Notice is hereby given that the following filing(s) has/have been made with the Commission pursuant to provisions of the Act and rules promulgated under the Act. All interested persons are referred to the application(s) and/or declaration(s) for complete statements of the proposed transaction(s) summarized below. The application(s) and/or declaration(s) and any amendment(s) is/are available for pubic inspection through the Commission's Branch of Public Reference.
Interested persons wishing to comment or request a hearing on the application(s) and/or declaration(s) should submit their views in writing by March 14, 2000, to the Secretary, Securities and Exchange Commission, Washington, DC 20549-0609, and serve a copy on the relevant applicant(s) and/or declarant(s) at the address(es) specified below. Proof of service (by affidavit or, in the case of an attorney at law, by certificate) should be filed with the request. Any request for hearing should identify specifically the issues of facts or law that are disputed. A person who so requests will be notified of any hearing, if ordered, and will receive a copy of any notice or order issued in the matter. After March 14, 2000, the application(s) and/or declaration(s), as filed or as amended, may be granted and/or permitted to become effective.
Alliant Energy Corporation, et al. (70-9597)
Alliant Energy Corporation (“Alliant Energy”), 222 West Washington Avenue, Madison, Wisconsin 53703, a registered holding company, and its public utility subsidiary companies, Wisconsin Power & Light Company (“WP&L”), 222 West Washington Avenue, Madison, Wisconsin 53703, IES Utilities, Inc. (“IES”), Alliant Tower, 200 First Street, S.E., Cedar Rapids, Iowa 52401, and Interstate Power Company (“IPC”, and together with WP&L and IES, “Operating Companies”), 1000 Main Street, P.O. Box 769, Dubuque, Iowa 52004-07691, have filed an application-declaration under sections 6(a), 7, 9(a), 10, 12(b), and 13(b) of the Act and rules 43, 45, 54 and 90 under the Act.
WP&L and IES currently have in place separate programs under which each company sells its customer accounts receivable (“Receivables”) to Ciesco, L.P. (“Ciesco”), an accounts receivable financing conduit managed by Citicorp North America, Inc. (“Citicorp”), a subsidiary of Citibank N.A. (“Citibank”). The purpose of the programs is to enable the three utilities to accelerate cash receipts from the Receivables, reducing the need for more costly sources of working capital.
WP&L and IES, together with IPC, intend to enter into a new receivables financing program that will replace the existing program, which expires on March 31, 2000. In connection with the new program, the Operating Companies propose to organize special purpose subsidiaries (“Subsidiaries”) to engage in the business of acquiring Receivables from the Operating Companies and selling them at a discount to Ciesco or Citibank.
Under the proposal, each Operating Company would organize a Subsidiary as a single-member, nominally capitalized limited liability company, which would acquire its parent Operating Company's Receivables under separate receivables sale agreements. The Subsidiaries will not conduct any other business or own any other assets. The Subsidiaries would form a jointly owned, nominally capitalized limited liability company (“Newco”), which would acquire the Receivables from the Subsidiaries under the new terms and conditions, under a receivables purchase and sale agreement. Newco, in turn, would sell an undivided percentage ownership interest in the pool of Receivables to Ciesco or Citibank, as the case may be, under separate receivables purchase and sale agreements.
Each Subsidiary will purchase the Receivables from its parent Operating Company at a discount. This discount will take into account Ciesco's and Citibank's cost of funds, as the case may be, and program fees and administrative and servicing costs, all of which would be passed through by Newco, and the historical default experience on accounts receivable originated by the Operating Company.
The purpose of forming the Subsidiaries is to isolate the Receivables from the Operating Company which has originated them such that, in accordance with generally accepted accounting principles, the sale of the Receivables to the Subsidiaries qualifies for treatment as an asset sale by the Operating Companies rather than as a loan secured by the Receivables. This allows the Receivables to be removed as assets from the Operating Companies' books. Through Newco, the Operating Companies will be able to consolidate their Receivables into a larger pool and eliminate duplicate structuring and administrative costs that would be associated with creating and maintaining separate programs with Ciesco. Alliant Energy Corporate Services, Inc. (“Services”), a service company subsidiary of Alliant Energy, will be designated the initial Collection Agent under each receivables sale agreement. It, however, will subcontract with the Operating Companies to perform the duties of the Collection Agent, and, in that capacity, each of the Operating Companies will continue to bill its customers and service their accounts. The originating Operating Company, as subcontractor to Services, will be entitled to receive an agent's fee of 1/4 of 1% per annum on the average daily amount of capital invested by Ciesco in its Receivables. In addition, Alliant Energy proposes to provide credit support under certain circumstances in favor of Ciesco, Citicorp and Citibank. Specifically, Start Printed Page 10571Ciesco, Citicorp and Citibank would have limited recourse against Alliant Energy, under an agreement with Alliant Energy (“Agreement”), for defaulted Receivables. The recourse limit for defaulted Receivables is calculated under the Agreement by multiplying the amount of capital invested by Ciesco by a percentage equal to the greatest of: (a) Three times the maximum amount of Receivables of any single customer of an Operating Company that may be financed under the program (“Concentration Limit”), expressed as a percentage of the pool of Receivables sold by Newco in any particular period;  (b) three times the greatest 12-month rolling average default ratio for the Receivables for the twelve months ending immediately on the date of calculation; and (c) 9%.
In addition, Ciesco, Citicorp and Citibank would have recourse against Alliant Energy for Ciesco's (or Citibank's) expenses incurred in (a) funding the purchase of Receivables and (b) paying the Collection Agent fee, to the extent that those expenses are not paid out of collections. Alliant Energy is liable also for (a) failure to transfer to Newco or Ciesco a first priority ownership interest in the Receivables; (b) the breach by an Operating Company, a Subsidiary or Newco of its representations, warranties and covenants; and (c) certain indemnity obligations.
For the Commission, by the Division of Investment Management, under delegated authority.Start Signature
Margaret H. McFarland,
1. Citibank will acquire the Receivables in the event Ciesco is unable to issue commercial paper to fund the purchase of Receivables.Back to Citation
2. Ciesco or Citibank, as owner of the Receivables, would be obligated to pay the agent's fee; however, that payment will be passed through to the Operating Companies out of the collections on the Receivables.Back to Citation
3. The Concentration Limit has been set initially at three percent, but may be adjusted by mutual agreement.Back to Citation
[FR Doc. 00-4554 Filed 2-25-00; 8:45 am]
BILLING CODE 8010-01-M