PROSPECTUS SUPPLEMENT
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(To prospectus dated August 18, 2000)
$300,000,000
Consolidated Edison Company of
New York, Inc.
7.50% Debentures, Series 2000 B
Due September 1, 2010
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We will pay interest on the Debentures on March 1, 2001 and thereafter
semi-annually on March 1 and September 1 in each year. The Debentures will
mature on September 1, 2010. We may not redeem the Debentures prior to maturity.
The Debentures will be unsecured obligations and rank equally with our
other unsecured debt securities that are not subordinated obligations. The
Debentures will be issued only in registered form in denominations of $1,000.
Per Debenture Total
Public offering price (1) 99.2380% $297,714,000
Underwriting discount .3436% $ 1,030,800
Proceeds, before expenses, to Con Edison of New York 98.8944% $296,683,200
(1) Plus accrued interest from August 28, 2000, if settlement occurs
after that date
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus supplement or the accompanying prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
The Debentures will be ready for delivery in book-entry form only
through the facilities of The Depository Trust Company on or about August 28,
2000.
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Merrill Lynch & Co.
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The date of this prospectus supplement is August 23, 2000.
TABLE OF CONTENTS
Prospectus Supplement
Page
Description of Debentures................................................S-3
Underwriting.............................................................S-4
Prospectus
About This Prospectus .....................................................3
Where You Can Find More Information........................................3
Con Edison of New York.....................................................4
Use of Proceeds............................................................4
Ratio of Earnings to Fixed Charges ........................................5
Description of Securities..................................................5
Plan of Distribution......................................................13
Legal Matters.............................................................14
Experts...................................................................14
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You should rely on the information contained or incorporated by
reference in this prospectus supplement and the accompanying prospectus. We have
not, and the underwriter has not, authorized any other person to provide you
with any different information. If anyone provides you with different or
inconsistent information, you should not rely on it. We are not, and the
underwriter is not, making an offer to sell these securities in any jurisdiction
where the offer or sale is not permitted. You should assume that the information
appearing in this prospectus supplement, the accompanying prospectus and the
documents incorporated by reference is accurate only as of their respective
dates. Our business, financial condition, results of operations and prospects
may have changed since those dates.
S-2
DESCRIPTION OF DEBENTURES
General
The Debentures will mature on September 1, 2010, and may not be
redeemed prior to maturity. Additional information describing the Debentures and
the Indenture under which they are to be issued is included in "Description of
Securities" in the prospectus.
Interest
We will pay interest on the Debentures at the rate per annum stated on
the first page of this prospectus supplement. Interest will accrue from August
28, 2000 or from the most recent interest payment date to which interest has
been paid. Interest is payable on March 1, 2001 and thereafter semi-annually on
March 1 and September 1 in each year to holders of record at the close of
business on the fifteenth day, whether or not a business day, of the calendar
month next preceding such interest payment date, except as otherwise provided in
the Indenture.
Book-Entry System
This discussion of The Depository Trust Company ("DTC") and its
book-entry system supplements the discussion of depositary arrangements in
"Description of Securities - Global Securities" in the prospectus.
DTC will act as securities depository for the Debentures. The Debentures
will be issued in fully-registered form in the name of Cede & Co. (DTC's
partnership nominee). One or more fully-registered Debenture certificates will
be issued as Global Securities for the Debentures, in the aggregate principal
amount of the 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. DTC holds securities that its participants ("Direct Participants")
deposit with DTC. DTC also facilitates the settlement among Direct Participants
of securities transactions, such as transfers and pledges, in deposited
securities through electronic computerized book-entry changes in Direct
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. 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 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" and
together with Direct Participants, "Participants"). The Rules applicable to DTC
and its Participants are on file with the Securities and Exchange Commission.
Purchases of Debentures under the DTC system must be made by or through
Direct Participants, which will receive a credit for the Debentures on DTC's
records. The ownership interest of each actual purchaser of Debentures
("Beneficial Owner") is in turn to be recorded on the Participants' records.
Beneficial Owners will not receive written confirmation from DTC of their
purchase, but Beneficial Owners are expected to receive written confirmations
providing details of the transaction, as well as periodic statements of their
holdings, from the Participant through which the Beneficial Owner entered into
the transaction. Transfers of ownership interests in the 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 Debentures, except in the event that use of the
book-entry system for the Debentures is discontinued.
S-3
To facilitate subsequent transfers, all Debentures deposited by Direct
Participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of Debentures with DTC and their registration in the name
of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of
the actual Beneficial Owners of the Debentures; DTC's records reflect only the
identity of the Direct Participants to whose accounts such 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
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.
Neither DTC nor Cede & Co. will consent or vote with respect to
Debentures. Under its usual procedures, DTC would mail an Omnibus Proxy to Con
Edison of New York as soon as possible after the record date. The Omnibus Proxy
assigns Cede & Co.'s consenting or voting rights to those Direct Participants to
whose accounts the Debentures are credited on the record date (identified in a
listing attached to the Omnibus Proxy).
Principal and interest payments on the Debentures will be made to DTC.
DTC's practice is to credit Direct Participants' accounts on the payable date in
accordance with their respective holdings shown on DTC's records unless DTC has
reason to believe that it will not receive payment on the payable date. Payments
by Participants to Beneficial Owners will be governed by standing instructions
and customary practices, as is the case with securities held for the accounts of
customers in bearer form or registered in "street name," and will be the
responsibility of such Participant and not of DTC or Con Edison of New York,
subject to any statutory or regulatory requirements as may be in effect from
time to time. Payment of principal and interest to DTC is the responsibility of
Con Edison of New York, disbursement of such payments to Direct Participants
shall be the responsibility of DTC, and disbursements of such payments to the
Beneficial Owners shall be the responsibility of Participants.
DTC may discontinue providing its services as securities depository
with respect to the Debentures at any time by giving reasonable notice to Con
Edison of New York. Under such circumstances, in the event that a successor
securities depository is not obtained, Debenture certificates are required to be
printed and delivered. Con Edison of New York may decide to discontinue use of
the system of book-entry transfers through DTC (or a successor securities
depository). In that event, Debenture certificates will be printed and
delivered.
The information in this section concerning DTC and DTC's book-entry
system has been obtained from sources that Con Edison of New York believes to be
reliable (including DTC), but Con Edison of New York takes no responsibility for
the accuracy thereof.
Neither Con Edison of New York, the Trustee nor the Underwriter will
have any responsibility or obligation to Participants, or the persons for whom
they act as nominees, with respect to the accuracy of the records of DTC, its
nominee or any Participant with respect to any ownership interest in the
Debentures, or payments to, or the providing of notice for, Participants or
Beneficial Owners.
UNDERWRITING
We intend to offer the Debentures through the underwriter Merrill
Lynch, Pierce, Fenner & Smith Incorporated. Subject to the terms and conditions
contained in the underwriting agreement between us and the underwriter, we have
agreed to sell the Debentures to the underwriter and the underwriter has agreed
to purchase the Debentures from us.
S-4
We have agreed to indemnify the underwriter against certain
liabilities, including liabilities under the Securities Act of 1933, or to
contribute to payments the underwriter may be required to make in respect of
those liabilities.
The underwriter is offering the Debentures, subject to prior sale,
when, as and if issued to and accepted by it, subject to approval of legal
matters by its counsel, including the validity of the Debentures, and other
conditions contained in the underwriting agreement, such as the receipt by the
underwriter of officer's certificates and legal opinions. The underwriter
reserves the right to withdraw, cancel or modify offers to the public and to
reject orders in whole or in part.
Commissions and Discounts
The underwriter has advised us that it proposes initially to offer the
Debentures to the public at the public offering price on the cover page of this
prospectus supplement, and to dealers at that price less a concession not in
excess of .25% of the principal amount of the Debentures. After the initial
public offering, the public offering price and concession may be changed.
The expenses of the offering, not including the underwriting discount,
are estimated to be less than $300,000 and are payable by us.
New Issue of Debentures
The Debentures are a new issue of securities with no established trading
market. We do not intend to apply for the listing of the Debentures on any
national securities exchange or for quotation of the Debentures on any automated
dealer quotation system. We have been advised by the underwriter that it
presently intends to make a market in the Debentures after completion of the
offering. However, the underwriter is under no obligation to do so and may
discontinue any market-making activities at any time without any notice. We
cannot assure the liquidity of the trading market for the Debentures or that an
active public trading market for the Debentures will develop. If an active
public trading market for the Debentures does not develop, the market price and
liquidity of the Debentures may be adversely affected.
Price Stabilization and Short Positions
In connection with the offering, the underwriter is permitted to engage in
transactions that stabilize the market price of the Debentures. Such
transactions consist of bids or purchases to peg, fix or maintain the price of
the Debentures. If the underwriter creates a short position in the Debentures in
connection with the offering, i.e., if it sells more Debentures than are on the
cover page of this prospectus supplement, the underwriter may reduce that short
position by purchasing Debentures in the open market. Purchases of a security to
stabilize the price or to reduce a short position could cause the price of the
security to be higher than it might be in the absence of such purchases.
Neither we nor the underwriter makes any representation or prediction as to
the direction or magnitude of any effect that the transactions described above
may have on the price of the Debentures. In addition, neither we nor the
underwriter makes any representation that the underwriter will engage in these
transactions or that these transactions, once commenced, will not be
discontinued without notice.
Other Relationships
The underwriter and its affiliates have engaged in, and may in the future
engage in, investment banking and other commercial dealings in the ordinary
course of business with us. The underwriter has received customary fees and
commissions for these transactions.
S-5
PROSPECTUS
Consolidated Edison Company of New York, Inc.
Debt Securities
Consolidated Edison Company of New York, Inc. may offer and sell up to
$565,000,000 of our unsecured debt securities. We will establish the specific
terms of each series of our debt securities, their offering prices and how they
will be offered at the time we offer them, and we will describe them in one or
more supplements to this prospectus. This prospectus may not be used to offer
and sell our debt securities unless accompanied by a prospectus supplement. You
should read this prospectus and the related supplement before you invest in our
debt securities.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAVE THESE ORGANIZATIONS DETERMINED THAT THIS
PROSPECTUS IS ACCURATE OR COMPLETE.
ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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We will offer and sell our debt securities through one or more
underwriters. We will set forth in the related prospectus supplement the name of
the underwriters, the discount or commission received by the underwriters from
us as compensation, our other expenses for the offering and sale of the debt
securities, and the net proceeds we receive from the sale. See "Plan of
Distribution."
The date of this Prospectus is August 18, 2000.
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TABLE OF CONTENTS
About This Prospectus ...................................................3
Where You Can Find More Information......................................3
Con Edison of New York...................................................4
Use of Proceeds..........................................................4
Ratio of Earnings to Fixed Charges.......................................5
Description of Securities................................................5
Plan of Distribution....................................................13
Legal Matters...........................................................14
Experts ................................................................14
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement we have filed with the
Securities and Exchange Commission using a "shelf" registration process. By
using this process, we may offer up to a total dollar amount of $565,000,000 of
our debt securities in one or more offerings. This prospectus provides you with
a general description of the debt securities we may offer. Each time we offer
debt securities, we will provide you with a supplement to this prospectus that
will describe the specific terms of that offering. The prospectus supplement may
also add, update or change the information contained in this prospectus. Before
you invest, you should carefully read this prospectus, the applicable prospectus
supplement and the information contained in the documents we refer to in this
prospectus under "Where You Can Find More Information."
References in this prospectus to the terms "we", "us" or other similar
terms mean Consolidated Edison Company of New York, Inc., unless the context
clearly indicates otherwise. We are also referred to in this prospectus as Con
Edison of New York.
You should rely only on the information contained or incorporated by
reference in this prospectus and any accompanying prospectus supplement. We have
not authorized anyone else to provide you with any different information. If
anyone provides you with different or inconsistent information, you should not
rely on it. We are not making an offer to sell securities in any jurisdiction
where the offer or sale is not permitted. The information contained in this
prospectus is current only as of the date of this prospectus.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other
information with the Securities and Exchange Commission. We file such reports,
proxy statements and other information through the Commission's Electronic Data
Gathering, Analysis and Retrieval system and these filings are publicly
available through the Commission's Web site (http://www.sec.gov). You may read
and copy such material at the public reference facilities maintained by the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549;
at the Commission's New York Regional Office, 7 World Trade Center, 13th Floor,
New York, New York 10048; and at its Chicago Regional Office, Northwest Atrium
Center, 500 West Madison Street, 14th Floor, Chicago, Illinois 60661. You may
also obtain copies of such material at prescribed rates from the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549. In addition, you may inspect such material at the offices of the New York
Stock Exchange, Inc., 20 Broad Street, New York, New York 10005, the Chicago
Stock Exchange, 120 South LaSalle Street, Chicago, Illinois 60605 and the
Pacific Stock Exchange, 301 Pine Street, San Francisco, California 94104.
The Commission allows us to "incorporate by reference" into this prospectus
the information we file with them. This means that we can disclose important
information to you by referring you to the documents containing the information.
The information we incorporate by reference is considered to be an important
part of this prospectus and should be read with the same care. Information that
we file later with the Commission that is incorporated by reference into this
prospectus will automatically update and supercede this information. We are
incorporating by reference into this prospectus the following documents that we
have filed with the Commission and any subsequent filings we make with the
Commission under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange
Act of 1934 until the offering of the debt securities described in this
prospectus is completed:
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o Con Edison of New York's Annual Report on Form 10-K for the year ended
December 31, 1999 ("1999 Form 10-K"), o Con Edison of New York's Quarterly
Reports on Form 10-Q for the quarterly periods ended March 31, 2000 and June
30, 2000, and
o Con Edison of New York's Current Reports on Form 8-K, dated March 29, 2000,
and May 3, 2000.
This prospectus is part of a registration statement we have filed with
the Commission relating to our debt securities. As permitted by the Commission's
rules, this prospectus does not contain all of the information included in the
registration statement and the accompanying exhibits and schedules we file with
the Commission. You should read the registration statement and the exhibits and
schedules for more information about us and our debt securities. The
registration statement, exhibits and schedules are also available at the
Commission's Public Reference Section or through its Web site.
You may obtain a free copy of our filings with the Commission by writing or
telephoning us at our principal executive offices: Corporate Secretary,
Consolidated Edison Company of New York, Inc., 4 Irving Place, New York, New
York 10003 (Telephone No.: 212-460-6066).
CON EDISON OF NEW YORK
Con Edison of New York, incorporated in New York State in 1884,
provides electric service to its approximately 3 million electric customers in
New York City (except part of Queens) and most of Westchester County, New York.
Con Edison of New York also provides gas service to over one million customers
in Manhattan, the Bronx and parts of Queens and Westchester, and steam service
in part of Manhattan. Consolidated Edison, Inc. ("CEI"), incorporated in New
York State in 1997, became the holding company for Con Edison of New York on
January 1, 1998. CEI completed its purchase of Orange and Rockland Utilities,
Inc. in July 1999 and agreed to purchase Northeast Utilities in October 1999.
Orange and Rockland provides electric service to approximately 250,000 customers
and gas service to approximately 100,000 customers in New York, New Jersey and
Pennsylvania. Northeast Utilities subsidiaries provide electric service to over
1.7 million customers in Connecticut, New Hampshire and western Massachusetts.
USE OF PROCEEDS
Unless we inform you otherwise in a supplement to this prospectus, we
anticipate using any net proceeds received by us from the sale of the debt
securities for general corporate purposes, including, among others:
o Repayment of short term debt,
o Repurchase, retirement or refinancing of other securities, and
o Funding of construction expenditures.
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RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth Con Edison of New York's ratio of
earnings to fixed charges for the periods indicated:
Twelve Months Ended Year Ended December 31,
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June 30, 2000 1999 1998 1997 1996 1995
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3.91 4.17 4.36 4.09 4.18 4.20
The ratio of earnings to fixed charges has been computed based
upon net income plus Federal income tax, Federal income tax deferred, investment
tax credits deferred and fixed charges. Fixed charges include interest on
long-term debt and other interest expense, amortization of debt expense,
discount and premium, and a reasonable approximation of the interest component
of rentals.
DESCRIPTION OF SECURITIES
The debt securities are to be issued under an Indenture, dated as of
December 1, 1990, between Con Edison of New York and The Chase Manhattan Bank,
as Trustee ("Trustee"), (successor to The Chase Manhattan Bank (National
Association)), as amended and supplemented by a First Supplemental Indenture,
dated as of March 6, 1996 (the Indenture, as amended and supplemented, is herein
referred to as the "Indenture"), copies of which are included as exhibits to the
registration statement of which this prospectus is a part. Con Edison of New
York may also enter into one or more additional indentures with other trustees
with respect to certain of the debt securities. Any such indenture would contain
covenants and other provisions similar to those described below. Reference is
made to the prospectus supplement regarding any additional indentures under
which Debt securities will be issued.
The debt securities will be unsecured general obligations of Con Edison
of New York ranking equally and ratably in right of payment with the unsecured
debt securities of Con Edison of New York issued under the Indenture that are
not subordinated obligations of Con Edison of New York ("Subordinated
Securities") and the unsecured promissory notes of Con Edison of New York issued
as collateral for, and in consideration of the net proceeds of, a like amount of
tax-exempt revenue bonds issued by New York State Energy Research and
Development Authority; provided, however, that if so provided in the prospectus
supplement relating to a series of debt securities, the debt securities will be
Subordinated Securities.
There is no requirement that future issues of debt securities of Con
Edison of New York be issued under the Indenture, and Con Edison of New York
will be free to employ other indentures or documentation, containing provisions
different from those included in the Indenture or applicable to one or more
issues of Securities, in connection with future issues of such other debt
securities.
The Indenture does not specifically restrict the ability of Con Edison
of New York to engage in transactions which could have the effect of increasing
the ratio of debt to equity capitalization of Con Edison of New York or a
successor corporation. For example, the Indenture does not limit the amount of
indebtedness of Con Edison of New York, the payment of dividends by Con Edison
of New York or the acquisition by Con Edison of New York of any of the equity
securities of Con Edison of New York or CEI. The Indenture also permits Con
Edison of New
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York to merge or consolidate or to transfer its assets, subject to certain
conditions (see "Consolidation, Merger and Sale" below). Con Edison of New York
must obtain approvals from state and/or federal regulatory bodies to merge or
consolidate or, with limited exceptions, to issue securities or transfer assets.
The following summary of the Indenture does not purport to be complete
and is subject to, and qualified in its entirety by reference to, the Indenture,
including the definitions therein of certain terms.
General: The Indenture provides that the debt securities offered and
other unsecured debt securities of Con Edison of New York, without limitation as
to aggregate principal amount (collectively the "Indenture Securities"), may be
issued in one or more series, in each case as authorized from time to time by
Con Edison of New York.
Reference is made to the prospectus supplement relating to the debt
securities offered for the following terms:
(1) the title of the debt securities;
(2) the aggregate principal amount of the debt securities;
(3) the percentage of the principal amount representing the price
for which the debt securities shall be issued;
(4) the date or dates on which the principal of, and premium, if
any, on the debt securities shall be payable;
(5) the rate or rates (which may be fixed or variable) at which
the debt securities shall bear interest, if any, or the method
by which such rate or rates shall be determined;
(6) if the amount of payments of the principal of, premium, if
any, or interest, if any, on the debt securities may be
determined with reference to an index, formula or other
method, the manner in which such amounts shall be determined;
(7) the date or dates from which any such interest shall accrue,
or the method by which such date or dates shall be determined,
the dates on which any such interest shall be payable and any
record dates therefor;
(8) the place or places where the principal of, and premium, if
any, and interest, if any, on the debt securities shall
be payable;
(9) the period or periods, if any, within which, the price or
prices at which, and the terms and conditions upon which the
debt securities may be redeemed, in whole or in part, at the
option of Con Edison of New York;
(10) the obligation, if any, of Con Edison of New York to redeem,
purchase or repay the debt securities pursuant to any sinking
fund or analogous provision or at the option of a holder
thereof and the period or periods within which, the price or
prices at which, and the terms and conditions upon which the
debt securities shall be redeemed, purchased or repaid
pursuant to such obligation;
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(11) whether the debt securities are to be issued in whole or in
part in the form of one or more Global Securities and, if so,
the identity of the Depositary for such Global Security or
Global Securities;
(12) if other than $1,000 or an integral multiple thereof, the
denominations in which the debt securities
shall be issued;
(13) if other than the principal amount thereof, the portion of the
principal amount of the debt securities payable upon
declaration of acceleration of the maturity of the debt
securities;
(14) any deletions from or modifications of or additions to the
Events of Default set forth in Section 6.01
of the Indenture pertaining to the debt securities;
(15) the provisions, if any, relating to the cancellation and
satisfaction of the Indenture with respect to the debt
securities prior to the maturity thereof pursuant to Section
12.02 of the Indenture (see "Satisfaction and Discharge of
Indenture; Defeasance");
(16) the terms, if any, upon which Con Edison of New York may elect
not to pay interest on an interest
payment date;
(17) the provisions, if any, relating to the subordination of the
debt securities pursuant to Article 15 of
the Indenture (see "Subordination"); and
(18) any other terms of the debt securities not inconsistent with
the provisions of the Indenture and not
adversely affecting the rights of any other series of
Indenture Securities then outstanding. (Section
2.03)
Con Edison of New York may authorize the issuance and provide for the
terms of a series of Indenture Securities pursuant to a resolution of its Board
of Trustees or any duly authorized committee thereof or pursuant to a
supplemental indenture. The provisions of the Indenture described above permit
Con Edison of New York, in addition to issuing Indenture Securities with terms
different from those of Indenture Securities previously issued, to "reopen" a
previous issue of a series of Indenture Securities and to issue additional
Indenture Securities of such series.
The Indenture Securities will be issued only in registered form without
coupons and, unless otherwise provided with respect to a series of Indenture
Securities, in denominations of $1,000 and integral multiples thereof. (Section
2.02) Indenture Securities of a series may be issued in whole or in part in the
form of one or more Global Securities (see "Global Securities"). One or more
Global Securities will be issued in a denomination or aggregate denominations
equal to the aggregate principal amount of outstanding Indenture Securities of
the series to be represented by such Global Security or Global Securities.
(Section 2.01) No service charge will be made for any transfer or exchange of
Indenture Securities, but Con Edison of New York may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. (Section 2.05)
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One or more series of the Indenture Securities may be issued with the
same or various maturities at par or at a discount. Debt securities bearing no
interest or interest at a rate which at the time of issuance is below the market
rate ("Original Issue Discount Securities") will be sold at a discount (which
may be substantial) below their stated principal amount. Federal income tax
consequences and other special considerations applicable to any such Original
Issue Discount Securities will be described in the prospectus supplement
relating thereto.
Subordination: If the prospectus supplement relating to a particular
series of Indenture Securities so provides, such securities will be Subordinated
Securities and the payment of the principal of, premium, if any, and interest on
the Subordinated Securities will be subordinate and junior in right of payment
to the prior payment in full of all Senior Indebtedness to the extent set forth
in the next paragraph. (Section 15.01)
In the event (a) of any distribution of assets of Con Edison of New
York in bankruptcy, reorganization or receivership proceedings, or upon an
assignment for the benefit of creditors, or any other marshalling of assets and
liabilities of Con Edison of New York, except for a distribution in connection
with a consolidation, merger, sale, transfer or lease permitted under the
Indenture (see "Consolidation, Merger and Sale"), or (b) the principal of any
Senior Indebtedness shall have been declared due and payable by reason of an
event of default with respect thereto and such event of default shall not have
been rescinded, then the holders of Subordinated Securities will not be entitled
to receive or retain any payment, or distribution of assets of Con Edison of New
York, in respect of the principal of, premium, if any, and interest on the
Subordinated Securities until the holders of all Senior Indebtedness receive
payment of the full amount due in respect of the principal of, premium, if any,
and interest on the Senior Indebtedness or provision for such payment on the
Senior Indebtedness shall have been made. (Section 15.02)
Subject to the payment in full of all Senior Indebtedness, the holders
of the Subordinated Securities shall be subrogated to the rights of the holders
of the Senior Indebtedness to receive payments or distributions applicable to
the Senior Indebtedness until all amounts owing on the Subordinated Securities
shall be paid in full. (Section 15.03)
"Senior Indebtedness" means all indebtedness of Con Edison of New York
for the repayment of money borrowed (whether or not represented by bonds,
debentures, notes or other securities) other than the indebtedness evidenced by
the Subordinated Securities and any indebtedness subordinated to, or
subordinated on parity with, the Subordinated Securities. "Senior Indebtedness"
does not include customer deposits or other amounts securing obligations of
others to Con Edison of New York. (Section 15.01)
The Indenture does not limit the aggregate amount of Senior
Indebtedness that Con Edison of New York may issue. As of July 31, 2000, $4.8
billion of Senior Indebtedness was outstanding.
Redemption: If the prospectus supplement relating to a particular
series of Indenture Securities so provides, such securities will be subject to
redemption at the option of Con Edison of New York. Notice of any redemption of
Indenture Securities shall be given to the registered holders of such securities
not less than 30 days nor more than 60 days prior to the date fixed for
redemption. If less than all of a series of Indenture Securities are to be
redeemed, the Trustee shall select, in such manner as in its sole discretion it
shall deem appropriate and fair, the Indenture Securities of such series or
portions thereof to be redeemed.
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Global Securities: The Indenture Securities of a series may be issued
in whole or in part in the form of one or more Global Securities that will be
deposited with, or on behalf of, the Depositary identified in the prospectus
supplement relating thereto. Unless and until it is exchanged in whole or in
part for Indenture Securities in definitive form, a Global Security may not be
transferred except as a whole by the Depositary for such Global Security to a
nominee of such Depositary or by a nominee of such Depositary to such Depositary
or another nominee of such Depositary or by such Depositary or any such nominee
to a successor Depositary or a nominee of such successor Depositary. (Sections
2.01 and 2.05)
The specific terms of the depositary arrangement with respect to any
Indenture Securities of a series will be described in the prospectus supplement
relating thereto. Con Edison of New York anticipates that the following
provisions will apply to all depositary arrangements.
Upon the issuance of a Global Security, the Depositary for such Global
Security will credit, on its book entry registration and transfer system, the
respective principal amounts of the Indenture Securities represented by such
Global Security to the accounts of institutions that have accounts with such
Depositary ("participants"). The accounts to be credited shall be designated by
the underwriters through which such Indenture Securities were sold. Ownership of
beneficial interests in a Global Security will be limited to participants or
persons that may hold interests through participants. Ownership of beneficial
interests in such Global Security will be shown on, and the transfer of that
ownership will be effected only through, records maintained by the Depositary
for such Global Security or by participants or persons that hold through
participants. The laws of some states require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to transfer beneficial interests in
a Global Security.
So long as the Depositary for a Global Security, or its nominee, is the
owner of such Global Security, such Depositary or such nominee, as the case may
be, will be considered the sole owner or holder of the Indenture Securities
represented by such Global Security for all purposes under the Indenture. Except
as set forth below, owners of beneficial interests in a Global Security will not
be entitled to have Indenture Securities of the series represented by such
Global Security registered in their names, will not receive or be entitled to
receive physical delivery of Indenture Securities of such series in definitive
form and will not be considered the owners or holders thereof under the
Indenture.
Payments of principal of, premium, if any, and interest, if any, on
Indenture Securities registered in the name of or held by a Depositary or its
nominee will be made to the Depositary or its nominee, as the case may be, as
the registered owner of the Global Security representing such Indenture
Securities. None of Con Edison of New York, the Trustee or any paying agent for
such Indenture Securities 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 such Indenture Securities or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
Con Edison of New York expects that the Depositary for Indenture
Securities of a series, upon receipt of any payment of principal, premium, if
any, or interest, if any, in respect of a Global Security will immediately
credit participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of such Global Security
as shown on the records of such Depositary. Con Edison of New York also expects
that payments by participants to owners of beneficial interests in such Global
Security held through such
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participants will be governed by standing instructions and customary practices,
as is now the case with securities registered in "street name," and will be the
responsibility of such participants.
If a Depositary for Indenture Securities of a series is at any time
unwilling or unable to continue as Depositary and a successor depositary is not
appointed by Con Edison of New York within 90 days, Con Edison of New York will
issue Indenture Securities of such series in definitive form in exchange for the
Global Security or Global Securities representing the Indenture Securities of
such series. In addition, Con Edison of New York may at any time and in its sole
discretion determine not to have any Indenture Securities of a series
represented by one or more Global Securities and, in such event, will issue
Indenture Securities of such series in definitive form in exchange for the
Global Security or Global Securities representing such Indenture Securities.
Further, if Con Edison of New York so specifies with respect to the Indenture
Securities of a series, each person specified by the Depositary of the Global
Security representing Indenture Securities of such series may, on terms
acceptable to Con Edison of New York and the Depositary for such Global
Security, receive Indenture Securities of the series in definitive form. In any
such instance, each person so specified by the Depositary of the Global Security
will be entitled to physical delivery in definitive form of Indenture Securities
of the series represented by such Global Security equal in principal amount to
such person's beneficial interest in the Global Security.
Payments and Paying Agents: Payment of principal of and premium, if
any, on Indenture Securities will be made against surrender of such Indenture
Securities at The Bank of New York, 101 Barclay Street, Stock Transfer Division,
New York, New York 10286. Unless otherwise indicated in the prospectus
supplement, payment of any installment of interest on Indenture Securities will
be made to the person in whose name such Indenture Security is registered at the
close of business on the record date for such interest. Unless otherwise
indicated in the prospectus supplement, payments of such interest will be made
at The Bank of New York, or by a check mailed to each holder of an Indenture
Security at such holder's registered address.
All moneys paid by Con Edison of New York to a paying agent for the
payment of principal of, premium, if any, or interest, if any, on any Indenture
Security that remain unclaimed at the end of two years after such principal,
premium or interest shall have become due and payable will be repaid to Con
Edison of New York and the holder of such Indenture Security entitled to receive
such payment will thereafter look only to Con Edison of New York for payment
thereof. (Section 12.05) However, any such payment shall be subject to escheat
pursuant to state abandoned property laws.
Consolidation, Merger and Sale: The Indenture permits Con Edison of New
York, without the consent of the holders of any of the Indenture Securities, to
consolidate with or merge into any other corporation or sell, transfer or lease
its assets as an entirety or substantially as an entirety to any person,
provided that: (i) the Successor is a corporation organized under the laws of
the United States of America or any state thereof; (ii) the Successor assumes
Con Edison of New York's obligations under the Indenture and the Indenture
Securities; (iii) immediately after giving effect to the transaction, no Event
of Default (see "Default and Certain Rights on Default") and no event that,
after notice or lapse of time, or both, would become an Event of Default, shall
have occurred and be continuing; and (iv) certain other conditions are met.
(Section 11.02) The Indenture does not restrict the merger of another
corporation into Con Edison of New York.
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Modification of the Indenture: The Indenture contains provisions
permitting Con Edison of New York and the Trustee, without the consent of the
holders of the Indenture Securities, to establish, among other things, the form
and terms of any series of Indenture Securities issuable thereunder by one or
more supplemental indentures, and, with the consent of the holders of a majority
in aggregate principal amount of the Indenture Securities of any series at the
time outstanding, evidenced as in the Indenture provided, to execute
supplemental indentures adding any provisions to or changing in any manner or
eliminating any of the provisions of the Indenture or of any supplemental
indenture with respect to Indenture Securities of such series, or modifying in
any manner the rights of the holders of the Indenture Securities of such series;
provided, however, that no such supplemental indenture shall (i) extend the
fixed maturity, or the earlier optional date of maturity, if any, of any
Indenture Security of a particular series or reduce the principal amount thereof
or the premium thereon, if any, or reduce the rate or extend the time of payment
of interest thereon, or make the principal thereof or premium, if any, or
interest thereon payable in any coin or currency other than that provided in the
Indenture Security, without the consent of the holder of each Indenture Security
so affected, or (ii) reduce the principal amount of Indenture Securities of any
series, the holders of which are required to consent to any such supplemental
indenture, without the consent of the holders of all Indenture Securities of
such series outstanding thereunder. (Sections 10.01 and 10.02)
Default and Certain Rights on Default: The Indenture provides that the
Trustee or the holders of 25% or more in aggregate principal amount of Indenture
Securities of a series outstanding thereunder may declare the principal of all
Indenture Securities of such series to be due and payable immediately, if any
Event of Default with respect to such series of Indenture Securities shall occur
and be continuing. However, if all defaults with respect to Indenture Securities
of such series (other than non-payment of accelerated principal) are cured, the
holders of a majority in aggregate principal amount of the Indenture Securities
of such series outstanding thereunder may waive the default and rescind the
declaration and its consequences. Events of Default with respect to a series of
Indenture Securities include (unless specifically deleted in the supplemental
indenture or Board Resolution under which such series of Indenture Securities is
issued, or modified in any such supplemental indenture):
(i) failure to pay interest when due on any Indenture Security of
such series, continued for 30 days;
(ii) failure to pay principal or premium, if any, when due on any
Indenture Security of such series;
(iii) failure to perform any other covenant of Con Edison of New
York in the Indenture or the Indenture Securities of such
series (other than a covenant included in the Indenture or the
Indenture Securities solely for the benefit of series of
Indenture Securities other than such series), continued for 60
days after written notice from the Trustee or the holders of
25% or more in aggregate principal amount of the Indenture
Securities of such series outstanding thereunder;
(iv) certain events of bankruptcy, insolvency or reorganization; and
(v) any other Event of Default as may be specified for such
series. (Section 6.01)
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The Indenture provides that the holders of a majority in aggregate
principal amount of the Indenture Securities of any series outstanding
thereunder may, subject to certain exceptions, direct the time, method and place
of conducting any proceeding for any remedy available to, or exercising any
power or trust conferred upon, the Trustee with respect to Indenture Securities
of such series and may on behalf of all holders of Indenture Securities of such
series waive any past default and its consequences with respect to Indenture
Securities of such series, except a default in the payment of the principal of
or premium, if any, or interest on any of the Indenture Securities of such
series. (Section 6.06)
Holders of Indenture Securities of any series may not institute any
proceeding to enforce the Indenture unless the Trustee thereunder shall have
refused or neglected to act for 60 days after a request and offer of
satisfactory indemnity by the holders of 25% or more in aggregate principal
amount of the Indenture Securities of such series outstanding thereunder, but
the right of any holder of Indenture Securities of any series to enforce payment
of principal of or premium, if any, or interest on the holder's Indenture
Securities when due shall not be impaired. (Section 6.04)
The Trustee is required to give the holders of Indenture Securities of
any series notice of defaults with respect to such series (Events of Default
summarized above, exclusive of any grace period and irrespective of any
requirement that notice of default be given) known to it within 90 days after
the happening thereof, unless cured before the giving of such notice, but,
except for defaults in payments of principal of, premium, if any, or interest on
the Indenture Securities of such series, the Trustee may withhold notice if and
so long as it determines in good faith that the withholding of such notice is in
the interests of such holders. (Section 6.07)
Con Edison of New York is required to deliver to the Trustee each year
an Officers' Certificate stating whether such officers have obtained knowledge
of any default by Con Edison of New York in the performance of certain covenants
and, if so, specifying the nature thereof. (Section 4.06)
Concerning the Trustee: The Indenture provides that the Trustee shall,
prior to the occurrence of any Event of Default with respect to the Indenture
Securities of any series and after the curing or waiving of all Events of
Default with respect to such series which have occurred, perform only such
duties as are specifically set forth in the Indenture. During the existence of
any Event of Default with respect to the Indenture Securities of any series, the
Trustee shall exercise such of the rights and powers vested in it under the
Indenture with respect to such series and use the same degree of care and skill
in their exercise as a prudent man would exercise or use under the circumstances
in the conduct of his own affairs. (Section 7.01)
The Trustee may acquire and hold Indenture Securities and, subject to
certain conditions, otherwise deal with Con Edison of New York as if it were not
Trustee under the Indenture. (Section 7.04)
The Chase Manhattan Bank, which is the Trustee under the Indenture, is
a participating bank under Con Edison of New York's revolving credit agreements,
and is a depository for funds and performs other services for, and transacts
other banking business with, Con Edison of New York in the normal course of
business.
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Satisfaction and Discharge of Indenture; Defeasance: The Indenture may
be discharged upon payment of the principal of, premium, if any, and interest on
all the Indenture Securities and all other sums due under the Indenture. In
addition, the Indenture provides that if, at any time after the date of the
Indenture, Con Edison of New York, if so permitted with respect to Indenture
Securities of a particular series, shall deposit with the Trustee, in trust for
the benefit of the holders thereof, (i) funds sufficient to pay, or (ii) such
amount of obligations issued or guaranteed by the United States of America as
will, or will together with the income thereon without consideration of any
reinvestment thereof, be sufficient to pay all sums due for principal of,
premium, if any, and interest on the Indenture Securities of such series, as
they shall become due from time to time, and certain other conditions are met,
the Trustee shall cancel and satisfy the Indenture with respect to such series
to the extent provided therein. (Sections 12.01 and 12.02) The prospectus
supplement describing the Indenture Securities of such series will more fully
describe the provisions, if any, relating to such cancellation and satisfaction
of the Indenture with respect to such series.
Reports Furnished Securityholders: Con Edison of New York will furnish the
holders of Indenture Securities copies of all annual financial reports
distributed to its stockholders generally as soon as practicable after the
mailing of such material to the stockholders. (Section 4.07)
PLAN OF DISTRIBUTION
Con Edison of New York will offer the debt securities through one or
more underwriters. The names of the managing underwriter or underwriters and any
other underwriters, and the terms of the transaction, including compensation of
the underwriters and dealers, if any, will be set forth in the prospectus
supplement relating to the offering of the debt securities. Only underwriters
named in a prospectus supplement will be deemed to be underwriters in connection
with the debt securities described therein. Firms not so named will have no
direct or indirect participation in the underwriting of such debt securities,
although such a firm may participate in the distribution of such debt securities
under circumstances entitling it to a dealer's commission. It is anticipated
that any underwriting agreement pertaining to any debt securities will (1)
entitle the underwriters to indemnification by Con Edison of New York against
certain civil liabilities under the Securities Act of 1933, as amended, or to
contribution for payments the underwriters may be required to make in respect
thereof, (2) provide that the obligations of the underwriters will be subject to
certain conditions precedent, and (3) provide that the underwriters generally
will be obligated to purchase all such debt securities if any are purchased. The
underwriters may engage in transactions with, or perform services for, Con
Edison of New York in the ordinary course of business.
In connection with an offering made hereby, the underwriters may
purchase and sell the debt securities in the open market. These transactions may
include over-allotment and stabilizing transactions and purchases to cover short
positions created by the underwriters in connection with an offering.
Stabilizing transactions consist of certain bids or purchases for the purpose of
preventing or delaying a decline in the market price of the debt securities, and
short positions created by the underwriters involve the sale by the underwriters
of a greater aggregate principal amount of debt securities than they are
required to purchase from Con Edison of New York. The underwriters also may
impose a penalty bid, whereby selling concessions allowed to broker-dealers in
respect of the debt securities sold in the offering may be reclaimed by the
underwriters if such debt securities are repurchased by the underwriters in
stabilizing or covering transactions. These activities may stabilize, maintain
or otherwise affect the market price of the debt securities, which may be higher
than the price that might otherwise prevail in the open market; and these
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activities, if commenced, may be discontinued at any time. These transactions
may be affected in the over-the-counter market or otherwise.
The anticipated date of delivery of the debt securities will be as set
forth in the prospectus supplement relating to the offering of the debt
securities.
LEGAL MATTERS
The validity of the debt securities and certain other related legal
matters will be passed upon for Con Edison of New York by Peter A. Irwin, Esq.,
Associate General Counsel. Certain legal matters in connection with the debt
securities will be passed upon for the Underwriters by Dewey Ballantine LLP,
1301 Avenue of the Americas, New York, New York 10019-6092.
EXPERTS
The consolidated financial statements incorporated in this prospectus
by reference to Con Edison of New York's Annual Report on Form 10-K for the year
ended December 31, 1999, have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.