount and/or cost of
property additions acquired or constructed by PGE from March 31, 1945 to the end
of the preceding calendar year, less (1) property additions theretofore made the
basis for action or credit under the Mortgage, (2) available additions
theretofore made the basis for action or credit under the Mortgage, and (3)
property additions theretofore credited against any previous replacement fund
requirement. PGE may at its election credit against the amount, if any, required
to be paid (i) any available bond retirements, (ii) certain expenditures for the
acquisition of or for improvements, additions, renewals or replacements to
bondable public utility property subject to a prior lien, and (iii) certain
retirements of prior lien indebtedness. To the extent that such credits at any
time exceed the replacement fund requirement, PGE may withdraw cash or bonds
held by the Trustee in the replacement fund or, under certain circumstances,
reinstate available bond retirements previously taken as a credit against any
replacement fund requirement. Any cash so deposited with the Trustee for the
replacement fund may, at the option of PGE, be applied to the redemption or
purchase of bonds. Redemptions of First Mortgage Bonds are at the then
applicable Regular Redemption Prices. (Section 4.04; New Supplementals Sections
1.04 and 1.03)
The amount of the mandatory credit for property additions has always
exceeded the replacement fund requirement and therefore PGE has not been
required (or permitted) to pay cash or deliver bonds to the Trustee. PGE expects
this to continue in the foreseeable future.
MINIMUM PROVISION FOR DEPRECIATION
The "minimum provision for depreciation" as applied to bondable public
utility property, as presently defined in the Mortgage, is, for any period
(other than periods of less than a calendar year), 15% of the gross operating
revenues derived from such property during such period, after deducting the cost
of purchased power and lease or rental payments for generating or transmission
facilities, less all amounts expended for maintenance of such property during
such period. The "minimum provision for depreciation" as applied to bondable
public utility property not subject to a prior lien is similarly determined on
the basis of gross
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operating revenues from, and maintenance expenditures upon, bondable public
utility property not at the time subject to a prior lien. (Section 1.10G)
When the holders of 75% in principal amount of bonds of all series then
outstanding, including the holders of not less than 60% in principal amount of
the bonds then outstanding of each series which is affected by such amendments,
shall have consented thereto:
(1) The definitions of minimum provision for depreciation will be
amended so that the minimum provision for depreciation for the period from
March 31, 1945 through December 31, 1966 as applied to bondable public
utility property, whether or not subject to lien, shall mean $35,023,487.50
(which is the amount of such minimum provision for such period under the
existing definitions of minimum provision for depreciation); the minimum
provision for depreciation as applied to bondable public utility property
for any calendar year subsequent to December 31, 1966, shall mean the
greater of (i) an amount equal to 2% of such property, as shown by PGE's
books as of January 1 of such year, with respect to which PGE was then
required to make appropriations to a reserve or reserves for depreciation
or obsolescence, or (ii) the amount actually appropriated in respect of
such property to such reserve or reserves for such calendar year, in either
case less an amount equal to the aggregate of (a) the amount of any
property additions which during such calendar year were made the basis for
a sinking fund credit, pursuant to the provisions of a sinking fund for
bonds of any series, and (b) 166 2/3% of the principal amount of bonds of
any series which were credited against any sinking fund payment due during
such calendar year for bonds of any series, or which were redeemed in
anticipation of, or out of moneys paid to the Trustee on account of any
sinking fund payment due during such calendar year for bonds of any series;
and the aggregate amount of the minimum provision for depreciation as
applied to bondable public utility property from March 31, 1945 to any date
shall mean $35,023,487.50 plus the sum of the minimum provision for
depreciation for each calendar year or fraction thereof between December
31, 1966 and such date, calculated as set forth immediately above.
(2) The amended definitions of minimum provision for depreciation as
applied to bondable public utility property set forth in (1) above will be
further amended so that (A) the property additions and bonds referred to in
(a) and (b) of (1) above will be limited to property additions and bonds
which, as a result of having been made the basis of a sinking fund credit
for bonds of any series or having been redeemed in anticipation of or out
of moneys paid to the Trustee on account of a sinking fund payment for
bonds of any series, become disqualified from being made the basis of the
authentication and delivery of bonds or any other further action or credit
under the Mortgage, either without time limit or only for as long as any
bonds of such series are outstanding, and (B) the amended definition of the
aggregate amount of the minimum provision for depreciation as applied to
bondable public utility property from March 31, 1945 to any date set forth
in (1) above will be further amended by adding thereto (1) the amount of
any property additions referred to in (a) of (1) above, as so amended,
which between December 31, 1966 and such date were made the basis for a
sinking fund credit pursuant to the provisions of a sinking fund for bonds
of any series, and thereafter and on or prior to such date become
"available additions" as a result of the fact that all bonds of such series
ceased to be outstanding and (ii) 166 2/3% of the principal amount of bonds
referred to in (b) of (1) above, as so amended, which between December 31,
1966 and such date were credited against any sinking fund payment, or were
redeemed in anticipation of, or out of moneys paid to the Trustee on
account of, any sinking fund payment, due between December 31, 1966 and
such date for bonds of any series, and thereafter and on or prior to such
date became "available bond retirements" as a result of the fact that all
bonds of such series ceased to be outstanding.
The "minimum provision for depreciation" as applied to bondable public utility
property not subject to a prior lien for any period subsequent to December 31,
1966 will be calculated on similar bases except that the property referred to in
clauses (i) and (ii) of (1) above will be bondable public utility property not
subject to prior lien. If the revised definitions set forth in (1) above or in
both (1) and (2) above should become effective it is expected that the minimum
provisions for depreciation for periods subsequent to December 31,1966 will be
reduced from such minimum provisions as computed in accordance with the existing
definitions. Each holder of a First Mortgage Bond, by his acceptance of such
First Mortgage Bond, shall thereby consent to both such amendments; no further
vote or consent of holders of the First Mortgage Bonds
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shall be required to permit either such amendment to become effective; and in
determining whether the holders of not less than 75% in principal amount of
bonds outstanding at the time either such amendment becomes effective have
consented thereto, the holder of all First Mortgage Bonds then outstanding shall
be deemed to have so consented. (New Supplementals Sections 1.08 and 1.07)
Similar provisions amending the definitions of "minimum provision for
depreciation" set forth in (1) above have been included in all prior
Supplemental Indentures under which new series of bonds have been issued,
commencing with the Sixteenth Supplemental Indenture. Similar provisions
amending the definitions of "minimum provision for depreciation" set forth in
(2) have been included in all prior Supplemental Indentures under which new
series of bonds have been issued, commencing with the Twenty-fifth Supplemental
Indenture.
The amendment set forth in (1) above also contains provisions to the effect
that all bonds of any series and all property additions made the basis of a
credit upon any sinking fund payment for bonds of any series or redeemed by
operation of the sinking fund for bonds of any series (whether on any sinking
fund payment date or in anticipation of any sinking fund payment) shall not be
made the basis of the authentication and delivery of bonds or of any other
further action or credit under the Mortgage. The amendment set forth in (2)
above will eliminate such provisions. Certain presently outstanding series of
bonds are entitled to the benefits of similar provisions, presently effective,
prohibiting the use of bonds or property additions made the basis of a credit
upon or redeemed by operation of the sinking fund, if any, for bonds of that
series or certain previously issued series. None of such provisions limit the
use of such bonds or property additions in calculating the amended definitions
of minimum provision for depreciation referred to in either (1) or (2) above.
When the holders of 75% in principal amount of bonds of all series than
outstanding, including holders of not less than 60% of the bonds then
outstanding of each series which is affected by such amendment, shall have
consented thereto, the foregoing provisions prohibiting the use of bonds or
property additions so credited against (or redeemed out of the proceeds of) any
sinking fund payment for bonds of any series, or for bonds of certain series, as
the case may be, will remain effective only so long as any such bonds of such
series are outstanding. When all bonds of a series cease to be outstanding,
bonds and/or property additions so credited (or redeemed) by operation of the
sinking fund for bonds of such series equal to 1% per annum of the principal
amount of bonds of such series theretofore issued (after making certain
deductions) will remain unavailable for further action or credit under the
Mortgage, but the amount of such bonds and property additions in excess of such
1% per annum will become "available additions" or "available bond retirements",
as the case may be. (New Supplementals Sections 1.08 and 1.07) Similar
provisions with respect to the use of bonds and property additions so credited
against (or redeemed out of the proceeds of) sinking fund payments and the
amount of such bonds and property additions in excess of such 1% per annum
becoming "available additions" or "available bond retirements", as the case may
be, have been included in all prior Supplemental Indentures under which new
series of bonds have been issued, commencing with the Twenty-fifth Supplemental
Indenture.
ISSUANCE OF ADDITIONAL BONDS
The principal amount of bonds which may be issued under the Mortgage is
unlimited. Additional bonds may from time to time be issued on the basis of (1)
60% of available additions, (2) the deposit of cash or (3) available bond
retirements. With certain exceptions in the case of (3) above, the issuance of
bonds is subject to net earnings available for interest for 12 consecutive
months within the preceding 15 months being at least twice the annual interest
requirements on all bonds to be outstanding and prior lien indebtedness.
(Article FIVE) Cash deposited with the Trustee pursuant to (2) above may be (i)
withdrawn in an amount equal to 60% of available additions, (ii) withdrawn in an
amount equal to available bond retirements or (iii) applied to the purchase or
redemption of bonds. (Article SEVEN) At June 30, 1995, PGE had available
additions and available bond retirements sufficient to permit the issuance of
approximately $230,000,000 and $100,000,000, respectively, in principal amount
of additional bonds, including the First Mortgage Bonds. As of June 30, 1995,
net earnings available for interest would permit the issuance of up to
$750,000,000 principal amount of additional bonds, including the First Mortgage
Bonds. This amount would increase to the extent proceeds of the issuance of
bonds are used to retire presently outstanding first mortgage bonds.
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Available additions are determined, at any time, by deducting from the
aggregate amount of property additions since March 31, 1945 (1) the greater of
the aggregate amount of retirements since March 31, 1945 or the aggregate amount
of the minimum provision for depreciation upon bondable public utility property
not subject to a prior lien since March 31, 1945, and (2) the aggregate of
available additions theretofore made the basis for action or credit under the
Mortgage. (Sections 1.10.I, 3.01 and 3.03.A) Property additions taken as a
credit against the replacement fund requirement are not deemed to be "made the
basis for action or credit". (Section 1.10.H)
DIVIDEND RESTRICTIONS
So long as any of the First Mortgage Bonds, or bonds of any other series
heretofore authenticated under the Mortgage, are outstanding, dividends (other
than dividends in capital stock of PGE) may not be declared or paid or other
distributions made on Common Stock of PGE, nor may any shares of capital stock
of PGE be purchased (other than in exchange for or from the proceeds of other
shares of capital stock of PGE), if the aggregate amount so distributed or
expended after December 31, 1944 would exceed the aggregate amount of PGE's net
income, as adjusted, available for dividends on its Common Stock accumulated
after December 31, 1944. (Section 4.06; New Supplementals Sections 1.04 and
1.03) At June 30, 1995, $531,000,000 of accumulated net income was available for
payment of dividends under the foregoing provision.
RELEASE AND SUBSTITUTION OF PROPERTY
Property subject to the lien of the Mortgage may (subject to certain
exceptions and limitations) be released only upon the substitution of cash,
purchase money obligations or certain other property or upon the basis of
available additions or available bond retirements. (Article SIX)
MODIFICATION OF THE MORTGAGE
The rights of the bondholders may be modified with the consent of the
holders of 75% of the bonds, including the consent of the holders of 60% of the
bonds of each series the rights of the holders of which are affected by such
modification. In general, no modification of the terms of principal and
interest, and no modification affecting the lien of the Mortgage or reducing the
percentage required for modification, is effective against any bondholder
without his consent. (Section 17.02) The Mortgage may also be modified in
various other respects not inconsistent with the Mortgage and which do not
adversely affect the interests of the holders of bonds. (Section 17.01)
DEFAULTS AND NOTICE THEREOF
Defaults are defined as being: default in payment of principal; default for
60 days in payment of interest or of any sinking fund or replacement or
improvement fund obligation; certain events of bankruptcy, insolvency or
reorganization; or default continuing for 60 days after notice in performance or
observance of other covenants, agreements or conditions. (Section 11.01) The
Trustee may withhold notice of defaults (except in payment of principal,
interest or any sinking or purchase fund installment) if it in good faith
determines it to be in the interest of the bondholders. (Section 14.09) The
holders of 25% of the bonds may declare the principal and accrued interest due
on default, but the holders of a majority may annul such declaration if such
default has been cured. (Section 11.01) No holder of bonds may enforce the lien
of the Mortgage without giving the Trustee written notice of a default and
unless the holders of 25% of the bonds have requested the Trustee to act and
offered the Trustee indemnity against expenses and the Trustee has failed to act
within 60 days. (Section 11.21) The holders of a majority of the bonds may
direct the time, method and place of conducting any proceedings for any remedy
available to the Trustee or exercising any trust or power conferred upon the
Trustee, but the Trustee is not required to incur personal liability if there is
reasonable ground for believing that it will not be sufficiently indemnified for
any expenditures in connection therewith. (Section 11.20)
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EVIDENCE TO BE FURNISHED TO THE TRUSTEE
Compliance with Mortgage provisions is evidenced by written statements of
officers of PGE or persons selected and paid by PGE. In certain cases, opinions
of counsel and certificates of an engineer, accountant, appraiser or other
expert (who in some instances must be independent), must be furnished. Various
certificates and other papers are required to be filed annually and in certain
events, including an annual certificate with respect to compliance with the
terms of the Mortgage and absence of defaults.
SENIOR UNSECURED DEBT SECURITIES
The Senior Unsecured Debt Securities may be issued from time to time in one
or more series under an indenture to be dated as of the first day of the month
of its execution ("Senior Indenture"), between PGE and a trustee to be selected
by PGE (the "Senior Trustee"). A copy of the Senior Indenture will be filed as
an exhibit to the Registration Statement of which this Prospectus is a part on
or before execution thereof by PGE and the Senior Trustee. The following
description of the general provisions of the Senior Indenture is not complete
and is subject in all respects to the provisions of, and is qualified in its
entirety by reference to, the Senior Indenture in the form in which it is filed
as an exhibit to the Registration Statement of which this Prospectus is a part.
Reference is hereby made to the Senior Indenture as so filed for a full
description of such provisions, including the definitions of certain terms used
and for other information regarding the Senior Unsecured Debt Securities. The
particular terms of the Senior Unsecured Debt Securities offered by any
Prospectus Supplement and the extent, if any, to which the general provisions
described herein may apply to such Senior Unsecured Debt Securities will be
described in the Prospectus Supplement relating to such Senior Unsecured Debt
Securities.
GENERAL
The aggregate principal amount of the Senior Unsecured Debt Securities
issuable under the Senior Indenture will be unlimited. The Senior Unsecured Debt
Securities may be issued from time to time in one or more series pursuant to an
indenture supplemental to the Senior Indenture. The specific terms for each
particular series of the Senior Unsecured Debt Securities, including (i) the
title of such series; (ii) the aggregate principal amount of such series; (iii)
the date or dates on which the principal of such series is payable; (iv) the
rate or rates, if any, at which such series will bear interest or the method of
determination of such rate or rates, the date or dates from which such interest
will accrue, the date or dates on which such interest will be payable or the
manner of determination of such interest payment dates and the record dates for
the interest payable on such interest payment dates; (v) the place where the
principal of, premium, if any, and interest on such series will be payable; (vi)
the period or periods, if any, within which, the price or prices at which and
the terms and conditions upon which such series may be redeemed, in whole or in
part, at the option of PGE; (vii) the terms and conditions, if any, on which
such series may be discharged prior to redemption or maturity; (viii) the
obligation, if any, of PGE to redeem or purchase such series pursuant to any
sinking fund or analogous provisions or at the option of a holder thereof, and
the terms and conditions upon which such series shall be redeemed or purchased,
in whole or in part, pursuant to such obligations; (ix) the denominations in
which such series shall be issuable; (x) any other terms of such series; and
(xi) whether the Senior Unsecured Debt Securities of such series will be issued
as a global security, and in such case, the circumstances, if any, under which
beneficial owners of interests in any such global security may exchange such
interests for Senior Unsecured Debt Securities of such series, the manner for
payment of principal of and any premium and interest on such global security,
the identity of the depository, and the terms of the depository arrangement,
will be set forth in the Prospectus Supplement relating thereto which will
accompany this Prospectus.
The Senior Unsecured Debt Securities will not be secured by any lien, but
will rank on a parity with all other unsecured and unsubordinated indebtedness
of PGE.
The Senior Unsecured Debt Securities or any series thereof may be issued as
"original issue discount securities" to be sold at a discount below their
principal amount. Special federal income tax and other considerations applicable
thereto will be described in the Prospectus Supplement relating thereto.
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THE SENIOR INDENTURE
The Senior Indenture will contain provisions, which will be described in
the Prospectus Supplement relating to the Senior Unsecured Debt Securities, with
regard to (i) PGE's consolidating or merging with or into any other corporation
or selling or conveying its property as an entirety or substantially as an
entirety to another corporation, (ii) PGE's granting to any holder of its
outstanding unsecured debt for money borrowed a mortgage, lien, encumbrance or
security interest in its property, (iii) the terms and conditions with regard to
amending or modifying the Senior Indenture; (iv) Events of Default with respect
to Senior Unsecured Debt Securities of any series; and (v) the duties and
responsibilities of the Senior Trustee.
The Senior Indenture will not contain any provisions that afford protection
to the holders of Senior Unsecured Debt Securities in the event of a highly
leveraged transaction involving PGE.
PGE will have the right at all times to assign any of its rights or
obligations under the Senior Indenture to Portland General or a direct or
indirect wholly owned subsidiary of Portland General or PGE; provided, that, in
the event of any such assignment, PGE will remain liable for all such
obligations. Subject to the foregoing, the Senior Indenture will be binding upon
and inure to the benefit of the parties thereto and their respective successors
and assigns, and may not otherwise be assigned.
The Senior Indenture and the Senior Unsecured Debt Securities will be
governed by and construed in accordance with, the laws of the State of New York.
PLAN OF DISTRIBUTION
PGE may offer the Debt Securities ("Offered Securities") in one or more of
the following ways from time to time: (i) through underwriters or dealers; (ii)
directly to a limited number of purchasers or to a single purchaser; (iii)
through agents or (iv) through a combination of any such methods. A Prospectus
Supplement with respect to each series of the Offered Securities will set forth
the terms of the offering of the Offered Securities and the proceeds to PGE from
the sale thereof, the name or names of any underwriters or agents, any
underwriting discounts and other items constituting underwriters' compensation,
any initial public offering price and any discounts or concessions allowed or
reallowed or paid to dealers. Any initial public offering price and any
discounts or concessions allowed or reallowed or paid to dealers may be changed
from time to time.
If underwriters are utilized, the Offered Securities being sold to them
will be acquired by the underwriters for their own account and may be resold
from time to time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of sale. The Offered Securities may be offered to the public either
through underwriting syndicates represented by one or more managing
underwriters, or directly by one or more firms acting as underwriters. The
underwriter or underwriters with respect to the Offered Securities being offered
will be named in a Prospectus Supplement relating to such offering and, if an
underwriting syndicate is used, the managing underwriter or underwriters will be
set forth on the cover page of such Prospectus Supplement. Any underwriting
agreement will provide that the obligations of the underwriters are subject to
certain conditions precedent, and that the underwriters will be obligated to
purchase all of the Offered Securities to which such underwriting agreement
relates if any are purchased. Any underwriter utilized may be entitled to
indemnification from PGE against certain civil liabilities, including
liabilities under the Securities Act of 1933.
The Offered Securities may be sold directly by PGE or through agents
designated by PGE from time to time. Any agent involved in the offer or sale of
the Offered Securities or any series thereof in respect of which this Prospectus
is delivered will be named, and any commissions payable by PGE to such agent
will be set forth, in a Prospectus Supplement. Agents who participate in the
distribution of the Offered Securities may be entitled to indemnification by PGE
against certain liabilities, including liabilities under the Securities Act of
1933.
If so indicated in the Prospectus Supplement, PGE will authorize
underwriters or other persons acting as agents to solicit offers by certain
institutions to purchase the Offered Securities from PGE pursuant to contracts
providing for payment and delivery on a future date. Institutions with which
such contracts may be
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made include commercial and savings banks, insurance companies, pension funds,
investment companies, educational and charitable institutions and others, but in
all cases will be subject to the approval of PGE. The obligations of any
purchaser under any such contract will be subject to the condition that the
purchase of the Offered Securities shall not at the time of delivery be
prohibited under the laws of the jurisdiction to which such purchaser is
subject. The underwriters and such agents will not have any responsibility in
respect of the validity or performance of such contracts.
Each series of Offered Securities will be a new issue of securities and
will have no established market. Any underwriters to whom Offered Securities are
sold by PGE for public offering and sale may make a market in such Offered
Securities, but such underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. The Offered Securities
may or may not be listed on a national securities exchange. No assurance can be
given as to the liquidity of or the trading markets for any of the Offered
Securities.
LEGAL OPINIONS
Legal matters in connection with the issuance and sale of the Offered
Securities are being passed upon for PGE by Steven F. McCarrel, Deputy General
Counsel of Portland General and Assistant Secretary of PGE, and for the
underwriters or agents by Morgan, Lewis & Bockius LLP, 101 Park Avenue, New
York, NY 10178. As to all matters governed by Oregon law, Morgan, Lewis &
Bockius LLP will rely upon the opinion of Mr. McCarrel.
EXPERTS
PGE's consolidated financial statements and schedules included in its
Annual Report on Form 10-K for the year ended December 31, 1994, which are
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 incorporated herein by reference in reliance upon the
authority of said firm as experts in accounting and auditing in giving said
reports.
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SS
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO
BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS PROSPECTUS
SUPPLEMENT OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY CIRCUMSTANCE IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY
SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AS OF
ANY TIME SUBSEQUENT TO THE DATE OF SUCH INFORMATION.
-------------------------------------
TABLE OF CONTENTS
PAGE
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PROSPECTUS SUPPLEMENT
Portland General Electric Company....... S-3
Risk Factors............................ S-3
Summary Financial Information........... S-6
Use of Proceeds......................... S-6
Description of the Series A Junior
Subordinated Debentures................ S-7
Certain Federal Income Tax
Considerations......................... S-11
Underwriting............................ S-14
Legal Matters........................... S-15
PROSPECTUS
Available Information................... 2
Incorporation of Certain Documents by
Reference............................. 2
Portland General Electric Company....... 3
Use of Proceeds......................... 3
Ratio of Earnings to Fixed Charges...... 3
Description of Debt Securities.......... 3
Junior Subordinated Debentures......... 3
First Mortgage Bonds................... 9
Senior Unsecured Debt Securities....... 15
Plan of Distribution.................... 16
Legal Opinions.......................... 17
Experts................................. 17
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$75,000,000
PORTLAND GENERAL
ELECTRIC COMPANY
8 1/4% QUARTERLY INCOME DEBT
SECURITIES (QUID(SM))
(JUNIOR SUBORDINATED
DEFERRABLE INTEREST
DEBENTURES, SERIES A)
---------------------------
LOGO
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GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
SMITH BARNEY INC.
REPRESENTATIVES OF THE UNDERWRITERS
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