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U.S. Securities and Exchange Commission

Holding Company Act Release 27616


(Release No. 35-27616; 70-10082)

Mississippi Power Company

Order Authorizing the Issuance and Sale of Notes and Commercial Paper and Reserving Jurisdiction

December 16, 2002

Mississippi Power Company ("Mississippi"), Gulfport, Mississippi, a public-utility subsidiary company of The Southern Company ("Southern"), a registered holding company, has filed with the Securities and Exchange Commission ("Commission") a declaration ("Declaration") under sections 6(a) and 7 of the Public Utility Holding Company Act of 1935, as amended ("Act") and rule 54 under the Act. The Commission issued a notice of the filing of the Declaration on November 15, 2002 (HCAR No. 27602).

Mississippi proposes to issue and sell, from time-to-time, through March 31, 2006 (the "Authorization Period") up to $500 million aggregate principal amount at any one time outstanding of the following: (1) short-term and/or term-loan notes to lenders; (2) commercial paper to or through dealers; and/or (3) non-negotiable promissory notes issued to public entities for their revenue anticipation notes. Mississippi requests that the Commission reserve jurisdiction over short-term borrowings in connection with the issuance of non-negotiable promissory notes to public entities for their revenue anticipation notes, pending completion of the record.

Mississippi proposes to borrow from certain banks or other lending institutions. The institutional borrowings will be evidenced by notes to be dated as of the date of such borrowings and to mature in not more than seven years after the date of issue, or by "grid" notes evidencing all outstanding borrowings from each lender to be dated as of the date of the initial borrowing and to mature not more than seven years after the date of issue. Mississippi proposes that any note evidencing such borrowings may not be prepayable, or that it may be prepaid with payment of a premium that is not in excess of the stated interest rate on the borrowing to be prepaid.

Borrowings will be at the lender's prevailing rate offered to corporate borrowers of similar quality. Such rates will not exceed the lenders prime rate or (i) LIBOR plus up to 3% or (ii) a rate not to exceed the prime rate to be established by bids obtained from the lenders prior to a proposed borrowing. Compensation for the credit facilities may be provided by fees of up to 1% per annum of the amount of the facility. Compensating balances may be used in lieu of fees to compensate certain of the lenders.

Mississippi also proposes to issue and sell commercial paper to or through dealers from time-to-time through the Authorization Period. Such commercial paper would be in the form of promissory notes with varying maturities not to exceed 390 days. Actual maturities would be determined by market conditions, the effective interest costs of issuing such commercial paper, and Mississippi's anticipated cash flow, including the proceeds of other borrowings, at the time of issuance. The commercial paper notes will be issued in denominations of not less than $50,000 and will be sold by Mississippi directly to or though the dealer. The discount rate (or the interest rate in the case of interest-bearing notes), including any commissions, will not be in excess of the discount rate per annum (or equivalent interest rate) prevailing at the date of issuance for commercial paper of comparable quality of the particular maturity sold by issuers to commercial paper dealers.

The proceeds from the proposed borrowings will be used by Mississippi for working capital purposes, including the financing in part of its construction program. None of the proceeds from any borrowing or from the sale of any of the notes will be used by Mississippi, directly or indirectly, for the acquisition of any interest in an "exempt wholesale generator" or a "foreign utility company," as those terms are defined in sections 32 and 33 of the Act, respectively. Mississippi further states that, except as may be otherwise authorized by the Commission, any short-term or long-term borrowings of Mississippi outstanding after March 31, 2006 and March 31, 2013, respectively, will be retired from internal cash resources, the proceeds of equity financings or the proceeds of short-term or long-term debt.

Mississippi represents that it will maintain common equity as a percentage of its consolidated capitalization at 30% or above during the Authorization Period. Mississippi also represents that it will not issue any rated securities unless the securities are at the investment grade level as established by at least one nationally recognized statistical rating organization. Mississippi requests that the Commission reserve jurisdiction over the issuance by Mississippi of any such securities that are rated below investment grade.

Mississippi states, for purposes of rule 54, that the conditions specified in rule 53(a) are satisfied and that none of the adverse conditions specified in rule 53(b) exist. As a result, the Commission will not consider the effect on the Southern system of the capitalization or earnings of any Southern subsidiary that is an EWG or FUCO, in determining whether to approve the proposed transactions.

Fees and expenses in the estimated amount of $10,000 are expected to be incurred in connection with these transactions. Mississippi states that no other state or federal commission, other than this Commission, has jurisdiction over the proposed transactions. Due notice of the filing of the Declaration has been given in the manner prescribed in rule 23 under the Act, and no hearing has been requested or ordered by the Commission. On the basis of the facts in the record, it is hereby found, except for those matters over which jurisdiction has been reserved, that the applicable standards of the Act and rules are satisfied, and that no adverse findings are necessary.

IT IS ORDERED, under the applicable provisions of the Act and rules under the Act, that, except as to matters on which jurisdiction has been reserved, the Declaration, as amended, be and hereby is, permitted to become effective, subject to the terms and conditions prescribed in rule 24 under the Act.

IT IS FURTHER ORDERED, that jurisdiction is reserved over short-term borrowings in connection with the issuance of non-negotiable promissory notes to public entities for their revenue anticipation notes, pending completion of the record.

For the Commission, by the Division of Investment Management, pursuant to delegated authority.


Margaret H. McFarland
Deputy Secretary



Modified: 07/23/2003