- 4 -
Index to Exhibits
Sequential Page
Number at which
Exhibit Description Exhibit Begins
1 Underwriting Agreement relating
to 1999 A Debentures.
4 Form of 1999 A Debenture.
8 Tax Opinion of Dewey Ballantine LLP, dated June 25, 1999.
12 Ratio of Earnings to Fixed Charges
23 Consent of Dewey Ballantine LLP. (Included as part
of Exhibit 8).
UNDERWRITING AGREEMENT
June 25, 1999
To the Representative Named
on the Signature Page Hereof:
Dear Sirs:
Subject to the terms and conditions stated or incorporated by reference herein,
Consolidated Edison Company of New York, Inc. (the "Company") hereby agrees to
sell to the Underwriters named in Schedule I hereto (the "Underwriters") and the
Underwriters hereby agree to purchase, severally and not jointly, the principal
amount set forth opposite their names in Schedule I hereto of the securities
specified in Schedule II hereto (the "Designated Securities").
The representative named on the signature page hereof (the "Representative")
represents that the Underwriters have authorized the Representative to enter
into this Underwriting Agreement and to act hereunder on their behalf.
Except as otherwise provided in Schedule II hereto each of the provisions of the
Company's Underwriting Agreement Basic Provisions, dated April 16, 1992, as
filed as Exhibit 1(b) to Registration Statement No. 33-47261 (the "Basic
Provisions"), is incorporated herein by reference in its entirety, and shall be
deemed to be a part of this Agreement to the same extent as if such provisions
had been set forth in full herein. Unless otherwise defined herein, terms
defined in the Basic Provisions are used herein as therein defined.
Payment for the Designated Securities will be made against delivery thereof to
the Representative for the accounts of the respective Underwriters at the time
and place and at the purchase price to the Underwriters set forth in Schedule II
hereto.
- 2 -
If the foregoing is in accordance with your understanding, please sign and
return to us counterparts hereof, and upon acceptance hereof by you, on behalf
of each of the Underwriters, this letter and such acceptance hereof, including
the Basic Provisions incorporated herein by reference, shall constitute a
binding agreement between each of the Underwriters and the Company.
Very truly yours,
CONSOLIDATED EDISON COMPANY
OF NEW YORK, INC.
By: Robert P. Stelben
Robert P. Stelben
Vice President and Treasurer
Confirmed and Accepted as of the date hereof on behalf of itself and each other
Underwriter, if any:
SALOMON SMITH BARNEY INC.
By: Henry A. Clark, III
Name: Henry A. Clark, III
Title: Managing Director
SCHEDULE I
Principal Amount of
Designated Securities
Underwriter to be Purchased
Salomon Smith Barney Inc. $ 30,125,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated 30,125,000
Morgan Stanley & Co. Incorporated 30,125,000
Goldman, Sachs & Co. 30,125,000
Lehman Brothers Inc. 30,125,000
PaineWebber Incorporated 30,125,000
Prudential Securities Incorporated 30,125,000
ABN AMRO Incorporated 2,000,000
A.G. Edwards & Sons, Inc. 2,000,000
Bear, Stearns & Co. Inc 2,000,000
BT Alex. Brown Incorporated 2,000,000
Dain Rauscher Wessels 2,000,000
A division of Dain Rauscher Incorporated
Doley Securities, Inc. 2,000,000
Donaldson Lufkin & Jenrette Securities Corporation 2,000,000
EVEREN Securities, Inc. 2,000,000
First Union Capital Markets Corporation 2,000,000
J.C. Bradford & Co. 2,000,000
Legg Mason Wood Walker, Incorporated 2,000,000
McDonald Investments Inc. 2,000,000
Olde Discount Corporation 2,000,000
Raymond James & Associates, Inc. 2,000,000
Robert W. Baird & Co. Incorporated 2,000,000
SG Cowen Securities Corporation 2,000,000
TD Securities (USA) Inc. 2,000,000
The Robinson-Humphrey Company, LLC 2,000,000
U.S. Bancorp Piper Jaffray, Inc. 2,000,000
Wachovia Securities, Inc. 2,000,000
Warburg Dillon Read LLC 2,000,000
Wasserstein Parella & Co. 2,000,000
The Williams Capital Group, L..P. 2,000,000
Advest, Inc. 625,000
BB&T Capital Markets 625,000
A division of Scott & Stringfellow
Blaylock & Partners, L.P. 625,000
C.L. King & Associates, Inc. 625,000
Crowell, Weedon & Co. 625,000
Fahnestock & Co. Inc. 625,000
Fidelity Capital Markets 625,000
A division of National Financial Services Corporation
Fifth Third/The Ohio Company 625,000
First Albany Corporation 625,000
Gibraltar Securities Co. 625,000
Gruntal & Co., L.L.C. 625,000
J.J.B. Hilliard, W.L. Lyons, Inc. 625,000
Janney Montgomery Scott Inc. 625,000
McGinn, Smith & Co., Inc. 625,000
Mesirow Financial, Inc. 625,000
Morgan Keegan & Company, Inc. 625,000
Muriel Siebert & Co., Inc. 625,000
Parker/Hunter Incorporated 625,000
Pryor, McClendon, Counts & Co. 625,000
Ragen MacKensie Incorporated 625,000
Ramirez & Co., Inc. 625,000
Roney Capital Markets 625,000
A division of Banc One Capital Markets, Inc.
Charles Schwab & Co., Inc. 625,000
Stephens Inc. 625,000
Stifel, Nicolaus & Company, Incorporated 625,000
Sutro & Co. Incorporated 625,000
Tucker Anthony Incorporated 625,000
Utendahl Capital Partners, L.P. 625,000
Wedbush Morgan Securities, Inc. 625,000
Total $ 275,000,000
SCHEDULE II
Title of Designated Securities:
7.35% Public Income NotES (7.35% Debentures, Series 1999 A) due 2039.
Aggregate principal amount:
$275,000,000, issuable in minimum denominations of $25 and increased in
multiples thereof.
Price to Public:
Initially 100% of the principal amount of the Designated Securities, plus
accrued interest, if any, from June 30, 1999 to the date of delivery,
thereafter at market prices prevailing at the time of sale or at
negotiated prices.
Purchase Price by Underwriters:
96.85% of the principal amount of the Designated Securities, plus accrued
interest, if any, from June 30, 1999 to the date of delivery.
Specified funds for, and manner of, payment of purchase price:
Funds will be delivered by wire transfer to:
Citibank, N.A.
ABA #021000089
For credit to the account of
Con Edison, No. 00000158
Indenture:
Indenture, dated as of December 1, 1990, between the Company and The Chase
Manhattan Bank, as Trustee, as amended and supplemented by the First
Supplemental Indenture, dated as of March 6, 1996, between the Company and
The Chase Manhattan Bank, as Trustee.
- 2 -
Maturity:
July 1, 2039.
Interest Rate:
As set forth in the prospectus supplement, dated June 25, 1999, for the
Designated Securities (the "Prospectus Supplement") to the prospectus,
dated February 11, 1998 (the "Prospectus"), filed with the Securities and
Exchange Commission (the "SEC") pursuant to Rule 424(b)(2) under the
Securities Act of 1933, as amended, in connection with the Company's
Registration Statement on Form S-3 (No. 333-45745, declared effective by
the SEC on February 11, 1998).
Interest Payment Dates:
As set forth in the Prospectus Supplement.
Redemption Provisions:
As set forth in the Prospectus Supplement.
Sinking Fund Provisions:
None.
Time of Delivery:
10:00 a.m., on June 30, 1999.
Closing Location:
Room 1618-S at the Company, 4 Irving Place, New York, NY 10003.
- 3 -
Information furnished by or on behalf of the Underwriters for use in the
Prospectus for the Designated Securities:
1. The paragraph regarding stabilization on page 2 of the Prospectus.
2. The paragraph regarding delivery of the Designated Securities on the front
cover of the Prospectus Supplement
3. The second paragraph, the final sentence of the third paragraph, the
second sentence of the fourth paragraph, and the fifth, sixth and seventh
paragraphs of the section entitled "Underwriting" on pages S-9 and S-10
of the Prospectus Supplement.
Address of Representative:
Salomon Smith Barney Inc.
Seven World Trade Center
New York, New York 10048
Attention: Hal A. Clark, Managing Director
Captions in the Prospectus and Prospectus Supplement referred to in Section
6(c)(xi) of the Basic Provisions:
Description of Securities
Description of the PINES
Modifications of Basic Provisions:
1. Delete Section 3 of the Basic Provisions in its entirety and substitute the
following:
"One or more Global Securities (as defined in the Indenture specified in
the Underwriting Agreement) for the Designated Securities in the aggregate
principal amount of the Designated Securities shall be registered in the
name of Cede & Co. and delivered to The Depository Trust Company with
instructions to credit the Designated Securities to the account of, or as
otherwise instructed by, the Representative against payment by the
Representative of the purchase price therefor in the amount, the funds and
manner specified in the Underwriting Agreement, at the place, time and
date specified in the Underwriting Agreement or at such other place, time
and date as the Representative and the Company may agree in writing, said
time and date being herein referred to as the "Time of Delivery" for said
Designated Securities.
2. Delete Section 6(c)(ii) of the Basic Provisions in its entirety and
substitute the following:
"(ii) The Company has authorized equity capitalization as set forth, or
incorporated by reference, in the Prospectus;"
- 4 -
3. In Sections 1(g) and 6(c)(iii) of the Basic Provisions, insert "law or"
immediately before the phrase "principles of public policy."
4. In Section 6(f) of the Basic Provisions, substitute "Fitch Investor
Services" for "Duff and Phelps Inc."
5. In Section 7(a) of the Basic Provisions, insert "promptly as such expenses
are incurred" immediately before the phrase "; provided, however,".
6. In Section 7(d) of the Basic Provisions, add at the end: "The foregoing
provisions regarding contribution shall apply except as otherwise required
by applicable law."
7. Add as new Section 1(n) of the Basic Provisions: "The Company does not
have sufficient information to make a determination that, for the twelve
months ended June 28, 1999, there was any decrease, as compared with the
corresponding prior period, in operating revenues less fuel, purchased
power and gas purchased for resale."
8. Delete clause (iii)(D) of Annex I of the Basic Provisions.
9. The word "Prospectus" in Annex I of the Basic Provisions may be changed to
the words "Registration Statement", defined to include the documents
incorporated by reference therein.
10. Clause (iii)A of Annex I of the Basic Provisions is revised as follows:
"(A) the unaudited financial statements incorporated by reference in the
Registration Statement, or from which information set forth in the
Registration Statement was taken, do not comply as to form in all material
respects with the applicable accounting requirements of the Exchange Act
and the published rules and regulations thereunder, or any material
modifications should be made to the unaudited financial statements for
them to be in conformity with generally accepted accounting principles,"
11. Add as new Section 6(c)(xii) of the Basic Provisions:"Consolidated Edison,
Inc. is exempt from the provisions of the Public Utility Holding Company
Act of 1935 except Section 9(a)(2) thereof."
12. In Section 1(c) of the Basic Provisions, add ", and the Prospectus, as it
may be amended or supplemented pursuant to Section 4 hereof, as of the
Time of Delivery will not," immediately before the phrase "contain an
untrue statement of a material fact".
Other:
None.
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Company or its
agent for registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
REGISTERED REGISTERED
Consolidated Edison Company of New York, Inc.
7.35% Public Income NotES due 2039
(7.35% DEBENTURES, SERIES 1999 A)
INTEREST RATE MATURITY DATE CUSIP
7.35% per annum July 1, 2039 209111 83 0
REGISTERED HOLDER: [Cede & Co.]
PRINCIPAL SUM: [TWO HUNDRED SEVENTY FIVE MILLION DOLLARS ($275,000,000)]
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC., a New York corporation
(hereinafter called the "Company", which term includes any successor corporation
under the Indenture hereinafter referred to), for value received, hereby
promises to pay to the registered holder named above or registered assigns, on
the maturity date stated above, unless redeemed prior thereto as hereinafter
provided, the principal sum stated above and to pay interest thereon from June
30, 1999, or from the most recent interest payment date to which interest has
been duly paid or provided for, initially on October 1, 1999 and thereafter
quarterly on January 1, April 1, July 1 and October 1 of each year, at the
interest rate stated above, until the date on which payment of such principal
sum has been made or duly provided for. The interest so payable on any interest
payment date will be paid to the person in whose name this Debenture is
registered at the close of business on the fifteenth day of the month preceding
the interest payment date, except as otherwise provided in the Indenture.
The principal of this Debenture, when due and payable, shall, upon
presentation and surrender hereof, be paid at the principal office of the
Company. The interest on this Debenture, when due and payable, shall be paid at
the principal office of the Company, or at the option of the Company, by check
mailed to the address of the registered holder hereof or registered assigns as
such address shall appear in the Security Register. All such payments shall be
made in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts.
- 2 -
This Debenture is one of a duly authorized series of an issue of unsecured
debt securities of the Company designated as its 7.35% Public Income NotES
(7.35% Debentures, Series 1999 A) due 2039 (hereinafter called the
"Debentures"), issued and to be issued under an Indenture dated as of December
1, 1990 between the Company and The Chase Manhattan Bank, Trustee (hereinafter
called the "Trustee", which term includes any successor trustee under the
Indenture), as amended and supplemented by the First Supplemental Indenture,
dated as of March 6, 1996, between the Company and the Trustee (hereinafter
called the "Indenture"). Reference is made to the Indenture and any supplemental
indenture thereto for the provisions relating, among other things, to the
respective rights of the Company, the Trustee and the holders of the Debentures,
and the terms on which the Debentures are, and are to be, authenticated and
delivered.
The interest payable on any interest payment date shall computed on the
basis of twelve 30-day months and a 360-day year and, for any period shorter
than a full quarterly interest period, will be computed on the basis of the
actual number of days elapsed in such 90-day quarterly interest period. If any
interest payment date falls on a Sunday or legal holiday or a day on which
banking institutions in the City of New York are authorized by law to close,
then payment of interest may be made on the next succeeding business day.
The Company may redeem the Debentures, in whole or in part, at any time on
or after July 1, 2004 at a redemption price equal to 100% of the principal
amount of the Debentures to be redeemed together with unpaid accrued interest
thereon to the date fixed for redemption.
If this Debenture or any portion hereof is called for redemption, interest
shall cease to accrue on this Debenture or such portion hereof on the date fixed
for redemption.
If an Event of Default (as defined in the Indenture) shall have occurred
and be continuing, with respect to the Debentures, the principal hereof may be
declared, and upon such declaration shall become, due and payable, in the
manner, with such effect and subject to the conditions provided in the
Indenture. Any such declaration may be rescinded by holders of a majority in
principal amount of the outstanding Debentures if all Events of Default with
respect to the Debentures (other than the non-payment of principal of the
Debentures which shall have become due by such declaration) shall have been
remedied.
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of not less than a majority in aggregate
principal amount of the Debentures at the time outstanding, evidenced as in the
Indenture provided, to execute supplemental indentures adding any provisions to
the Indenture or to any supplemental indenture with respect to the Debentures,
or modifying in any manner the rights of the holders of the Debentures;
provided, however, that no such supplemental indenture shall (i) extend the
maturity of any Debenture, or reduce the principal amount thereof, or reduce the
rate or extend the time of payment of interest thereon, or make the principal
thereof, or interest thereon, payable in any coin or currency other than that in
the Debentures provided, without the consent of the holder of each Debenture so
affected, or (ii) reduce the aforesaid
-3-
principal amount of Debentures, the holders of which are required to consent to
any such supplemental indenture without the consent of the holders of all
Debentures then outstanding.
The Debentures are issuable as registered Debentures only, in the
denomination of $25 and any integral multiples thereof approved by the Company,
such approval to be evidenced by the execution thereof.
This Debenture is transferable by the registered holder hereof in person
or by his attorney duly authorized in writing on the books of the Company at the
office or agency to be maintained by the Company for that purpose, but only in
the manner, subject to the limitations and upon payment of any tax or
governmental charge for which the Company may require reimbursement as provided
in the Indenture, and upon surrender and cancellation of this Debenture. Upon
any registration of transfer, a new registered Debenture or Debentures, of
authorized denomination or denominations, and in the same aggregate principal
amount, will be issued to the transferee in exchange therefor.
The Company, the Trustee, any paying agent and any Security registrar may
deem and treat the registered holder hereof as the absolute owner of this
Debenture (whether or not this Debenture shall be overdue and notwithstanding
any notations of ownership or other writing hereon made by anyone other than the
Security registrar) for the purpose of receiving payment of or on account of the
principal hereof and interest due hereon as herein provided and for all other
purposes, and neither the Company nor the Trustee nor any paying agent nor any
Security registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or interest
on this Debenture, or for any claim based hereon, or otherwise in respect
hereof, or based on or in respect of the Indenture or any indenture supplemental
thereto, against any incorporator or against any past, present or future
stockholder, officer or member of the Board of Trustees, as such, of the
Company, whether by virtue of any constitution, statute or rule of law, or by
the enforcement of any assessment or penalty or otherwise, all such liability
being, by the acceptance hereof and as part of the consideration for the issue
hereof, expressly waived and released.
This Debenture shall be deemed to be a contract made under the laws of the
State of New York, and for all purposes shall be construed in accordance with
the laws of the State of New York.
All terms used in this Debenture which are defined in the Indenture and
not defined herein shall have the meanings assigned to them in the Indenture.
-4-
This Debenture shall not be entitled to any benefit under the Indenture or
be valid or obligatory for any purpose until the certificate of authentication
on the face hereof is manually signed by the Trustee.
IN WITNESS WHEREOF, the Company has caused this Debenture to be signed by
the manual or facsimile signatures of a Vice President and the Treasurer of the
Company, and a facsimile of its corporate seal to be affixed or reproduced
hereon.
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
By
Vice President and Treasurer
By
Executive Vice President and Chief Financial
Officer
SEAL
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated herein issued under the
Indenture described herein.
THE CHASE MANHATTAN BANK,
as Trustee
By
Authorized Officer
Dewey Ballantine LLP
1301 Avenue of the Americas
New York, New York 10019
June 25, 1999
Consolidated Edison Company of
New York, Inc.
4 Irving Place
New York, New York 10003
Re: Registration Statement on Form S-3
Dear Sirs:
We have acted as special tax counsel to Consolidated Edison Company
of New York, Inc. (the "Company") in connection with the issuance of $275
million aggregate principal amount of the Company's 7.35% Public Income Notes
(7.35% Debentures, Series 1999 A) due 2039 ("PINES"). We have participated in
the preparation of the Registration Statement on Form S-3 relating to the
Company's debt securities (No. 333-45745), which was declared effective on
February 11, 1998, and the Prospectus Supplement, dated today, relating to the
PINES. The PINES will be issued pursuant to the Indenture, dated as of December
1, 1990, between the Company and the Chase Manhattan Bank, as Trustee, as
amended and supplemented by the First Supplemental Indenture, dated as of March
6, 1996, in the form filed as an exhibit to the Registration Statement.
On the basis and subject to the accuracy of the statements contained
in the materials referred to above, and our consideration of such other matters
as we have deemed necessary, it is our opinion that under current law the
material federal income tax consequences to holders of PINES will be as
described under the heading "Material Federal Income Tax Consequences" in the
Prospectus Supplement constituting part of the Registration Statement. You have
not requested, and we do not express, an opinion concerning any other tax
consequences of the issuance of the PINES. This opinion is not to be used,
circulated, quoted or otherwise referred to for any purpose without our express
written permission.
We hereby consent to the filing of this opinion with the Securities
and Exchange Commission as an exhibit to the Registration Statement and to the
references to our firm in the section captioned "Material Federal Income Tax
Consequences" in the Prospectus Supplement constituting part of the Registration
Statement. In giving the foregoing consent, we do not thereby admit that we come
within the category of persons whose consent is required under Section 7 of the
Securities Act of 1933 or the rules and regulations of the Securities and
Exchange Commission thereunder.
Very truly yours,
/s/ Dewey Ballantine LLP
CONSOLIDATED EDISON COM PANY OF NEW YORK, INC.
Ratio of Earnings to Fixed Charges
Twelve Months Ended
(Thousands of Dollars)
MARCH MARCH
1999 1998
---------- ---------
Earnings
Net Income $752,011 $724,759
Federal Income Tax 330,704 351,474
Federal Income Tax Deferred 102,500 39,400
Investment Tax Credits Deferred (8,689) (8,800)
---------- ----------
Total Earnings Before Federal Income Tax 1,176,526 1,106,833
Fixed Charges* 345,739 350,900
---------- ----------
Total Earnings Before Federal Income Tax
and Fixed Charges $1,522,265 $1,457,733
========== ==========
* Fixed Charges
Interest on Long-Term Debt $291,664 $306,016
Amort. of Debt Discount, Premium & Expense 13,791 12,448
Interest on Component of Rentals 18,297 18,520
Other Interest 21,987 13,916
---------- ----------
Total Fixed Charges $345,739 $350,900
========== ==========
Ratio of Earnings to Fixed Charges 4.40 4.15
