-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, E+lN7dKXaJAG28VlJ0e7cidtLvAdhHtZFk5fDIsbNYQIIwKXA9J3HJprK9rs7wkr chCBjCHYvI12RxqkowZMqg== 0000912057-99-004598.txt : 19991111 0000912057-99-004598.hdr.sgml : 19991111 ACCESSION NUMBER: 0000912057-99-004598 CONFORMED SUBMISSION TYPE: 424B5 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19991110 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WPS RESOURCES CORP CENTRAL INDEX KEY: 0000916863 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 391775292 STATE OF INCORPORATION: WI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B5 SEC ACT: SEC FILE NUMBER: 333-88525 FILM NUMBER: 99746295 BUSINESS ADDRESS: STREET 1: 700 N ADAMS ST STREET 2: PO BOX 19001 CITY: GREEN BAY STATE: WI ZIP: 54307-9001 BUSINESS PHONE: 9204331466 MAIL ADDRESS: STREET 1: 700 NORTH ADAMS STREET STREET 2: PO BOX 19001 CITY: GREEN BAY STATE: WI ZIP: 54307-9001 424B5 1 424B5 PROSPECTUS SUPPLEMENT (TO PROSPECTUS DATED OCTOBER 22, 1999) Filed Pursuant to Rule 424(b)(5) Registration No. 333-88525 $150,000,000 WPS RESOURCES CORPORATION [LOGO] 7.00% SENIOR NOTES DUE NOVEMBER 1, 2009
------------------- We will pay interest on the Senior Notes Due November 1, 2009, at the rate of 7.00% per year on May 1 and November 1 of each year, beginning on May 1, 2000. We will sell the notes only in denominations of $1,000 and integral multiples of that amount. We may redeem the notes in whole or in part at any time at a redemption price equal to the greater of (1) 100% of principal or (2) the sum of the remaining scheduled payments of principal and interest on the notes discounted to the redemption date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the "treasury yield" plus .20%, plus in each case accrued interest to the redemption date, as set forth in this prospectus supplement, without premium. The notes constitute a series of our senior debt securities and are unsecured and unsubordinated. The notes will be effectively subordinated to creditors and preferred shareholders of our subsidiaries with respect to the assets and earnings of our subsidiaries. See "Description of the Debt Securities" in the accompanying prospectus. ------------------- NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY OF THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. -------------------
PER NOTE TOTAL -------- ----- Public Offering Price(1)............................... 99.608% $149,412,000 Underwriting Commission(2)............................. .650% $ 975,000 Proceeds to Company(1)(3).............................. 98.958% $148,437,000
- ------- (1) The initial public offering price does not include accrued interest. Interest, if any, on the notes will accrue from November 15, 1999, and must be paid by the purchaser if notes are delivered after November 15, 1999. (2) We have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act of 1933. (3) Before deducting expenses payable by us estimated at $280,000. ------------------- The underwriters are severally offering the notes, subject to the prior receipt and acceptance of the notes by the underwriters and their right to reject any order in whole or in part. Delivery of the notes will be made in book-entry form only through the facilities of The Depository Trust Company on or about November 15, 1999. ------------------- A.G. EDWARDS & SONS, INC. ROBERT W. BAIRD & CO. INCORPORATED LEGG MASON WOOD WALKER INCORPORATED ------------ THE DATE OF THIS PROSPECTUS SUPPLEMENT IS NOVEMBER 9, 1999. THE COMPANY We operate as a holding company with both regulated and non-regulated business units. We are organized under the laws of the State of Wisconsin. Our principal wholly-owned subsidiary is Wisconsin Public Service Corporation, a regulated electric and gas utility operating in northeastern Wisconsin and the Upper Peninsula of Michigan. Our other major subsidiaries are Upper Peninsula Power Company, a regulated electric company operating in the Upper Peninsula of Michigan, and WPS Resources Capital Corporation, an intermediate holding company for our unregulated subsidiaries. Our unregulated subsidiaries include WPS Energy Services, Inc., a diversified energy company which sells electric energy, natural gas and alternate fuel products, risk management consulting services and project management, and WPS Power Development, Inc., which develops, acquires and owns electric projects and provides services to the electric power generation industry. Approximately 108% of our 1998 net income was derived from electric utility operations. Substantially all of our net income for the first nine months of 1999 was derived from Wisconsin Public Service Corporation and Upper Peninsula Power Company. RECENT EVENTS On November 1, 1999 our subsidiary WPS Power Development, Inc., through its subsidiary, Sunbury Holdings, LLC, completed the purchase of the Sunbury Generation Station, a four-unit coal fired power plant located in Shamokin Dam, Pennsylvania, from PP&L Resources, Inc. The assets acquired in the $106 million transaction include the coal-fired units with a demonstrated winter capacity of 389 megawatts, two 42-megawatt oil-fired combustion turbines, coal inventory and the Lady Jane Collieries, a coal transshipment facility. Under the terms of a three-year agreement, Sunbury Holdings, LLC, will sell a portion of the electricity from the Sunbury plant to PP&L, Inc. The remainder will be sold through a five-year contract with a wholesale marketer and on the wholesale energy market through WPS Energy Services, Inc., our energy marketing subsidiary. DESCRIPTION OF THE NOTES Notes Offered................................ $150 million principal amount of 7.00% Senior Notes Due November 1, 2009. Maturity..................................... November 1, 2009. Interest Rate................................ The notes will bear interest at the rate of 7.00% per year. Interest Payment Dates....................... May 1 and November 1 (commencing May 1, 2000). Ranking...................................... The notes will be unsecured general obligations and will rank on a parity with our other senior unsecured indebtedness. Claims of creditors and any preferred shareholders of each of our subsidiaries generally will have priority with respect to the assets and earnings of the subsidiaries over the claims of our creditors. The notes therefore will be effectively subordinated to creditors, including holders of secured indebtedness, and preferred shareholders of our subsidiaries. Since we are a holding company, our ability to pay debt service on the notes is largely dependent upon the ability of our subsidiaries to pay dividends and
S-2 make debt service payments to us. See "DESCRIPTION OF COMMON STOCK--Restrictions on Dividends Payable by Wisconsin Public Service Corporation" in the attached prospectus. Certain Covenants............................ The notes will be issued under the senior indenture which contains covenants that, among other things, restrict our ability to transfer the voting common stock of our subsidiary, Wisconsin Public Service Corporation, or to encumber the common stock of any of our subsidiaries. Use of Proceeds.............................. The proceeds from the notes will be applied to retire short-term indebtedness incurred by us to fund equity commitments to our subsidiaries including Wisconsin Public Service Corporation and finance acquisitions by our non-regulated subsidiaries. Form and Denomination........................ We will sell the notes in denominations of $1,000 and integral multiples of that amount, and the notes will be initially represented by a global note registered in the name of a nominee of The Depository Trust Company. Optional Redemption.......................... We may redeem the notes at our option, in whole at any time or in part from time to time, at a redemption price equal to the greater of (1) 100% of principal or (2) the sum of the present values of the remaining scheduled payments of principal and interest on the notes which we redeem, discounted to the date of redemption on a semiannual basis, assuming a 360-day year consisting of twelve 30-day months, at the "treasury yield," as defined below, plus two-tenths of one percent (.20%), plus in each case accrued interest to the date of redemption. The notes have no sinking fund provisions. "Treasury yield" means, with respect to any redemption date, the rate per year equal to the semiannual equivalent yield to maturity of the "comparable treasury issue," as defined below, assuming a price for the comparable treasury issue, expressed as a percentage of its principal amount equal to the "comparable treasury price," as defined below, for the redemption date. "Comparable treasury issue" means the United States Treasury security selected by an "independent investment banker," as defined below, as having a maturity comparable to the remaining term of the notes that the independent investment banker would utilize, at the time of selection and in accordance with customary financial practice, in
S-3 pricing new issues of corporate debt securities of comparable maturity to the remaining term of the notes. "Independent investment banker" means one of the "reference treasury dealers," as defined below, appointed by the senior indenture trustee after consultation with us. "Comparable treasury price" means, with respect to any redemption date, (1) the average of the bid and asked prices for the comparable treasury issue, expressed in each case as a percentage of its principal amount, on the third business day preceding the redemption date, as set forth in the daily statistical release, or any successor release, published by the Federal Reserve Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S. Government Securities" or (2) if that release or any successor release is not published or does not contain those prices on that business day, (A) the average of the "reference treasury dealer quotations," as defined below, for the redemption date, after excluding the highest and lowest reference treasury dealer quotations for the redemption date, or (B) if the senior indenture trustee obtains fewer than four reference treasury dealer quotations, the average of all the quotations which the senior indenture trustee obtains. "Reference treasury dealer quotations" means, with respect to each reference treasury dealer and any redemption date, the average, as determined by us, of the bid and asked prices for the comparable treasury issue, expressed in each case as a percentage of its principal amount, quoted in writing to us by the reference treasury dealer at 5:00 p.m. on the third business day preceding the redemption date. "Reference treasury dealer" means any primary U.S. Government securities dealer in New York City selected by us. If we determine to redeem less than all of the notes, the senior indenture trustee shall select, in such manner as it shall deem fair and appropriate, the particular notes or portions of notes to be redeemed. The senior indenture trustee shall give notice of redemption by mail not less than 30 nor more than 45 days before the date fixed for redemption to the holders of notes to be redeemed (which, as long as the notes are in the book-entry only system, will be The Depository Trust Company ("DTC") or its nominee or a successor depositary. On and after the date fixed for redemption, unless
S-4 we shall default in the payment of the redemption price and interest accrued on the notes to the date fixed for redemption), interest on the notes or the portions of the notes called for redemption shall cease to accrue. The senior indenture trustee will not mail any notice of redemption of the notes during the continuance of any event of default under the senior indenture, except that (1) when notice of redemption of any notes has been mailed, we shall redeem such notes but only if we have deposited before the occurrence of the event of default funds sufficient for that purpose with the senior indenture trustee or a paying agent for that purpose, and (2) the senior indenture trustee may mail notices of redemption of all outstanding notes during the continuance of an event of default under the Indenture. Unless we have deposited with the senior indenture trustee, at the time of mailing of any notice of redemption, an amount in cash sufficient to redeem all of the notes called for redemption, such notice will state that it is subject to the receipt of the redemption moneys by the senior indenture trustee before the redemption date, and such notice shall be of no effect unless such moneys are so received before such date.
S-5 SUMMARY FINANCIAL INFORMATION (DOLLARS IN THOUSANDS)
NINE MONTHS ENDED YEAR ENDED DECEMBER 31, SEPTEMBER 30, ----------------------- ----------------- 1996 1997 1998 1998 1999 ---- ---- ---- ---- ---- (UNAUDITED) CONSOLIDATED STATEMENT OF INCOME DATA Operating Revenues..................... $916,449 $935,837 $1,063,736 $771,208 $802,391 Operating Income....................... 112,652 108,161 100,044 82,740 89,085 Net Income............................. 52,885 55,809 46,631 40,216 46,612
AS AS ADJUSTED AMOUNT ADJUSTED(A) PERCENTAGE ------ ----------- ----------- CONSOLIDATED CAPITALIZATION AT SEPTEMBER 30, 1999 Long-term Debt(b)....................................... $ 340,784 $ 490,784 40.9% Preferred Stock of Subsidiary (without mandatory redemption provisions)................................ 51,195 51,195 4.3% Mandatorily Redeemable Trust Preferred Securities of Subsidiary Trust...................................... 50,000 50,000 4.2% Capital Lease Obligations of Subsidiary................. 73,765 73,765 6.1% Common Stock Equity(b).................................. 533,931 533,931 44.5% ---------- ---------- ---------- Total Capitalization.................................. $1,049,675 $1,199,765 100.0% ========== ========== ==========
- ------- (a) Adjusted to reflect the issuance of $150,000,000 of the notes. (b) Long-term debt includes $323,175,000 principal amount of first mortgage bonds of our utility subsidiaries (less current portion and unamortized discount and premium) and $19,154,000 of other debt of our subsidiaries. Long-term debt is increased by $4,089,000 and common stock equity is reduced by the same amount to reflect Wisconsin Public Service Corporation's guaranty of bank loans to the Wisconsin Public Service Corporation ESOP (Employee Stock Ownership Plan). RATIOS OF EARNINGS TO FIXED CHARGES (UNAUDITED)(A)
NINE MONTHS ENDED YEAR ENDED DECEMBER 31, SEPTEMBER 30, ----------------------- ------------- 1994 1995 1996 1997 1998 1999 ---- ---- ---- ---- ---- ---- Ratio of Earnings to Fixed Charges................ 3.42 3.49 3.11 3.19 2.80 3.10
- ------- (a) We have computed the ratio of earnings to fixed charges by dividing earnings, which include income before taxes and fixed charges, by fixed charges. This calculation excludes the effects of accounting changes which we have made over time. "Fixed charges" consist of (1) interest on debt and a portion of rentals determined to be representative of interest and (2) the preferred stock dividend requirements of our subsidiaries. The preferred stock dividend requirements of our subsidiaries were assumed to be equal to the pre-tax earnings that would be required to cover such dividend requirements based on our effective income tax rates for the respective periods. S-6 BOOK-ENTRY ISSUANCE--THE DEPOSITORY TRUST COMPANY DTC will act as securities depositary for the notes. The notes will initially be issued only as fully-registered securities registered in the name of Cede & Co. (DTC's partnership nominee). One or more fully-registered global certificates representing the total aggregate principal amount of the notes will be issued and will be deposited with the senior indenture trustee as custodian for DTC. The laws of some jurisdictions require that certain purchasers of securities take physical delivery of securities in definitive form. Such laws may impair the ability to transfer beneficial interests in the notes as represented by a global certificate. For additional information relating to DTC and the book-entry issuance system, see "Description of the Debt Securities --Book-Entry Securities" in the attached prospectus. DTC has advised us that its management is aware that some computer applications, systems and the like for processing data that are dependent upon calendar dates, including dates before, on, and after January 1, 2000, may encounter "Year 2000 problems." DTC has informed the industry, including direct and indirect participants and other members of the financial community, that it has developed and is implementing a program so that its systems, as the same relate to the timely payment of distributions, including principal and interest payments, to security holders, book-entry deliveries, and settlement of trades within DTC, continue to function appropriately. This program includes a technical assessment and a remediation plan, each of which is complete. Additionally, DTC's plan includes a testing phase, which is expected to be completed within appropriate time frames. However, DTC's ability to perform its services properly also is dependent upon other parties, including, but not limited to, issuers and their agents, as well as third-party vendors from whom it licenses software and hardware, and third-party vendors on whom it relies for information or the provision of services, including telecommunication and electrical utility service providers, among others. DTC has informed the industry that it is contacting and will continue to contact third-party vendors from whom it acquires services (1) to impress upon them the importance of these services being Year 2000 compliant, and (2) to determine the extent of their efforts for Year 2000 remediation and, as appropriate, testing of their services. In addition, DTC is in the process of developing contingency plans as it deems appropriate. UNDERWRITING Subject to the terms and conditions set forth in the underwriting agreement, we have agreed to sell to each of the underwriters named below, and each of the underwriters has severally agreed to purchase, the principal amounts of the % Senior Notes Due November 1, 20 set forth opposite their names below:
PRINCIPAL AMOUNT OF UNDERWRITER SENIOR NOTES ----------- ------------ A.G. Edwards & Sons, Inc.................................... $ 75,000,000 Robert W. Baird & Co. Incorporated.......................... 37,500,000 Legg Mason Wood Walker, Incorporated........................ 37,500,000 ------------ Total..................................................... $150,000,000 ============
Under the terms and conditions of the underwriting agreement, the underwriters agree to take and pay for all the notes, if any are taken. The underwriters propose to offer the notes in part directly to purchasers at the initial public offering price set forth on the cover page of this prospectus supplement and in part to certain securities dealers at that price less a concession of .40% of the principal amount of the notes. The underwriters may allow, and such dealers may reallow, a concession not to exceed .30% of the principal amount of the notes to certain S-7 brokers and dealers. After we release the notes for sale to the public, the underwriters may from time to time vary the offering price and other selling terms. The notes constitute a new issue of securities with no established trading market. The underwriters have advised us that they intend to make a market in the notes but the underwriters have not obligated themselves to do so and may discontinue market making at any time without notice. We can give you no assurance as to the liquidity of the trading market for the notes. The underwriters are permitted to engage in certain transactions that maintain or affect the price of the notes. Such transactions may include purchases to cover short positions created by the underwriters in connection with the offering. If the underwriters create a short position in the notes in connection with the offering by selling notes in an aggregate principal amount that exceeds the amount set forth on the cover page of this prospectus supplement, they may reduce that short position by purchasing notes in the open market. In general, purchases of a security 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 underwriters make 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 notes. In addition, neither we nor the underwriters make any representation that the underwriters will engage in such transactions or that, if they engage in such transactions, they will not discontinue such transactions without notice. Certain of the underwriters and their affiliates have engaged and in the future may engage in investment banking transactions with, and the provision of services to, us and our subsidiaries in the ordinary course of business. We have agreed to indemnify the several underwriters against certain liabilities, including liabilities under the Securities Act of 1933. LEGAL MATTERS Our counsel, Foley & Lardner, Milwaukee, Wisconsin will issue its opinion as to the validity of the notes being issued. Schiff Hardin & Waite, Chicago, Illinois will issue an opinion for the underwriters as to certain matters relating to the offering of the notes. S-8 - --------------------------------------------- --------------------------------------------- - --------------------------------------------- --------------------------------------------- YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND THE ATTACHED PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH DIFFERENT INFORMATION, AND IF YOU RECEIVE ANY UNAUTHORIZED INFORMATION YOU SHOULD NOT RELY ON IT. WE ARE NOT MAKING AN OFFER OF THESE SECURITIES IN ANY PLACE WHERE THE OFFER IS NOT PERMITTED. YOU SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE ATTACHED PROSPECTUS IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT OF THE APPLICABLE DOCUMENT. IF INFORMATION IN THIS PROSPECTUS SUPPLEMENT IS INCONSISTENT WITH THE PROSPECTUS, THIS PROSPECTUS SUPPLEMENT WILL APPLY AND WILL SUPERSEDE THAT INFORMATION IN THE PROSPECTUS. ------------------- TABLE OF CONTENTS
PAGE -------- PROSPECTUS SUPPLEMENT The Company............................. S-2 Recent Events........................... S-2 Description Of The Notes................ S-2 Summary Financial Information........... S-6 Book-Entry Issuance--The Depository Trust Company......................... S-7 Underwriting............................ S-7 Legal Matters........................... S-8 PROSPECTUS Summary................................. 1 Where You Can Find More Information..... 3 The Company............................. 4 Use Of Proceeds......................... 4 Description Of The Debt Securities...... 5 Description Of Common Stock............. 13 Plan of Distribution.................... 16 Legal Opinions.......................... 17 Experts................................. 17
$150,000,000 WPS RESOURCES CORPORATION 7.00% SENIOR NOTES DUE NOVEMBER 1, 2009 [LOGO] A.G. EDWARDS & SONS, INC. ROBERT W. BAIRD & CO. INCORPORATED LEGG MASON WOOD WALKER INCORPORATED - --------------------------------------------- --------------------------------------------- - --------------------------------------------- --------------------------------------------- -----END PRIVACY-ENHANCED MESSAGE-----