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U.S. Securities and Exchange Commission

SECURITIES AND EXCHANGE COMMISSION

(Release No. 35-27906; 70-10227)

Emera Inc., et al.

Supplemental Order Releasing Jurisdiction and Authorizing Financing and Other Transactions

October 29, 2004

Emera Inc. ("Emera"), Halifax, Nova Scotia, Canada, a registered holding company under the Public Utility Holding Act of 1935, as amended, ("Act"), and its direct and indirect subsidiary companies, Emera US Holdings Inc. ("Emera USH"), BHE Holdings Inc. ("BHEH"), New Castle, Wilmington, DE, and Bangor Hydro-Electric Company ("BHE"), Bangor, Maine, and the direct and indirect subsidiary companies of Emera listed in Exhibit A of their previously filed application-declaration ("Financing Application") (collectively, "Applicants"), have filed with the Securities and Exchange Commission ("Commission") a post-effective amendment ("Application") to that Financing Application under sections 6, 7, 9, 10, 12(b), 12(c),13(b), 32 and 33 of the Act and rules 43, 45, 46, 53, 54, 87 and 90 under the Act. In the Financing Application, Applicants requested authorization to engage in certain financing and other transactions as described below, during the period from the effective date of this order through June 30, 2007 ("Authorization Period"), and requested that the Commission reserve jurisdiction over the transactions requested in the Financing Application for the period from October 30, 2004, to June 30, 2007, until the record was complete.

In its order dated June 30, 2004, Holding Co. Act Release No. 27865 ("Initial Order"), the Commission authorized Applicants to engage in certain financing and other transactions summarized below and more fully described in the Initial Order and the Financing Application (SEC File No. 70-10227). The Initial Order authorized Applicants to engage in the proposed transactions, subject to certain limits stated in the order, until October 30, 2004, and reserved jurisdiction over (i) the authorization requested by the Applicants for the period from October 30, 2004, through June 30, 2007, and (ii) the issuance of any guarantee or other securities in reliance upon the authorization granted by the Commission in that order at any time that any one or more of the Investment Grade Ratings Criteria set forth in that order is not satisfied.

In the Initial Order, the Commission authorized Emera to:

  1. issue and sell through the Authorization Period1 up to $2 billion of securities at any one time outstanding ("Emera External Limit") and to issue guarantees and other forms of credit support in an aggregate amount of $500 million at any one time outstanding ("Emera Guarantee Limit");
     
  2. to enter into hedging transactions, including anticipatory hedges, with respect to its indebtedness to manage and minimize interest rate costs and to lock-in current interest rates;
     
  3. to finance certain of its nonutility subsidiaries at a mark up to Emera's cost of funds;
     
  4. to change the terms of any wholly-owned subsidiary's authorized capital stock;
     
  5. to issue up to 5 million shares of common stock under dividend reinvestment and stock-based management incentive and employee benefit plans;
     
  6. to invest up to $300 million in "Canadian Energy Related Subsidiaries";
     
  7. to issue and sell securities and guarantees in an aggregate amount of up to $2.0 billion, which would be included within the Emera External Limit and the Emera Guarantee Limit, for the purpose of financing the acquisition of exempt wholesale generators and foreign utility companies; and
     
  8. to restructure its nonutility interests from time to time, including establish one or more intermediate subsidiaries organized exclusively for the purpose of acquiring, financing, and holding the securities of one or more existing or future nonutility subsidiaries.
     

Emera's intermediate registered holding company subsidiaries Emera US Holdings Inc. ("EUSH") and BHE Holdings Inc. ("BHEH"), were authorized to issue and sell securities to Emera to finance one another through the issuance and acquisition of securities, and to finance Bangor Hydro-Electric Company ("BHE"), an electric public utility subsidiary company, by acquiring its securities.

Emera's nonutility subsidiaries were authorized to pay dividends out of capital or unearned surplus.

BHE was authorized to issue and sell up to $100 million in short-term debt.

Lastly, Emera and its subsidiaries were authorized to acquire the equity securities of one or more special purpose subsidiaries ("Financing Subsidiaries") organized solely to facilitate a financing transaction and to guarantee the securities issued by Financing Subsidiaries.

Applicants now request that the Commission release jurisdiction over the transactions proposed in the Financing Application and permit Applicants to conduct the transactions proposed in the Financing Application and authorized by the Initial Order through June 30, 2007 - for the full duration of the Authorization Period. The release of jurisdiction would affect only the Authorization Period; the other terms and conditions of the Initial Order would remain unchanged. The relief requested is necessary for Applicants to continue to finance and operate their businesses in compliance with the Act.

The fees, commissions and expenses to be paid or incurred by Emera directly or indirectly in connection with the preparation of the Application are estimated to be approximately $3,000. Applicants state that no state or federal commission, other than this Commission, has jurisdiction over the proposed transactions.

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 Financing 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, pending completion of the record, over the issuance of any guarantee or other securities in reliance upon the authorization granted by the Commission in the Initial Order at any time that at any time that any one or more of the Investment Grade Ratings Criteria is not satisfied.

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


Margaret H. McFarland
Deputy Secretary


Endnotes


http://www.sec.gov/divisions/investment/opur/filing/35-27906.htm

Modified: 11/08/2004