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U.S. Securities and Exchange Commission

SECURITIES AND EXCHANGE COMMISSION

(Release No. 35-27786; 70-10158)

Entergy Gulf States, Inc.

Order Authorizing Financing Transactions; Reservation of Jurisdiction

December 29, 2004

Entergy Gulf States, Inc. ("EGSI"), based in Beaumont, Texas, a wholly-owned electric utility subsidiary of the Entergy Corporation, a registered holding company under the Public Utility Holding Act of 1935, as amended, ("Act"), has filed with the Securities and Exchange Commission ("Commission") an application-declaration, as amended ("Application") under sections 6(a), 7, 9(a)(1), 10, 12(b) and 12(c) of the Act and rules 44, 45, 46, 53 and 54 under the Act. The Commission issued a notice of the filing of the Application on November 21, 2003 (HCAR No. 27767).

Introduction

EGSI requests the authorization of the Commission to engage in ongoing financing activities and to create specified types of new subsidiaries as part of those activities. By order dated December 26, 2000 (HCAR No. 27318), the Commission authorized EGSI to engage in a program of external financing and related transactions through December 31, 2003 (the "Current Order"). Specifically, the Commission authorized EGSI to issue and sell securities having an aggregate value not to exceed $2.2 billion of the following types: (i) first mortgage bonds, including first mortgage bonds of the medium term note series, (ii) debentures, (iii) preferred stock, preference stock and/or, through one or more special purpose subsidiaries, preferred securities, and (iv) tax-exempt bonds, including the possible issuance and pledge of first mortgage bonds, including first mortgage bonds of the medium term note series, as collateral security for those tax exempt bonds (the aggregate principal amount of which collateral securities was not included in the $2.2 billion authorization limit).

Summary of Requested Authorization

EGSI now requests authorization of a program of external financing and other related proposals for the period through March 31, 2007 ("Authorization Period") as follows:

  1. EGSI requests authority to issue and sell from time to time first mortgage bonds ("First Mortgage Bonds"), including first mortgage bonds of the medium term note series ("MTNs"), preferred stock ("Preferred Stock"), preference stock ("Preference Stock") unsecured long-term indebtedness ("Long-term Debt") and, directly or indirectly through one or more financing subsidiaries (as described in below), other forms of preferred or equity-linked securities ("Equity Interests"), in a combined aggregate amount of up to $2.0 billion;
     
  2. in connection with the issuance of Equity Interests, EGSI requests authority to issue Notes (as defined below) to the extent of the related issuance of Equity Interests and Equity Contribution (as defined below);
     
  3. EGSI intends to enter into arrangements for the issuance and sale from time to time of tax-exempt bonds ("Tax-exempt Bonds"), in an aggregate principal amount of up to $500 million, for the financing or refinancing of certain facilities eligible to be financed with tax exempt debt, such as sewage and solid waste disposal facilities. In connection with the issuance and sale of those Tax-Exempt Bonds, EGSI requests authority to issue and pledge collateral securities (First Mortgage Bonds or MTNs issued as collateral security for those Tax-Exempt Bonds) ("Collateral Securities") in an aggregate principal amount of up to $560 million (which $560 million is not included in the $2.0 billion authorization limit referenced in (i) above); and
     
  4. EGSI requests authority (a) to acquire the equity securities of one or more Financing Subsidiaries (as defined below), Special Purpose Subsidiaries (as defined below) and Partner Subs (as defined below) organized solely to facilitate financing as discussed below; (ii) to guarantee the securities issued by those Financing Subsidiaries and Special Purpose Subsidiaries, to the extent not exempt under rules 45(b) and 52, and (c) to have the Financing Subsidiaries and Special Purpose Subsidiaries pay EGSI, either directly or indirectly, dividends out of capital.
     

Proposed Financing Program

EGSI requests authority to issue and sell from time to time during the Authorization Period First Mortgage Bonds, MTNs, Long-term Debt, Preferred Stock, Preference Stock, and Equity Interests in an aggregate amount up to a combined aggregate principal amount of $2.0 billion. EGSI aso intends to enter into arrangements for the issuance and sale on its behalf of up to an aggregate principal amount of $500 million of Tax-Exempt Bonds (including the possible issuance and pledge of up to an aggregate principal amount of $560 million of Collateral Securities, which $560 million is not included in the $2.0 billion authorization limit).

Entergy contemplates that the First Mortgage Bonds, MTNs, Long-term Debt, Tax-Exempt Bonds (including Collateral Securities, if any), Preferred Stock, Preference Stock and Equity Interests would be issued and sold directly to one or more purchasers in negotiated transactions or to one or more investment banking or underwriting firms or other entities who would resell those securities without registration under the Securities Act of 1933 (the "Securities Act") in reliance upon one or more applicable exemptions from registration under that Act, or to the public in transactions registered under the Securities Act either (i) through underwriters selected by negotiation or competitive bidding or (ii) through selling agents, acting either as agent or as principal, for resale to the public either directly or through dealers.

First Mortgage Bonds and Medium Term Notes

EGSI proposes to issue First Mortgage Bonds under its Indenture of Mortgage, dated September 1, 1926 ("Indenture"), to Chase National Bank of the City of New York, as Trustee, to which JPMorgan Chase Bank is successor Trustee ("Trustee"), as amended and supplemented by sixty-six Supplemental Indentures and as may be supplemented by additional Supplemental Indentures (the Indenture as so amended and supplemented and as to be so amended and supplemented is referred to as the "Mortgage"), each relating to one or more new series of First Mortgage Bonds. The First Mortgage Bonds and MTNs1 would be issued on the basis of unfunded net property additions and previously retired bonds, as permitted and authorized by the Mortgage. First Mortgage Bonds and MTNs (i) may be subject to optional and/or mandatory redemption, in whole or in part, at par or at premiums above their principal amount, (ii) may be entitled to mandatory or optional sinking fund provisions, (iii) may be issued at fixed or floating rates of interest, (iv) may provide for reset of the coupon under a remarketing arrangement, (v) may be called from existing investors by a third party, (vi) may be backed by a bond insurance policy and (vii) would have a maturity ranging from one year to fifty years. The maturity dates, interest rates, redemption and sinking fund provisions and conversion features, if any, with respect to First Mortgage Bonds of a particular series or MTNs of a particular sub-series, as well as any associated placement, underwriting or selling agent fees, commissions and discounts, if any, would be established by negotiation or competitive bidding. The interest rate on First Mortgage Bonds or MTNs would not exceed at the time of issuance the greater of (i) 500 basis points over U.S. Treasury securities having a remaining term comparable to the term of that series, if issued at a fixed rate, or 500 basis points over the London Interbank Offered Rate ("LIBOR") for the relevant interest rate period, if issued at a floating rate, and (ii) a spread over U.S. Treasury securities or LIBOR, as the case may be, that is consistent with similar securities of comparable credit quality and maturities issued by other companies.

In each Supplemental Indenture relating to a series of First Mortgage Bonds or sub-series of MTNs, EGSI may create a dividend covenant relating to its payment of common stock dividends.

Long-Term Debt

EGSI, directly or through a Financing Subsidiary, also proposes to issue and sell from time to time long-term indebtedness. Long-term Debt of a particular series (i) would be unsecured, (ii) may be convertible into any other securities of EGSI (except common stock), (iii) would have a maturity ranging from one year to 50 years, (iv) may be subject to optional and/or mandatory redemption, in whole or in part, at par or at premiums above their principal amount, (v) may be entitled to mandatory or optional sinking fund provisions, (vi) may be issued at fixed or floating rates of interest, (vii) may provide for reset of the coupon under a remarketing arrangement, and (viii) may be called from existing investors by a third party.

The maturity dates, interest rates, redemption and sinking fund provisions and conversion features, if any, with respect to Long-term Debt of a particular series, as well as any associated placement, underwriting or selling agent fees, commissions and discounts, if any, would be established by negotiation or competitive bidding. The interest rate on Long-term Debt would not exceed at the time of issuance the greater of (i) 500 basis points over U.S. Treasury securities having a remaining term comparable to the term of that series, if issued at a fixed rate, or 500 basis points over LIBOR for the relevant interest rate period, if issued at a floating rate, and (ii) a spread over U.S. Treasury securities or LIBOR, as the case may be, that is consistent with similar securities of comparable credit quality and maturities issued by other companies.

Preferred Stock, Preference Stock and Equity Interests

EGSI proposes to issue and sell shares of its Preferred Stock, Cumulative, $100 Par Value ("$100 Preferred"), Preferred Stock, Cumulative, without par value ("No Par Preferred") and Preference Stock, without par value ("No Par Preference"), as currently authorized by its Restated Articles of Incorporation, as amended ("Articles"). In accordance with the Articles, EGSI had authorized and unissued at June 30, 2003, 5,306,232 shares of $100 Preferred, 10,000,000 shares of No Par Preferred and 20,000,000 shares of No Par Preference. In addition to these denominations, if Preferred Stock shares with different denominations are likely to have a materially better market reception than shares of $100 Preferred, and it is not deemed appropriate to use No Par Preferred or No Par Preference shares, EGSI may issue and sell that series of Preferred Stock to underwriters for deposit with a bank or trust company ("Depositary"). The underwriters would then receive from the Depositary and deliver to purchasers, in a subsequent public offering, shares of depositary preferred stock, each share of which would represent a stated fraction of a share of the new series of $100 Preferred. EGSI also seeks to have the flexibility to issue Equity Interests directly or indirectly through one or more special-purpose Finance Subsidiaries (see below) (including, specifically, trust preferred securities).

Preferred Stock, Preference Stock or Equity Interests may be issued in one or more series with those rights, preferences and priorities, including those related to redemption, designated in the instrument creating each series, as determined by EGSI's board of directors or an officer authorized by the board. Preferred Stock, Preference Stock or Equity Interests may be redeemable or may be perpetual. The dividend rate on any series of Preferred Stock or Equity Interests would not exceed at the time of issuance the greater of (i) 500 basis points over the yield to maturity of a U.S. Treasury security having a remaining term comparable to the term of that series, if issued at a fixed rate, or 500 basis points over LIBOR for the relevant interest rate period, if issued at a floating rate, and (ii) a rate that is consistent with similar securities of comparable credit quality and maturities issued by other companies. Dividends or distributions on Preferred Stock, Preference Stock or Equity Interests, each of which may be issued at fixed or floating dividend or distribution rates, would be made periodically and to the extent funds are legally available for that purpose, but may be made subject to terms which allow the issuer to defer dividend payments for specified periods.

Tax-exempt Bonds (including Collateral Securities, if any)

EGSI intends to enter into arrangements for the issuance by one or more governmental authorities ("Issuers") on behalf of EGSI of up to $500 million in aggregate principal amount of Tax-Exempt Bonds (and, in that connection, EGSI requests authority to issue of up to $560 million in aggregate principal amount of Collateral Securities, which $560 million is not included in the $2.0 billion authorization limit), and EGSI proposes to enter into one or more leases, subleases, installment sale agreements, refunding agreements or other agreements or supplements or amendments to those agreements ("Facilities Agreements") with the respective Issuers that would contemplate the issuance and sale by the Issuers of one or more series of Tax-Exempt Bonds in an aggregate principal amount of up to $500 million under one or more trust indentures and/or supplements to those indentures ("Indentures") between the Issuers and one or more trustees. Under the terms of each Facilities Agreement, EGSI would be obligated to make payments sufficient to provide for payment by the Issuer of the principal or redemption price of, premium (if any) and interest on, and other amounts owing with respect to the Tax-Exempt Bonds, together with related expenses.

The proceeds of the sale of Tax-Exempt Bonds, net of any underwriters' discounts and other expenses payable from proceeds, would be applied to financing, or refinancing tax-exempt bonds issued for the purpose of financing, certain EGSI facilities eligible to be financed with tax-exempt debt, including but not limited to sewage and/or solid waste disposal facilities ("Facilities"). Under the terms of each Facilities Agreement, EGSI may commit to purchase, acquire, construct, install, operate and/or maintain the Facilities that are the subject of the Agreement. In addition, under the terms of the Facilities Agreements, the respective Issuers may purchase from EGSI the Facilities that EGSI would then repurchase from those Issuers.

The Tax-Exempt Bonds of a particular series (i) would have a maturity ranging from one year to fifty years, (ii) may be subject to optional and/or mandatory redemption, in whole or in part, at par or at premiums above their principal amount, (c) may be entitled to mandatory or optional sinking fund provisions, (iv) may be issued at fixed or floating rates of interest, (v) may provide for reset of the coupon under a remarketing arrangement, (vi) may be called from existing investors by a third party, (vii) may be backed by a municipal bond insurance policy, (viii) may be supported by credit support such as a bank letter of credit and reimbursement agreement, (ix) may be supported by a lien subordinate to the Mortgage on the Facilities related to those Tax exempt Bonds, and (x) may be supported by the issuance and pledge of Collateral Securities.

The maturity dates, interest rates, redemption and sinking fund provisions and conversion features, if any, with respect to Tax-Exempt Bonds of a particular series, as well as any associated placement, underwriting or selling agent fees, commissions and discounts, if any, would be established by negotiation or competitive bidding. The interest rate on Tax-Exempt Bonds would not exceed at the time of issuance the greater of (i) 400 basis points over U.S. Treasury securities having a remaining term comparable to the term of that series, if issued at a fixed rate, or 400 basis points over LIBOR for the relevant interest rate period, if issued at a floating rate, and (ii) a spread over U.S. Treasury securities or LIBOR, as the case may be, that is consistent with similar securities of comparable credit quality and maturities issued on behalf of other companies.

Financing Subsidiaries and Special Purpose Subsidiaries.

EGSI requests authority to acquire, directly or indirectly, the equity securities of one or more Financing Subsidiaries, Special Purpose Subsidiaries and Partner Subs, which would be organized specifically for the purpose of facilitating the issuance of Equity Interests that would be reported by EGSI on its financial statements or the financial statements' footnotes. EGSI represents that it has in place sufficient internal controls to enable it to monitor the creation and use of any such entities. No Financing Subsidiary or Special Purpose Subsidiary would acquire or dispose of, directly or indirectly, any interest in any "utility asset," as that term is defined under the Holding Company Act. In connection with these financing transactions, EGSI may enter into one or more guarantee or other credit support agreements in favor of a Financing Subsidiary.

EGSI, in order to increase tax efficiencies, has created one direct special purpose financing subsidiary under the authority contained in the Commission's order dated January 16, 1996 (HCAR No. 26451). Any Financing Subsidiary or Special Purpose Subsidiary organized by EGSI under the authority granted by the Commission in this order would be organized only if, in management's opinion, the creation and utilization of that Financing Subsidiary or Special Purpose Subsidiary, would likely result in tax savings, increased financial flexibility, increased access to capital markets or a lower cost of capital for EGSI.

In connection with the issuance of certain types of Equity Interests, EGSI and/or a Financing Subsidiary proposes to organize one or more separate special purpose subsidiaries ("Special Purpose Subsidiaries") as any one or any combination of (i) a limited liability company, a limited partnership, a business trust, or any other domestic entity or structure that is considered advantageous by EGSI. If any Special Purpose Subsidiary is organized as a limited liability company, EGSI or a Financing Subsidiary may also organize a second special purpose wholly-owned subsidiary under the General Corporation Law of the State of Delaware or other jurisdiction ("Partner Sub") for the purpose of acquiring and holding Special Purpose Subsidiary membership interests in order to comply with any requirement under the applicable law that a limited liability company have at least two members. If any Special Purpose Subsidiary is organized as a limited partnership, EGSI or a Financing Subsidiary also may organize a Partner Sub for the purpose of acting as the general partner of that Special Purpose Subsidiary and may acquire, either directly or indirectly through that Partner Sub, a limited partnership interest in that Special Purpose Subsidiary to ensure that the Special Purpose Subsidiary would have a limited partner to the extent required by applicable law.

EGSI, a Financing Subsidiary and/or a Partner Sub would acquire all of the common stock or all of the general partnership or other common equity interests, as the case may be, of any Special Purpose Subsidiary for an amount not less than the minimum required by any applicable law (i.e., the aggregate of the equity accounts of that Special Purpose Subsidiary) ("Equity Contribution"). EGSI and/or a Financing Subsidiary may issue and sell to any Special Purpose Subsidiary, at any time or from time to time in one or more series, unsecured subordinated debentures, unsecured promissory notes or other unsecured debt instruments (Notes") governed by an indenture or other document, and that Special Purpose Subsidiary would apply both the Equity Contribution made to it and the proceeds from its sale of Equity Interests to purchase Notes. Alternatively, EGSI and/or a Financing Subsidiary may enter into a loan agreement or agreements with any Special Purpose Subsidiary under which that Special Purpose Subsidiary would loan to EGSI and/or a Financing Subsidiary both the Equity Contribution to that Special Purpose Subsidiary and the proceeds from the sale of Equity Interests by that Special Purpose Subsidiary, and EGSI and/or that Financing Subsidiary would issue to that Special Purpose Subsidiary Notes evidencing those borrowings. The Financing Subsidiary or the Special Purpose Subsidiary would then transfer (directly or indirectly) the proceeds to EGSI resulting in its payment of dividends out of capital to EGSI. The terms (e.g., interest rate, maturity, amortization, prepayment terms, default provisions) of any Notes would generally be designed to parallel the terms of the Equity Interests to which the Notes relate (the maximum principal amount of those Notes would not exceed the aggregate of the related Equity Contribution and Equity Interests).

EGSI and the Financing Subsidiaries also request authorization to guarantee solely in connection with the issuance of Equity Interests by a Special Purpose Subsidiary (i) payment of dividends or distributions on those securities by the Special Purpose Subsidiary if and to the extent that Special Purpose Subsidiary has funds legally available for that purpose, (ii) payments to the holders of those securities due upon liquidation of that Special Purpose Subsidiary or redemption of the Equity Interests of that Special Purpose Subsidiary, and (iii) certain additional amounts that may be payable in respect of the Equity Interests. Alternatively, EGSI may provide credit support for any guarantee that is provided by a Financing Subsidiary.

In the event of any voluntary or involuntary liquidation, dissolution or winding up of any Special Purpose Subsidiary, the holders of the Equity Interests issued by that Special Purpose Subsidiary would be entitled to receive, out of the assets of that Special Purpose Subsidiary available for distribution to its shareholders, partners or other owners (as the case may be), an amount equal to the par or stated value or liquidation preference of those Equity Interests plus any accrued and unpaid dividends or distributions.

The constituent instruments of each Special Purpose Subsidiary would provide, among other things, that the Special Purpose Subsidiary's activities would be limited to the issuance and sale of Equity Interests from time to time and lending to a Financing Subsidiary or Partner Sub (i) the proceeds of that sale and (ii) the Equity Contribution to that Special Purpose Subsidiary, and certain other related activities.

The amount of any long-term debt or preferred securities issued by any Finance Subsidiary would be counted against any limitation on the amounts of similar types of securities that EGSI may issue directly, as set forth in this order or in any other order that may issue in the future, to the extent that EGSI guarantees those securities.

EGSI's Representations

EGSI represents that:

  1. at all times during the Authorization Period, EMI and Entergy will each maintain common equity of at least 30% of total capitalization (based upon the financial statements filed with the most recent quarterly report on Form 10-Q or annual report on Form 10-K); and
     
  2. no guarantees or other securities may be issued in reliance upon the authorization granted by the Commission in this order unless (1) the security to be issued, if rated, is rated investment grade; (2) all outstanding securities of EGSI (except for preferred stock or preferred securities) that are rated are rated investment grade; and (3) all outstanding securities of Entergy that are rated are rated investment grade (collectively, the "Investment Grade Ratings Criteria"). Applicant's preferred stock and preferred securities are not rated investment grade. For purposes of this provision, a security would be deemed to be rated "investment grade" if it is rated investment grade by Moody's Investors Service, Standard & Poor's, Fitch Ratings or any other nationally recognized statistical rating organization ("NRSRO"), as that term is used in paragraphs (c) (2) (vi) (E), (F) and (H) of rule 15c3-1 under the Securities Exchange Act of 1934. EGSI further requests that the Commission reserve jurisdiction over the issuance of any guarantee or other security at any time that one or more of the Investment Grade Ratings Criteria are not satisfied.
     

Use of Proceeds

EGSI states that except as otherwise provided above, the proceeds from the proposed financings would be used for EGSI's general corporate purposes, including (i) financing its capital expenditures, (ii) repaying, redeeming, refunding or purchasing any of its securities under rule 42 and those issued on EGSI's behalf under section 9(c)(1), and (iii) financing its working capital requirements.

Reporting

EGSI proposes to file statements in accordance with rule 24 within 10 days after the consummation of any financing transaction involving Special Purpose Subsidiaries authorized in this order, containing the following: (i) a representation that the financial statements of EGSI account for all Special Purpose Subsidiaries in accordance with generally accepted accounting principles; (ii) a description of each Special Purpose Subsidiary, including the following information: (1) its name; (2) the value of EGSI's direct or indirect, through a Financing Subsidiary, investment in it; (3) the balance sheet account where the investment and the cost of the investment are booked; (4) the amount invested in the subsidiary by EGSI, either directly or through a Financing Subsidiary; (5) the form of organization (e.g., corporation, limited partnership, trust, etc.); (6) the percentage owned by EGSI, either directly or through a Financing Subsidiary; (7) the identities of all other owners, if the Special Purpose Subsidiary is not 100% owned by EGSI, either directly or through a Financing Subsidiary; (8) the purpose of the investment in the subsidiaries; (8) the amounts and types of securities to be issued by the subsidiaries; (iii) the amount of consideration received; (iv) the amount of any guarantee and/or Notes issued in connection with the offering; and (v) to the extent any securities are issued by any entity as authorized in this order that are not set forth on the balance sheet of EGSI, then the terms and conditions of those securities will be included.

Compliance with rules 53 and 54

The proposed transactions are also subject to rule 54, which provides that, in determining whether to approve the issue or sale of any securities for purposes other than the acquisition of an "exempt wholesale generator" ("EWG") or "foreign utility company" ("FUCO") or other transactions unrelated to EWGs or FUCOs ("Exempt Projects"), the Commission shall not consider the effect of the capitalization or earnings of subsidiaries of a registered holding company that are EWGs or FUCOs if the requirements of rule 53(a), (b) and (c) are satisfied. Under rule 53(a), the Commission shall not make certain specified findings under sections 7 and 12 of the Act in connection with a proposal by a holding company to issue securities for the purpose of acquiring the securities of or other interest in an EWG, or to guarantee the securities of an EWG, if each of the conditions in paragraphs (a)(1) through (a)(4) of rule 53 are met, provided that none of the conditions specified in paragraphs (b)(1) through (b)(3) of rule 53 exists.

EGSI represents that, under rule 54 under the Act, (i) the condition set forth in rule 53(a)(1) that Entergy's "aggregate investment" in EWGs and FUCOs not exceed 50% of Entergy's "consolidated retained earnings" is not currently satisfied, and (ii) all of the other criteria of rule 53(a) and (b) are satisfied. Specifically, EGSI represents that Entergy and its subsidiaries ("Entergy System") have complied with, and would continue to comply with (i) the record keeping requirements of rule 53(a)(2), the limitation in rule 53(a)(3) on the use of Entergy System domestic public utility subsidiary companies' personnel in rendering services to affiliated EWGs and FUCOs, and (ii) the requirements of rule 53(a)(4) concerning the submission of certain filings and reports under the Act to retail regulatory commissions. Finally, EGSI states that none of the conditions set forth in rule 53(b) exists (under which the provisions of rule 53 would not be available).

With respect to the condition set forth in clause (1) of rule 53(a), EGSI states that Entergy's "aggregate investment" in Exempt Projects (approximately $2.21 billion) is equal to approximately 56% of Entergy's "consolidated retained earnings" as of March 31, 2003 (approximately $3.9 billion). Entergy's aggregate investment in Exempt Projects currently exceeds the 50% limitation in rule 53(a)(1) as a result of increased investments in EWGs relating to the acquisition and/or construction of "eligible facilities" (as defined in section 32 of the Act).

EGSI states that although Entergy's current aggregate investment in EWGs and FUCOs exceeds the limit specified in rule 53(a)(1), the Commission by order dated June 13, 2000 (HCAR No. 27184) ( "June 2000 Order"), authorized Entergy to make investments in amounts up to 100% of its consolidated retained earnings in Exempt Projects and that therefore, Entergy's aggregate investment in those Exempt Projects is within the parameters authorized in the June 2000 Order.

Jurisdiction

EGSI states that no state commission, and no federal commission, other than the Commission, has jurisdiction over any of the transactions proposed in the Application.

Fees, Commissions and Expenses

EGSI states that the fees, commissions and expenses, including underwriting fees, arrangement fees and up-front fees, incurred or to be incurred in connection with the transactions proposed in the Application would not exceed 5% of the proceeds of the proposed transactions in the case of First Mortgage Bonds, MTNs, Long-term Debt, Preferred Stock, Preference Stock, Equity Interests and Tax-Exempt Bonds.

Conclusion

Due notice of the filing of the Application has been given in the manner prescribed in rule 23 under the Act, and no hearing has been requested of or ordered by the Commission. On the basis of the facts in the record, it is found that the applicable standards of the Act and rules under the Act are satisfied, and no adverse findings are necessary.

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

IT IS FURTHER ORDERED that jurisdiction is reserved over EGSI's issuance of any guarantee or other security at any time that one or more of the Investment Grade Ratings Criteria are not satisfied.

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


Jill M. Peterson
Assistant Secretary


Endnotes


http://www.sec.gov/divisions/investment/opur/filing/35-27786.htm

Modified: 06/28/2004