ML17300A646

Submits Financial Info Supporting Supplemental Application in Respect of Sale & Leaseback Transactions.Closing Date & Equity Investors/Investment Discussed.Chrysler,Commercial Federal,Bank of Boston & Util Quarterly Repts Encl

ML17300A646
Person / Time
Site:	Palo Verde
Issue date:	11/26/1986
From:	Toy T EL PASO ELECTRIC CO., MUDGE, ROSE, GUTHRIE, ALEXANDER & FERDEN
To:	Miraglia F Office of Nuclear Reactor Regulation
References
TAC-63146, NUDOCS 8612030697
Download: ML17300A646 (12)

Text

'EQULATO INFORMATION DISTRIBUTION TEI'I (R IDS)

I' ACCESSION NBR: 8612030697 DOC. DATE: 86/11/26 NOTARIZED: NO DOCKET FACIL: STN-50-529 Palo Verde Nuclear Stations Uni t 2r Arizona Pub 1 i 05000529 AUTH. NAME AUTHOR AFFILIATION TOYS T. I'. El Paso Electric Co.

TOYi T. M. Mudge~ Rose. Quthriei Alexander 8c Ferden REC I P. NAME RECIPIENT AFFILIATION MIRAQLIA>F J Division of Pressuri zed Water Reactor Licensing B (post 8

SUBJECT:

Submits financial info supporting supplemental application in respect of sale Cc leaseback transactions. Closing date fk equity investors/investment discussed. Chrgsleri Commercial

~ ~~ ~ J Federal'ank of Boston Zc util quarterly repts encl.

DISTRIBUTION CODE: B005D COPIES RECEIVED: LTR ENCL SIZE:

TITLE: Licensing Submittal: Application/General Info Amdt NOTES: Standardized plant. M. Davisi NRR: 1Cg. 05000529 RECIPIENT COPIES RECIP I ENT COP IES ID CODE/NAME LTTR ENCL ID CODE/NAI'IE LTTR ENCL PWR-B PD7 LA 1 1 PWR-B PD7 PD 05 2 2 LICITRA. E 01 1 1 INTERNAL: ACRS 10 3 3 *DM/LFMB 0 AEOD/PTB 1 1 ELD/HDS3 11 1 1 IE/DGAVT/GAB 1 1 0+

09'QN5 1 1 1 1 SP 1 1 EXTERNAL: LPDR 03 1 1 NRC PDR 02 1 1 NSIC 06 1 1 NOTES:

TOTAL NUMBER OF COPIES REQUIRED: LTTR 19 ENCL 18

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IvIUDGE ROSE GUTHRIE ALEXANDER I5'ERDON I80 MAIDEN LANE t SVITC 000, NORTHSRIOOC CCHTRC WASHINOTONg D.C. 20037 SIS NORTH FIAOLCR ORIVC 20t 429 0355 NEW YORK, N. Y. I0038 WCST PALH SCACH. FL 33401 305 550 8 IOO SUITC 2020 333 SOUTH ORANO AVCNUC 2 I 2- S I 0 -700 0 I2, RUL DC LA PAIX LOS ANOCLCSi CALIF, Q007I 7500t, PARIS, FRANCE 2I3 SI3 III2 CASLC ADORCSS> BALTUCHINS NCW YORK III At. SI. 57.7I TCLCXIWV I278$ 0 TCLCCOPICRt 2I2 245 2555 November 26, 1986 Director of Nuclear Reactor Regulation Attention: Frank J. Miraglia, Director Division of Pressurized Water Reactor Licensing-B Nuclear Regulatory Commission Washington, D.C. 20555 Re: Supplemental Application in Respect of Sale and Leaseback Transactions El Paso Electric Company Dated October by15, 1986 Palo Verde Nuclear Generating Station Unit 2 (Docket No. STN 50-529)

Dear Mr. Miraglia:

As undertaken in the above-captioned Supplemental Application (the Supplemental Application),

the undersigned, on behalf of El Paso Electric Company (El Paso), provides the following information:

(i) Closing Date: El Paso proposes to consummate two sale and leaseback transactions on or about December 18, 1986 with respect to all of the Remaining Unit 2 Interest. The proposed closing date is at least seven (7) days following December 5, 1986, the date specified for 1021.700.2898.58:1 8612030697 861126 PDR ~DOCK 05000529 PDR.

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the expiration of the comment period in the Federal Register notice (51 F.R.

40275, November 5, 1986) relating to the Supplemental Application.

(ii) Identity of Equity Investors:

The proposed Equity Investors are Chrysler Financial Corporation (Chrysler) or an af filiate thereof and Commercial Federal Corporation (Commercial) or an a ff il iate thereo f, respectively.

Chrysler and an affiliate of Commercial were two of the six Equity Investors which consummated sale and leaseback transactions with El Paso on August 18 and August 22, 1986 (see paragraph (i) under the caption "Background" in the Supplemental Application). The then cur-rently available interim and annual financial statements for Chrysler and Commercial were forwarded to the Commission under cover of letter dated August 7, 1986.

(iii) Equity Investment: Chrysler (or an affiliate thereof) will provide an equity investment of approximately $ 18.05 million (20%) with respect to approxi-mately 990.25 million of the equipment cost relating to the Remaining Unit 2 Interest. Commercial (or an af filiate thereof) will provide an equity invest-ment of approximately $ 18. 05 million (20%) with respect to approximately

$ 90.25 million of the equipment cost relating to the Remaining Unit 2 Interest. The debt portion, aggregating approximately $ 144.4 million, will be funded with the proceeds of a public offering by El Paso of Lease Obligation Bonds, Series 1986A (the Bonds), which offering is scheduled to be consummated, pursuant to an Underwriting Agreement (the Underwriting Agreement) with Smith Barney, Harris Upham & Co. Incorporated and PaineWebber Incorporated., as repre-sentatives of the several Underwriters (the Underwriters), simultaneously with 1021.700.2898.58:1

the consummation of the additional sale and leaseback transactions.

Enclosed herewith for each of El Paso, Bank of Boston Corporation (parent of The First National Bank of, Boston, the Owner Trustee), Chrysler and Commercial is Quarterly Report on Form 10-Q for the quarter mosta recently ended. These reports include current financial statements for each such person. Enclosed also is El Paso's Registration Statement on Form S-3 containing a preliminary prospectus relating to the Bonds.

El Paso will price the Bonds, execute the Underwriting Agreement with the Underwriters of such Bonds and offer the Bonds to the public as early as December 8, 1986, and no later then December 11, 1986.

Although the closings of the additional sale and lease-back transactions and the issuance of the Bonds may not occur until as late as December 18, 1986, El Paso and the Underwriters need assurance on or prior to the date of the commencement of the public offering that all con-ditions to such closings have been, or can reasonably be expected to be, fulfilled. Thus, by such time El Paso expects to have executed Participation Agreements with the respective Equity Investors; and El Paso will have determined that there has not been any appeal filed with respect to the Amended Order of the New Mexico Public Service Commission, issued on November 14, 1986, and that such Amended Order can be reasonably expected to become final on December 15, 1986. Furthermore, El Paso was advised, by a letter dated November 14, 1986 from the Chief Accountant of the Federal Energy Regulatory Commission, that no amendment to the Order, dated July 16, 1986, of the Federal Energy Regulatory Commission is necessary in order to authorize the issue and sale of the Bonds and the additional sale and lease-back transactions with the Equity Investors. Consistent with the foregoing objective of El Paso and the Underwriters, El Paso respectfully requests that a fur-ther amendment to Facility Operating License NPF-51 be issued as requested in the Supplemental Application on December 8, 1986 or as soon thereafter as possible but not later than December 11, 1986.

1021.700.2898.58:1

't Because of the importance of the foregoing schedule to the successful concurrent closing of the sale of the Bonds and the additional sale and leaseback transactions, officers of El Paso and counsel for El Paso, have indicated a desire to meet with the Commission ' sta f f in the event that the further amend-ment to the facility license cannot be issued as requested in this letter.

If I not hesitate to can be of further assistance, call at please do (212) 510-7750.

Sincerely, f~~ km~(

Timothy Michael To Copies with enclosures to:

Edward S. Christenbury, Esq.

Office of Executive Legal Director Nuclear Regulatory Commission 7735 Old Georgetown Road Bethesda, Maryland 21930 Edwin J. Reis, Esq.

Assistant Chief Hearing Counsel Nuclear Regulatory Commission 7735 Old Georgetown Road Bethesda, Maryland 21930 Mr. James C. Peterson Nuclear Regulatory Commission Air Rights III Building 4550 Montgomery Avenue Bethesda, Maryland 20814 Richard J. Goddard, Esq.

Office of Executive Legal Director Nuclear Regulatory Commission 7735 Old Georgetown Road Bethesda, Maryland 21930 1021.700.2898.58:1

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Dane George, Esq.

Kemp, Smith, Duncan 6 Hammond 2000 MBank Plaza El Paso, Texas 79901 Arthur C. Gehr, Esq.

Snell & Wilmer 3100 Valley Bank Center Phoenix, Arizona 85073 Mr. B.E. Bostic*

Executive Vice President El Paso Electric Company 303 North Oregon Street El Paso, Texas 79901 Mr. W.J. Johnson*

Vice President and Controller El Paso Electric Company 303 North Oregon Street El Paso, Texas 79901

• W/o enclosures 1021.700.2898.58:1

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