Filings Under the Public Utility Holding Company Act of 1935 (``Act'')

SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-26064]

Filings Under the Public Utility Holding Company Act of 1935

(``Act'')

June 10, 1994.

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 thereunder. 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 amendments thereto is/are available for public

inspection through the Commission's Office 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 July 5, 1994, to the Secretary, Securities and Exchange

Commission, Washington, DC 20549, 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 case of an attorney at law, by

certificate) should be filed with the request. Any request for hearing

shall identify specifically the issues of fact 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 said date, the application(s) and/or declaration(s), as

filed or as amended, may be granted and/or permitted to become

effective.

American Electric Power Company Inc., et al. (70-7022)

American Electric Power Company, Inc. (``AEP''), a registered

holding company, and AEP Generating Company (``Generating''), an

electric public utility subsidiary of AEP, both of 1 Riverside Plaza,

Columbus, Ohio 43215, have filed a post-effective amendment to their

application-declaration filed under Sections 9(a), 10, 12(b) and 12(d)

of the Act and Rules 44 and 45 thereunder.

By order dated August 17, 1984 (HCAR No. 23399), Generating

acquired a \1/2\ undivided interest in the Rockport Generating Station

(``Plant'') with Indiana & Michigan Electric Company, now Indiana

Michigan Power Company (``I&M''), also a subsidiary of AEP, including

responsibility for 50% of the costs associated with acquiring certain

air and water pollution control devices (``Project'').

By order dated October 4, 1984 (HCAR No. 23445) (``October 1984

Order''), Generating was authorized to enter into an Agreement of Sale

(``Agreement'') with the City of Rockport, Indiana (``City'') providing

for the construction and installation of the Project by the City, and

the issuance by the City of pollution control revenue bonds (``Series

1984 A bonds'') to finance Generating's share of the Project. The

October 1984 Order authorized the issuance of the Series 1984 A Bonds

in a principal amount of $150 million. In addition, the October 1984

Order reserved jurisdiction ``with respect to the fees and commissions

to be incurred by [Generating] and AEP in connection with this

transaction, and the terms of sale under the Agreement.''

By order dated September 6, 1985 (HCAR No. 23821) (``1985 Order''),

Generating was authorized to enter into a First Amendment to Agreement

of Sale (``1985 Agreement'') with the City providing for the issuance

and sale of three additional series of pollution control bonds

(collectively, ``Series 1985 Bonds''), each in the principal amount of

$55 million with a maturity of September 1, 2014. One series of the

Series 1985 Bonds was issued with a variable interest rate (``Variable

Rate Bonds'') the rate of which was based upon an index and not to

exceed 12% per annum, determined weekly and payable monthly. A second

series of the Series 1985 Bonds was issued with the interest payable

semi-annually at a rate which will be adjusted every five years based

upon an index (``Adjustable Bonds''). A third series of the Series 1985

Bonds was issued with the interest rate fixed at 9\3/8\% per annum,

payable semi-annually (``Fixed Rate Bonds''), and these Fixed Rate

Bonds were issued subject to optional redemption following an initial

period not to exceed ten years. The proceeds of the Series 1985 Bonds

were used to cover a portion of the cost of construction of the Project

and to refund the outstanding short-term Series 1984 A Bonds in the

principal amount of $150 million. The 1985 Order included no

reservation of jurisdiction.

AEP and Generating now propose that Generating entire into an

agreement with the City whereby the City will issue and sell up to $55

million of a series of refunding bonds (``Refunding Bonds'') the net

proceeds from the sale of which will be used to provide for the payment

of principal required for the refunding prior to their stated maturity

of $55 million principal amount of the Fixed Rate Bonds. The Refunding

Bonds will be issued under and secured by the existing indenture

(``Indenture'') between the City and the Lincoln National Bank and

Trust Company, as trustee (``Trustee'') and a fifth supplemental

indenture (``Fifth Supplemental Indenture'') to be execute pursuant to

Commission authorization under this post-effective amendment. Pursuant

to the Indenture and the Fifth Supplemental Indenture, the proceeds of

the sale of the Refunding Fixed Rate Bonds will be deposited with the

Trustee and applied by the Trustee, together with other funds supplied

by Generating, to the redemption of the Series 1985 A Bonds at a price

of 102% of the principal amount thereof.

It is stated that the Refunding Fixed Rate Bonds will bear interest

semi-annually and mature at a date or dates not more than 40 years from

the date of their issuance. The Refunding Fixed Rate Bonds may be

subject to mandatory or optional redemption under circumstances and

terms specified at the time of pricing, and, if it is deemed advisable,

may also include a sinking fund provision. In addition, the Refunding

Fixed Rate Bonds may not, if it is deemed advisable, be redeemable at

the option of the City in whole or in part at any time for a period to

be determined at the time of pricing the Refunding Fixed Rate Bonds.

Generating has been advised that, depending on maturity and other

factors, the annual interest rate on obligations, interest on which is

so excludable from gross income, historically has been, and can be

expected at the time of issuance of the Refunding Fixed Rate Bonds to

be, 1\1/2\% to 2\1/2\% or more lower than the rates of obligations of

like terms and comparable quality, interest on which is fully subject

to Federal income tax. In any event, on series or Refunding Fixed Rate

Bonds will be issued at rates in excess of those generally obtained at

the time of pricing for sales of substantially similar tax-exempt bonds

(having the same maturity, issued by entities of comparable credit

quality and having similar terms, conditions and features). As of June

1, 1994, Generating anticipated that the interest rate for the

Refunding Fixed Rate Bonds would be 7.25% without any credit

enhancement and 6.75% with bond insurance.

Generating will not agree, without further Commission

authorization, to the issuance of any Refunding Fixed Rate Bond by the

City (i) if the stated maturity of any such Bond shall be more than

forth (40) years, (ii) if the rate of interest to be borne by any such

Bond shall exceed 8% per annum, (iii) if the discount from the initial

public offering price of any such Bond shall exceed 5% of the principal

amount thereof, or (iv) if the initial public offering price shall be

less than 95% of the principal amount thereof.

Generating also proposes to provide credit enhancement for the

Refunding Bonds in the form of a letter of credit, surety bond or bond

insurance and pay any related fees. As a supplement or alternative to a

letter of credit, surety bond or bond insurance, AEP proposes to

guarantee the Refunding Bonds. Any letter of credit would not exceed

$55 million and would be for a term ranging from one to five years and

would be renewable. Drawings under the letter of credit would bear

interest at no more than 1% above the bank's prime rate. Generating may

pay an annual fee which would not exceed 1.25% of the face amount of

the letter of credit.

For the Commission, by the Division of Investment Management,

pursuant to delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 94-14736 Filed 6-16-94; 8:45 am]

BILLING CODE 8010-01-M