Subject
to Completion
Preliminary
Prospectus Supplement dated November 9, 2009
The
information in this preliminary prospectus supplement and the accompanying
prospectus is not complete and may be changed. Neither this
preliminary prospectus supplement nor the accompanying prospectus is an offer to
sell these securities and neither is soliciting any offer to buy these
securities in any jurisdiction where the offer or sale is not
permitted.
PRELIMINARY PROSPECTUS
SUPPLEMENT
(To
prospectus dated February 3, 2009)
$
PUBLIC
SERVICE COMPANY OF OKLAHOMA
%
Senior Notes, Series H, due 20
Interest on the Senior Notes is payable
semi-annually on
and of each year,
beginning
. The Senior Notes will mature
on
. We may redeem the Senior Notes either in whole or in part at our
option at any time, and from time to time, at the redemption prices described on
page S-4 of this prospectus supplement. The Senior Notes do not have
the benefit of a sinking fund.
The Senior Notes are unsecured and rank
equally with all of our other unsecured and unsubordinated indebtedness from
time to time outstanding and will be effectively subordinated to all of our
secured debt, to the extent of the assets securing such debt. We will
issue the Senior Notes only in registered form in multiples of
$1,000.
Per
Note
Total
Public
offering price
(1)
.
. . . . . . . . . . . . . . . . . . . . . . . . . . . .
.
% $
Underwriting
discount . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.
%
$
Proceeds,
before expenses, to Public Service Company of Oklahoma
% $
(1)
Plus accrued interest, if any, from
November , 2009
.
INVESTING
IN THESE NOTES INVOLVES RISKS. SEE THE SECTION ENTITLED “RISK
FACTORS” ON PAGE S-3 OF THIS PROSPECTUS SUPPLEMENT FOR MORE
INFORMATION.
Neither the U.S. Securities and
Exchange Commission nor any state securities commission has approved or
disapproved of the Senior Notes or determined that this prospectus supplement or
the accompanying prospectus is accurate or complete. Any
representation to the contrary is a criminal offense.
The Senior Notes are expected to be
delivered in book-entry form only through The Depository Trust Company on or
about November , 2009.
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Joint
Book-Running Managers
|
|
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Barclays
Capital
|
BNY
Mellon Capital Markets, LLC
|
Citi
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|
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BBVA
Securities
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Mizuho Securities USA
Inc.
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SunTrust
Robinson Humphrey
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The date
of this prospectus supplement is November ,
2009.
You should rely only on the information
incorporated by reference or provided in this prospectus supplement or the
accompanying prospectus. We have not authorized anyone to provide you
with different information. We are not making an offer of these
securities in any state where the offer is not permitted. You should
not assume that the information in this prospectus supplement is accurate as of
any date other than the date on the front of the document.
TABLE OF CONTENTS
Prospectus
Supplement
RISK
FACTORS
USE OF
PROCEEDS
SUPPLEMENTAL
DESCRIPTION OF THE SENIOR NOTES
UNDERWRITING
LEGAL
OPINIONS
Prospectus
THE
COMPANY
PROSPECTUS
SUPPLEMENTS
RISK
FACTORS
WHERE YOU
CAN FIND MORE INFORMATION
RATIO OF
EARNINGS TO FIXED CHARGES
USE OF
PROCEEDS
DESCRIPTION
OF THE NOTES
PLAN OF
DISTRIBUTION
LEGAL
OPINIONS
EXPERTS
RISK
FACTORS
Investing
in the Senior Notes involves risk. Please see the risk factors in our
Annual Report on Form 10-K for the fiscal year ended December 31, 2008, along
with certain amended and restated risk factors contained in our Quarterly
Reports on Form 10-Q for the quarters ended March 31, 2009, June 30, 2009 and
September 30, 2009, which are incorporated by reference in this prospectus
supplement and the accompanying prospectus. Before making an
investment decision, you should carefully consider these risks as well as other
information contained or incorporated by reference in this prospectus supplement
and the accompanying prospectus. The risks and uncertainties
described are those presently known to us. Additional risks and uncertainties
not presently known to us or that we currently deem immaterial may also impair
our operations, our financial results and the value of the Senior
Notes.
USE
OF PROCEEDS
The net proceeds from the sale of the
Senior Notes will be used for general corporate purposes relating to our utility
business. These purposes may include repaying existing
debt. We may also fund our construction program, repay advances from
affiliates and replenish working capital. If we do not use the net
proceeds immediately, we may temporarily invest them in short-term,
interest-bearing obligations. We estimate our 2010 construction costs
to be $157 million.
SUPPLEMENTAL
DESCRIPTION OF THE SENIOR NOTES
The following description of the
particular terms of the Senior Notes supplements and in certain instances
replaces the description of the general terms and provisions of the Senior Notes
under “Description of the Notes” in the accompanying prospectus. We
will issue the Senior Notes under an Indenture, dated as of November 1, 2000,
between us and The Bank of New York Mellon, as Trustee, as supplemented and
amended and as to be further supplemented and amended as of the issue date for
the Senior Notes.
Principal
Amount, Maturity, Interest and Payment
The Senior Notes will initially be
issued in an aggregate principal amount of
$ .
We may at any time and from time to time, without consent of the holders of the
Senior Notes, issue additional notes having the same ranking, interest rate,
maturity and other terms (other than the date of issuance, issue price and, in
some circumstances, the initial interest accrual date and initial interest
payment date) as the Senior Notes. These notes, together with the
Senior Notes, will be a single series of notes under the Indenture.
The Senior Notes will mature and become
due and payable, together with any accrued and unpaid interest,
on and
will bear interest at the rate of % per
year from November , 2009
until . The
Senior Notes are not subject to any sinking fund provision.
Interest on each Senior Note will be
payable semi-annually in arrears on
each
and
and at redemption, if any,
or maturity. The initial interest payment date
is ,
2010. Each payment of interest shall include interest accrued through the day
before such interest payment date. Interest on the Senior Notes will
be computed on the basis of a 360-day year consisting of twelve 30-day
months.
We will pay interest on the Senior
Notes (other than interest payable at redemption, if any, or maturity) in
immediately available funds to the registered holders of the Senior Notes as of
the Regular Record Date (as defined below) for each interest payment
date.
We will
pay the principal of the Senior Notes and any premium and interest payable at
redemption, if any, or at maturity in immediately available funds at the office
of The Bank of New York Mellon, 101 Barclay Street in New York, New
York.
If any
interest payment date, redemption date or the maturity is not a Business Day (as
defined below), we will pay all amounts due on the next succeeding Business Day
and no additional interest will be paid.
The “Regular Record Date” will be
the or prior
to the relevant interest payment date.
“Business Day” means any day that is
not a day on which banking institutions in New York City are authorized or
required by law or regulation to close.
Optional
Redemption
We may redeem the Senior Notes at our
option at any time upon no more than 60 and not less than 30 days’ notice by
mail. We may redeem the Senior Notes either as a whole or in part at
a redemption price equal to the greater of (1) 100% of the principal amount of
the Senior Notes being redeemed and (2) the sum of the present values of the
remaining scheduled payments of principal and interest on the Senior Notes being
redeemed (excluding the portion of any such interest accrued to the date of
redemption) discounted (for purposes of determining present value) to the
redemption date on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Treasury Rate (as defined below)
plus basis points; plus, in
each case, accrued interest thereon to the date of redemption.
“Comparable Treasury Issue” means the
United States Treasury security selected by an Independent Investment Banker as
having a maturity comparable to the remaining term (“remaining life”) of the
Senior Notes that would be utilized, at the time of selection and in accordance
with customary financial practice, in pricing new issues of corporate debt
securities of comparable maturity to the remaining life of the Senior
Notes.
“Comparable Treasury Price” means, with
respect to any redemption date, (1) the average of the Reference Treasury Dealer
Quotations for such redemption date, after excluding the highest and lowest such
Reference Treasury Dealer Quotations, or (2) if we obtain fewer than four such
Reference Treasury Dealer Quotations, the average of all such
quotations.
“Independent Investment Banker” means
one of the Reference Treasury Dealers appointed by us and reasonably acceptable
to the Trustee.
“Reference Treasury Dealer” means
Barclays Capital Inc., BNY Mellon Capital Markets, LLC, and Citigroup
Global Markets Inc., and their respective successors; provided, however, that if
any of the foregoing shall cease to be primary U.S. government securities
dealers we will substitute therefor another primary U.S. government securities
dealer reasonably acceptable to the Trustee.
“Reference Treasury Dealer Quotations”
means, with respect to each Reference Treasury Dealer and any redemption date,
the average, as determined by the Trustee, 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 the Trustee by such Reference Treasury
Dealer at or before 3:30 p.m., New York City time, on the third Business Day
preceding such redemption date.
“Treasury Rate” means:
·
|
the
yield, under the heading which represents the average for the immediately
preceding week, appearing in the most recently published statistical
release designated “H.15(519)” or any successor publication which is
published weekly by the Board of Governors of the Federal Reserve System
and which establishes yields on actively traded U.S. Treasury securities
adjusted to constant maturity under the caption “Treasury Constant
Maturities,” for the maturity corresponding to the Comparable Treasury
Issue (if no maturity is within three months before or after the remaining
life (as defined above), yields for the two published maturities most
closely corresponding to the Comparable Treasury Issue will be determined
and the Treasury Rate will be interpolated or extrapolated from such
yields on a straight line basis, rounding to the nearest month);
or
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·
|
if
such release (or any successor release) is not published during the week
preceding the calculation date or does not contain such yields, the rate
per annum equal to the semiannual equivalent yield to maturity of the
Comparable Treasury Issue, calculated using a price for the Comparable
Treasury Issue (expressed as a percentage of its principal amount) equal
to the Comparable Treasury Price for such redemption
date.
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Limitations
on Liens
So long
as any of our Senior Notes issued pursuant to this prospectus supplement are
outstanding, we will not create or suffer to be created or to exist any
additional mortgage, pledge, security interest, or other lien (collectively
“Liens”) on any of our utility properties or tangible assets now owned or
hereafter acquired to secure any indebtedness for borrowed money (“Secured
Debt”), without providing that such Senior Notes will be similarly
secured. This restriction does not apply to our subsidiaries, nor
will it prevent any of them from creating or permitting to exist Liens on their
property or assets to secure any Secured Debt. In addition, this
restriction does not prevent the creation or existence of:
·
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Liens
on property existing at the time of acquisition or construction of such
property (or created within one year after completion of such acquisition
or construction), whether by purchase, merger, construction or otherwise,
or to secure the payment of all or any part of the purchase price or
construction cost thereof, including the extension of any Liens to
repairs, renewals, replacements, substitutions, betterments, additions,
extensions and improvements then or thereafter made on the property
subject thereto;
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·
Financing
of our accounts receivable for electric service;
·
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Any
extensions, renewals or replacements (or successive extensions, renewals
or replacements), in whole or in part, of liens permitted by the foregoing
clauses; and
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·
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The
pledge of any bonds or other securities at any time issued under any of
the Secured Debt permitted by the above
clauses.
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In
addition to the permitted issuances above, Secured Debt not otherwise so
permitted may be issued in an amount that does not exceed 15% of Net Tangible
Assets as defined below.
“Net
Tangible Assets” means the total of all assets (including revaluations thereof
as a result of commercial appraisals, price level restatement or otherwise)
appearing on our balance sheet, net of applicable reserves and deductions, but
excluding goodwill, trade names, trademarks, patents, unamortized debt discount
and all other like intangible assets (which term shall not be construed to
include such revaluations), less the aggregate of our current liabilities
appearing on such balance sheet. For purposes of this definition, our
balance sheet does not include assets and liabilities of our
subsidiaries.
This
restriction also will not apply to or prevent the creation or existence of
leases made, or existing on property acquired, in the ordinary course of
business.
Additional
Information
For additional important information
about the Senior Notes, see “Description of the Notes” in the accompanying
prospectus, including: (i) additional information about the terms of
the Senior Notes, (ii) general information about the Indenture and the trustee,
and (iii) a description of other events of default under the
Indenture.
UNDERWRITING
Barclays
Capital Inc., BNY Mellon Capital Markets, LLC, and Citigroup Global Markets Inc.
are acting as representatives of the underwriters named below with respect to
the Senior Notes. Subject to the terms and conditions of the
underwriting agreement, we have agreed to sell to each of the underwriters named
below and each of the underwriters has severally and not jointly agreed to
purchase from us the respective principal amount of Senior Notes set forth
opposite its name below:
Underwriter
|
Principal Amount
of
Senior Notes
|
Barclays
Capital Inc.
|
$
|
BNY
Mellon Capital Markets, LLC
|
|
Citigroup
Global Markets Inc.
|
|
BBVA
Securities Inc.
|
|
Mizuho
Securities USA Inc.
|
|
SunTrust
Robinson Humphrey, Inc.
|
|
Total
|
$
|
In the
underwriting agreement, the underwriters have agreed, subject to the terms and
conditions set forth therein, to purchase all of the Senior Notes offered hereby
if any of the Senior Notes are purchased.
The expenses associated with the offer
and sale of the Senior Notes, excluding underwriting discount, are expected to
be approximately
$ .
The
underwriters propose to offer the Senior Notes to the public initially at the
public offering price set forth on the cover page of this prospectus supplement
and may offer the Senior Notes to certain dealers initially at that price less a
concession not in excess of % per
Senior Note. The underwriters may allow, and those dealers may
reallow, a discount not in excess
of % per Senior Note to certain
other dealers. After the initial public offering, the public offering
price, concession and discount may be changed.
Prior to
this offering, there has been no public market for the Senior
Notes. The Senior Notes will not be listed on any securities
exchange. Certain underwriters have advised us that they intend to
make a market in the Senior Notes. The underwriters will have no
obligation to make a market in the Senior Notes, however, and may cease market
making activities, if commenced, at any time. There can be no
assurance of a secondary market for the Senior Notes, or that the Senior Notes
may be resold.
We have agreed to indemnify the
underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended, or contribute to payments that each
underwriter may be required to make in respect thereof.
In connection with the offering, the
underwriters may purchase and sell the Senior Notes in the open
market. These transactions may include over-allotment and stabilizing
transactions and purchases to cover syndicate short positions created in
connection with the offering. Stabilizing transactions consist of
certain bids or purchases for the purposes of preventing or retarding a decline
in the market price of the Senior Notes and syndicate short positions involve
the sale by the underwriters of a greater number of Senior Notes than they are
required to purchase from us in the offering. The underwriters also
may impose a penalty bid, whereby selling concessions allowed to syndicate
members or other broker dealers in respect of the securities sold in the
offering for their account may be reclaimed by the syndicate if such Senior
Notes are repurchased by the syndicate in stabilizing or covering
transactions. These activities may stabilize, maintain or otherwise
affect the market price of the Senior Notes, which may be higher than the price
that might otherwise prevail in the open market, and these activities, if
commenced, may be discontinued at any time. These transactions may be
effected in the over-the-counter market or otherwise.
Some of the underwriters or their
affiliates engage in transactions with, and have performed services for, us and
our affiliates in the ordinary course of business and have, from time to time,
performed, and may in the future perform, various financial advisory, commercial
and investment banking services for us, for which they received, or will
receive, customary fees and expenses. For instance, affiliates of
certain of the underwriters are lenders under our parent company’s revolving
credit facilities.
Sales of the Notes by BNY Mellon
Capital Markets, LLC may be effected by Broadpoint Capital, Inc., as its
distribution agent.
LEGAL
OPINIONS
Jeffrey
D. Cross or Thomas G. Berkemeyer, Deputy General Counsel and Associate General
Counsel, respectively, of American Electric Power Service Corporation, our
service company affiliate, will issue an opinion about the legality of the notes
for us. Dewey & LeBoeuf LLP, New York, New York will issue an
opinion for the underwriters. From time to time, Dewey & LeBoeuf
LLP acts as counsel to our affiliates for some matters.
PROSPECTUS
PUBLIC
SERVICE COMPANY OF OKLAHOMA
1
RIVERSIDE PLAZA
COLUMBUS,
OHIO 43215
(614)
716-1000
$600,000,000
UNSECURED
NOTES
TERMS OF
SALE
The
following terms may apply to the notes that we may sell at one or more
times. A prospectus supplement or pricing supplement will include the
final terms for each note. If we decide to list upon issuance any
note or notes on a securities exchange, a prospectus supplement or pricing
supplement will identify the exchange and state when we expect trading could
begin.
- Mature
9 months to 50 years
- Fixed
or floating interest rate
-
Remarketing features
-
Certificate or book-entry form
- Subject
to redemption or repayment
- Not
convertible, amortized or subject to a sinking fund
-
Interest paid on fixed rate notes quarterly or semi-annually
-
Interest paid on floating rate notes monthly, quarterly, semi-annually, or
annually
- Issued
in multiples of a minimum denomination
INVESTING
IN THESE NOTES INVOLVES RISKS. SEE THE SECTION ENTITLED “RISK
FACTORS” ON PAGE 2 FOR MORE INFORMATION.
The
notes 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.
The date
of this prospectus is February 3, 2009.
THE
COMPANY
We
generate, sell, purchase, transmit and distribute electric power. We
serve approximately 525,000 retail customers in eastern and southwestern
Oklahoma. We also sell and transmit power at wholesale to other
electric utilities, municipalities, rural electric cooperatives and nonutility
entities engaged in the wholesale power market. Our principal
executive offices are located at 1 Riverside Plaza, Columbus, Ohio 43215
(telephone number 614-716-1000). We are a subsidiary of American
Electric Power Company, Inc. (“AEP”), a public utility holding company, and we
are a part of the American Electric Power integrated utility
system. The executive offices of American Electric Power Company,
Inc. are located at 1 Riverside Plaza, Columbus, Ohio 43215
(telephone number 614-716-1000).
PROSPECTUS
SUPPLEMENTS
We may
provide information to you about the notes in up to three separate documents
that progressively provide more detail: (a) this prospectus provides general
information some of which may not apply to your notes; (b) the accompanying
prospectus supplement provides more specific terms of your notes; and (c) if not
included in the accompanying prospectus supplement, a pricing supplement will
provide the final terms of your notes. It is important for you to
consider the information contained in this prospectus, the prospectus supplement
and any pricing supplement in making your investment decision.
RISK
FACTORS
Investing
in the notes involves risk. Please see the risk factors described in
our most recent Annual Report on Form 10-K for the fiscal year ended December
31, 2007, along with certain amended and restated risk factors contained in our
Quarterly Reports on Form 10-Q for the quarters ended March 31, 2008, June 30,
2008 and September 30, 2008, which are incorporated by reference in this
prospectus. Before making an investment decision, you should
carefully consider these risks as well as other information contained or
incorporated by reference in this prospectus. The risks and
uncertainties described are those presently known to us. Additional risks and
uncertainties not presently known to us or that we currently deem immaterial may
also impair our business operations, our financial results and the value of the
notes.
WHERE
YOU CAN FIND MORE INFORMATION
This
prospectus is part of a registration statement we filed with the Securities and
Exchange Commission (“SEC”). We also file annual, quarterly and
special reports and other information with the SEC. You may read and
copy any document we file at the SEC’s Public Reference Room at 100 F Street
N.E., Room 1580, Washington, D.C. 20549. Please call the
SEC at 1-800-SEC-0330 for further information on the public reference
rooms. You may also examine our SEC filings through the SEC’s web
site at http://www.sec.gov.
The SEC
allows us to “incorporate by reference” the information we file with them, which
means that we can disclose important information to you by referring you to
those documents. The information incorporated by reference is
considered to be part of this prospectus, and later information that we file
with the SEC will automatically update and supersede this
information. We incorporate by reference the documents listed below
and any future filings made with the SEC under Sections 13(a), 13(c), 14, or
15(d) of the Securities Exchange Act of 1934 (including any documents filed
after the date of the initial registration statement and prior to its
effectiveness) until we sell all the notes.
·
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Annual
Report on Form 10-K for the year ended December 31,
2007;
|
·
|
Quarterly
Reports on Form 10-Q for the quarters ended March 31, 2008, June 30, 2008
and September 30, 2008; and
|
·
|
Current
Reports on Form 8-K dated April 4, 2008, May 7, 2008 and December 9,
2008.
|
You may
request a copy of these filings, at no cost, by writing or telephoning us at the
following address:
Ms. R.
Buonavolonte
American
Electric Power Service Corporation
1
Riverside Plaza
Columbus,
Ohio 43215
614-716-1000
You
should rely only on the information incorporated by reference or provided in
this prospectus or any supplement and in any written communication from us or
any underwriter specifying the final terms of the particular
offering. We have not authorized anyone else to provide you with
different information. We are not making an offer of these notes in
any state where the offer is not permitted. You should not assume
that the information in this prospectus or any supplement is accurate as of any
date other than the date on the front of those documents.
RATIO
OF EARNINGS TO FIXED CHARGES
The Ratio
of Earnings to Fixed Charges for each of the periods indicated is as
follows:
Twelve Months Period Ended
|
Ratio
|
|
|
December
31, 2003
|
2.96
|
December
31, 2004
|
2.14
|
December
31, 2005
|
3.40
|
December
31, 2006
|
2.18
|
December
31, 2007
|
.15
|
September
30, 2008
|
1.52
|
The Ratio of
Earnings to Fixed Charges for the nine-months ended September 30, 2008 was
3.32. For the year ended December 31, 2007, the earnings to cover
fixed charges were deficient by $46,139,000. For current information
on the Ratio of Earnings to Fixed Charges, please see our most recent Form 10-K
and Form 10-Q. See
Where You Can Find More
Information
on page 2.
USE
OF PROCEEDS
Unless
otherwise stated in a prospectus supplement, the net proceeds from the sale of
the notes will be used for funding our construction program and for other
general corporate purposes relating to our utility business. These
purposes may include redeeming or repurchasing outstanding debt (including the
repayment of advances from affiliates) or preferred stock and replenishing
working capital. If we do not use the net proceeds immediately, we
will temporarily invest them in short-term, interest-bearing
obligations. We estimate that our construction costs in 2009 will
approximate $188,000,000. At December 17, 2008, we had approximately
$8,000,000 in advances from affiliates outstanding.
DESCRIPTION
OF THE NOTES
General
We will
issue the notes under an Indenture dated November 1, 2000 (as previously
supplemented and amended) between us and the Trustee, The Bank of New
York. This prospectus briefly outlines some provisions of the
Indenture. If you would like more information on these provisions,
you should review the Indenture and any supplemental indentures or company
orders that we have filed or will file with the SEC. See
Where You Can Find More
Information
on how to locate these documents. You may also
review these documents at the Trustee’s offices at 101 Barclay Street 8W, New
York, New York.
The
Indenture does not limit the amount of notes that may be issued. The
Indenture permits us to issue notes in one or more series or tranches upon the
approval of our board of directors and as described in one or more supplemental
indentures. Each series of notes may differ as to their
terms. The Indenture also gives us the ability to reopen a previous
issue of a series of notes and issue additional notes of such
series.
The notes
are unsecured and will rank equally with all our unsecured unsubordinated
debt. For current information on our debt outstanding see our most
recent Form 10-K and 10-Q. See
Where You Can Find More
Information
.
The notes
will be denominated in U.S. dollars and we will pay principal and interest in
U.S. dollars. Unless an applicable pricing or prospectus supplement
states otherwise, the notes will not be subject to any conversion, amortization,
or sinking fund. We expect that the notes will be “book-entry,”
represented by a permanent global note registered in the name of The Depository
Trust Company, or its nominee. We reserve the right, however, to
issue note certificates registered in the name of the noteholders.
In the
discussion that follows, whenever we talk about paying principal on the notes,
we mean at maturity or redemption. Also, in discussing the time for
notices and how the different interest rates are calculated, all times are New
York City time and all references to New York mean the City of New York, unless
otherwise noted.
The
following terms may apply to each note as specified in the applicable pricing or
prospectus supplement and the note.
Redemptions
If we
issue redeemable notes, we may redeem such notes at our option unless an
applicable pricing or prospectus supplement states otherwise. The
pricing or prospectus supplement will state the terms of
redemption. We may redeem notes in whole or in part by delivering
written notice to the noteholders no more than 60, and not less than 30, days
prior to redemption. If we do not redeem all the notes of a series at
one time, the Trustee selects the notes to be redeemed in a manner it determines
to be fair.
Remarketed
Notes
If we
issue notes with remarketing features, an applicable pricing or prospectus
supplement will describe the terms for the notes including: interest rate,
remarketing provisions, our right to redeem notes, the holders’ right to tender
notes, and any other provisions.
Book-Entry
Notes - Registration, Transfer, and Payment of Interest and
Principal
Unless
otherwise stated in a prospectus supplement, the Depository Trust Company
(“DTC”), New York, New York, will act as securities depository for the
notes. The notes will be issued as fully-registered notes registered
in the name of Cede & Co. (DTC’s partnership nominee) or such other name as
may be requested by an authorized representative of DTC. One
fully-registered note certificate will be issued for each issue of the notes,
each in the aggregate principal amount of such issue, and will be deposited with
DTC.
DTC, the
world’s largest securities depository, 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, as amended . DTC holds
and provides asset servicing for over 3.5 million issues of U.S. and non-U.S.
equity issues, corporate and municipal debt issues, and money market instruments
(from over 100 countries) that DTC’s participants (“Direct Participants”)
deposit with DTC. DTC also facilitates the post-trade settlement
among Direct Participants of sales and other securities transactions in
deposited securities, through electronic computerized book-entry transfers and
pledges between Direct Participants’ accounts. This eliminates the
need for physical movement of securities certificates. Direct
Participants include both U.S. and non-U.S. securities brokers and dealers,
banks, trust companies, clearing corporations, and certain other
organizations. DTC is a wholly-owned subsidiary of The Depository
Trust & Clearing Corporation (“DTCC”). DTCC is the holding
company for DTC, National Securities Clearing Corporation and Fixed Income
Clearing Corporation, all of which are registered clearing
agencies. DTCC is owned by the users of its regulated
subsidiaries. Access to the DTC system is also available to others
such as both U.S. and non-U.S. securities brokers and dealers, banks, trust
companies, and clearing corporations that clear through or maintain a custodial
relationship with a Direct Participant, either directly or indirectly (“Indirect
Participants”). DTC has Standard & Poor’s highest
rating: AAA. The DTC Rules applicable to its Participants
are on file with the SEC. More information about DTC can be found at
www.dtcc.com and www.dtc.org.
Purchases
of notes under the DTC system must be made by or through Direct Participants,
which will receive a credit for the notes on DTC’s records. The
ownership interest of each actual purchaser of each note (“Beneficial Owner”) is
in turn to be recorded on the Direct and Indirect Participants’
records. Beneficial Owners will not receive written confirmation from
DTC of their purchase. Beneficial Owners are, however, expected to
receive written confirmations providing details of the transaction, as well as
periodic statements of their holdings, from the Direct or Indirect Participant
through which the Beneficial Owner entered into the
transaction. Transfers of ownership interests in the notes are to be
accomplished by entries made on the books of Direct and Indirect Participants
acting on behalf of Beneficial Owners. Beneficial Owners will not
receive certificates representing their ownership interests in notes, except in
the event that use of the book-entry system for the notes is
discontinued.
To
facilitate subsequent transfers, all notes deposited by Direct Participants with
DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or
such other name as may be requested by an authorized representative of
DTC. The deposit of notes with DTC and their registration in the name
of Cede & Co. or such other DTC nominee do not effect any change in
beneficial ownership. DTC has no knowledge of the actual Beneficial
Owners of the notes; DTC’s records reflect only the identity of the Direct
Participants to whose accounts such notes are credited, which may or may not be
the Beneficial Owners. The Direct and Indirect 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 Direct Participants and Indirect
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. Beneficial Owners of notes may wish to take certain
steps to augment the transmission to them of notices of significant events with
respect to the notes, such as redemptions, tenders, defaults, and proposed
amendments to the notes documents. For example, Beneficial Owners of
notes may wish to ascertain that the nominee holding the notes for their benefit
has agreed to obtain and transmit notices to Beneficial Owners. In
the alternative, Beneficial Owners may wish to provide their names and addresses
to the registrar and request that copies of notices be provided directly to
them.
Redemption
notices shall be sent to DTC. If less than all of the notes are being
redeemed, DTC’s practice is to determine by lot the amount of the interest of
each Direct Participant in such issue to be redeemed.
Neither
DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with
respect to the notes unless authorized by a Direct Participant in accordance
with DTC’s MMI Procedures. Under its usual procedures, DTC mails an
Omnibus Proxy to us 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 notes are credited on the record date
(identified in a listing attached to the Omnibus Proxy).
Redemption
proceeds and distributions on the notes will be made to Cede & Co., or such
other nominee as may be requested by an authorized representative of
DTC. DTC’s practice is to credit Direct Participants’ accounts upon
DTC’s receipt of funds and corresponding detail information from us or the
Trustee on the payable date in accordance with their respective holdings shown
on DTC’s records. Payments by Participants to Beneficial Owners will
be governed by standing instructions and customary practices, as is the case
with notes 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, the Trustee or us, subject to any statutory or regulatory requirements as
may be in effect from time to time. Payment of redemption proceeds
and distributions to Cede & Co. (or such other nominee as may be requested
by an authorized representative of DTC) is our or the Trustee’s responsibility,
disbursement of such payments to Direct Participants will be the responsibility
of DTC, and disbursement of such payments to the Beneficial Owners will be the
responsibility of Direct and Indirect Participants.
A
Beneficial Owner shall give notice to elect to have its notes purchased or
tendered, through its Participant, to the Tender/Remarketing Agent, and shall
effect delivery of such notes by causing the Direct Participant to transfer the
Participant’s interest in the notes, on DTC’s records, to the Tender/Remarketing
Agent. The requirement for physical delivery of the notes in
connection with an optional tender or a mandatory purchase will be deemed
satisfied when the ownership rights in the notes are transferred by Direct
Participants on DTC’s records and followed by a book-entry credit of tendered
notes to the Tender/Remarketing Agent’s DTC account.
DTC may
discontinue providing its services as depository with respect to the notes at
any time by giving reasonable notice to us. Under such circumstances,
in the event that a successor depository is not obtained, note certificates are
required to be printed and delivered.
We may
decide to discontinue use of the system of book-entry only transfers through DTC
(or a successor securities depository). In that event, note
certificates will be printed and delivered to DTC.
The
information in this section concerning DTC and DTC’s book-entry system has been
obtained from sources that we believe to be reliable, but we take no
responsibility for the accuracy thereof.
Note
Certificates-Registration, Transfer, and Payment of Interest and
Principal
If we
issue note certificates, they will be registered in the name of the
noteholder. The notes may be transferred or exchanged, pursuant to
administrative procedures in the Indenture, without the payment of any service
charge (other than any tax or other governmental charge) by contacting the
paying agent. Payments on note certificates will be made by
check.
Interest
Rate
The
interest rate on the notes will either be fixed or floating. The
interest paid will include interest accrued to, but excluding, the date of
maturity or redemption. Interest is generally payable to the person
in whose name the note is registered at the close of business on the record date
before each interest payment date. Interest payable at maturity or
redemption, however, will be payable to the person to whom principal is
payable.
Unless an
applicable pricing or prospectus supplement states otherwise, if we issue a note
after a record date but on or prior to the related interest payment date, we
will pay the first interest payment on the interest payment date after the next
record date. We will pay interest payments by check or wire transfer,
at our option.
Fixed
Rate Notes
A pricing
or prospectus supplement will designate the record dates, payment dates and the
fixed rate of interest payable on a note. We will pay interest
monthly, quarterly or semi-annually, and upon maturity or
redemption. Unless an applicable pricing or prospectus supplement
states otherwise, if any payment date falls on a day that is not a business day,
we will pay interest on the next business day and no additional interest will be
paid. Interest payments will be the amount of interest accrued to,
but excluding, each payment date. Interest will be computed using a
360-day year of twelve 30-day months.
Floating
Rate Notes
Each
floating rate note will have an interest rate formula. The applicable
pricing supplement will state the initial interest rate or interest rate formula
on each note effective until the first interest reset date. The
applicable pricing or prospectus supplement will state the method and dates on
which the interest rate will be determined, reset and paid.
Events
of Default
“Event of
Default” means any of the following:
- failure
to pay the principal of (or premium, if any, on) any note of a series for three
days after payment is due;
- failure
to pay any interest on any note of any series for 30 days after payment is
due;
- failure
to perform any other requirements in such notes, or in the Indenture in regard
to such notes, for 90 days after notice;
- failure
to pay any sinking fund installment for three days after payment is
due;
- certain
events of bankruptcy or insolvency; or any other event of default specified in a
series of notes.
An Event
of Default for a particular series of notes does not necessarily mean that an
Event of Default has occurred for any other series of notes issued under the
Indenture. If an Event of Default occurs and continues, the Trustee
or the holders of at least 33% of the principal amount of the notes of the
series affected may require us to repay the entire principal of the notes of
such series within ten days after the date of such notice (“Repayment
Acceleration”). In most instances, the holders of at least a majority
in aggregate principal amount of the notes of the affected series may rescind a
previously triggered Repayment Acceleration if we have first cured our default
by depositing with the Trustee enough money to pay all (unaccelerated) past due
amounts and penalties, if any.
The
Trustee must within 90 days after a default occurs, notify the holders of the
notes of the series of default unless such default has been cured or
waived. We are required to file an annual certificate with the
Trustee, signed by an officer, concerning any default by us under any provisions
of the Indenture.
Subject
to the provisions of the Indenture relating to its duties in case of default,
the Trustee shall be under no obligation to exercise any of its rights or powers
under the Indenture at the request, order or direction of any holders unless
such holders offer the Trustee reasonable indemnity. Subject to the
provisions for indemnification, the holders of a majority in principal amount of
the notes of any series may direct the time, method and place of conducting any
proceedings for any remedy available to, or exercising any trust or power
conferred on, the Trustee with respect to such notes.
Modification
of Indenture
Under the
Indenture, our rights and obligations and the rights of the holders of any notes
may be changed. Any change affecting the rights of the holders of any
series of notes requires the consent of the holders of not less than a majority
in aggregate principal amount of the outstanding notes of all series affected by
the change, voting as one class. However, we cannot change the terms
of payment of principal or interest, or a reduction in the percentage required
for changes or a waiver of default, unless the holder consents. We
may issue additional series of notes and take other action that does not affect
the rights of holders of any series by executing supplemental indentures without
the consent of any noteholders.
Consolidation,
Merger or Sale
We may
merge or consolidate with any entity or sell substantially all of our assets as
an entirety as long as the successor or purchaser expressly assumes the payment
of principal, and premium, if any, and interest on the notes.
Legal
Defeasance
We will
be discharged from our obligations on the notes of any series at any time
if:
·
|
we
deposit with the Trustee sufficient cash or government securities to pay
(i) the principal, interest, any premium and any other sums due to the
stated maturity date or a redemption date of the note of the series and
(ii) any applicable mandatory sinking fund payments on the day such
payments are due;
|
·
|
we
deliver to the Trustee an opinion of counsel to the effect that such
provision would not cause any outstanding notes then listed on a national
security exchange to be delisted;
and
|
·
|
we
deliver to the Trustee an opinion of counsel stating that the federal
income tax obligations of noteholders of that series will not change as a
result of our performing the action described
above.
|
If this
happens, the noteholders of the series will not be entitled to the benefits of
the Indenture except for registration of transfer and exchange of notes and
replacement of lost, stolen or mutilated notes.
Covenant
Defeasance
We will
be discharged from our obligations under certain restrictive covenants
applicable to the notes of a particular series if, among other things, we
perform all of the actions described above. See
Legal
Defeasance
. If this happens, any later breach of that
particular restrictive covenant will not result in Repayment
Acceleration. If we cause an Event of Default apart from breaching
that restrictive covenant, there may not be sufficient money or government
obligations on deposit with the Trustee to pay all amounts due on the notes of
that series. In that instance, we would remain liable for such
amounts.
Governing
Law
The
Indenture and notes of all series will be governed by the laws of the State of
New York.
Concerning
the Trustee
We and
our affiliates use or will use some of the banking services of the Trustee and
other services of its affiliates in the normal course of
business.
PLAN
OF DISTRIBUTION
We may
sell the notes (a) through agents; (b) through underwriters or dealers; or (c)
directly to one or more purchasers.
By
Agents
Notes may
be sold on a continuing basis through agents designated by us. The
agents will agree to use their reasonable efforts to solicit purchases for the
period of their appointment.
The
Agents will not be obligated to make a market in the notes. We cannot
predict the amount of trading or liquidity of the notes.
By
Underwriters
If
underwriters are used in the sale, the underwriters will acquire the notes for
their own account. The underwriters may resell the notes in one or
more transactions, including negotiated transactions, at a fixed public offering
price or at varying prices determined at the time of sale. The
obligations of the underwriters to purchase the notes will be subject to certain
conditions. The underwriters will be obligated to purchase all the
notes of the series offered if any of the notes are purchased. Any
initial public offering price and any discounts or concessions allowed or
re-allowed or paid to dealers may be changed from time to time.
Direct
Sales
We may
also sell notes directly. In this case, no underwriters or agents
would be involved.
General
Information
Underwriters,
dealers, and agents that participate in the distribution of the notes may be
underwriters as defined in the Securities Act of 1933 (the “Act”), and any
discounts or commissions received by them from us and any profit on the resale
of the notes by them may be treated as underwriting discounts and commissions
under the Act.
We may
have agreements with the underwriters, dealers and agents to indemnify them
against certain civil liabilities, including liabilities under the Act or to
contribute to payments that each underwriter, dealer or agent may be required to
make in respect thereto.
Underwriters,
dealers and agents and their respective affiliates may engage in transactions
with, or perform services for, us or our affiliates in the ordinary course of
their businesses.
LEGAL
OPINIONS
Jeffrey
D. Cross or Thomas G. Berkemeyer, Deputy General Counsel and Associate General
Counsel, respectively, of American Electric Power Service Corporation, our
service company affiliate, will issue an opinion about the legality of the notes
for us. Dewey & LeBoeuf LLP, New York, NY will issue an opinion
for the agents or underwriters. From time to time, Dewey &
LeBoeuf LLP acts as counsel to our affiliates for some matters.
EXPERTS
The
financial statements and the related financial statement schedule incorporated
in this Prospectus by reference from the Public Service Company of Oklahoma
Annual Report on Form 10-K for the year ended December 31, 2007 have been
audited by Deloitte & Touche LLP, an independent registered public
accounting firm, as stated in their reports (which reports express an
unqualified opinion and, as to the report related to the financial statements,
includes an explanatory paragraph concerning the adoption of new accounting
pronouncements in 2006 and 2007), which are incorporated herein by reference,
and have been so incorporated in reliance upon the reports of such firm given
upon their authority as experts in accounting and auditing.
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