|
Filed
pursuant to Rule 424(b)(2). Based upon the registration of $350,000,000
aggregate principal amount of FPL Group Capital Inc’s Series A Enhanced
Junior Debentures due 2066 to be offered by means of this prospectus
supplement and the accompanying prospectus under Registration Statement
Nos. 333-137120, 333-137120-01, 333-137120-02, 333-137120-03,
333-137120-04, 333-137120-05, 333-137120-06, 333-137120-07 and
333-137120-08 (“Registration Statement No. 333-137120”), a filing fee of
$37,450 has been calculated in accordance with Rule 457(r). This
filing
fee will be offset against the $477,806 aggregate registration
fee
previously paid. No additional registration fee has been paid with
respect
to this offering. In accordance with Rules 456(b) and 457(r), the
registrants will have $440,356 remaining available for future registration
fees, being the sum of (a) $85,596 from the $123,046 that has already
been
paid with respect to $1,337,450,000 aggregate amount of securities
that
were previously registered pursuant to Registration Statement
Nos. 333-102173, 333-102173-01, 333-102173-02 and 333-102173-03,
which registration statement was filed with the Securities and
Exchange
Commission on December 23, 2002, and were not issued or sold thereunder
and (b) $354,760 from the $354,760 that has already been paid with
respect
to $2,800,000,000 aggregate amount of securities that were previously
registered pursuant to Registration Statement Nos. 333-116209,
333-116209-01,
333-116209-02,
333-116209-03,
333-116209-04
and 333-116209-05,
which registration statement was filed with the Securities and
Exchange
Commission on June 4, 2004, and were not issued or sold thereunder.
This
paragraph shall be deemed to update the “Calculation of Registration Fee”
table in Registration Statement
No. 333-137120.
|
PROSPECTUS
SUPPLEMENT
(To
prospectus dated September 5, 2006)
$350,000,000
Series
A Enhanced Junior Subordinated Debentures
due 2066
The
Series A Enhanced Junior Subordinated Debentures
will
be Fully and Unconditionally Guaranteed
by
FPL
GROUP, INC.
_________________
The
Series A Enhanced Junior Subordinated Debentures will bear interest at
6.60% per
year. FPL Group Capital will pay interest on the securities on January
1, April
1, July 1 and October 1 of each year, beginning January 1, 2007. The securities
will be issued in registered form and in denominations of $25 and integral
multiples thereof. The securities will mature on October 1, 2066.
FPL
Group
Capital may defer interest payments on the securities on one or more occasions
for up to 10 consecutive years as described in this prospectus supplement.
Deferred interest payments will accrue additional interest at the same
rate at
which the Junior Subordinated Debentures bear interest, to the extent permitted
by law.
FPL
Group
Capital may redeem the securities at its option at the times and the prices
described in this prospectus supplement.
FPL
Group
Capital intends to apply to list the securities on the New York Stock Exchange.
Trading on the New York Stock Exchange is expected to commence within 30
days
after the securities are first issued.
See
“Risk Factors” beginning on page S-8 to read about certain factors you should
consider before making an investment in the securities.
________________
Neither
the Securities and Exchange Commission nor any state securities commission
has
approved or disapproved of the securities or determined if this prospectus
supplement or the accompanying prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
________________
|
Per
Junior
Subordinated
Debenture
|
Total
|
|
|
Price
to Public (1)
|
$
25.00
|
$350,000,000
|
|
Underwriting
Discount (2)
|
$ 0.7875
|
$
11,025,000
|
|
Proceeds
to FPL Group Capital (before expenses) (2)
|
$24.2125
|
$338,975,000
|
(1)
Plus
accrued interest, if any, from the date the securities are originally issued,
if
settlement occurs after that date.
(2)
Underwriting commissions of $0.7875 per security (or up to $11,025,000
for all
securities) will be deducted from the proceeds paid to FPL Group Capital
by the
underwriters. However, the commission will be $0.50 per security for sales
to
institutions and,
to
the extent of such sales, the total underwriting discount will be less
than the
amount set forth herein. In addition, other expenses of the offering will
be paid by FPL Group Capital except as discussed under “Underwriting” in this
prospectus supplement.
The
securities are expected to be delivered in book-entry only form through
The
Depository Trust Company, on or about
September
19, 2006.
________________
Merrill
Lynch & Co. acted as structuring advisor for this transaction.
Joint
Book-Running Managers
| Citigroup |
Merrill
Lynch & Co.
|
Morgan
Stanley
|
||
|
UBS
Investment
Bank
|
Wachovia
Securities
|
|||
Junior
Co-Managers
| A.G. Edwards |
Lehman
Brothers
|
| Raymond James |
Wells
Fargo Securities
|
The
date
of this prospectus supplement is September 12, 2006.
The
accompanying prospectus is part of a registration statement filed with the
Securities and Exchange Commission. You should rely only on the information
incorporated by reference or provided in this prospectus supplement and in
the
accompanying prospectus and in any written communication from FPL Group Capital,
FPL Group or the underwriters specifying the final terms of the offering. None
of FPL Group Capital, FPL Group or the underwriters has authorized anyone else
to provide you with additional or different information. None of FPL Group
Capital, FPL Group or the underwriters is making an offer of these securities
in
any jurisdiction where the offer is not permitted. You should not assume that
the information in this prospectus supplement or in the accompanying prospectus
is accurate as of any date other than the date on the front of those documents
or that the information incorporated by reference is accurate as of any date
other than the date of the document incorporated by
reference.
_________________________
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You
should read the following summary in conjunction with the more detailed
information incorporated by reference or provided in this prospectus supplement
or in the accompanying prospectus. This prospectus supplement and the
accompanying prospectus contain forward-looking statements (as that term is
defined in the Private Securities Litigation Reform Act of 1995).
Forward-looking statements should be read with the cautionary statements in
the
accompanying prospectus under the heading “Forward-Looking Statements” and the
important factors discussed in this prospectus supplement and in the
incorporated documents. To the extent the following information is inconsistent
with the information in the accompanying prospectus, you should rely on the
following information. You should pay special attention to the “Risk Factors”
section beginning on page S-8 of this prospectus supplement to determine whether
an investment in these securities is appropriate for you.
FPL
GROUP CAPITAL AND FPL GROUP
FPL
Group Capital
FPL
Group
Capital was incorporated in 1985 as a Florida corporation and is a wholly-owned
subsidiary of FPL Group. FPL Group Capital holds the capital stock or other
ownership interests of, and provides funding for, FPL Group’s operating
subsidiaries other than Florida Power & Light Company. These operating
subsidiaries’ business activities primarily consist of FPL Energy, LLC’s
competitive energy business.
FPL
Group
FPL
Group
is a holding company incorporated in 1984 as a Florida corporation. FPL Group’s
principal subsidiary, Florida Power & Light Company, is a rate-regulated
utility engaged primarily in the generation, transmission, distribution and
sale
of electric energy. Other operations are conducted through FPL Group
Capital.
Both
FPL
Group Capital’s and FPL Group’s principal executive offices are located at 700
Universe Boulevard, Juno Beach, Florida 33408, telephone number (561) 694-4000,
and their mailing address is P.O. Box 14000, Juno Beach, Florida
33408-0420.
RECENT
DEVELOPMENTS
On
December 18, 2005, FPL Group entered into an Agreement and Plan of Merger with
Constellation Energy Group, Inc. and its wholly-owned subsidiary. Under the
terms of the merger agreement, a wholly-owned subsidiary of Constellation Energy
formed for the purpose of the merger will merge with and into FPL Group. As
a
result, FPL Group will survive the merger and will become a wholly-owned
subsidiary of Constellation Energy upon completion of the merger. Following
the
merger, FPL Group Capital would be an indirect subsidiary of Constellation
Energy. Consummation of the merger is subject to customary closing conditions,
including FPL Group and Constellation Energy shareholder approvals, approvals
by
public service or utility commissions of specified states and approval from
the
Federal Energy Regulatory Commission. On December 19, 2005, FPL Group and
Florida Power & Light Company filed with the Securities and Exchange
Commission a Current Report on Form 8-K that provides additional
information on the Agreement and Plan of Merger, as well as other matters,
and
included a copy of that agreement as an exhibit.
SUMMARY—Q&A
What
securities are being offered pursuant to this prospectus
supplement?
FPL
Group
Capital is offering $350,000,000 aggregate principal amount of its Series A
Enhanced Junior Subordinated Debentures due 2066, which will be referred to
as
the “Junior Subordinated Debentures” in this prospectus supplement. FPL Group
Capital’s corporate parent, FPL Group, has agreed to fully and unconditionally
guarantee the payment of principal, interest and premium, if any, on the Junior
Subordinated Debentures. The
Junior Subordinated Debentures will be issued in denominations of $25 and
integral multiples thereof.
What
interest will
be
paid by FPL Group Capital?
The
Junior Subordinated Debentures will bear interest at 6.60% per year. Subject
to
FPL Group Capital’s right to defer interest payments described below, interest
is payable quarterly in arrears on January 1, April 1, July 1 and October 1
of
each year, beginning January 1, 2007.
For
a
more complete description of interest payable on the Junior Subordinated
Debentures, see “Specific Terms of the Junior Subordinated Debentures—Interest
and Maturity.”
What
are the record dates for the payment of interest?
So
long
as the Junior Subordinated Debentures remain in book-entry only form, the record
date for each interest payment date will be the close of business on the
business day immediately preceding the applicable interest payment date. If
the
Junior Subordinated Debentures do not remain in book-entry only form, the record
date for each interest payment date will be the close of business on the
fifteenth calendar day immediately preceding the applicable interest payment
date.
When
can payment of interest be deferred?
So
long
as there is no event of default under the subordinated indenture pursuant to
which the Junior Subordinated Debentures will be issued, FPL Group Capital
may
defer interest payments on the Junior Subordinated Debentures, from time to
time, for one or more periods (each, an “Optional Deferral Period”) of up to
10 consecutive years per Optional Deferral Period. In other words, FPL
Group Capital may declare at its discretion up to a 10-year interest payment
moratorium on the Junior Subordinated Debentures, and may choose to do that
on
more than one occasion. FPL Group Capital may not defer payments beyond the
maturity date of the Junior Subordinated Debentures (which is October 1, 2066).
Any deferred interest on the Junior Subordinated Debentures will accrue
additional interest at the same rate at which the Junior Subordinated Debentures
bear interest, to the extent permitted by applicable law. Once all accrued
and
unpaid interest on the Junior Subordinated Debentures has been paid, FPL Group
Capital can begin a new Optional Deferral Period.
What
restrictions are imposed on FPL Group Capital and FPL Group during an Optional
Deferral Period?
During
any period in which FPL Group Capital defers interest payments on the Junior
Subordinated Debentures, neither FPL Group nor FPL Group Capital may (with
limited exceptions):
|
·
|
declare
or pay any dividend or distribution on its capital
stock;
|
|
·
|
redeem,
purchase, acquire or make a liquidation payment with respect to any
of its
capital stock;
|
|
·
|
pay
any principal, interest or premium on, or repay, repurchase or redeem
any
debt securities that are equal or junior in right of payment with
the
Junior Subordinated Debentures or FPL Group’s guarantee (the “Subordinated
Guarantee”) of FPL Group Capital’s payment obligations under the Junior
Subordinated Debentures (as the case may be);
or
|
|
·
|
make
any payments with respect to any guarantee of debt securities if
such
guarantee is equal or junior in right of payment to the Junior
Subordinated Debentures or the Subordinated Guarantee (as the case
may
be).
|
Even
though you will not receive any interest payments on your Junior Subordinated
Debentures during an Optional Deferral Period, you will be required to accrue
interest income and include original issue discount in your gross income for
United States federal income tax purposes on an economic accrual basis, even
if
you are a cash basis taxpayer. You should consult with your own tax advisor
regarding the tax consequences of an investment in the Junior Subordinated
Debentures. See “Material United States Federal Income Tax Consequences—U.S.
Holders—Interest” in this prospectus supplement.
If
FPL
Group Capital defers interest for a period of 10 consecutive years from the
commencement of an Optional Deferral Period, FPL Group Capital will be required
to pay all accrued and unpaid interest at the conclusion of the 10-year period,
and to the extent it does not do so, FPL Group will be required to make
guarantee payments in accordance with the Subordinated Guarantee with respect
thereto. If FPL Group Capital fails to pay in full all accrued and unpaid
interest at the conclusion of the 10-year period, such failure continues for
30
days and FPL Group fails to make guarantee payments with respect thereto, an
event of default that gives rise to acceleration of principal and interest
on
the Junior Subordinated Debentures will occur under the subordinated indenture
pursuant to which the Junior Subordinated Debentures will be issued. See
“Description of the FPL Group and FPL Group Capital Junior Subordinated
Debentures and the FPL Group Subordinated Guarantee—Events of Default” and
“Description of the FPL Group and FPL Group Capital Junior Subordinated
Debentures and the FPL Group Subordinated Guarantee—Remedies” in the
accompanying prospectus.
When
can FPL Group Capital redeem the Junior Subordinated
Debentures?
FPL
Group
Capital may redeem the Junior Subordinated Debentures at its option before
their
maturity (i) in whole or in part on one or more occasions any time before
October 1, 2011 at 100% of their principal amount plus accrued and unpaid
interest plus any applicable “make-whole premium,” (ii) in whole or in part on
one or more occasions on or after October 1, 2011 at 100% of their principal
amount plus accrued and unpaid interest, or (iii) in whole, but not in part,
before October 1, 2011 at 100% of their principal amount plus accrued and unpaid
interest if certain changes in tax laws, regulations or interpretations occur.
The circumstances under which the Junior Subordinated Debentures may be
redeemed, and the redemption prices, are more fully described below under the
captions “Specific Terms of the Junior Subordinated Debentures—Redemption” and
“Specific Terms of the Junior Subordinated Debentures—Right to Redeem Upon a Tax
Event” in this prospectus supplement.
What
is the Replacement Capital Covenant?
Around
the time of the initial issuance of the Junior Subordinated Debentures, FPL
Group Capital and FPL Group will enter into a Replacement Capital Covenant,
as
described below under “Certain Terms of the Replacement Capital Covenant,” in
which FPL Group Capital and FPL Group will covenant for the benefit of holders
of a designated series of FPL Group Capital’s long-term indebtedness, other than
the Junior Subordinated Debentures, or in certain limited cases a designated
series of long-term indebtedness of FPL Group, that
|
·
|
FPL
Group Capital will not redeem or repurchase the Junior Subordinated
Debentures and
|
|
·
|
FPL
Group will not purchase the Junior Subordinated
Debentures
|
on
or
before October 1, 2036, except, subject to certain limitations, to the extent
that the applicable redemption or repurchase price does not exceed a specified
amount of proceeds from the sale, during the 180 days prior to the date of
that
redemption or repurchase, of qualifying securities that have equity-like
characteristics that are the same as, or more equity-like than, the applicable
characteristics of the Junior Subordinated Debentures at the time of redemption
or repurchase by FPL Group Capital or purchase by FPL Group. The Replacement
Capital Covenant is not intended for the benefit of holders of the Junior
Subordinated Debentures and may not be enforced by them, and the Replacement
Capital Covenant is not a term of the subordinated indenture pursuant to which
the Junior Subordinated Debentures will be issued, the Subordinated Guarantee
or
the Junior Subordinated Debentures.
What
is the ranking of the Junior Subordinated Debentures and the Subordinated
Guarantee?
FPL
Group
Capital’s payment obligation under the Junior Subordinated Debentures will be
unsecured and will rank junior and be subordinated in right of payment and
upon
liquidation to all of FPL Group Capital’s Senior Indebtedness, and FPL Group’s
payment obligation under the Subordinated Guarantee will be unsecured and will
rank junior and be subordinated in right of payment and upon liquidation to
all
of FPL Group’s Senior Indebtedness. Senior Indebtedness of FPL Group Capital and
FPL Group are defined below under “Specific Terms of the Junior Subordinated
Debentures—Ranking of the Junior Subordinated Debentures and the Subordinated
Guarantee.” However, the Junior Subordinated Debentures and the Subordinated
Guarantee will rank equally in right of payment
with
any
Pari Passu Securities, as defined below under “Specific Terms of the Junior
Subordinated Debentures—Ranking of the Junior Subordinated Debentures and the
Subordinated Guarantee.”
FPL
Group
Capital is a holding company that derives substantially all of its income from
its operating subsidiaries. Therefore, the Junior Subordinated Debentures will
be effectively subordinated to all indebtedness and other liabilities, including
trade payables, debt and preferred stock incurred or issued by FPL Group
Capital’s subsidiaries. In addition to trade liabilities, many of FPL Group
Capital’s operating subsidiaries incur debt in order to finance their business
activities. All of this indebtedness will be effectively senior to the Junior
Subordinated Debentures. The subordinated indenture pursuant to which the Junior
Subordinated Debentures will be issued does not place any limit on the amount
of
Senior Indebtedness that FPL Group Capital may issue, guarantee or otherwise
incur or the amount of liabilities, including debt or preferred stock, that
FPL
Group Capital’s subsidiaries may issue, guarantee or otherwise incur. FPL Group
Capital expects from time to time to incur additional indebtedness and other
liabilities that will be senior to the Junior Subordinated Debentures. At August
31, 2006, FPL Group Capital’s Senior Indebtedness, on an unconsolidated basis,
totaled approximately $4.5 billion.
FPL
Group
is a holding company that derives substantially all of its income from its
operating subsidiaries. Therefore, the Subordinated Guarantee will be
effectively subordinated to all indebtedness and other liabilities, including
trade payables, debt and preferred stock incurred or issued by FPL Group’s
subsidiaries. In addition to trade liabilities, many of FPL Group’s operating
subsidiaries incur debt in order to finance their business activities. All
of
this indebtedness will be effectively senior to the Subordinated Guarantee.
The
subordinated indenture pursuant to which the Junior Subordinated Debentures
will
be issued does not place any limit on the amount of Senior Indebtedness that
FPL
Group may issue, guarantee or otherwise incur or the amount of liabilities,
including debt or preferred stock, that FPL Group’s subsidiaries may issue,
guarantee or otherwise incur. FPL Group expects from time to time to incur
additional indebtedness and other liabilities that will be senior to the
Subordinated Guarantee. At August 31, 2006, FPL Group’s Senior Indebtedness, on
an unconsolidated basis, totaled approximately $4.5 billion, which amount
consisted solely of FPL Group’s guarantees of FPL Group Capital indebtedness
referred to in the paragraph above.
Will
the Junior Subordinated Debentures
be listed on a stock exchange?
FPL
Group
Capital intends to apply to list the Junior Subordinated Debentures on the
New
York Stock Exchange. If approved for listing, trading of the Junior Subordinated
Debentures is expected to begin within 30 days after they are first
issued.
In
what form will the Junior Subordinated Debentures be
issued?
The
Junior Subordinated Debentures will be represented by one or more global
certificates and registered in the name of The Depository Trust Company (“DTC”)
or its nominee. This means that you will not receive a certificate for your
Junior Subordinated Debentures and that your broker will maintain your position
in the Junior Subordinated Debentures. FPL Group Capital expects that the Junior
Subordinated Debentures will be ready for delivery through DTC on or about
the
date indicated on the cover of this prospectus supplement. See “Specific Terms
of the Junior Subordinated Debentures—Book-Entry Only Issuance—The Depository
Trust Company” in this prospectus supplement for additional
information.
What
are the expected credit ratings on the Junior Subordinated
Debentures?
FPL
Group
Capital expects that the Junior Subordinated Debentures will be rated “A3”
(Negative Outlook), “BBB+” (CreditWatch with Negative Implications) and “A-”
(Stable Outlook) by Moody’s Investors Service, Inc., Standard & Poor’s
Ratings Services, a division of The McGraw-Hill Companies, Inc., and Fitch
Ratings, respectively. Credit ratings are not a recommendation to buy, sell
or
hold these securities. Each rating may be subject to revision or withdrawal
at
any time by the assigning rating organization, and should be evaluated
independently of any other rating.
What
are the principal United States federal income tax consequences related to
the
Junior Subordinated Debentures?
In
connection with the issuance of the Junior Subordinated Debentures, FPL Group
Capital and FPL Group will receive an opinion from Thelen Reid & Priest LLP
that, for United States federal income tax purposes, the Junior Subordinated
Debentures will be classified as indebtedness (although there is no controlling
authority directly on point). This opinion is subject to certain customary
conditions. See “Material United States Federal Income Tax
Consequences.”
Each
holder of Junior Subordinated Debentures will, by accepting the Junior
Subordinated Debentures or a beneficial interest therein, be deemed to have
agreed that the holder intends that the Junior Subordinated Debentures
constitute indebtedness and will treat the Junior Subordinated Debentures as
indebtedness for all United States federal, state and local tax purposes. FPL
Group Capital intends to treat the Junior Subordinated Debentures in the same
manner.
If
FPL
Group Capital elects to defer interest on the Junior Subordinated Debentures
for
one or more Optional Deferral Periods, the holders of the Junior Subordinated
Debentures will be required to accrue income for United States federal income
tax purposes in the amount of the accrued and unpaid interest payments on the
Junior Subordinated Debentures, in the form of original issue discount, even
though cash interest payments are deferred and even though they may be cash
basis taxpayers.
Before
purchasing the securities, investors should carefully consider the following
risk factors together with the risk factors and other information incorporated
by reference or provided in this prospectus supplement or in the accompanying
prospectus in order to evaluate an investment in the
securities.
Risks
Relating to FPL Group’s and FPL Group Capital’s Business
See
the
“Risk Factors” section beginning on page 2 of the accompanying prospectus to
read about certain factors regarding FPL Group’s and FPL Group Capital’s
business that you should consider before making an investment in the Junior
Subordinated Debentures.
Risks
Relating to the Junior Subordinated Debentures
FPL
Group Capital can defer interest payments on the Junior Subordinated Debentures.
This may affect the market price of the Junior Subordinated
Debentures.
So
long
as there is no event of default under the subordinated indenture pursuant to
which the Junior Subordinated Debentures will be issued, FPL Group Capital
may
defer interest payments on the Junior Subordinated Debentures, from time to
time, for one or more Optional Deferral Periods of up to 10 consecutive years.
At the end of an Optional Deferral Period, if all amounts due are paid, FPL
Group Capital could start a new Optional Deferral Period of up to 10 consecutive
years. During any Optional Deferral Period, interest on the Junior Subordinated
Debentures would be deferred but would accrue additional interest at the same
rate at which the Junior Subordinated Debentures bear interest, to the extent
permitted by applicable law. No Optional Deferral Period may extend beyond
the
maturity date of the Junior Subordinated Debentures. During an Optional Deferral
Period, interest payments will not be due and payable and, therefore, FPL Group
will not be obligated to make payments under the Subordinated Guarantee. If
FPL
Group Capital exercises this interest deferral right, the market price of the
Junior Subordinated Debentures is likely to be affected. See “Specific Terms of
the Junior Subordinated Debentures—Option to Defer Interest Payments” in this
prospectus supplement.
If
FPL
Group Capital exercises its right to defer interest payments, the Junior
Subordinated Debentures may trade at a price that does not fully reflect the
value of accrued but unpaid interest on the Junior Subordinated Debentures.
In
addition, as a result of FPL Group Capital’s right to defer interest payments,
the market price of the Junior Subordinated Debentures may be more volatile
than
other securities that do not have these rights.
FPL
Group Capital is not permitted to pay current interest on the Junior
Subordinated Debentures until FPL Group Capital has paid all outstanding
deferred interest, and this could have the effect of extending interest deferral
periods.
During
an
Optional Deferral Period, FPL Group Capital will be prohibited from paying
current interest on the Junior Subordinated Debentures and FPL Group will be
prohibited from making such payment pursuant to the Subordinated Guarantee
until
FPL Group Capital, or FPL Group pursuant to the Subordinated Guarantee, has
paid
all accrued and unpaid deferred interest plus any accrued interest thereon.
As a
result, FPL Group Capital may not be able to pay current interest on the Junior
Subordinated Debentures if FPL Group Capital does not have available funds
to
pay all accrued and unpaid interest plus any accrued interest
thereon.
FPL
Group Capital’s right to redeem or repurchase the Junior Subordinated
Debentures, and FPL Group’s right to purchase the Junior Subordinated
Debentures, are limited by a covenant that FPL Group Capital and FPL Group
are
making in favor of certain of FPL Group Capital’s
debtholders.
FPL
Group
Capital has the right to redeem the Junior Subordinated Debentures under
circumstances and on terms specified in this prospectus supplement. However,
around the time of the initial issuance of the Junior Subordinated Debentures,
FPL Group Capital and FPL Group will enter into a Replacement Capital Covenant,
which is described below under “Certain Terms of the Replacement Capital
Covenant,” that will limit (1) FPL Group Capital’s ability to redeem or
repurchase the Junior Subordinated Debentures and (2) FPL Group’s ability to
purchase the Junior Subordinated Debentures. In the Replacement Capital
Covenant, FPL Group Capital and FPL
Group
will covenant for the benefit of holders of a designated series of FPL Group
Capital’s indebtedness that ranks senior to the Junior Subordinated Debentures,
or in certain limited cases holders of a designated series of long-term
indebtedness of FPL Group, that (a) FPL Group Capital will not redeem or
repurchase the Junior Subordinated Debentures and (b) FPL Group will not
purchase the Junior Subordinated Debentures, in each case on or before October
1, 2036, except, subject to certain limitations, to the extent that the
applicable redemption or repurchase price does not exceed a specified amount
of
proceeds from the sale, during the 180 days prior to the date of that redemption
or repurchase, of qualifying securities that have equity-like characteristics
that are the same as, or more equity-like than, the applicable characteristics
of the Junior Subordinated Debentures at the time of redemption or repurchase
by
FPL Group Capital or purchase by FPL Group.
The
ability to raise proceeds from qualifying securities during the 180 days prior
to a proposed redemption or repurchase by FPL Group Capital or purchase by
FPL
Group will depend on, among other things, market conditions at that time as
well
as the acceptability to prospective investors of the terms of those qualifying
securities. Accordingly, there could be circumstances where FPL Group Capital
would wish to redeem or repurchase some or all of the Junior Subordinated
Debentures, or FPL Group would wish to purchase some or all of the Junior
Subordinated Debentures, including as a result of a tax event, and sufficient
cash is available for that purpose, but FPL Group and FPL Group Capital are
restricted from doing so because of the inability to obtain proceeds from the
sale of qualifying securities.
The
obligations of FPL Group Capital under the Junior Subordinated Debentures and
FPL Group under the Subordinated Guarantee are
subordinated.
The
obligations of FPL Group Capital under the Junior Subordinated Debentures are
unsecured and will rank junior in right of payment to FPL Group Capital’s Senior
Indebtedness. This means that FPL Group Capital cannot make any payments on
the
Junior Subordinated Debentures until all holders of Senior Indebtedness of
FPL
Group Capital have been paid in full, or provision has been made for such
payment, if (i) certain events of bankruptcy, insolvency or reorganization
of
FPL Group Capital have occurred, (ii) any Senior Indebtedness of FPL Group
Capital is not paid when due (after the expiration of any applicable grace
period) and that default continues without a waiver, or (iii) any other default
has occurred and continues without waiver (after the expiration of any
applicable grace period) pursuant to which the holders of Senior Indebtedness
of
FPL Group Capital are permitted to accelerate the maturity of such Senior
Indebtedness. FPL Group Capital is a holding company that derives substantially
all of its income from its operating subsidiaries. Therefore, the Junior
Subordinated Debentures will be effectively subordinated to all indebtedness
and
other liabilities, including trade payables, debt and preferred stock incurred
or issued by FPL Group Capital’s subsidiaries. In addition to trade liabilities,
many of FPL Group Capital’s operating subsidiaries incur debt in order to
finance their business activities. All of this indebtedness will be effectively
senior to the Junior Subordinated Debentures. The subordinated indenture
pursuant to which the Junior Subordinated Debentures will be issued does not
place any limit on the amount of Senior Indebtedness that FPL Group Capital
may
issue, guarantee or otherwise incur or the amount of liabilities, including
debt
or preferred stock, that FPL Group Capital’s subsidiaries may issue, guarantee
or otherwise incur. FPL Group Capital expects from time to time to incur
additional indebtedness and other liabilities that will be senior to the Junior
Subordinated Debentures. At August 31, 2006, FPL Group Capital’s Senior
Indebtedness, on an unconsolidated basis, totaled approximately $4.5
billion.
The
obligations of FPL Group under the Subordinated Guarantee are unsecured and
will
rank junior in right of payment to FPL Group’s Senior Indebtedness. This means
that FPL Group cannot make any payments under the Subordinated Guarantee until
all holders of Senior Indebtedness of FPL Group have been paid in full, or
provision has been made for such payment, if (i) certain events of bankruptcy,
insolvency or reorganization of FPL Group have occurred, (ii) any Senior
Indebtedness of FPL Group is not paid when due (after the expiration of any
applicable grace period) and that default continues without a waiver, or (iii)
any other default has occurred and continues without waiver (after the
expiration of any applicable grace period) pursuant to which the holders of
Senior Indebtedness of FPL Group are permitted to accelerate the maturity of
such Senior Indebtedness. FPL Group is a holding company that derives
substantially all of its income from its operating subsidiaries. Therefore,
the
Subordinated Guarantee will be effectively subordinated to all indebtedness
and
other liabilities, including trade payables, debt and preferred stock incurred
or issued by FPL Group’s subsidiaries. In addition to trade liabilities, many of
FPL Group’s operating subsidiaries incur debt in order to finance their business
activities. The subordinated indenture pursuant to which the Junior Subordinated
Debentures will be issued does not place any limit
on
the
amount of Senior Indebtedness FPL Group may issue, guarantee or otherwise incur
or the amount of liabilities, including debt or preferred stock, that FPL
Group’s subsidiaries may issue, guarantee or otherwise incur. FPL Group expects
from time to time to incur additional indebtedness and other liabilities that
will be senior to the Subordinated Guarantee. The FPL Group consolidated
financial statements that are incorporated by reference in the accompanying
prospectus show the aggregate amount of FPL Group subsidiary debt as of the
date
of those statements. See “Specific Terms of the Junior Subordinated
Debentures—Ranking of the Junior Subordinated Debentures and the Subordinated
Guarantee” in this prospectus supplement. At August 31, 2006, FPL Group’s Senior
Indebtedness, on an unconsolidated basis, totaled approximately $4.5 billion,
which amount consisted solely of FPL Group’s guarantees of FPL Group Capital
indebtedness referred to in the paragraph above.
If
FPL Group Capital defers interest payments on the Junior Subordinated
Debentures, there will be United States federal income tax consequences to
holders of the Junior Subordinated Debentures.
If
FPL
Group Capital defers interest payments on the Junior Subordinated Debentures
for
one or more Optional Deferral Periods, you will be required to accrue interest
income as original issue discount, referred to in this prospectus supplement
as
“original issue discount,” in respect of the deferred interest on your Junior
Subordinated Debentures. As a result, for United States federal income tax
purposes you will include that original issue discount in gross income before
you receive interest payments, regardless of your regular method of accounting
for United States federal income taxes. However, FPL Group Capital has no
current intention of deferring interest payments on the Junior Subordinated
Debentures.
If
you
sell your Junior Subordinated Debentures before the record date for the payment
of interest at the end of an Optional Deferral Period, you will not receive
such
interest. Instead, the accrued interest will be paid to the holder of record
on
the record date, regardless of who the holder of record may have been on any
other date during the Optional Deferral Period. Moreover, the accrued original
issue discount will be added to your adjusted tax basis in the Junior
Subordinated Debentures but may not be reflected in the amount you realize
on
the sale. To the extent the amount realized on a sale is less than your adjusted
tax basis, you will recognize a capital loss for United States federal income
tax purposes. The deductibility of capital losses is subject to limitations.
See
“Material United States Federal Income Tax Consequences—U.S. Holders—Sale,
Exchange, Redemption or Retirement of the Junior Subordinated Debentures” in
this prospectus supplement.
A
classification of the Junior Subordinated Debentures as common equity by the
National Association of Insurance Commissioners may impact U.S. insurance
company investors and the value of the Junior Subordinated
Debentures.
The
Securities Valuation Office (the “SVO”) of the National Association of Insurance
Commissioners (“NAIC”) may from time to time classify securities in
U.S. insurers’ portfolios as debt, preferred equity or common equity
instruments. Under the written guidelines outlined by the SVO, it is not always
clear which securities classify as debt, preferred equity or common equity
or
which features are specifically relevant in making this determination. FPL
Group
Capital is aware that the SVO has classified several fixed income securities,
either definitively or preliminarily, as common equity. FPL Group Capital cannot
assure you that the Junior Subordinated Debentures would not be classified
as
common equity, if reviewed and classified by the SVO. If the NAIC were to
classify the Junior Subordinated Debentures as common equity, the willingness
of
U.S. insurance investors to hold the Junior Subordinated Debentures could
be reduced, which in turn could reduce the price of the Junior Subordinated
Debentures in any available after-market. On
September 12, 2006, the NAIC Financial Condition E Committee adopted a proposal
under which securities such as the Junior Subordinated Debentures would be
reported as preferred stock for the 2006 reporting year. This proposal remains
subject to final review by the NAIC, and there can be no assurance that the
NAIC
will approve the proposal. As of the date hereof, the SVO has not assigned
a classification to the Junior Subordinated Debentures and there can be no
assurance of the classification that may be assigned to the Junior Subordinated
Debentures in the future.
The
following material, which is presented in this prospectus supplement solely
to
furnish limited introductory information, is qualified in its entirety by,
and
should be considered in conjunction with, the more detailed information
incorporated by reference or provided in this prospectus supplement or in the
accompanying prospectus. In the opinion of FPL Group, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
financial statement presentation of the results of operations for the six months
ended June 30, 2006 and 2005 have been made. The income statement data for
the
six months ended June 30, 2006 and June 30, 2005, respectively, generally will
not give a true indication of the results that may be expected for an entire
year.
|
Six
Months Ended
June 30, |
Twelve
Months Ended December 31,
|
|||||||||||||||
|
2006
|
2005
|
2005
|
2004
|
2003
|
||||||||||||
|
|
(In
Millions, Except Earnings Per Share and
Ratios)
|
|||||||||||||||
|
|
(Unaudited)
|
|||||||||||||||
|
Operating
revenues
|
$
|
7,393
|
$
|
5,178
|
$
|
11,846
|
$
|
10,522
|
$
|
9,630
|
||||||
|
Net
income
|
$
|
486
|
$
|
340
|
$
|
885
|
$
|
887
|
$
|
890
|
(a)
|
|||||
|
Weighted-average
common shares
outstanding
(assuming dilution)
|
394.9
|
381.5
|
385.7
|
361.7
|
356.3
|
|||||||||||
|
Earnings
per share of common
stock
(assuming dilution)
|
$
|
1.23
|
$
|
0.89
|
$
|
2.29
|
$
|
2.45
|
$
|
2.50
|
(a)
|
|||||
|
Ratio
of earnings to fixed charges
|
2.76
|
2.23
|
2.76
|
2.96
|
3.28
|
|||||||||||
(a)
Includes
a $3 million loss, or
$(0.01) per share, for the cumulative effect of adopting Financial Accounting
Standards Board
Interpretation No. 46, “Consolidation of Variable Interest
Entities.”
The
following table shows FPL Group’s consolidated capitalization as of June 30,
2006, and as adjusted to reflect the issuance of the Junior Subordinated
Debentures and the other transactions described below. This table, which is
presented in this prospectus supplement solely to provide limited introductory
information, is qualified in its entirety by, and should be considered in
conjunction with, the more detailed information incorporated by reference or
provided in this prospectus supplement or in the accompanying
prospectus.
|
|
|
|
|
Adjusted(a)
|
||||||
|
June
30, 2006
|
Amount
|
Percent
|
||||||||
|
(Unaudited)
|
||||||||||
|
(In
Millions)
|
||||||||||
|
Common
Shareholders’ equity
|
$
|
9,075
|
$
|
9,075
|
48.4
|
%
|
||||
|
Long-term
debt (excluding current
maturities) |
8,360
|
9,660
|
51.6
|
%
|
||||||
|
Total
Capitalization
|
$
|
17,435
|
$
|
18,735
|
100.0
|
%
|
||||
(a)
To give effect to (i) the issuance of the Junior Subordinated Debentures offered
by this prospectus supplement, (ii) the currently anticipated issuance of FPL
Group Capital’s Series B Enhanced Junior Subordinated Debentures due 2066 in a
separate September 2006 offering, which together with the Junior Subordinated
Debentures offered by this prospectus supplement is not currently expected
to
exceed $700 million in principal amount, and (iii) the issuance of $600 million
of FPL Group Capital’s 5 5/8% Debentures, Series due September 1, 2011
on August 18, 2006. Adjusted amounts do not reflect the deduction of any
underwriting
discounts
in connection with the issuance of either series of junior subordinated
debentures or the $600 million of FPL Group Capital’s 5 5/8%
Debentures.
The
information in this section adds to the information in the “Use of Proceeds”
section on page 8 of the accompanying prospectus. Please read these two sections
together.
FPL
Group
Capital will add the net proceeds from the sale of the Junior Subordinated
Debentures to its general funds. FPL Group Capital expects to use its general
funds to repay a portion of commercial paper issued to fund investments by
FPL
Group Capital in independent power projects and to repay outstanding long-term
debt obligations. As of August 31, 2006, FPL Group Capital had $212.2 million
of
commercial paper outstanding, which had maturities of up to 30 days and which
had annual interest rates ranging from 5.27% to 5.34%. FPL Group Capital will
temporarily invest in short term instruments any proceeds that are not
immediately used for such repayment of commercial paper.
The
information in this section adds to the information in the “Description of the
FPL Group and FPL Group Capital Junior Subordinated Debentures and the FPL
Group
Subordinated Guarantee” section beginning on page 35 of the accompanying
prospectus. Please read these two sections together.
General.
FPL
Group
Capital will issue the Junior Subordinated Debentures under an indenture, dated
as of September 1, 2006, among FPL Group Capital, FPL Group, as guarantor,
and The Bank of New York, as subordinated indenture trustee, and referred to
in
this prospectus supplement as the “Subordinated Indenture.” An officer’s
certificate will supplement the Subordinated Indenture and establish the
specific terms of the Junior Subordinated Debentures. Under the Subordinated
Indenture, FPL Group Capital may issue an unlimited amount of additional
subordinated debt securities. The Subordinated Indenture does not limit the
aggregate amount of indebtedness FPL Group Capital, FPL Group or their
respective subsidiaries may issue, guarantee or incur.
Interest
and Maturity. Unless
an
earlier redemption has occurred, the entire principal amount of the Junior
Subordinated Debentures will mature and become due and payable, together with
any accrued and unpaid interest, on October 1, 2066.
The
Junior Subordinated Debentures will bear interest at 6.60% per year. Subject
to
FPL Group Capital’s right to defer interest payments as described below,
interest is payable quarterly in arrears on January 1, April 1, July 1 and
October 1 of each year, beginning January 1, 2007. If interest payments are
deferred or otherwise not paid, they will accrue and compound interest at the
same rate at which the Junior Subordinated Debentures bear interest to the
extent permitted by law. The amount of interest payable for any quarterly
interest accrual period will be computed on the basis of a 360-day year
consisting of twelve 30-day months. The amount of interest payable for any
period shorter than a full quarterly period for which interest is computed
will
be computed on the basis of the number of days in the period using 30-day
calendar months.
In
this
prospectus supplement the term “interest” includes quarterly interest payments
and applicable interest on interest payments accrued but not paid on the
applicable interest payment date.
A
“business day” is any day that is not a Saturday, a Sunday, a day on which
banking institutions or trust companies in New York City are generally
authorized or required by law or executive order to remain closed.
If
an
interest payment date, a redemption date or the maturity date of the Junior
Subordinated Debentures falls on a day that is not a business day, the payment
of interest and principal will be made on the next succeeding business day,
and
no interest on such payment will accrue for the period from and after the
interest payment date, the redemption date or the maturity date, as
applicable.
So
long
as the Junior Subordinated Debentures remain in book-entry only form, the record
date for each interest payment date will be the close of business on the
business day immediately preceding the applicable interest payment date. If
the
Junior Subordinated Debentures do not remain in book-entry only form, the record
date for each interest payment date will be the close of business on the
fifteenth calendar day immediately preceding the applicable interest payment
date.
Ranking
of the Junior Subordinated Debentures and the Subordinated
Guarantee.
FPL
Group Capital’s payment obligation under the Junior Subordinated Debentures will
be unsecured and will rank junior and be subordinated in right of payment and
upon liquidation to all of FPL Group Capital’s Senior Indebtedness, and FPL
Group’s payment obligation under the Subordinated Guarantee will be unsecured
and will rank junior and be subordinated in right of payment and upon
liquidation to all of FPL Group’s Senior Indebtedness. However, the Junior
Subordinated Debentures and the Subordinated Guarantee will rank equally in
right of payment with any Pari Passu Securities.
“Senior
Indebtedness,” when used with respect to FPL Group Capital or FPL Group, means
all of FPL Group Capital’s or FPL Group’s obligations, as the case may be,
whether presently existing or from time to time hereafter incurred, created,
assumed or existing, to pay principal, premium, interest, penalties, fees and
any other payment in respect of any of the following:
|
·
|
obligations
for borrowed money, including without limitation, such obligations
as are
evidenced by credit agreements, notes, debentures, bonds or other
securities or instruments;
|
|
·
|
capitalized
lease obligations;
|
|
·
|
all
obligations of the types referred to in the two preceding bullet
points of
others which FPL Group or FPL Group Capital, as the case may be,
has
assumed, endorsed, guaranteed, contingently agreed to purchase or
provide
funds for the payment of, or otherwise becomes liable for, under
any
agreement; or
|
|
·
|
all
renewals, extensions or refundings of obligations of the kinds described
in any of the preceding categories.
|
Any
such
obligation, indebtedness, renewal, extension or refunding, however, will not
be
Senior Indebtedness if the instrument creating or evidencing it or the
assumption or guarantee of it provides that it is not superior in right of
payment to or is equal in right of payment with the Junior Subordinated
Debentures or the Subordinated Guarantee, as the case may be. Furthermore,
trade
accounts payable and accrued liabilities arising in the ordinary course of
business will not be Senior Indebtedness. Senior Indebtedness will be entitled
to the benefits of the subordination provisions in the Subordinated Indenture
irrespective of the amendment, modification or waiver of any term of the Senior
Indebtedness.
No
payment of the principal (including redemption and sinking fund payments) of,
or
interest, or premium, if any, on the Junior Subordinated Debentures may be
made
by FPL Group Capital until all holders of Senior Indebtedness have been paid
in
full (or provision has been made for such payment), if any of the following
occurs:
|
·
|
certain
events of bankruptcy, insolvency or reorganization of FPL Group
Capital;
|
|
·
|
any
Senior Indebtedness of FPL Group Capital is not paid when due (after
the
expiration of any applicable grace period) and that default continues
without waiver; or
|
|
·
|
any
other default has occurred and continues without waiver (after the
expiration of any applicable grace period) pursuant to which the
holders
of Senior Indebtedness of FPL Group Capital are permitted to accelerate
the maturity of such Senior
Indebtedness.
|
Upon
any
distribution of assets of FPL Group Capital to creditors in connection with
any
insolvency, bankruptcy or similar proceeding, all principal of, and premium,
if
any, and interest due or to become due on all Senior Indebtedness of FPL Group
Capital must be paid in full before the holders of the Junior
Subordinated
Debentures
are entitled to receive or retain any payment from such distribution. See
“Description of the FPL Group and FPL Group Capital Junior Subordinated
Debentures and the FPL Group Subordinated Guarantee—Subordination” in the
accompanying prospectus.
“Pari
Passu Securities” means:
|
·
|
indebtedness
and other securities that, among other things, by its terms ranks
equally
with the Junior Subordinated Debentures, with respect to FPL Group
Capital, and the Subordinated Guarantee, with respect to FPL Group,
in
right of payment and upon liquidation; and
|
|
·
|
guarantees
of indebtedness or other securities described in the preceding bullet
point.
|
“Pari
Passu Securities” also includes FPL Group Capital’s trade accounts payable and
accrued liabilities arising in the ordinary course of business, but does not
include junior subordinated debentures previously issued by FPL Group Capital
or
the subordinated guarantee previously issued by FPL Group of those junior
subordinated debentures in connection with the outstanding preferred trust
securities of FPL Group Capital Trust I, which will rank senior to the
Junior Subordinated Debentures and the Subordinated Guarantee.
FPL
Group
Capital is a holding company that derives substantially all of its income from
its operating subsidiaries. Therefore, the Junior Subordinated Debentures will
be effectively subordinated to all indebtedness and other liabilities, including
trade payables, debt and preferred stock incurred or issued by FPL Group
Capital’s subsidiaries. In addition to trade liabilities, many of FPL Group
Capital’s operating subsidiaries incur debt in order to finance their business
activities. All of this indebtedness will be effectively senior to the Junior
Subordinated Debentures. The Subordinated Indenture does not place any limit
on
the amount of Senior Indebtedness that FPL Group Capital may issue, guarantee
or
otherwise incur or the amount of liabilities, including debt or preferred stock,
that FPL Group Capital’s subsidiaries may issue, guarantee or otherwise incur.
FPL Group Capital expects from time to time to incur additional indebtedness
and
other liabilities that will be senior to the Junior Subordinated Debentures.
At
August 31, 2006, FPL Group Capital’s Senior Indebtedness, on an unconsolidated
basis, totaled approximately $4.5 billion.
FPL
Group
is a holding company that derives substantially all of its income from its
operating subsidiaries. Therefore, the Subordinated Guarantee will be
effectively subordinated to all indebtedness and other liabilities, including
trade payables, debt and preferred stock incurred or issued by FPL Group’s
subsidiaries. In addition to trade liabilities, many of FPL Group’s operating
subsidiaries incur debt in order to finance their business activities. All
of
this indebtedness will be effectively senior to the Subordinated Guarantee.
The
Subordinated Indenture does not place any limit on the amount of Senior
Indebtedness that FPL Group may issue, guarantee or otherwise incur or the
amount of liabilities, including debt or preferred stock, that FPL Group’s
subsidiaries may issue, guarantee or otherwise incur. FPL Group expects from
time to time to incur additional indebtedness and other liabilities that will
be
senior to the Subordinated Guarantee. At August 31, 2006, FPL Group’s Senior
Indebtedness, on an unconsolidated basis, totaled approximately $4.5 billion,
which amount consisted solely of FPL Group’s guarantees of FPL Group Capital
indebtedness referred to in the paragraph above.
Redemption.
FPL
Group
Capital may redeem any or all of the Junior Subordinated Debentures at 100%
of
their principal amount plus accrued and unpaid interest thereon, if any, at
any
time or from time to time on or after October 1, 2011. FPL Group Capital
will give notice of its intent to redeem, any or all of the Junior Subordinated
Debentures at least 30 but no more than 60 days prior to the date scheduled
for
redemption (a “Redemption Notice”).
Before
October 1, 2011, FPL Group Capital may redeem, upon a Redemption Notice, any
or
all of the Junior Subordinated Debentures, at its option, at any time or from
time to time (each a “Redemption Date”) at a redemption price (“Redemption
Price”) equal to the sum of: (1) 100%
of the
principal amount of the Junior Subordinated Debentures being redeemed plus
(2)
accrued and unpaid interest thereon, if any, to the Redemption Date plus (3)
any
applicable “make-whole premium.” The Redemption Price for the Junior
Subordinated Debentures will never be less than 100%
of the
principal amount of those Junior Subordinated Debentures plus accrued and unpaid
interest on those Junior Subordinated Debentures to the Redemption
Date.
The
amount of the make-whole premium with respect to any Junior Subordinated
Debentures to be redeemed in accordance with the foregoing paragraph will be
equal to the excess, if any, of:
(1) the
sum
of the present values, calculated as of the Redemption Date, of:
|
(a)
|
each
interest payment that, but for such redemption, would have been payable
on
the Junior Subordinated Debentures being redeemed on each interest
payment
date occurring during the period from the Redemption Date to October
1,
2011 (excluding any accrued interest for the period prior to the
Redemption Date); and
|
|
(b)
|
the
principal amount that, but for such redemption, would have been payable
at
the final maturity of the Junior Subordinated Debentures being redeemed;
over
|
(2) the
principal amount of the Junior Subordinated Debentures being
redeemed.
The
present values of interest and principal payments referred to in clause (1)
above will be determined in accordance with generally accepted principles of
financial analysis. Such present values will be calculated by discounting the
amount of each payment of interest or principal from the date that each such
payment would have been payable, but for the redemption, to the Redemption
Date
at a discount rate equal to the Treasury Yield (as defined below) plus 25 basis
points.
FPL
Group
Capital will appoint an independent investment banking institution of national
standing to calculate the make-whole premium; provided
that Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Morgan Stanley & Co. Incorporated, UBS Securities LLC or
Wachovia Capital Markets, LLC will make such calculation if (1) FPL Group
Capital fails to make such appointment at least 30 days prior to the Redemption
Date, or (2) the institution so appointed is unwilling or unable to make such
calculation. If Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner
& Smith Incorporated, Morgan Stanley & Co. Incorporated, UBS Securities
LLC or Wachovia Capital Markets, LLC is to make such calculation but is
unwilling or unable to do so, then the subordinated indenture trustee will
appoint an independent investment banking institution of national standing
to
make such calculation. In any case, the institution making such calculation
is
referred to in this prospectus supplement as an “Independent Investment
Banker.”
For
purposes of determining the make-whole premium, “Treasury Yield” means a rate of
interest per year equal to the weekly average yield to maturity of United States
Treasury Notes that have a constant maturity that corresponds to the remaining
term to October 1, 2011 of the Junior Subordinated Debentures to be redeemed,
calculated to the nearest 1/12th of a year (the “Remaining Term”). The
Independent Investment Banker will determine the Treasury Yield as of the third
business day immediately preceding the applicable Redemption Date.
The
Independent Investment Banker will determine the weekly average yields of United
States Treasury Notes by reference to the most recent statistical release
published by the Federal Reserve Bank of New York and designated “H.15(519)
Selected Interest Rates” or any successor release (the “H.15 Statistical
Release”). If the H.15 Statistical Release sets forth a weekly average yield for
United States Treasury Notes having a constant maturity that is the same as
the
Remaining Term, then the Treasury Yield will be equal to such weekly average
yield. In all other cases, the Independent Investment Banker will calculate
the
Treasury Yield by interpolation, on a straight-line basis, between the weekly
average yields on the United States Treasury Notes that have a constant maturity
closest to and greater than the Remaining Term and the United States Treasury
Notes that have a constant maturity closest to and less than the Remaining
Term
(in each case as set forth in the H.15 Statistical Release). The Independent
Investment Banker will round any weekly average yields so calculated to the
nearest 1/100th of 1%,
and
will round upward for any figure of 1/200th of 1%
or
above. If weekly average yields for United States Treasury Notes are not
available in the H.15 Statistical Release or otherwise, then the Independent
Investment Banker will select comparable rates and calculate the Treasury Yield
by reference to those rates.
If
FPL
Group Capital at any time elects to redeem some but not all of the Junior
Subordinated Debentures, the subordinated indenture trustee will select the
particular Junior Subordinated Debentures to be redeemed using any method that
it deems fair and appropriate. However, if the Junior Subordinated Debentures
are solely registered
in
the
name of Cede & Co. and traded through DTC, then DTC will select the Junior
Subordinated Debentures to be redeemed in accordance with its practices as
described below in “—Book Entry-Only Issuance—The Depository Trust
Company.”
If
at the
time notice of redemption is given, the redemption moneys are not on deposit
with the subordinated indenture trustee, then the redemption shall be subject
to
their receipt on or before the Redemption Date and such notice shall be of
no
effect unless such moneys are received.
Right
to Redeem Upon a Tax Event.
Before
October 1, 2011, FPL Group Capital may redeem, upon a Redemption Notice, in
whole, but not in part, the Junior Subordinated Debentures, at any time within
90 days after there is a Tax Event (as defined below), at the redemption price
equal to 100%
of the
principal amount of the Junior Subordinated Debentures being redeemed plus
accrued and unpaid interest thereon, if any, to the date fixed for redemption
(“Tax Event Redemption Date”).
If
at the
time notice of redemption is given, the redemption moneys are not on deposit
with the subordinated indenture trustee, then the redemption shall be subject
to
their receipt on or before the Tax Event Redemption Date and such notice shall
be of no effect unless such moneys are received at any time within 90 days
after
there is a Tax Event.
A
“Tax
Event” happens when FPL Group or FPL Group Capital has received an opinion of
counsel experienced in tax matters that, as a result of:
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any
amendment to, clarification of, or change, including any announced
prospective change, in the laws or treaties of the United States
or any of
its political subdivisions or taxing authorities, or any regulations
under
those laws or treaties;
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an
administrative action, which means any judicial decision or any official
administrative pronouncement, ruling, regulatory procedure, notice
or
announcement including any notice or announcement of intent to issue
or
adopt any administrative pronouncement, ruling, regulatory procedure
or
regulation; or
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any
amendment to, clarification of, or change in the official position
or the
interpretation of any administrative action or judicial decision
or any
interpretation or pronouncement that provides for a position with
respect
to an administrative action or judicial decision that differs from
the
previously generally accepted position, in each case by any legislative
body, court, governmental authority or regulatory body, regardless
of the
time or manner in which that amendment, clarification or change is
introduced or made known,
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which
amendment, clarification, or change is effective or the administrative action
is
taken or judicial decision, interpretation or pronouncement is issued after
the
date of this prospectus supplement, there is more than an insubstantial risk
that interest payable by FPL Group Capital on the Junior Subordinated Debentures
is not deductible, or within 90 days would not be deductible, in whole or in
part, by FPL Group Capital for United States federal income tax
purposes.
Option
to Defer Interest Payments.
So long
as there is no event of default under the Subordinated Indenture, FPL Group
Capital may defer interest payments on the Junior Subordinated Debentures,
from
time to time, for one or more Optional Deferral Periods of up to 10 consecutive
years per Optional Deferral Period. However, a deferral of interest payments
cannot extend beyond the maturity date of the Junior Subordinated Debentures.
During an Optional Deferral Period, interest will continue to accrue on the
Junior Subordinated Debentures, compounded quarterly, and deferred interest
payments will accrue additional interest at the same rate at which the Junior
Subordinated Debentures bear interest, to the extent permitted by applicable
law. No interest will be due and payable on the Junior Subordinated Debentures
until the end of the Optional Deferral Period except upon a redemption of the
Junior Subordinated Debentures during the deferral period.
FPL
Group
Capital may pay at any time all or any portion of the interest accrued to that
point during an Optional Deferral Period. At the end of the Optional Deferral
Period or on any redemption date, FPL Group Capital will be obligated to pay
all
accrued and unpaid interest.
Once
all
accrued and unpaid interest on the Junior Subordinated Debentures has been
paid,
FPL Group Capital again can defer interest payments on the Junior Subordinated
Debentures as described above, provided that an Optional Deferral Period cannot
extend beyond the maturity date of the Junior Subordinated
Debentures.
If
FPL
Group Capital defers interest for a period of 10 consecutive years from the
commencement of an Optional Deferral Period, FPL Group Capital will be required
to pay all accrued and unpaid interest at the conclusion of the 10-year period,
and to the extent it does not do so, FPL Group will be required to make
guarantee payments in accordance with the Subordinated Guarantee with respect
thereto. If FPL Group Capital fails to pay in full all accrued and unpaid
interest at the conclusion of the 10-year period, such failure continues for
30
days and FPL Group fails to make guarantee payments with respect thereto, an
event of default that gives rise to acceleration of principal and interest
on
the Junior Subordinated Debentures will occur under the Subordinated Indenture.
See “Description of the FPL Group and FPL Group Capital Junior Subordinated
Debentures and the FPL Group Subordinated Guarantee—Events of Default” and
“Description of the FPL Group and FPL Group Capital Junior Subordinated
Debentures and the FPL Group Subordinated Guarantee—Remedies” in the
accompanying prospectus.
Book-Entry
Only Issuance—The Depository Trust Company.
The
Junior Subordinated Debentures will trade through DTC. The Junior Subordinated
Debentures will be represented by one or more global certificates and registered
in the name of Cede & Co., DTC’s nominee.
DTC
is a
New York clearing corporation and a clearing agency registered under Section
17A
of the Securities Exchange Act of 1934. DTC holds securities for its
participants. DTC also facilitates the post-trade settlement of securities
transactions among its participants through electronic computerized book-entry
transfers and pledges in the participants’ accounts. This eliminates the need
for physical movement of securities certificates. The participants include
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, in turn, is owned by
a number of participants of DTC, members of other clearing corporations and
by
The New York Stock Exchange, Inc., the American Stock Exchange LLC, and the
National Association of Securities Dealers, Inc. Others who maintain a custodial
relationship with a participant can use the DTC system. The rules that apply
to
DTC and those using its systems are on file with the Securities and Exchange
Commission.
Purchases
of the Junior Subordinated Debentures within the DTC system must be made through
participants, which will receive a credit for the Junior Subordinated Debentures
on DTC’s records. The beneficial ownership interest of each purchaser will be
recorded on the appropriate participant’s records. Beneficial owners will not
receive written confirmation from DTC of their purchases, but beneficial owners
should receive written confirmations of the transactions, as well as periodic
statements of their holdings, from the participants through which they purchased
Junior Subordinated Debentures. Transfers of ownership in the Junior
Subordinated Debentures are to be accomplished by entries made on the books
of
the participants acting on behalf of beneficial owners. Beneficial owners will
not receive certificates for their Junior Subordinated Debentures, except if
use
of the book-entry system for the Junior Subordinated Debentures is
discontinued.
To
facilitate subsequent transfers, all Junior Subordinated Debentures deposited
by
participants with DTC are registered in the name of DTC’s nominee, Cede &
Co. The deposit of the Junior Subordinated Debentures with DTC and their
registration in the name of Cede & Co. effects no change in beneficial
ownership. DTC has no knowledge of the actual beneficial owners of the Junior
Subordinated Debentures. DTC’s records reflect only the identity of the
participants to whose accounts such Junior Subordinated Debentures are credited.
These participants may or may not be the beneficial owners. Participants will
remain responsible for keeping account of their holdings on behalf of their
customers.
Conveyance
of notices and other communications by DTC to participants, and by 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 Junior Subordinated Debentures may wish to take certain
steps to augment transmission to them of notices of significant events with
respect to the Junior Subordinated Debentures,
such
as
redemptions, tenders, defaults and proposed amendments to the Subordinated
Indenture. Beneficial owners of the Junior Subordinated Debentures may wish
to
ascertain that the nominee holding the Junior Subordinated Debentures has agreed
to obtain and transmit notices to the beneficial owners.
Redemption
notices will be sent to Cede & Co., as registered holder of the Junior
Subordinated Debentures. If less than all of the Junior Subordinated Debentures
are being redeemed, DTC’s practice is to determine by lot the amount of Junior
Subordinated Debentures of each participant to be redeemed.
Neither
DTC nor Cede & Co. will itself consent or vote with respect to Junior
Subordinated Debentures, unless authorized by a participant in accordance with
DTC’s procedures. Under its usual procedures, DTC would mail an omnibus proxy to
FPL Group Capital as soon as possible after the record date. The omnibus proxy
assigns the consenting or voting rights of Cede & Co. to those participants
to whose accounts the Junior Subordinated Debentures are credited on the record
date. FPL Group Capital and FPL Group believe that these arrangements will
enable the beneficial owners to exercise rights equivalent in substance to
the
rights that can be directly exercised by a registered holder of the Junior
Subordinated Debentures.
Payments
of redemption proceeds, principal of, and interest on the Junior Subordinated
Debentures will be made to Cede & Co., or such other nominee as may be
requested by DTC. DTC’s practice is to credit participants’ accounts upon DTC’s
receipt of funds and corresponding detail information from FPL Group Capital
or
its agent, 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. Payments will be
the
responsibility of participants and not of DTC, The Bank of New York (the
subordinated indenture trustee), FPL Group Capital or FPL Group, subject to
any
statutory or regulatory requirements as may be in effect from time to time.
Payment of redemption proceeds, principal and interest to Cede & Co.
(or such other nominee as may be requested by DTC) is the responsibility of
FPL
Group Capital. Disbursement of payments to participants is the responsibility
of
DTC, and disbursement of payments to the beneficial owners is the responsibility
of participants.
Except
as
provided in this prospectus supplement, a beneficial owner will not be entitled
to receive physical delivery of the Junior Subordinated Debentures. Accordingly,
each beneficial owner must rely on the procedures of DTC to exercise any rights
under the Junior Subordinated Debentures.
DTC
may
discontinue providing its services as securities depositary with respect to
the
Junior Subordinated Debentures at any time by giving reasonable notice to FPL
Group Capital. In the event no successor securities depositary is obtained,
certificates for the Junior Subordinated Debentures will be printed and
delivered. FPL Group Capital and FPL Group may decide to replace DTC or any
successor depositary. Additionally, subject to the procedures of DTC, FPL Group
Capital and FPL Group may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor depositary) with respect to the Junior
Subordinated Debentures. In that event, certificates for the Junior Subordinated
Debentures will be printed and delivered.
The
information in this section concerning DTC and DTC’s book-entry system has been
obtained from sources that FPL Group Capital and FPL Group believe to be
reliable. None of FPL Group Capital, FPL Group or the underwriters take any
responsibility for the accuracy of this information.
Agreement
by Holders of Certain Tax Treatment.
Each
holder of the Junior Subordinated Debentures will, by accepting the Junior
Subordinated Debentures or a beneficial interest therein, be deemed to have
agreed that the holder intends that the Junior Subordinated Debentures
constitute indebtedness and will treat the Junior Subordinated Debentures as
indebtedness for all United States federal, state and local tax
purposes.
This
section briefly summarizes some of the provisions of the Replacement Capital
Covenant. This summary does not contain a complete description of the
Replacement Capital Covenant. You should read this summary together with the
Replacement Capital Covenant for a complete understanding of all the provisions.
The Replacement Capital Covenant is available from FPL Group or FPL Group
Capital upon request.
FPL
Group
Capital and FPL Group will covenant in the Replacement Capital Covenant for
the
benefit of holders of a designated series of FPL Group Capital’s long-term
indebtedness that ranks senior to the Junior Subordinated Debentures, or in
certain limited cases holders of a designated series of long-term indebtedness
of FPL Group, that
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FPL
Group Capital will not redeem or repurchase the Junior Subordinated
Debentures and
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FPL
Group will not purchase the Junior Subordinated
Debentures
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on
or
before October 1, 2036, except, subject to certain limitations, to the extent
that the applicable redemption or repurchase price does not exceed a specified
amount of proceeds from the sale, during the 180 days prior to the date of
that
redemption or repurchase, of qualifying securities that have equity-like
characteristics that are the same as, or more equity-like than, the applicable
characteristics of the Junior Subordinated Debentures at the time of redemption
or repurchase by FPL Group Capital or purchase by FPL Group.
The
covenants of FPL Group Capital and FPL Group in the Replacement Capital Covenant
run only to the benefit of holders of the designated series of FPL Group
Capital’s long-term indebtedness or the long-term indebtedness of FPL Group, as
applicable. The Replacement Capital Covenant is not intended for the benefit
of
holders of the Junior Subordinated Debentures and may not be enforced by them,
and the Replacement Capital Covenant is not a term of the Subordinated
Indenture, the Subordinated Guarantee or the Junior Subordinated
Debentures.
The
ability to raise proceeds from qualifying securities during the 180 days prior
to a proposed redemption or repurchase by FPL Group Capital or purchase by
FPL
Group of the Junior Subordinated Debentures will depend on, among other things,
market conditions at that time as well as the acceptability to prospective
investors of the terms of those qualifying securities.
The
Replacement Capital Covenant may be terminated if the holders of a majority
of
the aggregate principal amount of the then existing covered debt agree to
terminate the Replacement Capital Covenant, or if FPL Group Capital and FPL
Group no longer have outstanding any indebtedness that qualifies as covered
debt, and will be terminated on October 1, 2036, if not so terminated
earlier.
The
following is a general discussion of the material U.S. federal income tax
considerations relating to the purchase, ownership and disposition of the Junior
Subordinated Debentures. This discussion only applies to Junior Subordinated
Debentures that are held as capital assets by holders who purchase the Junior
Subordinated Debentures in the initial offering at their “issue price,” which
will equal the first price to the public (not including bond houses, brokers
or
similar persons or organizations acting in the capacity of underwriters,
placement agents or wholesalers) at which a substantial amount of the Junior
Subordinated Debentures are sold for money. This discussion does not describe
all of the material tax considerations that may be relevant to holders in light
of their particular circumstances or to holders subject to special rules, such
as certain financial institutions, banks, insurance companies, tax-exempt
entities, certain former citizens or residents of the United States, dealers
in
securities, traders in securities that elect to use a mark-to-market method
of
accounting, partnerships and other pass-through entities (and persons holding
the Junior Subordinated Debentures through a partnership or other pass-through
entity), persons holding the Junior Subordinated Debentures as part of a hedge,
straddle, constructive sale, conversion transaction or other integrated
transaction, holders whose functional currency is not the U.S. dollar, passive
foreign investment companies, controlled foreign corporations and corporations
that accumulate earnings to avoid U.S. federal income tax. In addition, this
discussion does not address the effect of any state, local, foreign or other
tax
laws or any U.S. federal estate, gift or alternative minimum tax considerations.
This discussion is based on the Internal Revenue Code of 1986, as amended (the
“Code”), administrative pronouncements, judicial decisions and final, temporary
and proposed Treasury regulations, all as in effect on the date hereof, and
all
of which are subject to change, possibly with retroactive effect.
As
used
in this prospectus supplement, the term “U.S. holder” means a beneficial owner
of a Junior Subordinated Debenture that is for U.S. federal income tax
purposes:
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an
individual citizen or resident of the United
States;
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a
corporation (or other entity taxable as a corporation for U.S. federal
income tax purposes) created or organized in or under the laws of
the
United States or of any state thereof or the District of
Columbia;
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an
estate the income of which is subject to U.S. federal income taxation
regardless of its source; or
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a
trust if (i) a court within the United States is able to exercise
primary
supervision over its administration and one or more United States
persons
have the authority to control all substantial decisions of the trust,
or
(ii) that trust was in existence on August 1, 1996 and has a valid
election in effect under applicable U.S. Treasury regulations to
be
treated as a domestic trust.
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As
used
in this summary, the term “non-U.S. holder” means a beneficial owner of a Junior
Subordinated Debenture that is not a U.S. person (as such term is defined in
the
Code).
Persons
considering the purchase of the Junior Subordinated Debentures should consult
their own tax advisors as to the U.S. federal income tax considerations relating
to the purchase, ownership and disposition of the Junior Subordinated Debentures
in light of their particular circumstances, as well as the effect of any state,
local, foreign or other tax laws.
Classification
of the Junior Subordinated Debentures
The
determination of whether a security should be classified as indebtedness or
equity for U.S. federal income tax purposes requires a judgment based on all
relevant facts and circumstances. There is no statutory, judicial or
administrative authority that directly addresses the U.S. federal income tax
treatment of securities similar to the Junior Subordinated Debentures. Based
upon an analysis of the relevant facts and circumstances, including certain
assumptions made by them and representations provided by FPL Group Capital
and
FPL Group to them, Thelen Reid & Priest LLP will provide FPL Group Capital
and FPL Group with an opinion generally to the effect that under then current
law and assuming full compliance with the terms of the Subordinated Indenture
and other relevant documents, the Junior Subordinated Debentures will be treated
as indebtedness of FPL Group Capital for U.S. federal income tax purposes
(although there is no controlling authority directly on point). This opinion
is
not binding on the Internal Revenue Service (“IRS”) or any court and there can
be no assurance that the IRS or a court will agree with this opinion. FPL Group
Capital agrees, and by acquiring an interest in a Junior Subordinated Debenture
each beneficial owner of a Junior Subordinated Debenture will agree, to treat
the Junior Subordinated Debentures as indebtedness for U.S. federal income
tax
purposes, and the remainder of this discussion assumes this treatment. Holders
should consult their own tax advisors regarding the tax consequences if the
Junior Subordinated Debentures are not treated as indebtedness for U.S. federal
income tax purposes.
U.S.
Holders
Interest
Pursuant
to applicable U.S. Treasury regulations, the possibility that interest on the
Junior Subordinated Debentures might be deferred could result in the Junior
Subordinated Debentures being treated as issued with original issue discount,
unless the likelihood of a deferral is remote within the meaning of the
regulations. FPL Group Capital believes that the likelihood of interest deferral
is remote and therefore that the possibility of a deferral will not result
in
the Junior Subordinated Debentures being treated as issued with original issue
discount. Similarly, in certain circumstances (see “Specific Terms of the Junior
Subordinated Debentures—Redemption” and “Specific Terms of the Junior
Subordinated Debentures—Right to Redeem Upon a Tax Event”), FPL Group Capital
may be obligated to pay amounts in excess of stated interest on or principal
of
the Junior Subordinated Debentures. Such excess payments will not affect the
amount of interest income that a U.S. holder recognizes if there is only a
remote likelihood that such payments will be made. FPL Group Capital believes
that the likelihood that it will make any
such
payments is remote. Accordingly, interest paid on the Junior Subordinated
Debentures should be taxable to a U.S. holder as ordinary interest income at
the
time it accrues or is received, in accordance with that U.S. holder’s method of
accounting for U.S. federal income tax purposes. However, there can be no
assurance that the IRS or a court will agree with this position. If the
possibility of interest deferral or excess payments were determined not to
be
remote, or if interest were in fact deferred or excess payments were in fact
made, a U.S. holder might be required to accrue interest income on its Junior
Subordinated Debentures using a constant yield method, regardless of that
holder’s regular method of accounting and before that U.S. holder actually
receives any cash payment attributable to that interest. Additionally, if a
holder were to dispose of its Junior Subordinated Debentures prior to the end
of
the Optional Deferral Period or the end of the period during which a redemption
of the Junior Subordinated Debentures would require the payment of a make-whole
premium, and the possibility of such interest deferral or the payment of a
make-whole premium were determined not to have been remote as of the date the
Junior Subordinated Debentures were originally issued, the holder would likely
be required to treat as ordinary income rather than as capital gain any income
realized on the taxable disposition of a Junior Subordinated
Debenture.
Sale,
Exchange, Redemption or Retirement of the Junior Subordinated
Debentures
Upon
the
sale, exchange, redemption or retirement of a Junior Subordinated Debenture,
a
U.S. holder will generally recognize gain or loss equal to the difference
between the amount realized on the sale, exchange, redemption or retirement
and
that U.S. holder’s adjusted tax basis in the Junior Subordinated Debenture. For
these purposes, the amount realized does not include any amount attributable
to
accrued but unpaid interest, which will constitute ordinary income if not
previously included in income. Assuming that there are no deferred payments
of
interest on the Junior Subordinated Debentures and that the Junior Subordinated
Debentures are not deemed to be issued with original issue discount, a U.S.
holder’s adjusted tax basis in the Junior Subordinated Debentures generally will
be its initial purchase price. If the Junior Subordinated Debentures are deemed
to be issued with original issue discount, a U.S. holder’s tax basis in the
Junior Subordinated Debentures generally will be its initial purchase price,
increased by original issue discount previously includible in that U.S. holder’s
gross income to the date of disposition and decreased by payments received
by
that U.S. holder on the Junior Subordinated Debentures since and including
the
date that the Junior Subordinated Debentures were deemed to be issued with
original issue discount. Gain or loss realized on the sale, exchange, redemption
or retirement of a Junior Subordinated Debenture will generally be capital
gain
or loss and will be long-term capital gain or loss if at the time of the sale,
exchange, redemption or retirement the Junior Subordinated Debenture has been
held by that U.S. holder for more than one year. A U.S. holder that is an
individual is generally entitled to preferential treatment for net long-term
capital gains. The ability of a U.S. holder to deduct capital losses is
limited.
Backup
Withholding and Information Reporting
Information
reporting requirements generally apply in connection with payments on the Junior
Subordinated Debentures to, and proceeds from a sale or other disposition of
the
Junior Subordinated Debentures by, non-corporate U.S. holders. A U.S. holder
will be subject to backup withholding tax on interest paid on the Junior
Subordinated Debentures and proceeds from a sale or other disposition of the
Junior Subordinated Debentures if the U.S. holder fails to provide its correct
taxpayer identification number to the paying agent in the manner required under
U.S. federal income tax law, fails to comply with applicable backup withholding
tax rules or does not otherwise establish an exemption from backup withholding.
Any amounts withheld under the backup withholding rules will entitle that U.S.
holder to a credit against that U.S. holder’s U.S. federal income tax liability
and may entitle that U.S. holder to a refund, provided that the required
information is timely and properly furnished to the IRS.
U.S.
holders should consult their tax advisors regarding the application of backup
withholding in their particular situation, the availability of an exemption
from
backup withholding and the procedure for obtaining such an exemption, if
available.
Non-U.S.
Holders
Assuming
that the Junior Subordinated Debentures will be treated as indebtedness for
U.S.
federal income tax purposes, no withholding of United States federal income
tax
will apply to interest paid on a Junior Subordinated Debenture to a non-U.S.
holder under the “portfolio interest exemption,” provided that:
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the
interest is not effectively connected with the non-U.S. holder’s conduct
of a trade or business in the United
States;
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the
non-U.S. holder does not actually or constructively own 10% or more
of the
total combined voting power of all classes of FPL Group Capital’s stock
entitled to vote;
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the
non-U.S. holder is not a controlled foreign corporation that is related
directly or constructively to FPL Group Capital through stock ownership;
and
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the
non-U.S. holder provides to the withholding agent, in accordance
with
specified procedures, a statement to the effect that that such non-U.S.
holder is not a United States person (generally by providing a properly
executed IRS Form W-8BEN).
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If
a
non-U.S. holder cannot satisfy the requirements of the portfolio interest
exemption described above, interest paid on the Junior Subordinated Debentures
(including payments in respect of original issue discount, if any, on the Junior
Subordinated Debentures) made to a non-U.S. holder should be subject to a 30%
United States federal withholding tax, unless that non-U.S. holder provides
the
withholding agent with a properly executed statement (i) claiming an
exemption from or reduction of withholding under an applicable United States
income tax treaty or (ii) stating that the interest is not subject to
withholding tax because it is effectively connected with that non-U.S. holder’s
conduct of a trade or business in the United States.
If
a
non-U.S. holder is engaged in a trade or business in the United States (or,
if
an applicable United States income tax treaty applies, if the non-U.S. holder
maintains a permanent establishment within the United States) and the interest
is effectively connected with the conduct of that trade or business (or, if
an
applicable United States income tax treaty applies, attributable to that
permanent establishment), that non-U.S. holder will be subject to United States
federal income tax on the interest on a net income basis in the same manner
as
if that non-U.S. holder were a U.S. holder. In addition, a non-U.S. holder
that
is a foreign corporation engaged in a trade or business in the United States
may
be subject to a 30% (or, if an applicable United States income tax treaty
applies, a lower rate as provided) branch profits tax.
Any
gain
realized on the disposition of a Junior Subordinated Debenture generally will
not be subject to United States federal income tax unless:
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that
gain is effectively connected with the non-U.S. holder’s conduct of a
trade or business in the United States (or, if an applicable United
States
income tax treaty applies, is attributable to a permanent establishment
maintained by the non-U.S. holder within the United States);
or
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the
non-U.S. holder is an individual who is present in the United States
for
183 days or more in the taxable year of the disposition and certain
other
conditions are met.
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In
general, backup withholding and information reporting will not apply to interest
paid on a Junior Subordinated Debenture to a non-U.S. holder, or to proceeds
from the disposition of a Junior Subordinated Debenture by a non-U.S. holder,
in
each case, if the non-U.S. holder certifies under penalties of perjury that
it
is a non-U.S. holder and neither FPL Group Capital nor the paying agent has
actual knowledge (or reason to know) to the contrary. Any amounts withheld
under
the backup withholding rules will entitle such non-U.S. holder to a credit
against U.S. federal income tax liability and may entitle such non-U.S. holder
to a refund, provided that the required information is timely and properly
furnished to the IRS. In general, if a Junior Subordinated Debenture is not
held
through a qualified intermediary, the amount of payments made on that Junior
Subordinated Debenture, the name and address of the beneficial owner and the
amount, if any, of tax withheld may be reported to the IRS.
Non-U.S.
holders should consult their tax advisors regarding the application of backup
withholding in their particular situation, the availability of an exemption
from
backup withholding and the procedure for obtaining such an exemption, if
available.
The
United States federal income tax discussion set forth above is included for
general information only and may not be applicable depending upon a holder’s
particular situation. Holders should consult their tax advisors regarding the
tax consequences to them of the purchase, ownership and disposition of the
Junior Subordinated Debentures, including the tax consequences under state,
local, foreign and other tax laws.
The
information in this section adds to the information in the “Plan of
Distribution” section beginning on page 51 of the accompanying prospectus.
Please read these two sections together.
FPL
Group
Capital is selling the Junior Subordinated Debentures to the underwriters named
in the table below pursuant to an underwriting agreement among FPL Group
Capital, FPL Group and the underwriters named below, for whom Citigroup Global
Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan
Stanley & Co. Incorporated, UBS Securities LLC and Wachovia Capital Markets,
LLC are acting as representatives. Subject to certain conditions, FPL Group
Capital has agreed to sell to each of the underwriters, and each of the
underwriters has severally agreed to purchase, the principal amount of Junior
Subordinated Debentures set forth opposite that underwriter’s name in the table
below:
|
Underwriter
|
Principal
Amount
of
Junior
Subordinated
Debentures
|
|||
|
Citigroup
Global Markets Inc.
|
$
|
56,350,000
|
||
|
Merrill
Lynch, Pierce, Fenner & Smith
Incorporated
|
56,350,000
|
|||
|
Morgan
Stanley & Co. Incorporated
|
56,350,000
|
|||
|
UBS
Securities LLC
|
56,350,000
|
|||
|
Wachovia
Capital Markets, LLC
|
56,350,000
|
|||
|
A.G.
Edwards & Sons, Inc.
|
7,000,000
|
|||
|
Lehman
Brothers Inc.
|
19,250,000
|
|||
|
Raymond
James & Associates, Inc.
|
7,000,000
|
|||
|
Wells
Fargo Securities, LLC
|
7,000,000
|
|||
|
Robert
W. Baird & Co. Incorporated
|
3,500,000
|
|||
|
BB&T
Capital Markets, a division of
Scott & Stringfellow, Inc.
|
3,500,000
|
|||
|
BNY
Capital Markets, Inc.
|
3,500,000
|
|||
|
Comerica
Securities, Inc.
|
3,500,000
|
|||
|
Jefferies
& Company, Inc.
|
3,500,000
|
|||
|
RBC
Dain Rauscher Inc.
|
3,500,000
|
|||
|
Samuel
A. Ramirez & Co., Inc.
|
3,500,000
|
|||
|
The
Williams Capital Group, L.P.
|
3,500,000
|
|||
|
Total
|
$
|
350,000,000
|
||
Under
the
terms and conditions of the underwriting agreement, the underwriters must buy
all of the Junior Subordinated Debentures if they buy any of them. The
underwriting agreement provides that the obligations of the underwriters
pursuant thereto are subject to certain conditions. In the event of a default
by
an underwriter, the underwriting agreement provides that, in certain
circumstances, the purchase commitment of the non-defaulting
underwriters
may be increased or the underwriting agreement may be terminated. The
underwriters will offer the Junior Subordinated Debentures to the public if
the
underwriters buy the Junior Subordinated Debentures from FPL Group
Capital.
FPL
Group
Capital will compensate the underwriters by selling the Junior Subordinated
Debentures to them at a price that is less than the price to the public by
the
amount of the “Underwriting Discount” set forth on the cover page of this
prospectus supplement. The underwriters will sell the Junior Subordinated
Debentures to the public at the price to the public set forth on the cover
page
of this prospectus supplement and may sell the Junior Subordinated Debentures
to
certain dealers at a price that represents a concession not in excess of $0.50
per Junior Subordinated Debenture under the price to the public; provided that
the concession will be $0.30 per Junior Subordinated Debenture for sales to
institutions. Any underwriter may allow, and the dealers may reallow, a
concession not in excess of $0.45 per Junior Subordinated Debenture to other
underwriters or to other dealers, provided that there will be no concession
with
respect to sales to institutions.
An
underwriter may reject offers for the Junior Subordinated Debentures. After
the
initial public offering of the Junior Subordinated Debentures, the underwriters
may change the offering price and other selling terms of the Junior Subordinated
Debentures.
FPL
Group
Capital intends to apply to list the Junior Subordinated Debentures on the
New
York Stock Exchange, and trading of the Junior Subordinated Debentures on the
New York Stock Exchange is expected to begin within a 30-day period after the
Junior Subordinated Debentures are first issued. The underwriters have advised
FPL Group Capital that they intend to make a market in the Junior Subordinated
Debentures prior to the commencement of trading on the New York Stock Exchange
but are not obligated to do so and may discontinue such market-making activities
at any time without notice. FPL Group Capital cannot give any assurance as
to
the maintenance of the trading market for, or the liquidity of, the Junior
Subordinated Debentures.
In
connection with the offering, Citigroup Global Markets Inc., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. Incorporated,
UBS Securities LLC and Wachovia Capital Markets, LLC on behalf of the
underwriters may purchase and sell the Junior Subordinated Debentures in the
open market. These transactions may include over-allotment, syndicate covering
transactions and stabilizing transactions. Over-allotment includes syndicate
sales of Junior Subordinated Debentures in excess of the principal amount of
Junior Subordinated Debentures to be purchased by the underwriters in the
offering, which creates a syndicate short position. Syndicate covering
transactions involve purchases of the Junior Subordinated Debentures in the
open
market after the distribution has been completed in order to cover syndicate
short positions. Stabilizing transactions consist of certain bids or purchases
of Junior Subordinated Debentures made for the purpose of preventing or
retarding a decline in the market price of the Junior Subordinated Debentures
while the offering is in progress.
The
underwriters may also impose a penalty bid. Penalty bids permit the underwriters
to reclaim an initial dealers’ concession from a syndicate member when Citigroup
Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Morgan Stanley & Co. Incorporated, UBS Securities LLC and Wachovia Capital
Markets, LLC, in covering syndicate short positions or making stabilizing
purchases, repurchases the Junior Subordinated Debentures originally sold by
that syndicate member.
Any
of
these activities may cause the price of the Junior Subordinated Debentures
to be
higher than the price that otherwise would exist in the open market in the
absence of such transactions. These transactions may be effected in the
over-the-counter market or otherwise and, if commenced, may be discontinued
at
any time.
Certain
of the underwriters may make the Junior Subordinated Debentures available for
distribution on the Internet through a proprietary Web site and/or a third-party
system operated by MarketAxess Corporation, an Internet-based communications
technology provider. MarketAxess Corporation is providing the system as a
conduit for communications between those underwriters and their customers and
is
not a party to any transactions. MarketAxess Corporation, a registered
broker-dealer, will receive compensation from those underwriters based on
transactions those underwriters conduct through the system. Those underwriters
will make the Junior Subordinated Debentures available to their customers
through Internet distributions, whether made through a proprietary or
third-party system, on the same terms as distributions made through other
channels.
FPL
Group
Capital estimates that its expenses in connection with the sale of the Junior
Subordinated Debentures, other than underwriting discounts, will be $400,000.
This estimate includes expenses relating to printing, rating agency fees,
trustee’s fees and legal fees, among other expenses. The Underwriters have
agreed to make a payment to FPL Group Capital in lieu of reimbursement of a
portion of FPL Group Capital’s expenses in connection with this
offering.
FPL
Group
Capital and FPL Group have agreed to indemnify the underwriters against, or
to
contribute to payments the underwriters may be required to make in respect
of,
certain liabilities, including liabilities under the Securities Act of
1933.
The
underwriters and their affiliates engage in transactions with, and perform
services for, FPL Group, its subsidiaries (including FPL Group Capital) and
its
affiliates in the ordinary course of business and have engaged, and may engage
in the future engage, in commercial banking and investment banking transactions
with FPL Group, its subsidiaries and its affiliates.
PROSPECTUS
FPL
GROUP, INC.
Senior
Debt Securities and Junior Subordinated Debentures
__________________________
FPL
GROUP CAPITAL INC
Senior
Debt Securities and Junior Subordinated Debentures
Guaranteed
as described in this prospectus by
FPL
GROUP, INC.
__________________________
FPL
GROUP CAPITAL TRUST II
FPL
GROUP CAPITAL TRUST III
FPL
GROUP TRUST I
FPL
GROUP TRUST II
Preferred
Trust Securities
Guaranteed
as described in this prospectus by
FPL
GROUP, INC.
__________________________
Each
of
FPL Group, Inc., FPL Group Capital Inc, FPL Group Capital Trust II, FPL
Group Capital Trust III, FPL Group Trust I and FPL Group Trust II
may offer any combination of the securities described in this prospectus in
one
or more offerings from time to time in amounts authorized from time to
time.
FPL
Group, FPL Group Capital, FPL Group Capital Trust II, FPL Group Capital
Trust III, FPL Group Trust I and FPL Group Trust II will provide
specific terms of the securities, including the offering prices, in supplements
to this prospectus. The supplements may also add, update or change information
contained in this prospectus. You should read this prospectus and any
supplements carefully before you invest.
FPL
Group’s common stock is listed on the New York Stock Exchange and trades under
the symbol “FPL.”
FPL
Group, FPL Group Capital, FPL Group Capital Trust II, FPL Group Capital
Trust III, FPL Group Trust I and FPL Group Trust II may offer
these securities directly or through underwriters, agents or dealers. The
supplements to this prospectus will describe the terms of any particular plan
of
distribution, including any underwriting arrangements. The “Plan of
Distribution” section beginning on page 51 of this prospectus also provides more
information on this topic.
See
“Risk Factors” beginning on page 2 of this prospectus to read about certain
factors you should consider before purchasing any of the securities being
offered.
FPL
Group’s, FPL Group Capital’s, FPL Group Capital Trust II’s, FPL Group
Capital Trust III’s, FPL Group Trust I’s and FPL Group Trust II’s
principal executive offices are located at 700 Universe Boulevard, Juno Beach,
Florida 33408, telephone number (561) 694-4000, and their mailing address
is P.O. Box 14000, Juno Beach, Florida 33408-0420.
__________________________
Neither
the Securities and Exchange Commission nor any state securities commission
has
approved or disapproved of these securities or determined if this prospectus
is
truthful or complete. Any representation to the contrary is a criminal
offense.
September
5, 2006
This
prospectus is part of a registration statement that FPL Group, FPL Group
Capital, FPL Group Capital Trust II, FPL Group Capital Trust III, FPL
Group Trust I and FPL Group Trust II, among other registrants, have
filed with the Securities and Exchange Commission (“SEC”) using a “shelf”
registration process. FPL Group Capital Trust II and FPL Group Capital
Trust III are each referred to in this prospectus as “FPL Group Capital
Trust” and FPL Group Trust I and FPL Group Trust II are each referred
to in this prospectus as “FPL Group Trust.” In addition, FPL Group Capital Trust
and FPL Group Trust are each referred to in this prospectus as the
“Trust.”
Under
this shelf registration process, FPL Group, FPL Group Capital and/or the Trust
may issue and sell any combination of the securities described in this
prospectus in one or more offerings from time to time. As of the date of this
prospectus, FPL Group, FPL Group Capital and/or the Trust are each authorized
to
issue securities up to a maximum aggregate offering price of $1,400,000,000,
provided that the aggregate amount of all such securities or combinations of
such securities offered by FPL Group, FPL Group Capital and the Trust under
the
registration statement as of this date may not exceed $1,400,000,000. The
aggregate amount of securities which FPL Group, FPL Group Capital and/or the
Trust are authorized to issue pursuant to this registration statement may be
increased in the future. FPL Group may offer any of the following securities:
senior debt securities, subordinated debt securities, guarantees related to
the
preferred trust securities which the Trust may offer and guarantees related
to
the senior debt securities and subordinated debt securities FPL Group Capital
may offer. FPL Group Capital may offer any of the following securities: senior
debt securities or subordinated debt securities. The Trust may offer preferred
trust securities.
This
prospectus provides you with a general description of the securities that FPL
Group, FPL Group Capital and/or the Trust may offer. Each time FPL Group, FPL
Group Capital and/or the Trust sells securities, FPL Group, FPL Group Capital
and/or the Trust will provide a prospectus supplement that will contain specific
information about the terms of that offering. Material United States federal
income tax considerations applicable to the offered securities will be discussed
in the applicable prospectus supplement if necessary. The prospectus supplement
may also add, update or change information contained in this prospectus. You
should read both this prospectus and any prospectus supplement together with
additional information described under the headings “Where You Can Find More
Information” and “Incorporation by Reference.”
For
more
detailed information about the securities, you can read the exhibits to the
registration statement. Those exhibits have been either filed with the
registration statement or incorporated by reference to earlier SEC filings
listed in the registration statement.
Before
purchasing the securities, investors should carefully consider the following
risk factors together with the risk factors and other information incorporated
by reference or provided in this prospectus or in a prospectus supplement in
order to evaluate an investment in the securities.
FPL
Group and FPL Group Capital are subject to complex laws and regulations and
to
changes in laws and regulations as well as changing governmental policies and
regulatory actions, including initiatives regarding deregulation and
restructuring of the energy industry. Florida Power & Light Company holds
franchise agreements with local municipalities and counties, and must
renegotiate expiring agreements. These factors may have a negative impact on
the
business and results of operations of FPL Group and FPL Group
Capital.
FPL
Group
and FPL Group Capital are subject to complex laws and regulations, and to
changes in laws or regulations, including the Public Utility Regulatory Policies
Act of 1978, the Public Utility Holding Company Act of 2005, the Federal Power
Act, the Atomic Energy Act of 1954, the Energy Policy Act of 2005 and certain
sections of the Florida statutes relating to public utilities, changing
governmental policies and regulatory actions, including those of the Federal
Energy Regulatory Commission, the Florida Public Service Commission and the
legislatures and utility commissions of other states in which FPL Group and
FPL
Group Capital have operations, and the U.S. Nuclear Regulatory Commission,
with respect to, among other things, allowed rates of return, industry and
rate
structure, operation of nuclear power facilities, operation and construction
of
plant facilities, operation and
construction
of transmission facilities, acquisition, disposal, depreciation and amortization
of assets and facilities, recovery of fuel and purchased power costs,
decommissioning costs, return on common equity and equity ratio limits, and
present or prospective wholesale and retail competition (including but not
limited to retail wheeling and transmission costs). The Florida Public Service
Commission has the authority to disallow recovery by Florida Power & Light
Company of any and all costs that it considers excessive or imprudently
incurred. The regulatory process generally restricts Florida Power & Light
Company’s ability to grow earnings and does not provide any assurance as to
achievement of earnings levels.
FPL
Group
and FPL Group Capital are subject to extensive federal, state and local
environmental statutes as well as the effect of changes in or additions to
applicable statutes, rules and regulations relating to air quality, water
quality, waste management, wildlife mortality, natural resources and health
and
safety that could, among other things, restrict or limit the output of certain
facilities or the use of certain fuels required for the production of
electricity and/or require additional pollution control equipment and otherwise
increase costs. There are significant capital, operating and other costs
associated with compliance with these environmental statutes, rules and
regulations, and those costs could be even more significant in the
future.
FPL
Group
and FPL Group Capital operate in a changing market environment influenced by
various legislative and regulatory initiatives regarding deregulation,
regulation or restructuring of the energy industry, including deregulation
or
restructuring of the production and sale of electricity. FPL Group and its
subsidiaries will need to adapt to these changes and may face increasing
competitive pressure.
FPL
Group’s results of operations could be affected by Florida Power & Light
Company’s ability to renegotiate franchise agreements with municipalities and
counties in Florida.
The
operation of power generation facilities, including nuclear facilities, involves
significant risks that could adversely affect the results of operations and
financial condition of FPL Group and FPL Group Capital.
The
operation of power generation facilities involves many risks, including start
up
risks, breakdown or failure of equipment, transmission lines or pipelines,
use
of new technology, the dependence on a specific fuel source, including the
supply and transportation of fuel, or the impact of unusual or adverse weather
conditions (including natural disasters such as hurricanes), as well as the
risk
of performance below expected or contracted levels of output or efficiency.
This
could result in lost revenues and/or increased expenses, including the
requirement to purchase power in the market at potentially higher prices to
meet
their contractual obligations. Insurance, warranties or performance guarantees
may not cover any or all of the lost revenues or increased expenses, including
the cost of replacement power. In addition to these risks, FPL Group’s and FPL
Group Capital’s nuclear units face certain risks that are unique to the nuclear
industry including the ability to store and/or dispose of spent nuclear fuel,
the potential payment of significant retrospective insurance premiums, as well
as additional regulatory actions up to and including shutdown of the units
stemming from public safety concerns, whether at FPL Group’s and FPL Group
Capital’s plants, or at the plants of other nuclear operators. Breakdown or
failure of an operating facility of FPL Energy, LLC, a subsidiary of FPL Group
Capital, may prevent the facility from performing under applicable power sales
agreements which, in certain situations, could result in termination of the
agreement or incurring a liability for liquidated damages.
The
construction of, and capital improvements to, power generation facilities
involve substantial risks. Should construction or capital improvement efforts
be
unsuccessful, the results of operations and financial condition of FPL Group
and
FPL Group Capital could be adversely affected.
FPL
Group’s and FPL Group Capital’s ability to successfully and timely complete
their power generation facilities currently under construction, those projects
yet to begin construction or capital improvements to existing facilities within
established budgets is contingent upon many variables and subject to substantial
risks. Should any such efforts be unsuccessful, FPL Group and FPL Group Capital
could be subject to additional costs, termination payments under committed
contracts, and/or the write-off of their investment in the project or
improvement.
The
use of derivative contracts by FPL Group and FPL Group Capital in the normal
course of business could result in financial losses that negatively impact
the
results of operations of FPL Group and FPL Group Capital.
FPL
Group
and FPL Group Capital use derivative instruments, such as swaps, options and
forwards to manage their commodity and financial market risks, and to a lesser
extent, engage in limited trading activities. FPL Group and FPL Group Capital
could recognize financial losses as a result of volatility in the market values
of these contracts, or if a counterparty fails to perform. In the absence of
actively quoted market prices and pricing information from external sources,
the
valuation of these derivative instruments involves management’s judgment or use
of estimates. As a result, changes in the underlying assumptions or use of
alternative valuation methods could affect the reported fair value of these
contracts. In addition, Florida Power & Light Company’s use of such
instruments could be subject to prudency challenges and if found imprudent,
cost
recovery could be disallowed by the Florida Public Service
Commission.
FPL
Group’s competitive energy business is subject to risks, many of which are
beyond the control of FPL Group and FPL Group Capital, that may reduce the
revenues and adversely impact the results of operations and financial condition
of FPL Group and FPL Group Capital.
There
are
other risks associated with FPL Group’s and FPL Group Capital’s competitive
energy business. In addition to risks discussed elsewhere, risk factors
specifically affecting FPL Energy’s success in competitive wholesale markets
include the ability to efficiently develop and operate generating assets, the
successful and timely completion of project restructuring activities,
maintenance of the qualifying facility status of certain projects, the price
and
supply of fuel (including transportation), transmission constraints, competition
from new sources of generation, excess generation capacity and demand for power.
There can be significant volatility in market prices for fuel and electricity,
and there are other financial, counterparty and market risks that are beyond
the
control of FPL Energy. FPL Energy’s inability or failure to effectively hedge
its assets or positions against changes in commodity prices, interest rates,
counterparty credit risk or other risk measures could significantly impair
FPL
Group’s future financial results. In keeping with industry trends, a portion of
FPL Energy’s power generation facilities operate wholly or partially without
long-term power purchase agreements. As a result, power from these facilities
is
sold on the spot market or on a short-term contractual basis, which may affect
the volatility of FPL Group’s and FPL Group Capital’s financial results. In
addition, FPL Energy’s business depends upon transmission facilities owned and
operated by others; if transmission is disrupted or capacity is inadequate
or
unavailable, FPL Energy’s ability to sell and deliver its wholesale power may be
limited.
FPL
Group’s and FPL Group Capital’s ability to successfully identify, complete and
integrate acquisitions, including the proposed merger with Constellation Energy
Group, Inc., is subject to significant risks, including the effect of increased
competition for acquisitions resulting from the consolidation of the power
industry.
FPL
Group
and FPL Group Capital are likely to encounter significant competition for
acquisition opportunities that may become available as a result of the
consolidation of the power industry, in general, as well as the passage of
the
Energy Policy Act of 2005. In addition, FPL Group and FPL Group Capital may
be
unable to identify attractive acquisition opportunities at favorable prices
and
to successfully and timely complete and integrate them.
FPL
Group’s ability to successfully complete and integrate the proposed merger
between FPL Group and Constellation Energy Group, Inc. (“Constellation Energy”)
is subject to certain risks and uncertainties including the ability to obtain
governmental approvals of the transaction on the proposed terms, conditions
and
schedule; the failure of FPL Group or Constellation Energy’s shareholders to
approve the transaction; the risk that anticipated synergies will not be
achieved or will take longer to achieve than expected; disruption from the
transaction making it more difficult to maintain relationships with customers,
employees, suppliers or governmental entities; unexpected transaction costs
or
liabilities; economic conditions; and other specific factors discussed in
documents filed with the SEC by both FPL Group and Constellation
Energy.
FPL
Group’s proposed merger with Constellation Energy is subject to receipt of
consents or approvals from governmental entities that could delay or prevent
the
completion of the merger or impose conditions that
could
have a material adverse effect on the combined company or that could cause
abandonment of the merger.
Completion
of the proposed merger is conditioned upon the receipt of consents, orders,
approvals or clearances, as required, from the Federal Energy Regulatory
Commission and the public service commissions or similar entities in several
of
the states in which Constellation Energy and/or FPL Group operate electric
and/or gas businesses, including the state of Maryland. Among other things,
governmental entities could condition their approval of the merger upon
Constellation Energy and/or FPL Group entering into agreements to restrict
the
operations of the combined businesses in accordance with specified business
conduct rules, to divest generation facilities or to take other actions which
governmental entities deem necessary or desirable in the public interest. The
terms of any such conditions that may be imposed, if any, are not known by
FPL
Group as of the date hereof. If those approvals are not received, or they are
not received on terms that satisfy the conditions set forth in the merger
agreement, then neither Constellation Energy nor FPL Group will be required
to
complete the merger. Recently adopted energy legislation in Maryland requires
the appointment of a new group of commissioners at the Maryland Public Service
Commission (“MPSC”) and directs the MPSC to complete a prompt and comprehensive
review of the merger pursuant to new standards. These changes have created
additional uncertainty about the MPSC approval process and may result in
substantial delay in the timing of required MPSC approval of the merger or
the
imposition of terms and conditions that are unfavorable to the combined company,
such as a requirement to share expected merger savings with utility customers.
In addition, one lawsuit has been filed challenging the constitutionality of
certain provisions of the new legislation, and additional lawsuits may be filed
in the future. The outcome of such litigation and the additional uncertainty
that could result cannot be predicted. A substantial delay in obtaining required
approvals or the imposition of unfavorable terms or conditions in connection
with such approvals could have a material adverse effect on the business,
financial condition or results of operations of FPL Group, FPL Group Capital
or
the combined company. In addition, delays or unfavorable terms could lead
Constellation Energy or FPL Group to become involved in litigation with one
or
more governmental entities or may cause the abandonment of the
merger.
The
anticipated benefits of combining FPL Group and Constellation Energy may not
be
realized.
FPL
Group
entered into the merger agreement with the expectation that the merger would
result in various benefits, including, among other things, synergies, cost
savings and operating efficiencies. Although FPL Group expects to achieve the
anticipated benefits of the merger, including the synergies, achieving them
is
subject to a number of uncertainties, including:
| · |
the
ability of the two companies to combine certain of their operations
or
take advantage of expected growth
opportunities;
|
| · |
whether
the governmental entities whose approval is required to complete
the
merger impose conditions on the merger or require the combined
company to share a portion of such merger benefits, from both the
utility
and the competitive energy businesses, with utility customers, any
of
which may have an adverse effect on the combined company;
and
|
| · |
general
competitive factors in the
marketplace.
|
No
assurance can be given that these benefits will be achieved, or if achieved,
the
timing of their achievement. Failure to achieve these anticipated benefits
could
result in increased costs and decreases in the amount of expected revenues
of
the combined company.
In
addition, Constellation Energy’s business involves certain risks which are
different from the risks of FPL Group’s current business, and as a result the
combined company may be exposed to competitive, regulatory, operational and
other challenges that do not affect FPL Group’s businesses to a similar
extent.
FPL
Group and its subsidiaries, including FPL Group Capital, will be subject to
business uncertainties and contractual restrictions while the merger is pending
that could adversely affect their businesses.
Uncertainty
about the effect of the merger on employees and customers may have an adverse
effect on FPL Group and its subsidiaries, including FPL Group Capital,
regardless of whether the merger is eventually completed. Although FPL Group
and
FPL Group Capital have taken steps designed to reduce any adverse effects,
these
uncertainties may impair FPL Group’s and FPL Group Capital’s ability to attract,
retain and motivate key personnel until the merger is completed, or the merger
agreement is terminated, and for a period of time thereafter. These
uncertainties also could cause customers, suppliers and others that deal with
FPL Group and FPL Group Capital to seek to change existing business
relationships with FPL Group and FPL Group Capital.
Employee
retention and recruitment may be particularly challenging during the pendency
of
the merger, as employees and prospective employees may be uncertain about their
future roles with the combined company. If, despite FPL Group’s and FPL Group
Capital’s retention and recruiting efforts, key employees depart or fail to
accept employment with either of the companies because of issues relating to
the
uncertainty and difficulty of integration or a desire not to remain with the
combined company, FPL Group’s, FPL Group Capital’s or the combined company’s
business could be seriously harmed.
The
pursuit of the merger and the preparation for the integration of Constellation
Energy and FPL Group place a significant burden on management and internal
resources. The diversion of management attention away from day-to-day business
concerns and any difficulties encountered in the transition and integration
process could harm FPL Group’s and FPL Group Capital’s businesses, financial
condition and operating results, regardless of whether the merger is eventually
completed.
In
addition, the merger agreement restricts FPL Group and its subsidiaries,
including FPL Group Capital, without Constellation Energy’s consent, from making
certain acquisitions and taking other specified actions until the merger occurs
or the merger agreement terminates. These restrictions may prevent FPL Group
and
FPL Group Capital from pursuing otherwise attractive business opportunities
and
making other changes to their businesses prior to completion of the merger
or
termination of the merger agreement.
Because
FPL Group and FPL Group Capital rely on access to capital markets, the inability
to maintain current credit ratings and access capital markets on favorable
terms
may limit the ability of FPL Group and FPL Group Capital to grow their
businesses and would likely increase interest costs.
FPL
Group, FPL Group Capital and Florida Power & Light Company rely on access to
capital markets as a significant source of liquidity for capital requirements
not satisfied by operating cash flows. The inability of FPL Group, FPL Group
Capital and Florida Power & Light Company to maintain their current credit
ratings could affect their ability to raise capital on favorable terms,
particularly during times of uncertainty in the capital markets, which, in
turn,
could impact FPL Group’s and FPL Group Capital’s ability to grow their
businesses and would likely increase their interest costs.
Customer
growth in Florida Power & Light Company’s service area affects FPL Group’s
results of operations.
FPL
Group’s results of operations are affected by the growth in customer accounts in
Florida Power & Light Company’s service area. Customer growth can be
affected by population growth as well as economic factors in Florida, including
job and income growth, housing starts and new home prices. Customer growth
directly influences the demand for electricity and the need for additional
power
generation and power delivery facilities at Florida Power & Light
Company.
Weather
affects FPL Group’s and FPL Group Capital’s results of
operations.
FPL
Group’s and FPL Group Capital’s results of operations are affected by changes in
the weather. Weather conditions directly influence the demand for electricity
and natural gas and affect the price of energy commodities, and can affect
the
production of electricity at wind and hydro-powered facilities. FPL Group’s
and
FPL
Group Capital’s results of operations can be affected by the impact of severe
weather which can be destructive, causing outages and/or property damage, may
affect fuel supply, and could require additional costs to be incurred. At
Florida Power & Light Company, recovery of these costs is subject to Florida
Public Service Commission approval.
FPL
Group and FPL Group Capital are subject to costs and other effects of legal
proceedings as well as changes in or additions to applicable tax laws, rates
or
policies, rates of inflation, accounting standards, securities laws and
corporate governance requirements.
FPL
Group
and FPL Group Capital are subject to costs and other effects of legal and
administrative proceedings, settlements, investigations and claims, as well
as
the effect of new, or changes in, tax laws, rates or policies, rates of
inflation, accounting standards, securities laws and corporate governance
requirements.
Threats
of terrorism and catastrophic events that could result from terrorism may impact
the operations of FPL Group and FPL Group Capital in unpredictable
ways.
FPL
Group
and FPL Group Capital are subject to direct and indirect effects of terrorist
threats and activities. Generation and transmission facilities, in general,
have
been identified as potential targets. The effects of terrorist threats and
activities include, among other things, terrorist actions or responses to such
actions or threats, the inability to generate, purchase or transmit power,
the
risk of a significant slowdown in growth or a decline in the U.S. economy,
delay
in economic recovery in the U.S., and the increased cost and adequacy of
security and insurance.
The
ability of FPL Group and FPL Group Capital to obtain insurance and the terms
of
any available insurance coverage could be affected by national, state or local
events and company-specific events.
FPL
Group’s and FPL Group Capital’s ability to obtain insurance, and the cost of and
coverage provided by such insurance, could be affected by national, state or
local events as well as company-specific events.
FPL
Group and FPL Group Capital are subject to employee workforce factors that
could
affect the businesses and financial condition of FPL Group and FPL Group
Capital.
FPL
Group
and FPL Group Capital are subject to employee workforce factors, including
loss
or retirement of key executives, availability of qualified personnel, collective
bargaining agreements with union employees and work stoppage that could affect
the businesses and financial condition of FPL Group and FPL Group
Capital.
FPL
Group
is a holding company incorporated in 1984 as a Florida corporation. FPL Group’s
principal subsidiary, Florida Power & Light Company, is a rate-regulated
utility engaged primarily in the generation, transmission, distribution and
sale
of electric energy. Other operations are conducted through FPL Group
Capital.
FPL
Group
Capital was incorporated in 1985 as a Florida corporation and is a wholly-owned
subsidiary of FPL Group. FPL Group Capital holds the capital stock or other
ownership interests of, and provides funding for, FPL Group’s operating
subsidiaries other than Florida Power & Light Company. These operating
subsidiaries’ business activities primarily consist of FPL Energy, LLC’s
competitive energy business.
FPL
GROUP TRUST I AND FPL GROUP TRUST II
FPL
Group
Capital Trust II, FPL Group Capital Trust III, FPL Group Trust I
and FPL Group Trust II are Delaware statutory trusts created pursuant to
separate trust agreements among FPL Group as depositor of the Trust, The Bank
of
New York as the Property Trustee, The Bank of New York (Delaware) as the
Delaware Trustee and
one
or
more Administrative Trustees appointed by FPL Group. The trust agreements will
be amended and restated substantially in the form filed as an exhibit to the
registration statement. Each trust agreement, as so amended and restated, is
referred to in this prospectus as the “Trust Agreement.” FPL Group Capital Trust
exists only to issue its preferred trust securities and common trust securities
and to hold the junior subordinated debentures of FPL Group Capital as trust
assets. FPL Group Trust exists only to issue its preferred trust securities
and
common trust securities and to hold the junior subordinated debentures of FPL
Group as trust assets. All of the common trust securities will be owned by
FPL
Group. Unless otherwise stated in a prospectus supplement, the common trust
securities will represent at least 3% of the total capital of the Trust.
Payments on any distribution payment date or redemption date will be made on
the
common trust securities pro rata with the preferred trust securities, except
that the common trust securities’ right to payment will be subordinated to the
rights of the preferred trust securities if there is a default under the Trust
Agreement. The Trust will have a term as stated in the applicable prospectus
supplement, but may dissolve earlier as provided in the Trust
Agreement.
The
Trust’s business and affairs will be conducted by its Administrative Trustees.
The office of the Delaware Trustee in the State of Delaware is White Clay
Center, Route 273, Newark, Delaware 19711. The principal place of business
of
the Trust is 700 Universe Boulevard, Juno Beach, Florida 33408, and the
telephone number is (561) 694-4000.
Unless
otherwise stated in a prospectus supplement, FPL Group and FPL Group Capital
will each add the net proceeds from the sale of their securities to its
respective general funds. FPL Group uses its general funds for corporate
purposes, including to provide funds for its subsidiaries and to repurchase
common stock. FPL Group Capital uses its general funds for corporate purposes,
including to repay short-term borrowings and to repay, redeem or repurchase
outstanding long-term debt obligations. FPL Group and FPL Group Capital will
each temporarily invest any proceeds that it does not need to use immediately
in
short-term instruments.
FPL
Group
Capital Trust will use the proceeds from the sale of preferred trust securities
and common trust securities to invest in junior subordinated debentures issued
by FPL Group Capital. FPL Group Capital will add the net proceeds from the
sale
of such junior subordinated debentures to its general funds, which will be
used
as described above.
FPL
Group
Trust will use the proceeds from the sale of preferred trust securities and
common trust securities to invest in junior subordinated debentures issued
by
FPL Group. FPL Group will add the net proceeds from the sale of such junior
subordinated debentures to its general funds, which will be used as described
above.
COMBINED
FIXED CHARGES PLUS PREFERRED DIVIDENDS
The
following table shows FPL Group’s consolidated ratio of earnings to fixed
charges and consolidated ratio of earnings to combined fixed charges and
preferred stock dividends for each of its last five fiscal years:
|
Years
Ended December 31,
|
|||||||||||||||||||
|
2005
|
2004
|
2003
|
2002
|
2001
|
|||||||||||||||
|
2.76
|
2.96
|
3.28
|
2.95
|
3.60
|
|||||||||||||||
FPL
Group’s consolidated ratio of earnings to fixed charges and consolidated ratio
of earnings to combined fixed charges and preferred stock dividends for the
six
months ended June 30, 2006 was 2.76.
FPL
Group
files annual, quarterly and other reports and other information with the SEC.
You can read and copy any information filed by FPL Group with the SEC at the
SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You
can obtain additional information about the Public Reference Room by calling
the
SEC at 1-800-SEC-0330.
In
addition, the SEC maintains an Internet site (www.sec.gov) that contains
reports, proxy and information statements, and other information regarding
issuers that file electronically with the SEC, including FPL Group. FPL Group
also maintains an Internet site (www.fplgroup.com).
FPL
Group
Capital does not file reports or other information with the SEC. FPL Group
includes summarized financial information relating to FPL Group Capital in
some
of its reports filed with the SEC. FPL Group does not intend to include any
separate financial information with respect to FPL Group Capital in its
consolidated financial statements because FPL Group and FPL Group Capital have
determined that this information is not material to the holders of FPL Group
Capital’s debt securities.
No
separate financial statements of the Trust are included in this prospectus.
FPL
Group and the Trust do not consider those financial statements to be material
to
holders of the preferred trust securities because (1) the Trust is a
special purpose entity and has no operating history or independent operations,
and (2) the Trust is not engaged in and does not propose to engage in any
activity other than holding as trust assets the junior subordinated debentures
of FPL Group Capital, in the case of FPL Group Capital Trust, and the junior
subordinated debentures of FPL Group in the case of FPL Group Trust, and issuing
its preferred trust securities and common trust securities. FPL Group and the
Trust do not expect the Trust to file periodic reports under Sections 13 or
15(d) of the Securities Exchange Act of 1934.
The
SEC
allows FPL Group, FPL Group Capital and the Trust to “incorporate by reference”
the information that FPL Group files with the SEC, which means that FPL Group,
FPL Group Capital and the Trust may, in this prospectus, disclose important
information to you by referring you to those documents. The information
incorporated by reference is an important part of this prospectus. Information
that FPL Group files in the future with the SEC will automatically update and
supersede this information. FPL Group, FPL Group Capital and the Trust are
incorporating by reference the documents listed below and any future filings
FPL
Group makes with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 after the date of this prospectus until FPL
Group, FPL Group Capital and/or the Trust sell all of these
securities:
|
(1)
|
FPL
Group’s Annual Report on Form 10-K for the year ended December 31,
2005, as amended by a Form 10-K/A filed with the SEC on April 28,
2006;
|
|
(2)
|
FPL
Group’s Quarterly Report on Form 10-Q for the quarters ended March 31,
2006 and June 30, 2006; and
|
|
(3)
|
FPL
Group’s Current Reports on Form 8-K filed with the SEC on January 5, 2006,
January 27, 2006, as amended by a Form 8-K/A filed with the SEC on
January
30, 2006 (excluding information furnished and not filed), April 24,
2006,
May 19, 2006, May 26, 2006, June 1, 2006, June 9, 2006, June 28,
2006,
July 5, 2006 and August 18, 2006.
|
You
may
request a copy of these documents, at no cost to you, by writing or calling
Robert J. Reger, Jr., Esq., Thelen Reid & Priest LLP, 875 Third Avenue,
New York, New York 10022, (212) 603-2000. FPL Group will provide to each
person, including any beneficial owner, to whom this prospectus is delivered,
a
copy of any or all of the information that has been incorporated by reference
in
this prospectus but not delivered with this prospectus.
In
connection with the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995, FPL Group, FPL Group Capital and the Trust are hereby filing
cautionary statements identifying important factors that could cause FPL Group’s
and FPL Group Capital’s actual results to differ materially from those projected
in forward-looking statements (as such term is defined in the Private Securities
Litigation Reform Act of 1995) made by or on behalf of FPL Group, FPL Group
Capital and the Trust in this prospectus or any supplement to this
prospectus, in presentations, in response to questions or otherwise. Any
statements that express, or involve discussions as to, expectations, beliefs,
plans, objectives, assumptions or future events or performance (often, but
not
always,
through the use of words or phrases such as “will likely result,” “are expected
to,” “will continue,” “is anticipated,” “believe,” “could,” “estimated,” “may,”
“plan,” “potential,” “projection,” “target,” “outlook”) are not statements of
historical facts and may be forward-looking. Forward-looking statements involve
estimates, assumptions and uncertainties. Accordingly, any such statements
are
qualified in their entirety by reference to, and are accompanied by, the
specific factors discussed in “Risk Factors” herein and in FPL Group’s reports
that are incorporated herein by reference (in addition to any assumptions and
other factors referred to specifically in connection with such forward-looking
statements) that could have a significant impact on FPL Group’s and FPL Group
Capital’s operations and financial results, and could cause FPL Group’s or FPL
Group Capital’s actual results to differ materially from those contained in
forward-looking statements made by or on behalf of FPL Group, FPL Group Capital
or the Trust.
Any
forward-looking statement speaks only as of the date on which that statement
is
made, and neither FPL Group, FPL Group Capital nor the Trust undertakes any
obligation to update any forward-looking statement to reflect events or
circumstances, including unanticipated events, after the date on which that
statement is made. New factors emerge from time to time and it is not possible
for management to predict all of those factors, nor can it assess the impact
of
each of those factors on the business or the extent to which any factor, or
combination of factors, may cause actual results to differ materially from
those
contained in any forward-looking statement.
The
issues and associated risks and uncertainties discussed in “Risk Factors” herein
and in the reports that are incorporated herein by reference are not the only
ones FPL Group or FPL Group Capital may face. Additional issues may arise or
become material as the energy industry evolves. The risks and uncertainties
associated with those additional issues could impair FPL Group’s and FPL Group
Capital’s businesses in the future.
General.
FPL
Group Capital will issue its debt securities (other than the FPL Group Capital
Junior Subordinated Debentures (as defined below under “Description of the FPL
Group and FPL Group Capital Junior Subordinated Debentures and the FPL Group
Subordinated Guarantee”)), in one or more series, under an Indenture, dated as
of June 1, 1999, between FPL Group Capital and The Bank of New York, as
trustee. This Indenture, as it may be amended and supplemented from time to
time, is referred to in this prospectus as the “Indenture.” The Bank of New
York, as trustee under the Indenture, is referred to in this prospectus as
the
“Indenture Trustee.” These debt securities are referred to in this prospectus as
the “Offered Senior Debt Securities.”
The
Indenture provides for the issuance from time to time of debentures, notes
or
other debt by FPL Group Capital in an unlimited amount. The Offered Senior
Debt
Securities and all other debentures, notes or other debt of FPL Group Capital
issued under the Indenture are collectively referred to in this prospectus
as
the “Senior Debt Securities.”
This
section briefly summarizes some of the terms of the Offered Senior Debt
Securities and some of the provisions of the Indenture. This summary does not
contain a complete description of the Offered Senior Debt Securities or the
Indenture. You should read this summary together with the Indenture and the
officer’s certificates or other documents establishing the Offered Senior Debt
Securities for a complete understanding of all the provisions and for the
definitions of some terms used in this summary. The Indenture, the form of
officer’s certificate that may be used to establish a series of Offered Senior
Debt Securities and a form of Offered Senior Debt Securities have been
previously filed with the SEC, and are exhibits to the registration statement
filed with the SEC of which this prospectus is a part. In addition, the
Indenture is qualified under the Trust Indenture Act of 1939 and is therefore
subject to the provisions of the Trust Indenture Act of 1939. You should read
the Trust Indenture Act of 1939 for a complete understanding of its
provisions.
All
Offered Senior Debt Securities of one series need not be issued at the same
time, and a series may be re-opened for issuances of additional Offered Senior
Debt Securities of such series. This means that FPL Group Capital may from
time
to time, without notice to, or the consent of the existing holders of the
Offered Senior Debt Securities of a particular series, create and issue
additional Offered Senior Debt Securities of such series. Such additional
Offered Senior Debt Securities will have the same terms as the Offered Senior
Debt Securities of such series in all respects (except for the payment of
interest accruing prior to the issue date of the additional Offered Senior
Debt
Securities or except for the first payments of interest following the issue
date
of the additional Offered
Senior
Debt Securities) so that the additional Offered Senior Debt Securities may
be
consolidated and form a single series with the Offered Senior Debt Securities
of
such series.
Each
series of Offered Senior Debt Securities may have different terms. FPL Group
Capital will include some or all of the following information about a specific
series of Offered Senior Debt Securities in the prospectus supplement relating
to those Offered Senior Debt Securities:
|
(1)
|
the
title of those Offered Senior Debt
Securities,
|
|
(2)
|
any
limit upon the aggregate principal amount of those Offered Senior
Debt
Securities,
|
|
(3)
|
the
date(s) on which FPL Group Capital will pay the principal of those
Offered
Senior Debt Securities,
|
|
(4)
|
the
rate(s) of interest on those Offered Senior Debt Securities, or how
the
rate(s) of interest will be determined, the date(s) from which interest
will accrue, the dates on which FPL Group Capital will pay interest
and
the record date for any interest payable on any interest payment
date,
|
|
(5)
|
the
person to whom FPL Group Capital will pay interest on those Offered
Senior
Debt Securities on any interest payment date, if other than the person
in
whose name those Offered Senior Debt Securities are registered at
the
close of business on the record date for that interest
payment,
|
|
(6)
|
the
place(s) at which or methods by which FPL Group Capital will make
payments
on those Offered Senior Debt Securities and the place(s) at which
or
methods by which the registered owners of those Offered Senior Debt
Securities may transfer or exchange those Offered Senior Debt Securities
and serve notices and demands to or upon FPL Group
Capital,
|
|
(7)
|
the
security registrar and any paying agent or agents for those Offered
Senior
Debt Securities,
|
|
(8)
|
any
date(s) on which, the price(s) at which and the terms and conditions
upon
which FPL Group Capital may, at its option, redeem those Offered
Senior
Debt Securities, in whole or in part, and any restrictions on those
redemptions,
|
|
(9)
|
any
sinking fund or other provisions or options held by the registered
owners
of those Offered Senior Debt Securities that would obligate FPL Group
Capital to repurchase or redeem those Offered Senior Debt
Securities,
|
|
(10)
|
the
denominations in which FPL Group Capital may issue those Offered
Senior
Debt Securities, if other than denominations of $1,000 and any integral
multiple of $1,000,
|
|
(11)
|
the
currency or currencies in which FPL Group Capital may pay the principal
of
or premium, if any, or interest on those Offered Senior Debt Securities
(if other than in U.S. dollars),
|
|
(12)
|
if
FPL Group Capital or a registered owner may elect to pay, or receive,
principal of or premium, if any, or interest on those Offered Senior
Debt
Securities in a currency other than that in which those Offered Senior
Debt Securities are stated to be payable, the terms and conditions
upon
which that election may be made,
|
|
(13)
|
if
FPL Group Capital will, or may, pay the principal of or premium,
if any,
or interest on those Offered Senior Debt Securities in securities
or other
property, the type and amount of those securities or other property
and
the terms and conditions upon which FPL Group Capital or a registered
owner may elect to pay or receive those
payments,
|
|
(14)
|
if
the amount payable in respect of principal of or premium, if any,
or
interest on those Offered Senior Debt Securities may be determined
by
reference to an index or other fact or event ascertainable outside
of the
Indenture, the manner in which those amounts will be
determined,
|
|
(15)
|
the
portion of the principal amount of those Offered Senior Debt Securities
that FPL Group Capital will pay upon declaration of acceleration
of the
maturity of those Offered Senior Debt Securities, if other than the
entire
principal amount of those Offered Senior Debt
Securities,
|
|
(16)
|
any
events of default with respect to those Offered Senior Debt Securities
and
any covenants of FPL Group Capital for the benefit of the registered
owners of those Offered Senior Debt Securities, other than those
specified
in the Indenture,
|
|
(17)
|
the
terms, if any, pursuant to which those Offered Senior Debt Securities
may
be exchanged for shares of capital stock or other securities of any
other
entity,
|
|
(18)
|
a
definition of “Eligible Obligations” under the Indenture with respect to
those Offered Senior Debt Securities denominated in a currency other
than
U.S. dollars, and any other provisions for the reinstatement of FPL
Group
Capital’s indebtedness in respect of those Offered Senior Debt Securities
after their satisfaction and
discharge,
|
|
(19)
|
if
FPL Group Capital will issue those Offered Senior Debt Securities
in
global form, necessary information relating to the issuance of those
Offered Senior Debt Securities in global
form,
|
|
(20)
|
if
FPL Group Capital will issue those Offered Senior Debt Securities
as
bearer securities, necessary information relating to the issuance
of those
Offered Senior Debt Securities as bearer
securities,
|
|
(21)
|
any
limits on the rights of the registered owners of those Offered Senior
Debt
Securities to transfer or exchange those Offered Senior Debt Securities
or
to register their transfer, and any related service
charges,
|
|
(22)
|
any
exceptions to the provisions governing payments due on legal holidays
or
any variations in the definition of business day with respect to
those
Offered Senior Debt Securities,
|
|
(23)
|
other
than the Guarantee described under “Description of the FPL Group Capital
Senior Debt Securities Guarantee” below, any collateral security,
assurance, or guarantee for those Offered Senior Debt Securities,
and
|
|
(24)
|
any
other terms of those Offered Senior Debt Securities that are not
inconsistent with the provisions of the Indenture. (Indenture, Section
301).
|
FPL
Group
Capital may sell Offered Senior Debt Securities at a discount below their
principal amount. Some of the important United States federal income tax
considerations applicable to Offered Senior Debt Securities sold at a discount
below their principal amount may be discussed in the related prospectus
supplement. In addition, some of the important United States federal income
tax
or other considerations applicable to any Offered Senior Debt Securities that
are denominated in a currency other than U.S. dollars may be discussed in the
related prospectus supplement.
Except
as
otherwise stated in the related prospectus supplement, the covenants in the
Indenture would not give registered owners of Offered Senior Debt Securities
protection in the event of a highly-leveraged transaction involving FPL Group
Capital or FPL Group.
Security
and Ranking.
The
Offered Senior Debt Securities will be unsecured obligations of FPL Group
Capital. The Indenture does not limit FPL Group Capital’s ability to provide
security with respect to other Senior Debt Securities. All Senior Debt
Securities issued under the Indenture will rank equally and ratably with all
other Senior Debt Securities issued under the Indenture, except to the extent
that FPL Group Capital elects to provide security with respect to any Senior
Debt Security without providing that security to all outstanding Senior Debt
Securities as allowed under the Indenture. The Offered Senior Debt Securities
will rank senior to FPL Group Capital’s Junior Subordinated Debentures. The
Indenture does not limit FPL Group Capital’s ability to issue other unsecured
debt.
FPL
Group
Capital is a holding company that derives substantially all of its income from
its operating subsidiaries. Therefore, the Senior Debt Securities will be
effectively subordinated to all indebtedness and other liabilities, including
trade payables, debt and preferred stock, incurred or issued by FPL Group
Capital’s subsidiaries. The Indenture does not place any limit on the amounts of
liabilities, including debt or preferred stock, that FPL Group Capital’s
subsidiaries may issue, guarantee or otherwise incur.
Payment
and Paying Agents.
Except
as stated in the related prospectus supplement, on each interest payment date
FPL Group Capital will pay interest on each Offered Senior Debt Security to
the
person in whose name that Offered Senior Debt Security is registered as of
the
close of business on the record date relating to that interest payment date.
However, on the date that the Offered Senior Debt Securities mature, FPL Group
Capital will pay the interest to the person to whom it pays the principal.
Also,
if FPL Group Capital has defaulted in the payment of interest on any Offered
Senior Debt Security, it may pay that defaulted interest to the registered
owner
of that Offered Senior Debt Security:
|
(1)
|
as
of the close of business on a date that the Indenture Trustee selects,
which may not be more than 15 days or less than 10 days before the
date that FPL Group Capital proposes to pay the defaulted interest,
or
|
|
(2)
|
in
any other lawful manner that does not violate the requirements of
any
securities exchange on which that Offered Senior Debt Security is
listed
and that the Indenture Trustee believes is acceptable. (Indenture,
Section 307).
|
Unless
otherwise stated in the related prospectus supplement, the principal, premium,
if any, and interest on the Offered Senior Debt Securities at maturity will
be
payable when such Offered Senior Debt Securities are presented at the main
corporate trust office of The Bank of New York, as paying agent, in The City
of
New York. FPL Group Capital may change the place of payment on the Offered
Senior Debt Securities, appoint one or more additional paying agents, including
itself, and remove any paying agent. (Indenture, Section 602).
Transfer
and Exchange.
Unless
otherwise stated in the related prospectus supplement, Offered Senior Debt
Securities may be transferred or exchanged at the main corporate trust office
of
The Bank of New York, as security registrar, in The City of New York. FPL Group
Capital may change the place for transfer and exchange of the Offered Senior
Debt Securities and may designate one or more additional places for that
transfer and exchange.
Except
as
otherwise stated in the related prospectus supplement, there will be no service
charge for any transfer or exchange of the Offered Senior Debt Securities.
However, FPL Group Capital may require payment of any tax or other governmental
charge in connection with any transfer or exchange of the Offered Senior Debt
Securities.
FPL
Group
Capital will not be required to transfer or exchange any Offered Senior Debt
Security selected for redemption. Also, FPL Group Capital will not be required
to transfer or exchange any Offered Senior Debt Security during a period of
15
days before selection of Offered Senior Debt Securities to be redeemed.
(Indenture, Section 305).
Defeasance.
FPL
Group Capital may, at any time, elect to have all of its obligations discharged
with respect to all or a portion of any Senior Debt Securities. To do so, FPL
Group Capital must irrevocably deposit with the Indenture Trustee or any paying
agent, in trust:
|
(1)
|
money
in an amount that will be sufficient to pay all or that portion of
the
principal, premium, if any, and interest due and to become due on
those
Senior Debt Securities, on or prior to their maturity,
or
|
|
(2)
|
in
the case of a deposit made prior to the maturity of that series of
Senior
Debt Securities,
|
| (a) |
direct
obligations of, or obligations unconditionally guaranteed by, the
United
States and entitled to the benefit of its full faith and credit
that do
not contain provisions permitting their redemption or other prepayment
at
the option of their issuer,
and
|
| (b) |
certificates,
depositary receipts or other instruments that evidence a direct
ownership
interest in those obligations or in any specific interest or principal
payments due in respect of those obligations that do not contain
provisions permitting their redemption or other prepayment at the
option
of their issuer, the principal of and the interest on which, when
due,
without any regard to reinvestment of that principal or interest,
will
provide money that, together with any money deposited with or held
by the
Indenture Trustee, will be sufficient to pay all or that portion
of the
principal, premium, if any, and interest due and to become due
on those
Senior Debt Securities, on or prior to their maturity,
or
|
|
(3)
|
a
combination of (1) and (2) that will be sufficient to pay all or
that
portion of the principal, premium, if any, and interest due and to
become
due on those Senior Debt Securities, on or prior to their maturity.
(Indenture, Section 701).
|
Limitation
on Liens.
So long
as any Senior Debt Securities remain outstanding, FPL Group Capital will not
secure any indebtedness with a lien on any shares of the capital stock of any
of
its majority-owned subsidiaries, which shares of capital stock FPL Group Capital
now or hereafter directly owns, unless FPL Group Capital equally secures all
Senior Debt Securities. However, this restriction does not apply to or
prevent:
|
(1)
|
any
lien on capital stock created at the time FPL Group Capital acquires
that
capital stock, or within 270 days after that time, to secure all or a
portion of the purchase price for that capital
stock,
|
|
(2)
|
any
lien on capital stock existing at the time FPL Group Capital acquires
that
capital stock (whether or not FPL Group Capital assumes the obligations
secured by the lien and whether or not the lien was created in
contemplation of the acquisition),
|
|
(3)
|
any
extensions, renewals or replacements of the liens described in (1)
and (2)
above, or of any indebtedness secured by those liens; provided,
that,
|
| (a) |
the
principal amount of indebtedness secured by those liens immediately
after
the extension, renewal or replacement may not exceed the principal
amount
of indebtedness secured by those liens immediately before the
extension,
renewal or replacement,
and
|
| (b) |
the
extension, renewal or replacement lien is limited to no more than
the same
proportion of all shares of capital stock as were covered by the
lien that
was extended, renewed or replaced,
or
|
|
(4)
|
any
lien arising in connection with court proceedings; provided, that,
either
|
| (a) |
the
execution or enforcement of that lien is effectively stayed within
30 days
after entry of the corresponding judgment (or the corresponding
judgment
has been discharged within that 30 day period) and the claims
secured by
that lien are being contested in good faith by appropriate
proceedings,
|
| (b) |
the
payment of that lien is covered in full by insurance and the
insurance
company has not denied or contested coverage,
or
|
| (c) |
so
long as that lien is adequately bonded, any appropriate legal
proceedings
that have been duly initiated for the review of the corresponding
judgment, decree or order have not been fully terminated or the
periods
within which those proceedings may be initiated have not
expired.
|
Liens
on
any shares of the capital stock of any of FPL Group Capital’s majority-owned
subsidiaries, which shares of capital stock FPL Group Capital now or hereafter
directly owns, other than liens described in (1) through (4) above, are referred
to in this prospectus as “Restricted Liens.” The foregoing limitation does not
apply to the extent that FPL Group Capital creates any Restricted Liens to
secure indebtedness that, together with all other indebtedness of FPL Group
Capital secured by Restricted Liens, does not at the time exceed 5% of FPL
Group
Capital’s Consolidated Capitalization. (Indenture, Section 608).
For
this
purpose, “Consolidated Capitalization” means the sum of:
|
(1)
|
Consolidated
Shareholders’ Equity;
|
|
(2)
|
Consolidated
Indebtedness for borrowed money (exclusive of any amounts which are
due
and payable within one year); and, without
duplication
|
|
(3)
|
any
preference or preferred stock of FPL Group Capital or any Consolidated
Subsidiary which is subject to mandatory redemption or sinking fund
provisions.
|
The
term
“Consolidated Shareholders’ Equity” as used above means the total assets of FPL
Group Capital and its Consolidated Subsidiaries less all liabilities of FPL
Group Capital and its Consolidated Subsidiaries. As used in this definition,
the
term “liabilities” means all obligations which would, in accordance with
generally accepted accounting principles, be classified on a balance sheet
as
liabilities, including without limitation:
|
(1)
|
indebtedness
secured by property of FPL Group Capital or any of its Consolidated
Subsidiaries whether or not FPL Group Capital or such Consolidated
Subsidiary is liable for the payment thereof unless, in the case
that FPL
Group Capital or such Consolidated Subsidiary is not so liable, such
property has not been included among the assets of FPL Group Capital
or
such Consolidated Subsidiary on such balance
sheet,
|
|
(2)
|
deferred
liabilities, and
|
|
(3)
|
indebtedness
of FPL Group Capital or any of its Consolidated Subsidiaries that
is
expressly subordinated in right and priority of payment to other
liabilities of FPL Group Capital or such Consolidated
Subsidiary.
|
As
used
in this definition, “liabilities” includes preference or preferred stock of FPL
Group Capital or any Consolidated Subsidiary only to the extent of any such
preference or preferred stock that is subject to mandatory redemption or sinking
fund provisions.
The
term
“Consolidated Indebtedness” means total indebtedness as shown on the
consolidated balance sheet of FPL Group Capital and its Consolidated
Subsidiaries.
The
term
“Consolidated Subsidiary,” means at any date any direct or indirect
majority-owned subsidiary whose financial statements would be consolidated
with
those of FPL Group Capital in FPL Group Capital’s consolidated financial
statements as of such date in accordance with generally accepted accounting
principles. (Indenture, Section 608).
The
foregoing limitation does not limit in any manner the ability of:
|
(1)
|
FPL
Group Capital to place liens on any of its assets other than the
capital
stock of directly held, majority-owned
subsidiaries,
|
|
(2)
|
FPL
Group Capital or FPL Group to cause the transfer of its assets or
those of
its subsidiaries, including the capital stock covered by the foregoing
restrictions,
|
|
(3)
|
FPL
Group to place liens on any of its assets,
or
|
|
(4)
|
any
of the direct or indirect subsidiaries of FPL Group Capital or FPL
Group
(other than FPL Group Capital) to place liens on any of their
assets.
|
Consolidation,
Merger, and Sale of Assets.
Under
the Indenture, FPL Group Capital may not consolidate with or merge into any
other entity or convey, transfer or lease its properties and assets
substantially as an entirety to any entity, unless:
|
(1)
|
the
entity formed by that consolidation, or the entity into which FPL
Group
Capital is merged, or the entity that acquires or leases FPL Group
Capital’s property and assets, is an entity organized and existing under
the laws of the United States, any state or the District of Columbia
and
that entity expressly assumes FPL Group Capital’s obligations on all
Senior Debt Securities and under the Indenture,
|
|
(2)
|
immediately
after giving effect to the transaction, no event of default under
the
Indenture and no event that, after notice or lapse of time or both,
would
become an event of default under the Indenture exists,
and
|
|
(3)
|
FPL
Group Capital delivers an officer’s certificate and an opinion of counsel
to the Indenture Trustee, as provided in the Indenture. (Indenture,
Section 1101).
|
The
Indenture does not restrict FPL Group Capital in a merger in which FPL Group
Capital is the surviving entity.
Events
of Default.
Each of
the following is an event of default under the Indenture with respect to the
Senior Debt Securities of any series:
|
(1)
|
failure
to pay interest on the Senior Debt Securities of that series within
30
days after it is due,
|
|
(2)
|
failure
to pay principal or premium, if any, on the Senior Debt Securities
of that
series when it is due,
|
|
(3)
|
failure
to comply with any other covenant in the Indenture, other than a
covenant
that does not relate to that series of Senior Debt Securities, that
continues for 90 days after FPL Group Capital receives written notice
of
such failure to comply from the Indenture Trustee, or FPL Group Capital
and the Indenture Trustee receive written notice of such failure
to comply
from the registered owners of at least 33% in principal amount of
the
Senior Debt Securities of that
series,
|
|
(4)
|
certain
events of bankruptcy, insolvency or reorganization of FPL Group Capital,
and
|
|
(5)
|
any
other event of default specified with respect to the Senior Debt
Securities of that series. (Indenture, Section
801).
|
In
the
case of the third event of default listed above, the Indenture Trustee may
extend the grace period. In addition, if registered owners of a particular
series have given a notice of default, then registered owners of at least the
same percentage of Senior Debt Securities of that series, together with the
Indenture Trustee, may also extend the grace period. The grace period will
be
automatically extended if FPL Group Capital has initiated and is diligently
pursuing corrective action. (Indenture, Section 801). An event of default with
respect to the Senior Debt Securities of a particular series will not
necessarily constitute an event of default with respect to Senior Debt
Securities of any other series issued under the Indenture.
Remedies.
If an
event of default applicable to the Senior Debt Securities of one or more series,
but not applicable to all outstanding Senior Debt Securities, exists, then
either the Indenture Trustee or the registered owners of at least 33% in
aggregate principal amount of the Senior Debt Securities of each of the affected
series may declare the principal of and accrued but unpaid interest on all
the
Senior Debt Securities of that series to be due and payable immediately.
However, under the Indenture, some Senior Debt Securities may provide for a
specified amount less than their entire principal amount to be due and payable
upon that declaration. These Senior Debt Securities are defined as “Discount
Securities” in the Indenture.
If
the
event of default is applicable to all outstanding Senior Debt Securities, then
only the Indenture Trustee or the registered owners of at least 33% in aggregate
principal amount of all outstanding Senior Debt Securities of all series, voting
as one class, and not the registered owners of any one series, may make a
declaration of acceleration. However, the event of default giving rise to the
declaration relating to any series of Senior Debt Securities will be
automatically waived, and that declaration and its consequences will be
automatically rescinded
and
annulled, if, at any time after that declaration and before a judgment or decree
for payment of the money due has been obtained:
|
(1)
|
FPL
Group Capital deposits with the Indenture Trustee a sum sufficient
to
pay:
|
| (a) |
all
overdue interest on all Senior Debt Securities of that
series,
|
| (b) |
the
principal of and any premium on any Senior Debt Securities of
that series
that have become due for reasons other than that declaration,
and interest
that is then due,
|
| (c) |
interest
on overdue interest for that series,
and
|
| (d) |
all
amounts due to the Indenture Trustee under the Indenture,
and
|
|
(2)
|
any
other event of default with respect to the Senior Debt Securities
of that
series has been cured or waived as provided in the Indenture. (Indenture,
Section 802).
|
Other
than its obligations and duties in case of an event of default under the
Indenture, the Indenture Trustee is not obligated to exercise any of its rights
or powers under the Indenture at the request or direction of any of the
registered owners, unless those registered owners offer reasonable indemnity
to
the Indenture Trustee. (Indenture, Section 903). If they provide this reasonable
indemnity, the registered owners of a majority in principal amount of any series
of Senior Debt Securities will have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Indenture
Trustee, or exercising any trust or power conferred on the Indenture Trustee,
with respect to the Senior Debt Securities of that series. However, if an event
of default under the Indenture relates to more than one series of Senior Debt
Securities, only the registered owners of a majority in aggregate principal
amount of all affected series of Senior Debt Securities, considered as one
class, will have the right to make that direction. Also, the direction must
not
violate any law or the Indenture, and may not expose the Indenture Trustee
to
personal liability in circumstances where its indemnity would not, in the
Indenture Trustee’s sole discretion, be adequate. (Indenture, Section
812).
No
registered owner of Senior Debt Securities of any series will have any right
to
institute any proceeding under the Indenture, or any remedy under the Indenture,
unless:
|
(1)
|
that
registered owner has previously given to the Indenture Trustee written
notice of a continuing event of default with respect to the Senior
Debt
Securities of that series,
|
|
(2)
|
the
registered owners of a majority in aggregate principal amount of
the
outstanding Senior Debt Securities of all series in respect of which
an
event of default under the Indenture exists, considered as one class,
have
made written request to the Indenture Trustee, and have offered reasonable
indemnity to the Indenture Trustee to institute that proceeding in
its own
name as trustee, and
|
|
(3)
|
the
Indenture Trustee has failed to institute any proceeding, and has
not
received from the registered owners of a majority in aggregate principal
amount of the outstanding Senior Debt Securities of all series in
respect
of which an event of default under the Indenture exists, considered
as one
class, a direction inconsistent with that request, within 60 days
after
that notice, request and offer. (Indenture,
Section 807).
|
However,
these limitations do not apply to a suit instituted by a registered owner of
a
Senior Debt Security for the enforcement of payment of the principal of or
premium, if any, or interest on that Senior Debt Security on or after the
applicable due date specified in that Senior Debt Security. (Indenture, Section
808).
FPL
Group
Capital is required to deliver to the Indenture Trustee an annual statement
as
to its compliance with all conditions and covenants under the Indenture.
(Indenture, Section 606).
Modification
and Waiver.
Without
the consent of any registered owner of Senior Debt Securities, FPL Group Capital
and the Indenture Trustee may amend or supplement the Indenture for any of
the
following purposes:
|
(1)
|
to
provide for the assumption by any permitted successor to FPL Group
Capital
of FPL Group Capital’s obligations under the Indenture and the Senior Debt
Securities in the case of a merger or consolidation or a conveyance,
transfer or lease of its assets substantially as an
entirety,
|
|
(2)
|
to
add covenants of FPL Group Capital or to surrender any right or power
conferred upon FPL Group Capital by the
Indenture,
|
|
(3)
|
to
add any additional events of
default,
|
|
(4)
|
to
change, eliminate or add any provision of the Indenture, provided
that if
that change, elimination or addition will materially adversely affect
the
interests of the registered owners of Senior Debt Securities of any
series
or tranche, that change, elimination or addition will become effective
with respect to that series or tranche
only
|
| (a) |
when
the required consent of the registered owners of Senior Debt
Securities of
that series or tranche has been obtained,
or
|
| (b) |
when
no Senior Debt Securities of that series or tranche remain outstanding
under the Indenture,
|
|
(5)
|
to
provide collateral security for all but not a part of the Senior
Debt
Securities,
|
|
(6)
|
to
establish the form or terms of Senior Debt Securities of any other
series
or tranche,
|
|
(7)
|
to
provide for the authentication and delivery of bearer securities
and the
related coupons and for other matters relating to those bearer
securities,
|
|
(8)
|
to
accept the appointment of a successor Indenture Trustee with respect
to
the Senior Debt Securities of one or more series and to change any
of the
provisions of the Indenture as necessary to provide for the administration
of the trusts under the Indenture by more than one
trustee,
|
|
(9)
|
to
add procedures to permit the use of a non-certificated system of
registration for the Senior Debt Securities of all or any series
or
tranche,
|
|
(10)
|
to
change any place where
|
| (a) |
the
principal of and premium, if any, and interest on all or any
series or
tranche of Senior Debt Securities are
payable,
|
| (b) |
all
or any series or tranche of Senior Debt Securities may be transferred
or
exchanged, and
|
| (c) |
notices
and demands to or upon FPL Group Capital in respect of Senior
Debt
Securities and the Indenture may be serve
or
|
|
(11)
|
to
cure any ambiguity or inconsistency or to add or change any other
provisions with respect to matters and questions arising under the
Indenture, provided those changes or additions may not materially
adversely affect the interests of the registered owners of Senior
Debt
Securities of any series or tranche. (Indenture, Section
1201).
|
The
registered owners of a majority in aggregate principal amount of the Senior
Debt
Securities of all series then outstanding may waive compliance by FPL Group
Capital with certain restrictive provisions of the Indenture. (Indenture,
Section 607). The registered owners of a majority in principal amount of the
outstanding Senior Debt
Securities
of any series may waive any past default under the Indenture with respect to
that series, except a default in the payment of principal, premium, if any,
or
interest and a default with respect to certain restrictive covenants or
provisions of the Indenture that cannot be modified or amended without the
consent of the registered owner of each outstanding Senior Debt Security of
that
series affected. (Indenture, Section 813).
In
addition to any amendments described above, if the Trust Indenture Act of 1939
is amended after the date of the Indenture in a way that requires changes to
the
Indenture or in a way that permits changes to, or the elimination of, provisions
that were previously required by the Trust Indenture Act of 1939, the Indenture
will be deemed to be amended to conform to that amendment of the Trust Indenture
Act of 1939 or to make those changes, additions or eliminations. FPL Group
Capital and the Indenture Trustee may, without the consent of any registered
owners, enter into supplemental indentures to make that amendment. (Indenture,
Section 1201).
Except
for any amendments described above, the consent of the registered owners of
a
majority in aggregate principal amount of the Senior Debt Securities of all
series then outstanding, considered as one class, is required for all other
modifications to the Indenture. However, if less than all of the series of
Senior Debt Securities outstanding are directly affected by a proposed
supplemental indenture, then the consent only of the registered owners of a
majority in aggregate principal amount of outstanding Senior Debt Securities
of
all directly affected series, considered as one class, is required. But, if
FPL
Group Capital issues any series of Senior Debt Securities in more than one
tranche and if the proposed supplemental indenture directly affects the rights
of the registered owners of Senior Debt Securities of less than all of those
tranches, then the consent only of the registered owners of a majority in
aggregate principal amount of the outstanding Senior Debt Securities of all
directly affected tranches, considered as one class, will be required. However,
none of those amendments or modifications may:
|
(1)
|
change
the dates on which the principal of or interest on a Senior Debt
Security
is due without the consent of the registered owner of that Senior
Debt
Security,
|
|
(2)
|
reduce
any Senior Debt Security’s principal amount or rate of interest (or the
amount of any installment of that interest) or change the method
of
calculating that rate without the consent of the registered owner
of that
Senior Debt Security,
|
|
(3)
|
reduce
any premium payable upon the redemption of a Senior Debt Security
without
the consent of the registered owner of that Senior Debt
Security,
|
|
(4)
|
change
the currency (or other property) in which a Senior Debt Security
is
payable without the consent of the registered owner of that Senior
Debt
Security,
|
|
(5)
|
impair
the right to sue to enforce payments on any Senior Debt Security
on or
after the date that it states that the payment is due (or, in the
case of
redemption, on or after the redemption date) without the consent
of the
registered owner of that Senior Debt
Security,
|
|
(6)
|
reduce
the percentage in principal amount of the outstanding Senior Debt
Security
of any series or tranche whose owners must consent to an amendment,
supplement or waiver without the consent of the registered owner
of each
outstanding Senior Debt Security of that series or
tranche,
|
|
(7)
|
reduce
the requirements for quorum or voting of any series or tranche without
the
consent of the registered owner of each outstanding Senior Debt Security
of that series or tranche, or
|
|
(8)
|
modify
certain of the provisions of the Indenture relating to supplemental
indentures, waivers of certain covenants and waivers of past defaults
with
respect to the Senior Debt Securities of any series or tranche, without
the consent of the registered owner of each outstanding Senior Debt
Security affected by the
modification.
|
A
supplemental indenture that changes or eliminates any provision of the Indenture
that has expressly been included only for the benefit of one or more particular
series or tranches of Senior Debt Securities, or that modifies the rights of
the
registered owners of Senior Debt Securities of that series or tranche with
respect to that provision,
will
not
affect the rights under the Indenture of the registered owners of the Senior
Debt Securities of any other series or tranche. (Indenture, Section
1202).
The
Indenture provides that, in order to determine whether the registered owners
of
the required principal amount of the outstanding Senior Debt Securities have
given any request, demand, authorization, direction, notice, consent or waiver
under the Indenture, or whether a quorum is present at the meeting of the
registered owners of Senior Debt Securities, Senior Debt Securities owned by
FPL
Group Capital or any other obligor upon the Senior Debt Securities or any
affiliate of FPL Group Capital or of that other obligor (unless FPL Group
Capital, that affiliate or that obligor owns all Senior Debt Securities
outstanding under the Indenture, determined without regard to this provision)
will be disregarded and deemed not to be outstanding. (Indenture, Section
101).
If
FPL
Group Capital solicits any action under the Indenture from registered owners
of
Senior Debt Securities, FPL Group Capital may, at its option, by signing a
written request to the Indenture Trustee, fix in advance a record date for
determining the registered owners of Senior Debt Securities entitled to take
that action. However, FPL Group Capital will not be obligated to do this. If
FPL
Group Capital fixes such a record date, that action may be taken before or
after
that record date, but only the registered owners of record at the close of
business on that record date will be deemed to be registered owners of Senior
Debt Securities for the purposes of determining whether registered owners of
the
required proportion of the outstanding Senior Debt Securities have authorized
that action. For these purposes, the outstanding Senior Debt Securities will
be
computed as of the record date. Any action of a registered owner of any Senior
Debt Security under the Indenture will bind every future registered owner of
that Senior Debt Security, or any Senior Debt Security replacing that Senior
Debt Security, with respect to anything that the Indenture Trustee or FPL Group
Capital do, fail to do, or allow to be done in reliance on that action, whether
or not that action is noted upon that Senior Debt Security. (Indenture, Section
104).
Resignation
and Removal of Indenture Trustee.
The
Indenture Trustee may resign at any time with respect to any series of Senior
Debt Securities by giving written notice of its resignation to FPL Group
Capital. Also, the registered owners of a majority in principal amount of the
outstanding Senior Debt Securities of one or more series of Senior Debt
Securities may remove the Indenture Trustee at any time with respect to the
Senior Debt Securities of that series, by delivering an instrument evidencing
this action to the Indenture Trustee and FPL Group Capital. The resignation
or
removal of the Indenture Trustee and the appointment of a successor trustee
will
not become effective until a successor trustee accepts its
appointment.
Except
with respect to an Indenture Trustee appointed by the registered owners of
Senior Debt Securities, the Indenture Trustee will be deemed to have resigned
and the successor will be deemed to have been appointed as trustee in accordance
with the Indenture if:
|
(1)
|
no
event of default under the Indenture or event that, after notice
or lapse
of time, or both, would become an event of default under the Indenture
exists, and
|
|
(2)
|
FPL
Group Capital has delivered to the Indenture Trustee a resolution
of its
Board of Directors appointing a successor trustee and that successor
trustee has accepted that appointment in accordance with the terms
of the
Indenture. (Indenture, Section
910).
|
Notices.
Notices
to registered owners of Senior Debt Securities will be sent by mail to the
addresses of those registered owners as they appear in the security register
for
those Senior Debt Securities. (Indenture, Section 106).
Title.
FPL
Group Capital, the Indenture Trustee, and any agent of FPL Group Capital or
the
Indenture Trustee, may treat the person in whose name a Senior Debt Security
is
registered as the absolute owner of that Senior Debt Security, whether or not
that Senior Debt Security is overdue, for the purpose of making payments and
for
all other purposes, regardless of any notice to the contrary. (Indenture,
Section 308).
Governing
Law.
The
Indenture and the Senior Debt Securities will be governed by, and construed
in
accordance with, the laws of the State of New York, without regard to New York’s
conflict of law principles, except to the extent that the law of any other
jurisdiction is mandatorily applicable. (Indenture, Section 112).
THE
FPL GROUP CAPITAL SENIOR DEBT SECURITIES
General.
This
section briefly summarizes some of the provisions of the Guarantee Agreement,
dated as of June 1, 1999, between FPL Group and The Bank of New York, as
Guarantee Trustee. The Guarantee Agreement was executed for the benefit of
the
Indenture Trustee, which holds the Guarantee Agreement for the benefit of
registered owners of the Senior Debt Securities covered by the Guarantee
Agreement. This summary does not contain a complete description of the Guarantee
Agreement. You should read this summary together with the Guarantee Agreement
for a complete understanding of all the provisions. The Guarantee Agreement
has
been previously filed with the SEC and is an exhibit to the registration
statement filed with the SEC of which this prospectus is a part. In addition,
the Guarantee Agreement is qualified as an indenture under the Trust Indenture
Act of 1939 and is therefore subject to the provisions of the Trust Indenture
Act of 1939. You should read the Trust Indenture Act of 1939 for a complete
understanding of its provisions.
Under
the
Guarantee Agreement, FPL Group absolutely, irrevocably and unconditionally
guarantees the prompt and full payment, when due and payable (including upon
acceleration or redemption), of the principal, interest and premium, if any,
on
the Senior Debt Securities that are covered by the Guarantee Agreement to the
registered owners of those Senior Debt Securities, according to the terms of
those Senior Debt Securities and the Indenture. Pursuant to the Guarantee
Agreement, all of the Senior Debt Securities are covered by the Guarantee
Agreement except Senior Debt Securities that by their terms are expressly not
entitled to the benefit of the Guarantee Agreement. All of the Offered Senior
Debt Securities will be covered by the Guarantee Agreement. This guarantee
is
referred to in this prospectus as the “Guarantee.” FPL Group is only required to
make these payments if FPL Group Capital fails to pay or provide for punctual
payment of any of those amounts on or before the expiration of any applicable
grace periods. (Guarantee Agreement, Section 5.01). In the Guarantee Agreement,
FPL Group has waived its right to require the Guarantee Trustee, the Indenture
Trustee or the registered owners of Senior Debt Securities covered by the
Guarantee Agreement to exhaust their remedies against FPL Group Capital prior
to
bringing suit against FPL Group. (Guarantee Agreement, Section
5.06).
The
Guarantee is a guarantee of payment when due (i.e., the guaranteed party may
institute a legal proceeding directly against FPL Group to enforce its rights
under the Guarantee Agreement without first instituting a legal proceeding
against any other person or entity). The Guarantee is not a guarantee of
collection. (Guarantee Agreement, Section 5.01).
Except
as
otherwise stated in the related prospectus supplement, the covenants in the
Guarantee Agreement would not give registered owners of the Senior Debt
Securities covered by the Guarantee Agreement protection in the event of a
highly-leveraged transaction involving FPL Group.
Security
and Ranking.
The
Guarantee is an unsecured obligation of FPL Group and will rank equally and
ratably with all other unsecured and unsubordinated indebtedness of FPL Group.
The Guarantee will rank senior to the Preferred Trust Securities Guarantee,
the
Subordinated Guarantee and the FPL Group Junior Subordinated Debentures (each
as
defined below) and FPL Group’s guarantee of FPL Group Capital’s preferred stock.
There is no limit on the amount of other indebtedness, including guarantees,
that FPL Group may incur or issue.
FPL
Group
is a holding company that derives substantially all of its income from its
operating subsidiaries. Therefore, the Guarantee is effectively subordinated
to
all indebtedness and other liabilities, including trade payables, debt and
preferred stock, incurred or issued by FPL Group’s subsidiaries. Neither the
Indenture nor the Guarantee Agreement places any limit on the amount of
liabilities, including debt or preferred stock, that FPL Group’s subsidiaries
may issue, guarantee or otherwise incur.
Events
of Default.
An event
of default under the Guarantee Agreement will occur upon the failure of FPL
Group to perform any of its payment obligations under the Guarantee Agreement.
(Guarantee Agreement, Section 1.01). The registered owners of a majority of
the aggregate principal amount of the outstanding Senior Debt Securities covered
by the Guarantee Agreement have the right to:
|
(1)
|
direct
the time, method and place of conducting any proceeding for any remedy
available to the Guarantee Trustee under the Guarantee Agreement,
or
|
|
(2)
|
direct
the exercise of any trust or power conferred upon the Guarantee Trustee
under the Guarantee Agreement. (Guarantee Agreement,
Section 3.01).
|
The
Guarantee Trustee must give notice of any event of default under the Guarantee
Agreement known to the Guarantee Trustee to the registered owners of Senior
Debt
Securities covered by the Guarantee Agreement within 90 days after the
occurrence of that event of default, in the manner and to the extent provided
in
subsection (c) of Section 313 of the Trust Indenture Act of 1939, unless such
event of default has been cured or waived prior to the giving of such notice.
(Guarantee Agreement, Section 2.07). The registered owners of all outstanding
Senior Debt Securities may waive any past event of default and its consequences.
(Guarantee Agreement, Section 2.06).
The
Guarantee Trustee, the Indenture Trustee and the registered owners of Senior
Debt Securities covered by the Guarantee Agreement have all of the rights and
remedies available under applicable law and may sue to enforce the terms of
the
Guarantee Agreement and to recover damages for the breach of the Guarantee
Agreement. The remedies of each of the Guarantee Trustee, the Indenture Trustee
and the registered owners of Senior Debt Securities covered by the Guarantee
Agreement, to the extent permitted by law, are cumulative and in addition to
any
other remedy now or hereafter existing at law or in equity. At the option of
any
of the Guarantee Trustee, the Indenture Trustee or the registered owners of
Senior Debt Securities covered by the Guarantee Agreement, that person or entity
may join FPL Group in any lawsuit commenced by that person or entity against
FPL
Group Capital with respect to any obligations under the Guarantee Agreement.
Also, that person or entity may recover against FPL Group in that lawsuit,
or in
any independent lawsuit against FPL Group, without first asserting, prosecuting
or exhausting any remedy or claim against FPL Group Capital. (Guarantee
Agreement, Section 5.06).
FPL
Group
is required to deliver to the Guarantee Trustee an annual statement as to its
compliance with all conditions under the Guarantee Agreement. (Guarantee
Agreement, Section 2.04).
Modification.
FPL
Group and the Guarantee Trustee may, without the consent of any registered
owner
of Senior Debt Securities covered by the Guarantee Agreement, agree to any
changes to the Guarantee Agreement that do not materially adversely affect
the
rights of registered owners. The Guarantee Agreement also may be amended with
the prior approval of the registered owners of a majority in aggregate principal
amount of all outstanding Senior Debt Securities covered by the Guarantee
Agreement. However, the right of any registered owner of Senior Debt Securities
covered by the Guarantee Agreement to receive payment under the Guarantee
Agreement on the due date of the Senior Debt Securities held by that registered
owner, or to institute suit for the enforcement of that payment on or after
that
due date, may not be impaired or affected without the consent of that registered
owner. (Guarantee Agreement, Section 6.01).
Termination
of the Guarantee Agreement.
The
Guarantee Agreement will terminate and be of no further force and effect upon
full payment of all Senior Debt Securities covered by the Guarantee Agreement.
(Guarantee Agreement, Section 5.05).
Governing
Law.
The
Guarantee Agreement will be governed by and construed in accordance with the
laws of the State of New York, without regard to conflict of laws principles
thereunder, except to the extent that the law of any other jurisdiction is
mandatorily applicable. (Guarantee Agreement, Section 5.07).
FPL
Group
will issue its debt securities (other than the FPL Group Junior Subordinated
Debentures (as defined below under “Description of the FPL Group and FPL Group
Capital Junior Subordinated Debentures and the FPL Group Subordinated
Guarantee”)), in one or more series, under an Indenture, between FPL Group and
The Bank of New York, as trustee. The terms of any offered debt securities
will
be described in a supplement to this prospectus.
General.
The
Trust may issue preferred trust securities and common trust securities under
the
Trust Agreement. The terms of the agreements pursuant to which the preferred
trust securities of FPL Group Capital Trust will be issued is herein referred
to
as the “FPL Group Capital Trust Agreement,” and the Trust Agreement pursuant to
which preferred trust securities of FPL Group Trust will be issued is herein
referred to as the “FPL Group Trust Agreement;” each of these agreements is
referred to in this prospectus as the “Trust Agreement.” The terms of the FPL
Group Capital Trust Agreement and the FPL Group Trust Agreement are
substantially the same. The preferred trust securities and common trust
securities issued by the Trust are referred to in this prospectus as “Preferred
Trust Securities” and “Common Trust Securities,” respectively, and collectively
as “Trust Securities.” These Trust Securities will represent undivided
beneficial interests in the assets of the Trust. In connection with the issuance
of Trust Securities by FPL Group Capital Trust, the related FPL Group Capital
Junior Subordinated Debentures (as defined below under “Description of the FPL
Group and FPL Group Capital Junior Subordinated Debentures and the FPL Group
Subordinated Guarantee”) will be held by FPL Group Capital Trust, and in
connection with the issuance of Trust Securities by FPL Group Trust, the related
FPL Group Junior Subordinated Debentures (as defined below under “Description of
the FPL Group and FPL Group Capital Junior Subordinated Debentures and the
FPL
Group Subordinated Guarantee”) will be held by FPL Group Trust. This section
briefly summarizes some of the provisions of the Trust Agreement. This summary
does not contain a complete description of the Trust Agreement. You should
read
this summary together with the Trust Agreement for a complete understanding
of
all the provisions. The form of the Trust Agreement has been previously filed
with the SEC and is an exhibit to the registration statement filed with the
SEC
of which this prospectus is a part. In addition, each Trust Agreement will
be
qualified as an indenture under the Trust Indenture Act of 1939 and is therefore
subject to the provisions of the Trust Indenture Act of 1939. You should read
the Trust Indenture Act of 1939 for a complete understanding of its
provisions.
In
this
section, any discussion of FPL Group Capital Trust, FPL Group Trust, Preferred
Trust Securities and Common Trust Securities relate only to the applicable
Trust. Holders of Preferred Trust Securities of FPL Group Capital Trust II,
FPL Group Capital Trust III, FPL Group Trust I and FPL Group
Trust II will be entitled to any of the benefits and protections contained
in the Trust Agreement applicable to the particular Trust which issued the
relevant Trust Securities and not with respect to any other Trust.
The
Preferred Trust Securities and Common Trust Securities issued by the Trust
will
be substantially the same except that, if there is an event of default under
the
Trust Agreement, as described below, that results from an event of default
under
the Subordinated Indenture (as such term is defined below under “Description of
the FPL Group and FPL Group Capital Junior Subordinated Debentures and the
FPL
Group Subordinated Guarantee—General”), the right of FPL Group, as holder of the
Common Trust Securities, to payment of distributions and upon liquidation or
redemption will be subordinated to the rights of the holders of the Preferred
Trust Securities. (Trust Agreement, Section 4.03). All of the Common Trust
Securities will be owned by FPL Group. (Trust Agreement, Section
5.10).
FPL
Group
will fully and unconditionally guarantee payments due on the Preferred Trust
Securities issued by the Trust through a combination of the
following:
|
(1)
|
with
respect to the Preferred Trust Securities issued by FPL Group Capital
Trust only, FPL Group’s guarantee of FPL Group Capital’s payment
obligations under the FPL Group Capital Junior Subordinated Debentures
(referred to in this prospectus as the “Subordinated
Guarantee”);
|
|
(2)
|
with
respect to the Preferred Trust Securities issued by FPL Group Trust
only,
FPL Group’s obligations under the FPL Group Junior Subordinated
Debentures;
|
|
(3)
|
the
rights of holders of Preferred Trust Securities to enforce those
obligations in (1) and (2) above, as
applicable;
|
|
(4)
|
FPL
Group’s agreement to pay the expenses of the Trust;
and
|
|
(5)
|
FPL
Group’s guarantee of payments due on the Preferred Trust Securities to
the
extent of the Trust’s legally available assets (referred to in this
prospectus as the “Preferred Trust Securities
Guarantee”).
|
No
single
one of the applicable documents listed above standing alone or operating in
conjunction with fewer than all of the other applicable documents constitutes
the guarantee by FPL Group. It is only the combined operation of these documents
that has the effect of providing a full and unconditional, but subordinated,
guarantee as to payment by FPL Group of the Preferred Trust
Securities.
FPL
Group
Capital Trust will use the proceeds from its sale of the Trust Securities to
purchase FPL Group Capital Junior Subordinated Debentures, and FPL Group Trust
will use the proceeds from its sale of the Trust Securities to purchase FPL
Group Junior Subordinated Debentures. (Trust Agreement, Section 2.05). The
FPL
Group Capital Junior Subordinated Debentures will be guaranteed by FPL Group
pursuant to the Subordinated Guarantee described below and issued under an
Indenture, dated as of March 1, 2004, among FPL Group Capital, FPL Group
and The Bank of New York, as trustee, or another subordinated indenture among
FPL Group Capital, FPL Group and The Bank of New York as specified in the
related prospectus supplement. The FPL Group Junior Subordinated Debentures
will
be issued under a subordinated indenture between FPL Group and The Bank of
New
York, as trustee. In connection with the issuance of Trust Securities, the
Junior Subordinated Debentures (as defined below under “Description of the FPL
Group and FPL Group Capital Junior Subordinated Debentures and the FPL Group
Subordinated Guarantee”) will be held in trust for the benefit of holders of the
applicable Preferred Trust Securities and Common Trust Securities. (Trust
Agreement, Section 2.09).
A
prospectus supplement relating to the Preferred Trust Securities will include
specific terms of those securities and of the Junior Subordinated Debentures
issued in connection therewith. For a description of some specific terms that
will affect both the Preferred Trust Securities and the Junior Subordinated
Debentures, and holders’ rights under each, see “Description of the FPL Group
and FPL Group Capital Junior Subordinated Debentures and the FPL Group
Subordinated Guarantee” below.
Distributions.
The only
income of the Trust available for distribution to the holders of Preferred
Trust
Securities will be payments on the applicable Junior Subordinated Debentures.
(Trust Agreement, Section 8.01). If neither FPL Group Capital nor FPL Group
makes interest payments on the FPL Group Capital Junior Subordinated Debentures,
or if FPL Group does not make interest payments on the FPL Group Junior
Subordinated Debentures, as the case may be, the Trust will not have funds
available to pay distributions on Preferred Trust Securities. The payment of
distributions, if and to the extent the Trust has sufficient funds available
for
the payment of such distributions, is guaranteed on a limited basis by FPL
Group
as described under “Description of the Preferred Trust Securities
Guarantee.”
Unless
otherwise provided in the related prospectus supplement, the issuer of the
Junior Subordinated Debentures may have the option to defer the payment of
interest from time to time on the Junior Subordinated Debentures for one or
more
periods, in which case, if the Junior Subordinated Debentures were issued in
connection with Preferred Trust Securities, distributions on the Preferred
Trust
Securities would be deferred during any such period. Unless otherwise provided
in the related prospectus supplement, distributions would, however, continue
to
accumulate. (Trust Agreement, Section 4.01). During any optional deferral
period, or for so long as an “Event of Default” under the Subordinated Indenture
resulting from a payment default or a payment default under the Preferred Trust
Securities Guarantee has occurred and is continuing, neither FPL Group nor
FPL
Group Capital, with respect to deferral of the payment of interest on the FPL
Group Capital Junior Subordinated Debentures, nor FPL Group, with respect to
the
deferral of the payment of interest on the FPL Group Junior Subordinated
Debentures, may:
|
(1)
|
declare
or pay any dividend or distribution on its capital
stock;
|
|
(2)
|
redeem,
purchase, acquire or make a liquidation payment with respect to any
of its
capital stock;
|
|
(3)
|
pay
any principal, interest or premium on, or repay, repurchase or redeem
any
debt securities that are equal or junior in right of payment with
the
Junior Subordinated Debentures or the Subordinated Guarantee (as
the case
may be); or
|
|
(4)
|
make
any payments with respect to any guarantee of debt securities if
such
guarantee is equal or junior in right of payment to the Junior
Subordinated Debentures or the Subordinated Guarantee (as the case
may
be),
|
other
than
|
(1)
|
purchases,
redemptions or other acquisitions of its capital stock in connection
with
any employment contract, benefit plan or other similar arrangement
with or
for the benefit of employees, officers, directors or agents or a
stock
purchase or dividend reinvestment plan, or the satisfaction of its
obligations pursuant to any contract or security outstanding on the
date
that the payment of interest is deferred requiring it to purchase,
redeem
or acquire its capital stock;
|
|
(2)
|
any
payment, repayment, redemption, purchase, acquisition or declaration
of
dividend listed as restricted payments in clauses (1) and (2) above
as a
result of a reclassification of its capital stock or the exchange
or
conversion of all or a portion of one class or series of its capital
stock
for another class or series of its capital
stock;
|
|
(3)
|
the
purchase of fractional interests in shares of its capital stock pursuant
to the conversion or exchange provisions of its capital stock or
the
security being converted or exchanged, or in connection with the
settlement of stock purchase
contracts;
|
|
(4)
|
dividends
or distributions paid or made in its capital stock (or rights to
acquire
its capital stock), or repurchases, redemptions or acquisitions of
capital
stock in connection with the issuance or exchange of capital stock
(or of
securities convertible into or exchangeable for shares of its capital
stock and distributions in connection with the settlement of stock
purchase contracts);
|
|
(5)
|
redemptions,
exchanges or repurchases of, or with respect to, any rights outstanding
under a shareholder rights plan or the declaration or payment thereunder
of a dividend or distribution of or with respect to rights in the
future;
|
|
(6)
|
payments
under any preferred trust securities guarantee or guarantee of
subordinated debentures executed and delivered by FPL Group concurrently
with the issuance by a trust of any preferred trust securities, so
long as
the amount of payments made on any preferred trust securities or
subordinated debentures (as the case may be) is paid on all preferred
trust securities or subordinated debentures (as the case may be)
then
outstanding on a pro rata basis in proportion to the full distributions
to
which each series of preferred trust securities or subordinated debentures
(as the case may be) is then entitled if paid in
full;
|
|
(7)
|
payments
under any guarantee of junior subordinated debentures executed and
delivered by FPL Group (including a FPL Group Subordinated Guarantee),
so
long as the amount of payments made on any junior subordinated debentures
is paid on all junior subordinated debentures then outstanding on
a pro
rata basis in proportion to the full payment to which each series
of
junior subordinated debentures is then entitled if paid in
full;
|
|
(8)
|
dividends
or distributions by FPL Group Capital on its capital stock to the
extent
owned by FPL Group; or
|
|
(9)
|
redemptions,
purchases, acquisitions or liquidation payments by FPL Group Capital
with
respect to its capital stock to the extent owned by FPL
Group.
|
The
exceptions in (8) and (9) above are not applicable to an optional deferral
period on the FPL Group Junior Subordinated Debentures.
Unless
otherwise provided in the related prospectus supplement, before an optional
deferral period ends, FPL Group Capital or FPL Group, as the case may be, may
further defer the payment of interest. Unless otherwise
provided
in the related prospectus supplement, no optional deferral period may exceed
the
period of time specified in that prospectus supplement. After any optional
deferral period and the payment of all amounts then due, FPL Group Capital
or
FPL Group, as the case may be, may select a new optional deferral period. No
interest period may be deferred beyond the maturity of the Junior Subordinated
Debentures.
Redemption.
Whenever
Junior Subordinated Debentures are repaid, whether at maturity or earlier
redemption, the Property Trustee will apply the proceeds to redeem a like amount
of Preferred Trust Securities and Common Trust Securities. (Trust Agreement,
Section 4.02(a)).
Preferred
Trust Securities will be redeemed at the redemption price plus accrued and
unpaid distributions with the proceeds from the contemporaneous redemption
or
repayment of Junior Subordinated Debentures. Redemptions of the Preferred Trust
Securities will be made on a redemption date only if the Trust has funds
available for the payment of the redemption price plus accrued and unpaid
distributions. (Trust Agreement, Section 4.02(c)).
Holders
of Preferred Trust Securities will be given not less than 30 nor more than
60
days’ notice of any redemption. (Trust Agreement, Section 4.02(b)). On or
before the redemption date, the Trust will irrevocably deposit with the paying
agent for Preferred Trust Securities sufficient funds and will give the paying
agent irrevocable instructions and authority to pay the redemption price plus
accrued and unpaid distributions to the holders upon surrender of their
Preferred Trust Securities. Distributions payable on or before a redemption
date
will be payable to the holders on the record date for the distribution payment.
If notice is given and funds are deposited as required, then on the redemption
date all rights of holders of the Preferred Trust Securities called for
redemption will cease, except the right of the holders to receive the redemption
price plus accrued and unpaid distributions, and the Preferred Trust Securities
will cease to be outstanding. No interest will accrue on amounts payable on
the
redemption date. In the event that any date fixed for redemption of Preferred
Trust Securities is not a business day, then payment will be made on the next
business day, except that, if such business day falls in the next calendar
year,
then payment will be made on the immediately preceding business day. No interest
will be payable because of any such delay. If payment of Preferred Trust
Securities called for redemption is improperly withheld or refused and not
paid
either by the Trust or by FPL Group pursuant to the Preferred Trust Securities
Guarantee, distributions on such Preferred Trust Securities will continue to
accrue to the date of payment. In that event, the actual payment date will
be
considered the date fixed for redemption for purposes of calculating the
redemption price plus accrued and unpaid distributions. (Trust Agreement,
Section 4.02(d)).
Subject
to applicable law, including United States federal securities laws, FPL Group
or
its affiliates may at any time and from time to time purchase outstanding
Preferred Trust Securities by tender, in the open market or by private
agreement.
If
Preferred Trust Securities are partially redeemed on a redemption date, a
corresponding percentage of the Common Trust Securities will be redeemed. The
particular Preferred Trust Securities to be redeemed will be selected not more
than 60 days prior to the redemption date by the Property Trustee by such method
as the Property Trustee shall deem fair, taking into account the denominations
in which they were issued. The Property Trustee will promptly notify the
Preferred Trust Security registrar in writing of the Preferred Trust Securities
selected for redemption and, where applicable, the partial amount to be
redeemed. (Trust Agreement, Section 4.02(f)).
Subordination
of Common Trust Securities.
Payment
of distributions on, and the redemption price, plus accrued and unpaid
distributions, of, the Preferred Trust Securities and Common Trust Securities
shall be made pro rata based on the liquidation preference amount of such
securities. However, if on any distribution payment date or redemption date
an
event of default under the Trust Agreement resulting from an event of default
under the related Subordinated Indenture has occurred and is continuing, no
payment on any Common Trust Security shall be made until all payments due on
the
Preferred Trust Securities have been made. In that case, funds available to
the
Property Trustee shall first be applied to the payment in full of all
distributions on, or the redemption price plus accrued and unpaid distributions
of, Preferred Trust Securities then due and payable. (Trust Agreement,
Section 4.03(a)).
If
an
event of default under the Trust Agreement results from an event of default
under the related Subordinated Indenture, the holder of Common Trust Securities
cannot take action with respect to the Trust
Agreement
default until the effect of all defaults with respect to the Preferred Trust
Securities has been cured, waived or otherwise eliminated. Until the event
of
default under the Trust Agreement with respect to Preferred Trust Securities
has
been cured, waived or otherwise eliminated, the Property Trustee shall, to
the
fullest extent permitted by law, act solely on behalf of the holders of
Preferred Trust Securities and not the holder of the Common Trust Securities,
and only the holders of Preferred Trust Securities will have the right to direct
the Property Trustee to act on their behalf. (Trust Agreement, Section
4.03(b)).
Liquidation
Distribution upon Dissolution.
The
Trust will be dissolved and liquidated by the Property Trustee on the first
to
occur of:
|
(1)
|
the
expiration of the term of the
Trust;
|
|
(2)
|
the
bankruptcy, dissolution or liquidation of FPL
Group;
|
|
(3)
|
the
redemption of all of the Preferred Trust Securities of the
Trust;
|
|
(4)
|
the
entry of an order for dissolution of the Trust by a court of competent
jurisdiction; or
|
|
(5)
|
at
any time, at the election of FPL Group. (Trust Agreement, Sections
9.01
and 9.02).
|
If
a
dissolution of the Trust occurs, the Trust will be liquidated by the Property
Trustee as expeditiously as the Property Trustee determines to be appropriate.
If a dissolution of the Trust occurs other than by redemption of all the
Preferred Trust Securities, the Property Trustee will provide for the
satisfaction of liabilities of creditors, if any, and distribute to each holder
of the Preferred Trust Securities and Common Trust Securities a proportionate
amount of Junior Subordinated Debentures. If a distribution of Junior
Subordinated Debentures is determined by the Property Trustee not to be
practical, holders of Preferred Trust Securities will be entitled to receive,
out of the assets of the Trust after adequate provision for the satisfaction
of
liabilities of creditors, if any, an amount equal to the aggregate liquidation
preference of the Preferred Trust Securities plus accrued and unpaid
distributions thereon to the date of payment. If this liquidation distribution
can be paid only in part because the Trust has insufficient assets available
to
pay in full the aggregate liquidation distribution, then the amounts payable
by
the Trust on the Preferred Trust Securities shall be paid on a pro rata basis.
FPL Group, as holder of the Common Trust Securities, will be entitled to receive
distributions upon any dissolution pro rata with the holders of the Preferred
Trust Securities, except that if an event of default (or event that, with the
lapse of time or giving of notice, would become such an event of default) has
occurred and is continuing under the related Subordinated Indenture, the
Preferred Trust Securities will have a preference over the Common Trust
Securities. (Trust Agreement, Section 9.04).
Events
of Default; Notice.
Any one
of the following events will be an event of default under the Trust Agreement
whether it shall be voluntary or involuntary or be effected by operation of
law
or pursuant to any judgment, decree or order of any court or any order, rule
or
regulation of any administrative or governmental body:
|
(1)
|
the
occurrence of an event of default as described in the related Subordinated
Indenture;
|
|
(2)
|
default
by the Trust in the payment of any distribution when it becomes due
and
payable, and continuation of that default for a period of 30
days;
|
|
(3)
|
default
by the Trust in the payment of any redemption price, plus accrued
and
unpaid distributions, of any Preferred Trust Security or Common Trust
Security when it becomes due and
payable;
|
|
(4)
|
default
in the performance, or breach, in any material respect, of any covenant
or
warranty of the trustees in the Trust Agreement which is not dealt
with
above, and continuation of that default or breach for a period of
90 days
after written notice to the Trust, the defaulting trustee under the
Trust
Agreement and FPL Group by the holders of Preferred Trust Securities
having at least 33% of the total liquidation preference amount of
the
outstanding Preferred Trust Securities. However, the holders of Preferred
Trust Securities will be deemed to have agreed to an extension of
the 90
day period if
|
|
corrective
action is initiated by any of the trustees within such period and
is
diligently pursued in good faith;
or
|
|
(5)
|
the
occurrence of certain events of bankruptcy or insolvency with respect
to
the Trust. (Trust Agreement, Section
1.01).
|
Within
90
days after the occurrence of any default known to the Property Trustee, the
Property Trustee shall transmit to the holders of Preferred Trust Securities,
FPL Group and the Administrative Trustees notice of any such default, unless
that default shall have been cured or waived. (Trust Agreement, Section
8.02).
A
holder
of Preferred Trust Securities may directly institute a proceeding to enforce
payment when due to the holder of the Preferred Trust Securities of the
principal of or interest on Junior Subordinated Debentures having a principal
amount equal to the aggregate liquidation preference amount of the holder’s
Preferred Trust Securities. The holders of Preferred Trust Securities have
no
other rights to exercise directly any other remedies available to the holder
of
the Junior Subordinated Debentures unless the trustees under the Trust Agreement
fail to do so. (Trust Agreement, Section 6.01(a)).
Removal
of Trustees.
Unless
an event of default under the related Subordinated Indenture has occurred and
is
continuing, the holder of the Common Trust Securities may remove any trustee
under the Trust Agreement at any time. If an event of default under the
Subordinated Indenture has occurred and is continuing, the holders of a majority
of the total liquidation preference amount of the outstanding Preferred Trust
Securities may remove the Property Trustee or the Delaware Trustee, or both
of
them. The holder of the Common Trust Securities may remove any Administrative
Trustee at any time. Any resignation or removal of a trustee under the Trust
Agreement will take effect only on the acceptance of appointment by the
successor trustee. (Trust Agreement, Section 8.10).
Holders
of Preferred Trust Securities will have no right to appoint or remove the
Administrative Trustees of the Trust, who may be appointed, removed or replaced
solely by FPL Group as the holder of the Common Trust Securities. (Trust
Agreement, Section 8.10).
Voting
Rights.
Except
as provided below and under “Description of the Preferred Trust Securities
Guarantee—Modification and Assignment,” and as otherwise required by law or the
Trust Agreement, the holders of Preferred Trust Securities will have no voting
rights.
While
Junior Subordinated Debentures are held by the Property Trustee, the Property
Trustee shall not:
|
(1)
|
direct
the time, method and place to conduct any proceeding for any remedy
available to the Subordinated Indenture Trustee (as such term is
defined
below under “Description of the FPL Group and FPL Group Capital Junior
Subordinated Debentures and the FPL Group Subordinated
Guarantee—General”), or execute any trust or power conferred on the
Subordinated Indenture Trustee with respect to the Junior Subordinated
Debentures;
|
|
(2)
|
waive
any past default under the related Subordinated
Indenture;
|
|
(3)
|
exercise
any right to rescind or annul a declaration that the principal of
all the
Junior Subordinated Debentures will be due and payable;
or
|
|
(4)
|
consent
to any amendment, modification or termination of the related Subordinated
Indenture or the Junior Subordinated Debentures, where that consent
will
be required,
|
without,
in each case, obtaining the prior approval of the holders of Preferred Trust
Securities having at least a majority of the aggregate liquidation preference
amount of all outstanding Preferred Trust Securities of the Trust. Where a
consent of each holder of Junior Subordinated Debentures affected is required,
no consent shall be given by the Property Trustee without the prior consent
of
each holder of the Preferred Trust Securities affected. The Property Trustee
shall not revoke any action previously authorized or approved by a vote of
the
holders of Preferred Trust Securities, except pursuant to the subsequent vote
of
the holders of Preferred Trust Securities. (Trust
Agreement,
Section 6.01(b)). If the Property Trustee fails to enforce its rights, as
holder, under the Junior Subordinated Debentures or the Trust Agreement, a
holder of the Preferred Trust Securities may institute a legal proceeding
directly against FPL Group or FPL Group Capital, as the case may be, to enforce
the Property Trustee’s rights under the Junior Subordinated Debentures or the
Trust Agreement without first instituting any legal proceeding against the
Property Trustee or anyone else. (Trust Agreement, Section 6.01(a)). The
Property Trustee shall notify all holders of Preferred Trust Securities of
any
notice of default received from the Subordinated Indenture Trustee. The Property
Trustee shall not take any action approved by the consent of the holders of
Preferred Trust Securities without an opinion of counsel experienced in those
matters to the effect that the Trust will be classified as a grantor trust
and
not as an association taxable as a corporation for United States federal income
tax purposes on account of that action. (Trust Agreement,
Section 6.01(b)).
Holders
of Preferred Trust Securities may give any required approval at a meeting
convened for such purpose or by written consent without prior notice. (Trust
Agreement, Section 6.06). The Administrative Trustees will give notice of any
meeting at which holders of Preferred Trust Securities are entitled to vote.
(Trust Agreement, Section 6.02).
No
vote
or consent of the holders of Preferred Trust Securities will be required for
the
Trust to redeem and cancel Preferred Trust Securities in accordance with the
Trust Agreement.
Notwithstanding
that holders of Preferred Trust Securities are entitled to vote or consent
under
any of the circumstances described above, any Preferred Trust Securities that
are owned by FPL Group Capital, FPL Group, any Administrative Trustee or any
affiliate of any of them, shall be treated as if they were not outstanding
for
purposes of such vote or consent. (Trust Agreement, Section 1.01).
Amendments.
The
Trust Agreement may be amended from time to time by a majority of its
Administrative Trustees and FPL Group, without the consent of any holders of
Preferred Trust Securities or the other trustees under the Trust Agreement
in
order to:
|
(1)
|
cure
any ambiguity; correct or supplement any provision that may be
inconsistent with any other provision of the Trust Agreement or amendment
to the Trust Agreement; or make any other provisions with respect
to
matters or questions arising under the Trust
Agreement;
|
|
(2)
|
change
the name of the Trust; or
|
|
(3)
|
modify,
eliminate or add to any provisions of the Trust Agreement to the
extent
necessary to ensure that the Trust will not be classified for United
States federal income tax purposes other than as a grantor trust
(and not
an association taxable as a corporation) at any time that any Preferred
Trust Securities and Common Trust Securities are outstanding or to
ensure
the Trust’s exemption from the status of an “investment company” under the
Investment Company Act of 1940.
|
No
amendment described above may materially adversely affect the interests of
any
holder of Preferred Trust Securities or Common Trust Securities without the
applicable consents required pursuant to the following two paragraphs. Any
of
the amendments of the Trust Agreement described in paragraph (1) above
shall become effective when notice of the amendment is given to the holders
of
Preferred Trust Securities and Common Trust Securities in accordance with the
provisions of the Trust Agreement. (Trust Agreement, Section
10.03(a)).
Except
as
provided below, any provision of the Trust Agreement may be amended by the
Administrative Trustees and FPL Group with:
|
(1)
|
the
consent of holders of Preferred Trust Securities and Common Trust
Securities representing not less than a majority in aggregate liquidation
preference amount of the Preferred Trust Securities and Common Trust
Securities then outstanding; and
|
|
(2)
|
receipt
by the trustees of an opinion of counsel to the effect that such
amendment
or the exercise of any power granted to the trustees in accordance
with
the amendment will not affect the Trust’s status as a
|
|
grantor
trust for federal income tax purposes (and not an association taxable
as a
corporation) or affect the Trust's exemption from the status of an
"investment
company" under the Investment Company Act
of 1940. (Trust
Agreement, Section 10.03(b)).
|
Each
affected holder of Preferred Trust Securities must consent to any amendment
to
the Trust Agreement that:
|
(1)
|
adversely
changes the amount or timing of any distribution with respect to
Preferred
Trust Securities or otherwise adversely affects the amount of any
distribution required to be made in respect of Preferred Trust Securities
as of a specified date;
|
|
(2)
|
restricts
the right of a holder of Preferred Trust Securities to institute
suit for
the enforcement of any such payment on or after that date;
or
|
|
(3)
|
modify
the provisions described in clauses (1) and (2) above. (Trust Agreement,
Section 10.03(c)).
|
Form,
Exchange and Transfer.
Preferred Trust Securities may be exchanged for other Preferred Trust Securities
in any authorized denomination and of like tenor and aggregate liquidation
preference. (Trust Agreement, Section 5.04).
Subject
to the terms of the Trust Agreement, Preferred Trust Securities may be presented
for exchange as provided above or for registration of transfer, duly endorsed
or
accompanied by a duly executed instrument of transfer, at the office of the
Preferred Trust Security registrar. The Administrative Trustees may designate
FPL Group or FPL Group Capital or any affiliate of either of them, as the
Preferred Trust Security registrar. The Property Trustee will initially act
as
the Preferred Trust Security registrar and transfer agent. (Trust Agreement,
Section 5.08). No service charge will be made for any registration of
transfer or exchange of Preferred Trust Securities, but the Preferred Trust
Security registrar may require payment of a sum sufficient to cover any tax
or
other governmental charge payable in connection with the transfer or exchange.
A
transfer or exchange will be made when the Preferred Trust Security registrar
and Administrative Trustees are satisfied with the documents of title and
identity of the person making the request. (Trust Agreement, Section 5.04).
The Administrative Trustees may at any time designate another transfer agent
and
registrar or rescind the designation of any transfer agent and registrar or
approve a change in the office through which any transfer agent and registrar
acts, except that FPL Group will, or will cause the Preferred Trust Security
registrar to, maintain an office or agency in The City of New York where
Preferred Trust Securities may be transferred or exchanged. (Trust Agreement,
Sections 2.07(a) and 5.08).
The
Trust
will not be required to:
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(1)
|
issue,
register the transfer of, or exchange any Preferred Trust Securities
during the period beginning at the opening of business 15
calendar days before the mailing of a notice of redemption of any
Preferred Trust Securities called for redemption and ending at the
close
of business on the day the notice is mailed;
or
|
|
(2)
|
register
the transfer of or exchange any Preferred Trust Securities so selected
for
redemption, in whole or in part, except the unredeemed portion of
any
Preferred Trust Securities being redeemed in part. (Trust Agreement,
Section 5.04).
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Payment
on Preferred Trust Securities and Paying Agent.
Unless
otherwise stated in a prospectus supplement, payments in respect of the
Preferred Trust Securities will be made on the applicable distribution dates
by
check mailed to the address of the holder entitled thereto as such address
appears on the Preferred Trust Security register. (Trust Agreement, Section
4.04). The paying agent shall initially be the Property Trustee and any
co-paying agent chosen by the Property Trustee that is acceptable to the
Administrative Trustees, FPL Group and, in the case of Preferred Trust
Securities issued by FPL Group Capital Trust, FPL Group Capital. The paying
agent may resign upon 30 days’ written notice to the Administrative Trustees,
the Property Trustee, FPL Group and, in the case of Preferred Trust Securities
issued by FPL Group Capital Trust, FPL Group Capital. In the event that
the
Property
Trustee shall no longer be the paying agent, the Administrative Trustees shall
appoint a successor, which shall be a bank, trust company or affiliate of FPL
Group reasonably acceptable to the Property Trustee, FPL Group, and, in the
case
of Preferred Trust Securities issued by FPL Group Capital Trust, FPL Group
Capital, to act as paying agent. (Trust Agreement, Section 5.09).
Duties
of the Trustees.
The
Delaware Trustee will act as the resident trustee in the State of Delaware
and
will have no other significant duties. The Property Trustee will hold the Junior
Subordinated Debentures on behalf of the Trust and will maintain a payment
account with respect to the Preferred Trust Securities and Common Trust
Securities, and will also act as trustee under the Trust Agreement for the
purposes of the Trust Indenture Act of 1939. (Trust Agreement, Sections 2.06
and
2.07(b)).
The
Administrative Trustees of the Trust are authorized and directed to conduct
the
affairs of the Trust and to operate the Trust so that
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(1)
|
the
Trust will not be deemed to be an “investment company” required to be
registered under the Investment Company Act of
1940,
|
|
(2)
|
the
Trust will not be taxed as a corporation, and
|
|
(3)
|
in
the case of FPL Group Capital Trust, the FPL Group Capital Junior
Subordinated Debentures will be treated as indebtedness of FPL Group
Capital for United States federal income tax purposes and, in the
case of
FPL Group Trust, the FPL Group Junior Subordinated Debentures will
be
treated as indebtedness of FPL Group for United States federal income
tax
purposes.
|
In
this
regard, FPL Group and the Administrative Trustees are authorized to take any
action, not inconsistent with applicable law, the certificate of trust or the
Trust Agreement, that FPL Group and the Administrative Trustees determine in
their discretion to be necessary or desirable for those purposes, as long as
the
action does not materially adversely affect the interests of the holders of
the
Preferred Trust Securities. (Trust Agreement, Section 2.07(d)).
Miscellaneous.
Holders
of the Preferred Trust Securities have no preemptive or similar rights. (Trust
Agreement, Section 5.13).
Notices.
Notices
to holders of Preferred Trust Securities will be sent by mail to the addresses
of those holders as they appear in the security register for those Preferred
Trust Securities. (Trust Agreement, Section 6.02).
Title.
The
Property Trustee, the Delaware Trustee, the Administrative Trustees, and the
Preferred Trust Security registrar and transfer agent, and any agent of the
Property Trustee, the Delaware Trustee, the Administrative Trustees, or the
Preferred Trust Security registrar and transfer agent, may treat the person
in
whose name a Preferred Trust Security is registered as the absolute owner of
that Preferred Trust Security for the purpose of receiving distributions and
all
other purposes, regardless of any notice to the contrary. (Trust Agreement,
Section 5.06).
Governing
Law.
The
Trust Agreement, the Preferred Trust Securities and the Common Trust Securities
will be governed by and construed in accordance with the laws of the State
of
Delaware, without regard to conflict of laws principles thereunder, except
to
the extent that the law of any other jurisdiction is mandatorily applicable.
(Trust Agreement, Section 10.05).
General.
This
section briefly summarizes some of the provisions of the Preferred Trust
Securities Guarantee Agreements that FPL Group will execute and deliver for
the
benefit of the holders of the Preferred Trust Securities issued by FPL Group
Capital Trust and FPL Group Trust. The terms of these agreements are
substantially the same, and they are referred to in this prospectus as the
“Preferred Trust Securities Guarantee Agreement.” This summary does not contain
a complete description of the Preferred Trust Securities Guarantee Agreement.
You
should
read this summary together with the Preferred Trust Securities Guarantee
Agreement for a complete understanding of all the provisions. The form of the
Preferred Trust Securities Guarantee Agreement has been previously filed with
the SEC and is an exhibit to the registration statement filed with the SEC
of
which this prospectus is a part. In addition, the Preferred Trust Securities
Guarantee Agreement will be qualified as an indenture under the Trust Indenture
Act of 1939 and is therefore subject to the provisions of the Trust Indenture
Act of 1939. You should read the Trust Indenture Act of 1939 for a complete
understanding of its provisions.
The
Bank
of New York will act as Preferred Trust Securities Guarantee Trustee under
the
Preferred Trust Securities Guarantee Agreement and will hold the Preferred
Trust
Securities Guarantee for the benefit of the holders of the Preferred Trust
Securities.
General
Terms of the Preferred Trust Securities Guarantee.
FPL
Group will absolutely, irrevocably and unconditionally agree to make the
guarantee payments listed below in full to the holders of the Preferred Trust
Securities if they are not made by the Trust, as and when due, regardless of
any
defense, right of set-off or counterclaim that the Trust may have or assert.
(Preferred Trust Securities Guarantee Agreement, Section 5.01). The
following payments will be subject to the Preferred Trust Securities Guarantee
(without duplication):
|
(1)
|
any
accrued and unpaid distributions required to be paid on Preferred
Trust
Securities, to the extent the Trust has funds in the payment account
maintained by the Property Trustee legally available for these payments
at
such time;
|
|
(2)
|
the
redemption price, plus all accrued and unpaid distributions to the
redemption date, for any Preferred Trust Securities called for redemption
by the Trust, to the extent the Trust has funds in the payment account
maintained by the Property Trustee legally available for these payments
at
such time; and
|
|
(3)
|
upon
a voluntary or involuntary dissolution, winding-up or termination
of the
Trust (except in connection with the distribution of Junior Subordinated
Debentures to the holders in exchange for Preferred Trust Securities
as
provided in the Trust Agreement or upon a redemption of all of the
Preferred Trust Securities upon maturity or redemption of the Junior
Subordinated Debentures as provided in the Trust Agreement), the
lesser
of:
|
|
(a)
|
the
aggregate of the liquidation preference amount and all accrued and
unpaid
distributions on Preferred Trust Securities to the date of payment,
to the
extent the Trust has funds in the payment account maintained by the
Property Trustee legally available for these payments at such time;
and
|
|
(b)
|
the
amount of assets of the Trust remaining available for distribution
to
holders of Preferred Trust Securities in liquidation of the Trust
after
satisfaction of liabilities to creditors of the Trust as required
by
applicable law.
|
(Preferred
Trust Securities Guarantee Agreement, Section 1.01). FPL Group’s obligation
to make a guarantee payment may be satisfied by either making a direct payment
of the required amounts by FPL Group to the holders of Preferred Trust
Securities or causing the Trust to pay such amounts to those holders. (Preferred
Trust Securities Guarantee Agreement, Section 5.01).
The
Preferred Trust Securities Guarantee will be a guarantee, subject to certain
subordination provisions, as to payment with respect to the Preferred Trust
Securities, but will not apply to any payment of distributions if and to the
extent that the Trust does not have funds legally available to make those
payments. (Preferred Trust Securities Guarantee Agreement, Sections 1.01 and
5.05). If neither FPL Group Capital nor FPL Group makes interest payments on
the
FPL Group Capital Junior Subordinated Debentures held by a Trust and if FPL
Group does not make interest payments on the FPL Group Junior Subordinated
Debentures held by a Trust, in each case the applicable Trust will not have
funds available to pay distributions on the Preferred Trust
Securities.
FPL
Group
will fully and unconditionally guarantee payments due on the Preferred Trust
Securities issued by the Trust through a combination of the
following:
|
(1)
|
with
respect to the Preferred Trust Securities issued by FPL Group Capital
Trust only, the Subordinated
Guarantee;
|
|
(2)
|
with
respect to the Preferred Trust Securities issued by FPL Group Trust
only,
FPL Group’s obligations under the FPL Group Junior Subordinated
Debentures;
|
|
(3)
|
the
rights of holders of Preferred Trust Securities to enforce those
obligations in (1) and (2) above, as
applicable;
|
|
(4)
|
FPL
Group’s agreement to pay the expenses of the Trust;
and
|
|
(5)
|
the
Preferred Trust Securities
Guarantee.
|
No
single
one of the applicable documents listed above standing alone or operating in
conjunction with fewer than all of the other applicable documents constitutes
the guarantee by FPL Group. It is only the combined operation of these documents
that has the effect of providing a full and unconditional, but subordinated,
guarantee as to payment by FPL Group of the Preferred Trust
Securities.
Except
as
otherwise stated in the related prospectus supplement, the covenants in the
Preferred Trust Securities Guarantee Agreement would not give holders of the
Preferred Trust Securities protection in the event of a highly-leveraged
transaction involving FPL Group.
Security
and Ranking.
The
Preferred Trust Securities Guarantee will be an unsecured obligation of FPL
Group and will rank:
|
(1)
|
subordinate
and junior in right of payment to all other liabilities of FPL Group,
including the Subordinated Guarantee and the Senior Debt Securities
Guarantee (except those made pari passu or subordinate by their
terms);
|
|
(2)
|
equal
in right of payment with the most senior preferred or preference
stock
that may be issued by FPL Group and with any guarantee that may be
entered
into by FPL Group in respect of any preferred or preference stock
of any
affiliate of FPL Group; and
|
|
(3)
|
senior
to FPL Group common stock. (Preferred Trust Securities Guarantee
Agreement, Section 6.01).
|
The
Preferred Trust Securities Guarantee Agreement does not limit the amount of
other indebtedness, including guarantees, that FPL Group may issue or incur
or
the amount of preferred or preference stock it may issue.
The
Trust
Agreement provides that by accepting Preferred Trust Securities, a holder agrees
to the subordination provisions and other terms of the Preferred Trust
Securities Guarantee. (Trust Agreement, Section 5.02).
The
Preferred Trust Securities Guarantee will be a guarantee of payment and not
of
collection, that is, the guaranteed party may institute a legal proceeding
directly against FPL Group to enforce its rights under the Preferred Trust
Securities Guarantee without first instituting a legal proceeding against anyone
else. (Preferred Trust Securities Guarantee Agreement, Sections 5.04 and
5.05).
FPL
Group
is a holding company that derives substantially all of its income from its
operating subsidiaries. Therefore, the Preferred Trust Securities Guarantee
will
be effectively subordinated to all indebtedness and other liabilities, including
trade payables, debt and preferred stock, incurred or issued by FPL Group’s
subsidiaries. Neither the Subordinated Indenture nor the Preferred Trust
Securities Guarantee Agreement places any limit on the
amount
of
liabilities, including debt or preferred stock, that FPL Group’s subsidiaries
may issue, guarantee or otherwise incur.
Events
of Default.
An event
of default under the Preferred Trust Securities Guarantee Agreement will occur
upon failure of FPL Group to perform any of its payment obligations under the
Preferred Trust Securities Guarantee Agreement, which failure has not been
cured
within 90 days of receipt of notice thereof. (Preferred Trust Securities
Guarantee Agreement, Section 1.01). Upon an event of default, the holders
of the Preferred Trust Securities having a majority of the aggregate liquidation
preference of the Preferred Trust Securities have the right to:
|
(1)
|
direct
the time, method and place of conducting any proceeding for any remedy
available to the Preferred Trust Securities Guarantee Trustee under
the
Preferred Trust Securities Guarantee Agreement,
or
|
|
(2)
|
direct
the exercise of any trust or power conferred upon the Preferred Trust
Securities Guarantee Trustee under the Preferred Trust Securities
Guarantee Agreement. (Preferred Trust Securities Guarantee Agreement,
Section 5.04).
|
Any
holder of the Preferred Trust Securities may enforce the Preferred Trust
Securities Guarantee, or institute a legal proceeding directly against FPL
Group
to enforce the Preferred Trust Securities Guarantee Trustee’s rights under the
Preferred Trust Securities Guarantee Agreement without first instituting a
legal
proceeding against the Trust, the Preferred Trust Securities Guarantee Trustee
or anyone else. (Preferred Trust Securities Guarantee Agreement, Section 5.04).
The holders of the Preferred Trust Securities having a majority of the aggregate
liquidation preference of the Preferred Trust Securities may waive any past
event of default and its consequences. (Preferred Trust Securities Guarantee
Agreement, Section 2.06).
FPL
Group
will be required to deliver to the Preferred Trust Securities Guarantee Trustee
an annual statement as to its compliance with all conditions under the Preferred
Trust Securities Guarantee Agreement. (Preferred Trust Securities Guarantee
Agreement, Section 2.04).
Modification
and Assignment.
No
consent of holders of Preferred Trust Securities is required for changes to
the
Preferred Trust Securities Guarantee Agreement that do not materially adversely
affect their rights. Except as provided below, changes to the Preferred Trust
Securities Guarantee Agreement that materially adversely affect the rights
of
Preferred Trust Securities require the prior approval of the holders of
Preferred Trust Securities having at least a majority of the aggregate
liquidation preference amount of the outstanding Preferred Trust Securities.
Each affected holder of Preferred Trust Securities must consent to any amendment
to the Preferred Trust Securities Guarantee Agreement that impairs the right
of
such holder to receive guarantee payments under the Preferred Trust Securities
Guarantee Agreement or to institute suit for enforcement of any such payment.
(Preferred Trust Securities Guarantee Agreement, Section 8.01).
All
guarantees and agreements contained in the Preferred Trust Securities Guarantee
Agreement will bind the successors, assigns, receivers, trustees and
representatives of FPL Group and will inure to the benefit of the holders of
the
Preferred Trust Securities then outstanding. (Preferred Trust Securities
Guarantee Agreement, Section 8.02).
Termination
of the Preferred Trust Securities Guarantee.
The
Preferred Trust Securities Guarantee Agreement will terminate and be of no
further force and effect upon:
|
(1)
|
full
payment of the redemption price, plus accrued and unpaid distributions
to
the redemption date, for all the Preferred Trust
Securities;
|
|
(2)
|
the
distribution of Junior Subordinated Debentures to holders of the
Preferred
Trust Securities in exchange for all of the Preferred Trust Securities;
or
|
|
(3)
|
full
payment of the amounts payable upon liquidation of the
Trust.
|
However,
the Preferred Trust Securities Guarantee will continue to be effective or will
be reinstated, as the case may be, if at any time, as result of the
subordination provisions or any mistake or any judicial proceeding or otherwise,
any holder of Preferred Trust Securities must return any sums paid under the
Preferred Trust Securities or the Preferred Trust Securities Guarantee.
(Preferred Trust Securities Guarantee Agreement, Section 7.01).
Governing
Law. The
Preferred Trust Securities Guarantee Agreement provides that it is to be
governed by and construed in accordance with the laws of the State of New York,
without regard to conflict of laws principles thereunder, except to the extent
that the law of any other jurisdiction is mandatorily applicable. (Preferred
Trust Securities Guarantee Agreement, Section 8.06).
JUNIOR
SUBORDINATED DEBENTURES
AND THE
FPL
GROUP SUBORDINATED GUARANTEE
General.
The
junior subordinated debentures issued by FPL Group Capital are referred to
in
this prospectus as the “FPL Group Capital Junior Subordinated Debentures.” The
junior subordinated debentures issued by FPL Group are referred to in this
prospectus as the “FPL Group Junior Subordinated Debentures,” and, together with
the FPL Group Capital Junior Subordinated Debentures, are referred to as the
“Junior Subordinated Debentures.” The FPL Group Capital Junior Subordinated
Debentures will be issued by FPL Group Capital in one or more series under
an
Indenture, dated as of March 1, 2004, among FPL Group Capital, FPL Group
and The Bank of New York, as trustee, or another subordinated indenture among
FPL Group Capital, FPL Group and The Bank of New York as specified in the
related prospectus supplement. The indenture or indentures pursuant to which
FPL
Group Capital Junior Subordinated Debentures may be issued, as it may be amended
from time to time, is referred to in this prospectus as the “FPL Group Capital
Subordinated Indenture.” The indenture or indentures pursuant to which FPL Group
Junior Subordinated Debentures may be issued, as it may be amended from time
to
time, is referred to in this prospectus as the “FPL Group Subordinated
Indenture.” The FPL Group Junior Subordinated Debentures will be issued by FPL
Group in one or more series under an indenture or indentures between FPL Group
and The Bank of New York, as trustee. In connection with the issuance of Trust
Securities, the Property Trustee will hold the FPL Group Capital Junior
Subordinated Debentures on behalf of FPL Group Capital Trust, or the FPL Group
Junior Subordinated Debentures on behalf of FPL Group Trust, as the case may
be,
as trust assets. Each of the FPL Group Capital Subordinated Indenture and the
FPL Group Subordinated Indenture, as each may be amended and supplemented from
time to time, is referred to in this prospectus as the “Subordinated Indenture.”
The Bank of New York, as trustee under each Subordinated Indenture, is referred
to in this prospectus as the “Subordinated Indenture Trustee.” The Subordinated
Indenture provides for the issuance from time to time of subordinated debt
in an
unlimited amount. The Junior Subordinated Debentures and all other subordinated
debt issued previously or hereafter under the Subordinated Indenture are
collectively referred to in this prospectus as the “Subordinated Indenture
Securities.”
This
section briefly summarizes some of the terms of the Junior Subordinated
Debentures, the Subordinated Guarantee applicable to the FPL Group Capital
Junior Subordinated Debentures, and some of the provisions of the Subordinated
Indenture. This summary does not contain a complete description of the Junior
Subordinated Debentures, the Subordinated Guarantee or the Subordinated
Indenture. You should read this summary together with the Subordinated Indenture
and the officer’s certificates or other documents establishing the Junior
Subordinated Debentures and the Subordinated Guarantee for a complete
understanding of all the provisions and for the definitions of some terms used
in this summary. The Subordinated Indenture (which, in the case of the FPL
Group
Capital Subordinated Indenture, contains the Subordinated Guarantee), the forms
of officer’s certificate that may be used to establish a series of Junior
Subordinated Debentures and the forms of the Junior Subordinated Debentures
have
been previously filed with the SEC, and are exhibits to the registration
statement. In addition, each Subordinated Indenture will be qualified under
the
Trust Indenture Act of 1939 and is therefore subject to the provisions of the
Trust Indenture Act of 1939. You should read the Trust Indenture Act of 1939
for
a complete understanding of its provisions.
Each
issue of the FPL Group Capital Junior Subordinated Debentures and the FPL Group
Junior Subordinated Debentures will constitute a separate series under the
respective Subordinated Indenture. In connection with the issuance of Trust
Securities, the aggregate principal amount of each series will be limited to
the
sum
of
the aggregate liquidation preference amount of the related Preferred Trust
Securities and the consideration paid by FPL Group for the related Common Trust
Securities.
All
FPL
Group Capital Junior Subordinated Debentures of one series need not be issued
at
the same time, and a series may be re-opened for issuances of additional FPL
Group Capital Junior Subordinated Debentures of such series. This means that
FPL
Group Capital may from time to time, without notice to, or the consent of the
existing holders of the FPL Group Capital Junior Subordinated Debentures of
a
particular series, create and issue additional FPL Group Capital Junior
Subordinated Debentures of such series. Such additional FPL Group Capital Junior
Subordinated Debentures will have the same terms as the FPL Group Capital Junior
Subordinated Debentures of such series in all respects (except for the payment
of interest accruing prior to the issue date of the additional FPL Group Capital
Junior Subordinated Debentures or except for the first payments of interest
following the issue date of the additional FPL Group Capital Junior Subordinated
Debentures) so that the additional FPL Group Capital Junior Subordinated
Debentures may be consolidated and form a single series with the FPL Group
Capital Junior Subordinated Debentures of such series.
Similarly,
all FPL Group Junior Subordinated Debentures of one series need not be issued
at
the same time, and a series may be re-opened for issuances of additional FPL
Group Junior Subordinated Debentures of such series, in the manner described
in
the paragraph above with respect to FPL Group Capital Junior Subordinated
Debentures.
The
FPL
Group Capital Junior Subordinated Debentures will be unsecured, subordinated
obligations of FPL Group Capital which rank junior to all of FPL Group Capital’s
Senior Indebtedness. The FPL Group Junior Subordinated Debentures will be
unsecured, subordinated obligations of FPL Group which rank junior to all of
FPL
Group’s Senior Indebtedness. The term “Senior Indebtedness” with respect to FPL
Group Capital or FPL Group, as the case may be, will be defined in the related
prospectus supplement. All Junior Subordinated Debentures issued under a
particular Subordinated Indenture will rank equally and ratably with all other
Junior Subordinated Debentures issued under that Subordinated Indenture, except
to the extent that FPL Group Capital or FPL Group, as the case may be, elects
to
provide security with respect to any series of Junior Subordinated Debentures
without providing that security to all outstanding Junior Subordinated
Debentures as allowed under the respective Subordinated Indenture. Junior
Subordinated Debentures issued under a particular Subordinated Indenture may
rank senior to, pari passu with, or junior to, Junior Subordinated Debentures
issued by the same issuer under another Subordinated Indenture. The FPL Group
Capital Junior Subordinated Debentures will be unconditionally guaranteed by
FPL
Group as to payment of principal, and any interest and premium, pursuant to
a
Subordinated Guarantee of FPL Group, included in the Subordinated Indenture
for
such FPL Group Capital Junior Subordinated Debentures, which Subordinated
Guarantee ranks junior to all of FPL Group’s Senior Indebtedness, and may rank
senior to, pari passu with, or junior to, FPL Group’s obligations under a
separate Subordinated Guarantee. See “—Subordinated Guarantee”
below.
Although
the FPL Group Capital Junior Subordinated Debentures and the FPL Group Junior
Subordinated Debentures are discussed together in this section of the
prospectus, FPL Group will have no obligation with respect to the FPL Group
Capital Junior Subordinated Debentures except in connection with the
Subordinated Guarantee and FPL Group Capital will have no obligation with
respect to the FPL Group Junior Subordinated Debentures.
Each
series of Junior Subordinated Debentures that may be issued under each
Subordinated Indenture may have different terms. FPL Group Capital or FPL Group,
as the case may be, will include some or all of the following information about
a specific series of Junior Subordinated Debentures in the prospectus supplement
relating to those Junior Subordinated Debentures:
|
(1)
|
the
title of those Junior Subordinated
Debentures,
|
|
(2)
|
any
limit upon the aggregate principal amount of those Junior Subordinated
Debentures,
|
|
(3)
|
the
date(s) on which the principal will be
paid,
|
|
(4)
|
the
rate(s) of interest on those Junior Subordinated Debentures, or how
the
rate(s) of interest will be determined, the date(s) from which interest
will accrue, the dates on which interest will be paid and the record
date
for any interest payable on any interest payment
date,
|
|
(5)
|
the
person to whom interest will be paid on any interest payment date,
if
other than the person in whose name those Junior Subordinated Debentures
are registered at the close of business on the record date for that
interest payment,
|
|
(6)
|
the
place(s) at which or methods by which payments will be made on those
Junior Subordinated Debentures and the place(s) at which or methods
by
which the registered owners of those Junior Subordinated Debentures
may
transfer or exchange those Junior Subordinated Debentures and serve
notices and demands to or upon FPL Group Capital or FPL Group, as
the case
may be,
|
|
(7)
|
the
security registrar and any paying agent or agents for those Junior
Subordinated Debentures,
|
|
(8)
|
any
date(s) on which, the price(s) at which and the terms and conditions
upon
which those Junior Subordinated Debentures may be redeemed at the
option
of the issuer, in whole or in part, and any restrictions on those
redemptions,
|
|
(9)
|
any
sinking fund or other provisions or options held by the registered
owners
of those Junior Subordinated Debentures that would obligate the issuer
to
repurchase or redeem those Junior Subordinated
Debentures,
|
|
(10)
|
the
denominations in which those Junior Subordinated Debentures may be
issued,
if other than denominations of $25 and any integral multiple of
$25,
|
|
(11)
|
the
currency or currencies in which the principal of or premium, if any,
or
interest on those Junior Subordinated Debentures may be paid (if
other
than in U.S. dollars),
|
|
(12)
|
if
FPL Group Capital, or FPL Group, as the case may be, or a registered
owner
may elect to pay, or receive, principal of or premium, if any, or
interest
on those Junior Subordinated Debentures in a currency other than
that in
which those Junior Subordinated Debentures are stated to be payable,
the
terms and conditions upon which that election may be
made,
|
|
(13)
|
if
the principal of or premium, if any, or interest on those Junior
Subordinated Debentures may be paid in securities or other property,
the
type and amount of those securities or other property and the terms
and
conditions upon which FPL Group Capital, or FPL Group, as the case
may be,
or a registered owner may elect to pay or receive those
payments,
|
|
(14)
|
if
the amount payable in respect of principal of or premium, if any,
or
interest on those Junior Subordinated Debentures may be determined
by
reference to an index or other fact or event ascertainable outside
of the
Subordinated Indenture, the manner in which those amounts will be
determined,
|
|
(15)
|
the
portion of the principal amount of the Junior Subordinated Debentures
that
will be paid by the issuer upon declaration of acceleration of the
maturity of those Junior Subordinated Debentures, if other than the
entire
principal amount of those Junior Subordinated
Debentures,
|
|
(16)
|
any
events of default with respect to those Junior Subordinated Debentures
and
any covenants of FPL Group Capital, or FPL Group, as the case may
be, for
the benefit of the registered owners of those Junior Subordinated
Debentures, other than those specified in the Subordinated
Indenture,
|
|
(17)
|
the
terms, if any, pursuant to which those Junior Subordinated Debentures
may
be exchanged for shares of capital stock or other securities of any
other
entity,
|
|
(18)
|
a
definition of “Eligible Obligations” under the Subordinated Indenture with
respect to the Junior Subordinated Debentures denominated in a currency
other than U.S. dollars, and any other provisions for the reinstatement
of
the issuer’s indebtedness in respect of those Junior Subordinated
Debentures after their satisfaction and
discharge,
|
|
(19)
|
if
those Junior Subordinated Debentures will be issued in global form,
necessary information relating to the issuance of those Junior
Subordinated Debentures in global
form,
|
|
(20)
|
if
those Junior Subordinated Debentures will be issued as bearer securities,
necessary information relating to the issuance of those Junior
Subordinated Debentures as bearer
securities,
|
|
(21)
|
any
limits on the rights of the registered owners of those Junior Subordinated
Debentures to transfer or exchange those Junior Subordinated Debentures
or
to register their transfer, and any related service
charges,
|
|
(22)
|
any
exceptions to the provisions governing payments due on legal holidays
or
any variations in the definition of business day with respect to
those
Junior Subordinated Debentures,
|
|
(23)
|
any
collateral security, assurance, or guarantee for those Junior Subordinated
Debentures (including, with respect to the FPL Group Capital Junior
Subordinated Debentures, any security, assurance of guarantee in
addition
to, or any exceptions to, the Subordinated Guarantee described under
“—Subordinated Guarantee of FPL Group Capital Junior Subordinated
Debentures” below),
|
|
(24)
|
the
designation of the trust to which the Junior Subordinated Debentures
are
to be issued, if the Junior Subordinated Debentures are issued in
connection with the issuance of Trust
Securities,
|
|
(25)
|
the
terms relating to any additional interest that may be payable as
a result
of any tax, assessment or governmental charges,
and
|
|
(26)
|
any
other terms of those Junior Subordinated Debentures that are not
inconsistent with the provisions of the Subordinated Indenture.
(Subordinated Indenture, Section
301).
|
Except
as
otherwise stated in the related prospectus supplement, the covenants in the
Subordinated Indenture would not give registered owners of Junior Subordinated
Debentures protection in the event of a highly-leveraged transaction involving
FPL Group Capital, in the case of the FPL Group Capital Junior Subordinated
Debentures, or FPL Group.
Subordination.
The
Junior Subordinated Debentures will be subordinate and junior in right of
payment to all Senior Indebtedness of FPL Group Capital, or FPL Group, as the
case may be. (FPL Group Capital Subordinated Indenture, Article Fifteen; FPL
Group Subordinated Indenture, Article Fourteen). No payment of the principal
(including redemption and sinking fund payments) of, or interest, or premium,
if
any, on the Junior Subordinated Debentures may be made by FPL Group Capital,
or
FPL Group, as the case may be, until all holders of Senior Indebtedness of
FPL
Group Capital, or FPL Group, as the case may be, have been paid in full (or
provision has been made for such payment), if any of the following
occurs:
|
(1)
|
certain
events of bankruptcy, insolvency or reorganization of FPL Group Capital
or
FPL Group, as the case may be;
|
|
(2)
|
any
Senior Indebtedness of FPL Group Capital, or of FPL Group, as the
case may
be, is not paid when due (after the expiration of any applicable
grace
period) and that default continues without waiver;
or
|
|
(3)
|
any
other default has occurred and continues without waiver (after the
expiration of any applicable grace period) pursuant to which the
holders
of Senior Indebtedness of FPL Group Capital, or FPL Group, as the
case may be, are permitted to accelerate the maturity of such Senior
Indebtedness.
|
|
(FPL Group Capital Subordinated
Indenture,
Section 1502; FPL Group Subordinated Indenture,
Section 1402).
|
Upon
any
distribution of assets of FPL Group Capital, or of FPL Group, as the case may
be, to creditors in connection with any insolvency, bankruptcy or similar
proceeding, all principal of, and premium, if any, and interest due or to become
due on all Senior Indebtedness of FPL Group Capital, or of FPL Group, as the
case may be, must be paid in full before the holders of the Junior Subordinated
Debentures are entitled to receive or retain any payment from such distribution.
(FPL Group Capital Subordinated Indenture, Section 1502; FPL Group
Subordinated Indenture, Section 1402).
FPL
Group
Capital is a holding company that derives substantially all of its income from
its operating subsidiaries. Therefore, FPL Group Capital Subordinated Indenture
Securities will be effectively subordinated to all indebtedness and other
liabilities, including trade payables, debt and preferred stock, incurred or
issued by FPL Group Capital’s subsidiaries. The FPL Group Capital Subordinated
Indenture does not place any limit on the amount of liabilities including debt
or preferred stock, that FPL Group Capital’s subsidiaries may issue, guarantee
or otherwise incur.
FPL
Group
is a holding company that derives substantially all of its income from its
operating subsidiaries. Therefore, FPL Group Subordinated Indenture Securities
will be effectively subordinated to all indebtedness and other liabilities,
including trade payables, debt and preferred stock, incurred or issued by FPL
Group’s subsidiaries. The FPL Group Subordinated Indenture does not place any
limit on the amount of liabilities including debt or preferred stock, that
FPL
Group’s subsidiaries may issue, guarantee or otherwise incur.
Subordinated
Guarantee of FPL Group Capital Junior Subordinated
Debentures.
Pursuant
to the Subordinated Guarantee, FPL Group will unconditionally and irrevocably
guarantee the payment of principal of and any interest and premium, if any,
on
the FPL Group Capital Junior Subordinated Debentures, when due and payable,
whether at the stated maturity date, by declaration of acceleration, call for
redemption or otherwise, in accordance with the terms of such FPL Group Capital
Junior Subordinated Debentures and the FPL Group Capital Subordinated Indenture.
The Subordinated Guarantee will remain in effect until the entire principal
of
and any premium, if any, and interest on the FPL Group Capital Junior
Subordinated Debentures has been paid in full or otherwise discharged in
accordance with the provisions of the FPL Group Capital Subordinated Indenture.
(FPL Group Capital Subordinated Indenture, Article Fourteen).
The
Subordinated Guarantee will be subordinate and junior in right of payment to
all
Senior Indebtedness of FPL Group. (FPL Group Capital Subordinated Indenture,
Section 1402). No payment of the principal (including redemption and sinking
fund payments) of, or interest, or premium, if any, on, the FPL Group Capital
Junior Subordinated Debentures may be made by FPL Group under the Subordinated
Guarantee until all holders of Senior Indebtedness of FPL Group have been paid
in full (or provision has been made for such payment), if any of the following
occurs:
|
(1)
|
certain
events of bankruptcy, insolvency or reorganization of FPL
Group;
|
|
(2)
|
any
Senior Indebtedness of FPL Group is not paid when due (after the
expiration of any applicable grace period) and that default continues
without waiver; or
|
|
(3)
|
any
other default has occurred and continues without waiver (after the
expiration of any applicable grace period) pursuant to which the
holders
of Senior Indebtedness of FPL Group are permitted to accelerate the
maturity of such Senior Indebtedness. (FPL Group Capital Subordinated
Indenture, Section 1403).
|
Upon
any
distribution of assets of FPL Group to creditors in connection with any
insolvency, bankruptcy or similar proceeding, all principal of, and premium,
if
any, and interest due or to become due on all Senior Indebtedness of FPL Group
must be paid in full before the holders of the FPL Group Capital Junior
Subordinated Debentures are entitled to receive or retain any payment from
such
distribution. (FPL Group Capital Subordinated Indenture, Section
1403).
FPL
Group
is a holding company that derives substantially all of its income from its
operating subsidiaries. Therefore, the Subordinated Guarantee is effectively
subordinated to all indebtedness and other liabilities, including trade
payables, debt and preferred stock, incurred or issued by FPL Group’s
subsidiaries. The FPL Group Capital Subordinated Indenture does not place any
limit on the amount of liabilities, including debt or preferred stock, that
FPL
Group’s subsidiaries may issue, guarantee or otherwise incur.
Payment
and Paying Agents.
Except
as stated in the related prospectus supplement, on each interest payment date
FPL Group Capital, or FPL Group, as the case may be, will pay interest on each
Junior Subordinated Debenture to the person in whose name that Junior
Subordinated Debenture is registered as of the close of business on the record
date relating to that interest payment date. However, on the date that the
Junior Subordinated Debentures mature, FPL Group Capital, or FPL Group, as
the
case may be, will pay the interest to the person to whom it pays the principal.
Also, if FPL Group Capital, or FPL Group, as the case may be, has defaulted
in
the payment of interest on any Junior Subordinated Debenture, it may pay that
defaulted interest to the registered owner of that Junior Subordinated
Debenture:
|
(1)
|
as
of the close of business on a date that the Subordinated Indenture
Trustee
selects, which may not be more than 15 days or less than 10 days
before
the date that FPL Group Capital, or FPL Group, as the case may be,
proposes to pay the defaulted interest,
or
|
|
(2)
|
in
any other lawful manner that does not violate the requirements of
any
securities exchange on which that Junior Subordinated Debenture is
listed
and that the Subordinated Indenture Trustee believes is acceptable.
(Subordinated Indenture, Section
307).
|
Unless
otherwise stated in the related prospectus supplement, the principal, premium,
if any, and interest on the Junior Subordinated Debentures at maturity will
be
payable when such Junior Subordinated Debentures are presented at the main
corporate trust office of The Bank of New York, as paying agent, in The City
of
New York. FPL Group Capital and/or FPL Group with respect to the FPL Group
Capital Junior Subordinated Debentures and FPL Group with respect to the FPL
Group Junior Subordinated Debentures may change the place of payment on the
Junior Subordinated Debentures, appoint one or more additional paying agents,
including itself, and remove any paying agent. (Subordinated Indenture, Section
602).
Transfer
and Exchange.
Unless
otherwise stated in the related prospectus supplement, Junior Subordinated
Debentures may be transferred or exchanged at the main corporate trust office
of
The Bank of New York, as security registrar, in The City of New York. FPL Group
Capital, or FPL Group, as the case may be, may change the place for transfer
and
exchange of the Junior Subordinated Debentures and may designate one or more
additional places for that transfer and exchange.
Except
as
otherwise stated in the related prospectus supplement, there will be no service
charge for any transfer or exchange of the Junior Subordinated Debentures.
However, FPL Group Capital, or FPL Group, as the case may be, may require
payment of any tax or other governmental charge in connection with any transfer
or exchange of the Junior Subordinated Debentures.
FPL
Group
Capital, or FPL Group, as the case may be, will not be required to transfer
or
exchange any Junior Subordinated Debenture selected for redemption. Also, FPL
Group Capital, or FPL Group, as the case may be, will not be required to
transfer or exchange any Junior Subordinated Debenture during a period of 15
days before selection of Junior Subordinated Debentures to be redeemed.
(Subordinated Indenture, Section 305).
Unless
otherwise stated in the related prospectus supplement, if Junior Subordinated
Debentures are issued in connection with the issuance of Trust Securities and
are subsequently distributed to holders of Preferred Trust Securities in a
dissolution of the Trust, the Junior Subordinated Debentures will be issued
in
fully registered certificated form in the denominations and integral multiples
thereof in which the Preferred Trust Securities have been issued, and they
may
be transferred or exchanged as described above. (Trust Agreement, Section
9.04).
Defeasance.
FPL
Group Capital and FPL Group may, at any time, elect to have all of their
obligations discharged with respect to all or a portion of any Subordinated
Indenture Securities (including the FPL Group
Capital
Junior Subordinated Debentures). FPL Group may, at any time, elect to have
all
of its obligations discharged with respect to all or a portion of any
Subordinated Indenture Securities (including the FPL Group Junior Subordinated
Debentures). To do so, FPL Group Capital or FPL Group, with respect to FPL
Group
Capital Junior Subordinated Debentures, or FPL Group with respect to the FPL
Group Junior Subordinated Debentures, must irrevocably deposit with the
Subordinated Indenture Trustee or any paying agent, in trust:
|
(1)
|
money
in an amount that will be sufficient to pay all or that portion of
the
principal, premium, if any, and interest due and to become due on
those
Subordinated Indenture Securities, on or prior to their maturity,
or
|
|
(2)
|
in
the case of a deposit made prior to the maturity of that series of
Subordinated Indenture Securities,
|
|
(a)
|
direct
obligations of, or obligations unconditionally guaranteed by, the
United
States and entitled to the benefit of its full faith and credit that
do
not contain provisions permitting their redemption or other prepayment
at
the option of their issuer, and
|
|
(b)
|
certificates,
depositary receipts or other instruments that evidence a direct ownership
interest in those obligations or in any specific interest or principal
payments due in respect of those obligations that do not contain
provisions permitting their redemption or other prepayment at the
option
of their issuer, the principal of and the interest on which, when
due,
without any regard to reinvestment of that principal or interest,
will
provide money that, together with any money deposited with or held
by the
Subordinated Indenture Trustee, will be sufficient to pay all or
that
portion of the principal, premium, if any, and interest due and to
become
due on those Subordinated Indenture Securities, on or prior to their
maturity, or
|
|
(3)
|
a
combination of (1) and (2) that will be sufficient to pay all or
that
portion of the principal, premium, if any, and interest due and to
become
due on those Subordinated Indenture Securities, on or prior to their
maturity. (Subordinated Indenture, Section
701).
|
Option
to Defer Interest Payments.
Unless
otherwise provided in a related prospectus supplement, FPL Group Capital, or
FPL
Group, as the case may be, may have the option to defer the payment of interest
from time to time on the Junior Subordinated Debentures for one or more periods.
As a consequence, if the Junior Subordinated Debentures are issued in connection
with Preferred Trust Securities, distributions on the Preferred Trust Securities
would be deferred during any optional deferral period. Interest would, however,
continue to accrue on the Junior Subordinated Debentures. Unless otherwise
provided in a related prospectus supplement, during any optional deferral
period, or for so long as an “Event of Default” under the Subordinated Indenture
resulting from a payment default (or a payment default under the Preferred
Trust
Securities Guarantee if the Junior Subordinated Debentures are issued in
connection with Preferred Trust Securities) has occurred and is continuing,
neither FPL Group nor FPL Group Capital, with respect to FPL Group Capital
Junior Subordinated Debentures, or FPL Group, with respect to FPL Group Junior
Subordinated Debentures may:
|
(1)
|
declare
or pay any dividend or distribution on its capital
stock;
|
|
(2)
|
redeem,
purchase, acquire or make a liquidation payment with respect to any
of its
capital stock;
|
|
(3)
|
pay
any principal, interest or premium on, or repay, repurchase or redeem
any
debt securities that are equal or junior in right of payment with
the
Junior Subordinated Debentures or, in the case of FPL Group Capital
Junior
Subordinated Debentures issued in connection with Preferred Trust
Securities, the Subordinated Guarantee (as the case may be);
or
|
|
(4)
|
make
any payments with respect to any guarantee of debt securities if
such
guarantee is equal or junior in right of payment to the Junior
Subordinated Debentures or the Subordinated Guarantee if the Junior
Subordinated Debentures are issued in connection with Preferred Trust
Securities (as the case may be),
|
other
than
|
(1)
|
purchases,
redemptions or other acquisitions of its capital stock in connection
with
any employment contract, benefit plan or other similar arrangement
with or
for the benefit of employees, officers, directors or agents or a
stock
purchase or dividend reinvestment plan, or the satisfaction of its
obligations pursuant to any contract or security outstanding on the
date
that the payment of interest is deferred requiring it to purchase,
redeem
or acquire its capital stock;
|
|
(2)
|
any
payment, repayment, redemption, purchase, acquisition or declaration
of
dividend listed as restricted payments in clauses (1) and (2) above
as a
result of a reclassification of its capital stock or the exchange
or
conversion of all or a portion of one class or series of its capital
stock
for another class or series of its capital stock;
|
|
(3)
|
the
purchase of fractional interests in shares of its capital stock pursuant
to the conversion or exchange provisions of its capital stock or
the
security being converted or exchanged, or in connection with the
settlement of stock purchase contracts;
|
|
(4)
|
dividends
or distributions paid or made in its capital stock (or rights to
acquire
its capital stock), or repurchases, redemptions or acquisitions of
capital
stock in connection with the issuance or exchange of capital stock
(or of
securities convertible into or exchangeable for shares of its capital
stock and distributions in connection with the settlement of stock
purchase contracts);
|
|
(5)
|
redemptions,
exchanges or repurchases of, or with respect to, any rights outstanding
under a shareholder rights plan or the declaration or payment thereunder
of a dividend or distribution of or with respect to rights in the
future;
|
|
(6)
|
payments
under any preferred trust securities guarantee or guarantee of
subordinated debentures executed and delivered by FPL Group concurrently
with the issuance by a trust of any preferred trust securities, so
long as
the amount of payments made on any preferred trust securities or
subordinated debentures (as the case may be) is paid on all preferred
trust securities or subordinated debentures (as the case may be)
then
outstanding on a pro rata basis in proportion to the full distributions
to
which each series of preferred trust securities or subordinated debentures
(as the case may be) is then entitled if paid in
full;
|
|
(7)
|
payments
under any guarantee of junior subordinated debentures executed and
delivered by FPL Group (including a FPL Group Subordinated Guarantee),
so
long as the amount of payments made on any junior subordinated debentures
is paid on all junior subordinated debentures then outstanding on
a pro
rata basis in proportion to the full payment to which each series
of
junior subordinated debentures is then entitled if paid in
full;
|
|
(8)
|
dividends
or distributions by FPL Group Capital on its capital stock to the
extent
owned by FPL Group; or
|
|
(9)
|
redemptions,
purchases, acquisitions or liquidation payments by FPL Group Capital
with
respect to its capital stock to the extent owned by FPL Group.
(Subordinated Indenture,
Section 608).
|
The
exceptions in (8) and (9) above are not applicable to an optional deferral
period on the FPL Group Junior Subordinated Debentures.
Unless
otherwise provided in a related prospectus supplement, before an optional
deferral period ends, FPL Group Capital, or FPL Group, as the case may be,
may
further defer the payment of interest. Unless otherwise provided in the related
prospectus supplement, no optional deferral period may exceed the period of
time
specified in that prospectus supplement. After any optional deferral period
and
the payment of all amounts then due, FPL Group Capital, or FPL Group, as the
case may be, may select a new optional deferral period. No interest period
may
be deferred beyond the maturity of the Junior Subordinated Debentures. If the
Junior Subordinated Debentures are issued in connection with Preferred Trust
Securities, FPL Group Capital, or FPL Group, as the case may be, will give
the
Trust and the Subordinated Indenture Trustee notice of its election of an
optional deferral period prior to the
earlier
of (i) one business day before the record date for the distribution on the
Preferred Trust Securities which would occur if FPL Group Capital, or FPL Group,
as the case may be, did not make the election to defer or (ii) the date the
Administrative Trustees are required to give notice to any securities exchange
or any other applicable self-regulatory organization of the record date for
such
a distribution. The Property Trustee shall send notice of that election to
the
holders of Preferred Trust Securities.
Additional
Interest.
If
the Junior Subordinated Debentures are issued in connection with the issuance
of
Trust Securities and if the Trust is required to pay any taxes, duties,
assessments or governmental charges imposed by the United States or any other
taxing authority on income derived from the interest payments on the Junior
Subordinated Debentures, then, so long as any Preferred Trust Securities remain
outstanding, FPL Group Capital, or FPL Group, as the case may be, will pay
as
interest on the Junior Subordinated Debentures any additional interest that
may
be necessary in order that the net amounts received and retained by the Trust
after the payment of those taxes, duties, assessments or governmental charges
will be the same as the Trust would have had in the absence of such payment.
(Subordinated Indenture, Section 313).
Redemption.
The
redemption terms of the Junior Subordinated Debentures, if any, will be set
forth in a prospectus supplement. Unless set forth differently in a prospectus
supplement, and except with respect to Junior Subordinated Debentures redeemable
at the option of the holder, Junior Subordinated Debentures will be redeemable
upon notice between 30 and 60 days prior to the redemption date. If less than
all of the Junior Subordinated Debentures of any series or any tranche thereof
are to be redeemed, the Subordinated Indenture Trustee will select the Junior
Subordinated Debentures to be redeemed. In the absence of any provision for
selection, the Subordinated Indenture Trustee will choose a method of random
selection as it deems fair and appropriate. (Subordinated Indenture, Sections
403 and 404).
Junior
Subordinated Debentures selected for redemption will cease to bear interest
on
the redemption date. The paying agent will pay the redemption price and any
accrued interest once the Junior Subordinated Debentures are surrendered for
redemption. (Subordinated Indenture, Section 405). If only part of a Junior
Subordinated Debenture is redeemed, the Subordinated Indenture Trustee will
deliver a new Junior Subordinated Debenture of the same series for the remaining
portion without charge. (Subordinated Indenture, Section 406).
Any
redemption at the option of FPL Group Capital, or FPL Group, as the case may
be,
may be conditional upon the receipt by the paying agent, on or prior to the
date
fixed for redemption, of money sufficient to pay the redemption price. If the
paying agent has not received such money by the date fixed for redemption,
neither FPL Group Capital nor FPL Group, in the case of FPL Group Capital Junior
Subordinated Debentures, nor FPL Group, in the case of FPL Group Junior
Subordinated Debentures, will be required to redeem such Junior Subordinated
Debentures. (Subordinated Indenture, Section 404).
If
the
Junior Subordinated Debentures are issued in connection with the issuance of
Trust Securities, for so long as the Trust is the holder of all of the related
Junior Subordinated Debentures the proceeds of any redemption of Junior
Subordinated Debentures will be used by the Trust to redeem Preferred Trust
Securities and Common Trust Securities in accordance with their terms. (Trust
Agreement, Section 4.02(a)).
Subject
to applicable law, including United States federal securities laws, FPL Group
or
its affiliates, including FPL Group Capital, may at any time and from time
to
time purchase outstanding Junior Subordinated Debentures by tender, in the
open
market or by private agreement.
Consolidation,
Merger, and Sale of Assets.
Under
the FPL Group Capital Subordinated Indenture, neither FPL Group Capital nor
FPL
Group may, and under the FPL Group Subordinated Indenture, FPL Group may not,
consolidate with or merge into any other entity or convey, transfer or lease
its
properties and assets substantially as an entirety to any entity,
unless:
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(1)
|
the
entity formed by that consolidation, or the entity into which FPL
Group
Capital or FPL Group, as the case may be, in the case of the FPL
Group
Capital Subordinated Indenture, or FPL Group, in the case of the
FPL Group
Subordinated Indenture, is merged, or the entity that acquires or
leases
FPL Group Capital’s or FPL Group’s, as the case may be, in the case of the
FPL Group Capital Subordinated Indenture, or FPL Group’s, in the case of
the FPL Group Subordinated Indenture,
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|
property and assets, is an entity
organized
and existing under the laws of the United States, any state or
the
District of Columbia and that entity expressly assumes FPL Group
Capital’s
or FPL Group’s, as the case may be, in the case of the FPL Group Capital
Subordinated Indenture, or FPL Group’s, in the case of the FPL Group
Subordinated Indenture, obligations on all Subordinated Indenture
Securities and under the Subordinated
Indenture,
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(2)
|
immediately
after giving effect to the transaction, no event of default under
the
Subordinated Indenture and no event that, after notice or lapse of
time or
both, would become an event of default under the Subordinated Indenture
exists, and
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(3)
|
FPL
Group Capital or FPL Group, as the case may be, in the case of the
FPL
Group Capital Subordinated Indenture, or FPL Group, in the case of
the FPL
Group Subordinated Indenture, delivers an officer’s certificate and an
opinion of counsel to the Subordinated Indenture Trustee, as provided
in
the Subordinated Indenture. (Subordinated Indenture, Section
1101).
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The
Subordinated Indenture does not prevent or restrict:
|
(1)
|
any
consolidation or merger after the consummation of which FPL Group
Capital
or FPL Group, in the case of the FPL Group Capital Subordinated Indenture,
or FPL Group, in the case of the FPL Group Subordinated Indenture,
would
be the surviving or resulting
entity;
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(2)
|
in
the case of the FPL Group Capital Subordinated Indenture, any
consolidation of FPL Group Capital with FPL Group or any other entity
all
of the outstanding voting securities of which are owned, directly
or
indirectly, by FPL Group, or any merger of any such entity into any
other
of such entities, or any conveyance or other transfer, or lease,
of
properties or assets by any thereof to any other
thereof;
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(3)
|
any
conveyance or other transfer, or lease, of any part of the properties
or
assets of FPL Group Capital or FPL Group, in the case of the FPL
Group
Capital Subordinated Indenture, or FPL Group, in the case of the
FPL Group
Subordinated Indenture, which does not constitute the entirety, or
substantially the entirety, thereof;
or
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|
(4)
|
the
approval by FPL Group Capital or FPL Group, in the case of the FPL
Group
Capital Subordinated Indenture, or FPL Group, in the case of the
FPL Group
Subordinated Indenture, of or the consent by FPL Group Capital or
FPL
Group, in the case of the FPL Group Capital Subordinated Indenture,
or FPL
Group, in the case of the FPL Group Subordinated Indenture, to any
consolidation or merger to which any direct or indirect subsidiary
or
affiliate of FPL Group may be a party, or any conveyance, transfer
or
lease by any such subsidiary or affiliate of any or all of its properties
or assets. (Subordinated Indenture, Section
1103).
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Events
of Default.
Each of
the following is an event of default under the Subordinated Indenture with
respect to the Subordinated Indenture Securities of any series:
|
(1)
|
failure
to pay interest on the Subordinated Indenture Securities of that
series
within 30 days after it is due (provided, however, that a valid optional
deferral period will not constitute an event of
default),
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(2)
|
failure
to pay principal or premium, if any, on the Subordinated Indenture
Securities of that series when it is
due,
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(3)
|
failure
to comply with any other covenant in the Subordinated Indenture,
other
than a covenant that does not relate to that series of Subordinated
Indenture Securities, that continues for 90 days after FPL Group
Capital
and FPL Group, in the case of the FPL Group Capital Subordinated
Indenture, or FPL Group, in the case of the FPL Group Subordinated
Indenture, receive written notice of such failure to comply from
the
Subordinated Indenture Trustee, or FPL Group Capital, in the case
of the
FPL Group Capital Subordinated Indenture, FPL Group and the Subordinated
Indenture Trustee receive written
|
|
notice of such failure to comply
from the
registered owners of at least 33% in principal amount of the Subordinated
Indenture Securities of that
series,
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(4)
|
certain
events of bankruptcy, insolvency or reorganization of FPL Group Capital
or
FPL Group in the case of the FPL Group Capital Subordinated Indenture,
or
FPL Group in the case of the FPL Group Subordinated Indenture,
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|
(5)
|
with
certain exceptions, the Subordinated Guarantee ceases to be effective,
is
found by a judicial proceeding to be unenforceable or invalid or
is denied
or disaffirmed by FPL Group, and
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|
(6)
|
any
other event of default specified with respect to the Subordinated
Indenture Securities of that series. (Subordinated Indenture, Section
801).
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In
the
case of the third event of default listed above, the Subordinated Indenture
Trustee may extend the grace period. In addition, if holders of a particular
series have given a notice of default, then holders of at least the same
percentage of Junior Subordinated Debentures of that series, together with
the
Subordinated Indenture Trustee, may also extend the grace period. The grace
period will be automatically extended if FPL Group Capital or FPL Group, in
the
case of the FPL Group Capital Subordinated Indenture, or FPL Group, in the
case
of the FPL Group Subordinated Indenture, has initiated and is diligently
pursuing corrective action in good faith. (Subordinated Indenture, Section
801).
An event of default with respect to the Subordinated Indenture Securities of
a
particular series will not necessarily constitute an event of default with
respect to Subordinated Indenture Securities of any other series issued under
the Subordinated Indenture.
Remedies.
If an
event of default applicable to the Subordinated Indenture Securities of one
or
more series, but not applicable to all outstanding Subordinated Indenture
Securities, exists, then either the Subordinated Indenture Trustee or the
registered owners of at least 33% in aggregate principal amount of the
Subordinated Indenture Securities of each of the affected series may declare
the
principal of and accrued but unpaid interest on all the Subordinated Indenture
Securities of that series to be due and payable immediately. (Subordinated
Indenture, Section 802).
If
the
event of default is applicable to all outstanding Subordinated Indenture
Securities, then only the Subordinated Indenture Trustee or the registered
owners of at least 33% in aggregate principal amount of all outstanding
Subordinated Indenture Securities of all series, voting as one class, and not
the registered owners of any one series, may make a declaration of acceleration.
(Subordinated Indenture, Section 802). However, the event of default giving
rise
to the declaration relating to any series of Subordinated Indenture Securities
will be automatically waived, and that declaration and its consequences will
be
automatically rescinded and annulled, if, at any time after that declaration
and
before a judgment or decree for payment of the money due has been
obtained:
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(1)
|
FPL
Group Capital or FPL Group in the case of the FPL Group Capital
Subordinated Indenture, or FPL Group in the case of the FPL Group
Subordinated Indenture, deposits with the Subordinated Indenture
Trustee a
sum sufficient to pay:
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|
(a)
|
all
overdue interest on all Subordinated Indenture Securities of that
series,
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|
(b)
|
the
principal of and any premium on any Subordinated Indenture Securities
of
that series that have become due for reasons other than that declaration,
and interest that is then due,
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(c)
|
interest
on overdue interest for that series,
and
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|
(d)
|
all
amounts due to the Subordinated Indenture Trustee under the Subordinated
Indenture, and
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(2)
|
any
other event of default with respect to the Subordinated Indenture
Securities of that series has been cured or waived as provided in
the
Subordinated Indenture. (Subordinated Indenture, Section
802).
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Other
than its obligations and duties in case of an event of default under the
Subordinated Indenture, the Subordinated Indenture Trustee is not obligated
to
exercise any of its rights or powers under the Subordinated Indenture at the
request or direction of any of the registered owners of the Subordinated
Indenture Securities, unless those registered owners offer reasonable indemnity
to the Subordinated Indenture Trustee. (Subordinated Indenture, Section 903).
If
they provide this reasonable indemnity, the registered owners of a majority
in
principal amount of any series of Subordinated Indenture Securities will have
the right to direct the time, method and place of conducting any proceeding
for
any remedy available to the Subordinated Indenture Trustee, or exercising any
trust or power conferred on the Subordinated Indenture Trustee, with respect
to
the Subordinated Indenture Securities of that series. However, if an event
of
default under the Subordinated Indenture relates to more than one series of
Subordinated Indenture Securities, only the registered owners of a majority
in
aggregate principal amount of all affected series of Subordinated Indenture
Securities, considered as one class, will have the right to make that direction.
Also, the direction must not violate any law or the Subordinated Indenture,
and
may not expose the Subordinated Indenture Trustee to personal liability in
circumstances where its indemnity would not, in the Subordinated Indenture
Trustee’s sole discretion, be adequate. (Subordinated Indenture, Section
812).
No
registered owner of Subordinated Indenture Securities of any series will have
any right to institute any proceeding under the Subordinated Indenture, or
exercise any remedy under the Subordinated Indenture, unless:
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(1)
|
that
registered owner has previously given to the Subordinated Indenture
Trustee written notice of a continuing event of default with respect
to
the Subordinated Indenture Securities of that
series,
|
|
(2)
|
the
registered owners of a majority in aggregate principal amount of
the
outstanding Subordinated Indenture Securities of all series in respect
of
which an event of default under the Subordinated Indenture exists,
considered as one class, have made written request to the Subordinated
Indenture Trustee, and have offered reasonable indemnity to the
Subordinated Indenture Trustee to institute that proceeding in its
own
name as trustee, and
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|
(3)
|
the
Subordinated Indenture Trustee has failed to institute any proceeding,
and
has not received from the registered owners of a majority in aggregate
principal amount of the outstanding Subordinated Indenture Securities
of
all series in respect of which an event of default under the Subordinated
Indenture exists, considered as one class, a direction inconsistent
with
that request, within 60 days after that notice, request and offer.
(Subordinated Indenture, Section
807).
|
However,
these limitations do not apply to a suit instituted by a registered owner of
a
Subordinated Indenture Security for the enforcement of payment of the principal
of or any premium, if any, or interest on that Subordinated Indenture Security
on or after the applicable due date specified in that Subordinated Indenture
Security. (Subordinated Indenture, Section 808).
Each
of
FPL Group Capital and FPL Group in the case of the FPL Group Capital
Subordinated Indenture, and FPL Group in the case of the FPL Group Subordinated
Indenture, is required to deliver to the Subordinated Indenture Trustee an
annual statement as to its compliance with all conditions and covenants
applicable to it under the Subordinated Indenture. (Subordinated Indenture,
Section 606).
Enforcement
of Certain Rights by Holders of Preferred Trust Securities.
If the
Junior Subordinated Debentures were issued in connection with the issuance
of
Trust Securities and if there is an event of default with respect to Junior
Subordinated Debentures held by the Trust, then the holders of Preferred Trust
Securities issued by the Trust will rely on the Property Trustee or the
Subordinated Indenture Trustee, acting for the benefit of the Property Trustee,
to enforce the Property Trustee’s rights against FPL Group Capital and FPL Group
in the case of the FPL Group Capital Subordinated Indenture, or FPL Group in
the
case of the FPL Group Subordinated Indenture, as a holder of the Junior
Subordinated Debentures. However, in such a situation, a holder of Preferred
Trust Securities may enforce the Subordinated Indenture directly against FPL
Group Capital in the case of the FPL Group Capital Subordinated Indenture,
or
FPL Group, in the case of the FPL Group Subordinated Indenture, to the same
extent, and upon the same conditions, as if the holder of Preferred Trust
Securities held a principal amount of Junior Subordinated Debentures equal
to
the aggregate liquidation amount of its Preferred Trust Securities.
(Subordinated Indenture, Section 610).
Subject
to their right to bring suit to enforce their right to payment, the holders
of
Preferred Trust Securities would not be able to institute any proceeding with
respect to the Subordinated Indenture unless the Subordinated Indenture Trustee
has failed to do so for 60 days after a request of the holders of at least
a
majority of the aggregate liquidation amount of outstanding Preferred Trust
Securities. Upon such failure, the holders of a majority of the aggregate
liquidation amount of the outstanding Preferred Trust Securities would have
the
right to directly institute proceedings for enforcement of all other rights
of
the Subordinated Indenture Trustee against FPL Group Capital in the case of
the
FPL Group Capital Subordinated Indenture, or FPL Group in the case of the FPL
Group Subordinated Indenture, to the fullest extent permitted by law.
(Subordinated Indenture, Sections 807, 808 and 812).
Modification
and Waiver.
Without
the consent of any registered owner of Subordinated Indenture Securities, FPL
Group, the Subordinated Indenture Trustee and, in the case of the FPL Group
Capital Subordinated Indenture, FPL Group Capital, may amend or supplement
the
Subordinated Indenture for any of the following purposes:
|
(1)
|
to
provide for the assumption by any permitted successor to FPL Group
Capital
or FPL Group of FPL Group Capital’s or FPL Group’s, in the case of the FPL
Group Capital Subordinated Indenture, or by any permitted successor
to FPL
Group of FPL Group’s, in the case of the FPL Group Subordinated Indenture,
obligations with respect to the Subordinated Indenture and the
Subordinated Indenture Securities in the case of a merger or consolidation
or a conveyance, transfer or lease of its properties and assets
substantially as an entirety,
|
|
(2)
|
to
add covenants of FPL Group Capital or FPL Group in the case of the
FPL
Group Capital Subordinated Indenture, or FPL Group in the case of
the FPL
Group Subordinated Indenture, or to surrender any right or power
conferred
upon FPL Group Capital, in the case of the FPL Group Capital Subordinated
Indenture, or FPL Group by the Subordinated
Indenture,
|
|
(3)
|
to
add any additional events of
default,
|
|
(4)
|
to
change, eliminate or add any provision of the Subordinated Indenture,
provided that if that change, elimination or addition will materially
adversely affect the interests of the registered owners of Subordinated
Indenture Securities of any series or tranche, that change, elimination
or
addition will become effective with respect to that series or tranche
only
|
|
(a)
|
when
the required consent of the registered owners of Subordinated Indenture
Securities of that series or tranche has been obtained,
or
|
|
(b)
|
when
no Subordinated Indenture Securities of that series or tranche remain
outstanding under the Subordinated
Indenture,
|
|
(5)
|
to
provide collateral security for all but not a part of the Subordinated
Indenture Securities,
|
|
(6)
|
to
establish the form or terms of Subordinated Indenture Securities
of any
other series or tranche,
|
|
(7)
|
to
provide for the authentication and delivery of bearer securities
and the
related coupons and for other matters relating to those bearer
securities,
|
|
(8)
|
to
accept the appointment of a successor Subordinated Indenture Trustee
or
co-trustee with respect to the Subordinated Indenture Securities
of one or
more series and to change any of the provisions of the Subordinated
Indenture as necessary to provide for the administration of the trusts
under the Subordinated Indenture by more than one
trustee,
|
|
(9)
|
to
add procedures to permit the use of a non-certificated system of
registration for the Subordinated Indenture Securities of all or
any
series or tranche,
|
|
(10)
|
to
change any place where
|
|
(a)
|
the
principal of and premium, if any, and interest on all or any series
or
tranche of Subordinated Indenture Securities are
payable,
|
|
(b)
|
all
or any series or tranche of Subordinated Indenture Securities may
be
transferred or exchanged, and
|
|
(c)
|
notices
and demands to or upon FPL Group Capital or FPL Group in the case
of the
FPL Group Capital Subordinated Indenture, or FPL Group in the case
of the
FPL Group Subordinated Indenture, in respect of Subordinated Indenture
Securities and the Subordinated Indenture may be served,
or
|
|
(11)
|
to
cure any ambiguity or inconsistency or to add or change any other
provisions with respect to matters and questions arising under the
Subordinated Indenture, provided those changes or additions may not
materially adversely affect the interests of the registered owners
of
Subordinated Indenture Securities of any series or tranche. (Subordinated
Indenture, Section 1201).
|
The
registered owners of a majority in aggregate principal amount of the
Subordinated Indenture Securities of all series then outstanding may waive
compliance by FPL Group Capital or FPL Group in the case of the FPL Group
Capital Subordinated Indenture, or by FPL Group in the case of the FPL Group
Subordinated Indenture, with certain restrictive provisions of the Subordinated
Indenture. (Subordinated Indenture, Section 607). The registered owners of
a
majority in principal amount of the outstanding Subordinated Indenture
Securities of any series may waive any past default under the Subordinated
Indenture with respect to that series, except a default in the payment of
principal, premium, if any, or interest and a default with respect to certain
restrictive covenants or provisions of the Subordinated Indenture that cannot
be
modified or amended without the consent of the registered owner of each
outstanding Subordinated Indenture Security of that series affected.
(Subordinated Indenture, Section 813). If the Trust holds Subordinated Indenture
Securities of any series, the Trust may not waive compliance, or any default
in
compliance, by FPL Group Capital or FPL Group with any covenant or term
contained in, or any past default under, the Subordinated Indenture or the
Subordinated Indenture Securities of such series, without the approval of at
least a majority (or such greater percentage required by the Trust Agreement)
in
aggregate liquidation preference amount of the outstanding Preferred Trust
Securities. (Subordinated Indenture, Sections 607 and 813).
In
addition to any amendments described above, if the Trust Indenture Act of 1939
is amended after the date of either Subordinated Indenture in a way that
requires changes to the Subordinated Indenture or in a way that permits changes
to, or the elimination of, provisions that were previously required by the
Trust
Indenture Act of 1939, the Subordinated Indenture will be deemed to be amended
to conform to that amendment of the Trust Indenture Act of 1939 or to make
those
changes, additions or eliminations. FPL Group Capital and FPL Group in the
case
of the FPL Group Capital Subordinated Indenture, or FPL Group in the case of
the
FPL Group Subordinated Indenture, and the Subordinated Indenture Trustee may,
without the consent of any registered owners, enter into supplemental indentures
to make that amendment. (Subordinated Indenture, Section 1201).
Except
for any amendments described above, the consent of the registered owners of
a
majority in aggregate principal amount of the Subordinated Indenture Securities
of all series then outstanding, considered as one class, is required for all
other modifications to the Subordinated Indenture. However, if less than all
of
the series of Subordinated Indenture Securities outstanding are directly
affected by a proposed supplemental indenture, then the consent only of the
registered owners of a majority in aggregate principal amount of outstanding
Subordinated Indenture Securities of all directly affected series, considered
as
one class, is required. But, if FPL Group Capital or FPL Group, as the case
may
be, issues any series of Subordinated Indenture Securities in more than one
tranche and if the proposed supplemental indenture directly affects the rights
of the registered owners of Subordinated Indenture Securities of less than
all
of those tranches, then the consent only of the registered owners of a majority
in aggregate principal amount of the outstanding Subordinated Indenture
Securities of all directly affected tranches, considered as one class, will
be
required. However, none of those amendments or modifications may:
|
(1)
|
change
the dates on which the principal of or interest (except as described
above
under “—Option to Defer Interest Payments”) on a Subordinated Indenture
Security is due without the consent of the registered owner of that
Subordinated Indenture Security,
|
|
(2)
|
reduce
any Subordinated Indenture Security’s principal amount or rate of interest
(or the amount of any installment of that interest) or change the
method
of calculating that rate without the consent of the registered owner
of
that Subordinated Indenture
Security,
|
|
(3)
|
reduce
any premium payable upon the redemption of a Subordinated Indenture
Security without the consent of the registered owner of that Subordinated
Indenture Security,
|
|
(4)
|
change
the currency (or other property) in which a Subordinated Indenture
Security is payable without the consent of the registered owner of
that
Subordinated Indenture Security,
|
|
(5)
|
impair
the right to sue to enforce payments on any Subordinated Indenture
Security on or after the date that it states that the payment is
due (or,
in the case of redemption, on or after the redemption date) without
the
consent of the registered owner of that Subordinated Indenture
Security,
|
|
(6)
|
in
the case of FPL Group Capital Subordinated Indenture, impair the
right to
receive payments under the Subordinated Guarantee or to institute
suit for
enforcement of any such payment under the Subordinated
Guarantee,
|
|
(7)
|
reduce
the percentage in principal amount of the outstanding Subordinated
Indenture Securities of any series or tranche whose owners must consent
to
an amendment, supplement or waiver without the consent of the registered
owner of each outstanding Subordinated Indenture Security of that
series
or tranche,
|
|
(8)
|
reduce
the requirements for quorum or voting of any series or tranche without
the
consent of the registered owner of each outstanding Subordinated
Indenture
Security of that series or tranche,
or
|
|
(9)
|
modify
certain of the provisions of the Subordinated Indenture relating
to
supplemental indentures, waivers of certain covenants and waivers
of past
defaults with respect to the Subordinated Indenture Securities of
any
series or tranche, without the consent of the registered owner of
each
outstanding Subordinated Indenture Security affected by the
modification.
|
A
supplemental indenture that changes or eliminates any provision of the
Subordinated Indenture that has expressly been included only for the benefit
of
one or more particular series or tranches of Subordinated Indenture Securities,
or that modifies the rights of the registered owners of Subordinated Indenture
Securities of that series or tranche with respect to that provision, will not
affect the rights under the Subordinated Indenture of the registered owners
of
the Subordinated Indenture Securities of any other series or tranche. If Junior
Subordinated Debentures were issued in connection with the issuance of Trust
Securities, so long as any Preferred Trust Securities are outstanding, the
Subordinated Indenture Trustee may not consent to any supplemental indenture
without the prior consent of the holders of a majority in aggregate liquidation
preference of all outstanding Preferred Trust Securities affected or, in the
case of changes described in clauses (1) through (9) immediately above, 100%
in
aggregate liquidation preference of all such outstanding Preferred Trust
Securities affected. (Subordinated Indenture, Section 1202).
Each
Subordinated Indenture provides that, in order to determine whether the
registered owners of the required principal amount of the outstanding
Subordinated Indenture Securities have given any request, demand, authorization,
direction, notice, consent or waiver under the Subordinated Indenture, or
whether a quorum is present at the meeting of the registered owners of
Subordinated Indenture Securities, (a) in the case of the FPL Group Capital
Subordinated Indenture, Subordinated Indenture Securities owned by FPL Group
Capital, FPL Group or any other obligor upon the Subordinated Indenture
Securities or any affiliate of FPL Group Capital, FPL Group or of that other
obligor (unless FPL Group Capital, FPL Group, that affiliate or that obligor
owns all Subordinated Indenture Securities outstanding under the Subordinated
Indenture, determined without regard to this provision) and (b) in the case
of
the FPL Group Subordinated Indenture, Subordinated Indenture Securities owned
by
FPL Group or any other obligor upon the Subordinated Indenture Securities or
any
affiliate of FPL Group or of that other obligor (unless FPL Group, that
affiliate or that obligor owns all Subordinated Indenture Securities outstanding
under the
Subordinated
Indenture, determined without regard to this provision), will be disregarded
and
deemed not to be outstanding. (Subordinated Indenture, Section
101).
If
FPL
Group Capital, in the case of the FPL Group Capital Subordinated Indenture,
or
FPL Group solicits any action under the Subordinated Indenture from registered
owners of Subordinated Indenture Securities, each of FPL Group Capital or FPL
Group in the case of the FPL Group Capital Subordinated Indenture, or FPL Group
in the case of the FPL Group Subordinated Indenture, may, at its option, by
signing a written request to the Subordinated Indenture Trustee, fix in advance
a record date for determining the registered owners of Subordinated Indenture
Securities entitled to take that action. However, neither FPL Group Capital
nor
FPL Group will be obligated to do this. If FPL Group Capital or FPL Group in
the
case of the FPL Group Capital Subordinated Indenture, or FPL Group in the case
of the FPL Group Subordinated Indenture, as the case may be, fixes such a record
date, that action may be taken before or after that record date, but only the
registered owners of record at the close of business on that record date will
be
deemed to be registered owners of Subordinated Indenture Securities for the
purposes of determining whether registered owners of the required proportion
of
the outstanding Subordinated Indenture Securities have authorized that action.
For these purposes, the outstanding Subordinated Indenture Securities will
be
computed as of the record date. Any action of a registered owner of any
Subordinated Indenture Security under the Subordinated Indenture will bind
every
future registered owner of that Subordinated Indenture Security, or any
Subordinated Indenture Security replacing that Subordinated Indenture Security,
with respect to anything that the Subordinated Indenture Trustee, FPL Group
Capital or FPL Group in the case of the FPL Group Capital Subordinated
Indenture, or FPL Group in the case of the FPL Group Subordinated Indenture,
do,
fail to do, or allow to be done in reliance on that action, whether or not
that
action is noted upon that Subordinated Indenture Security. (Subordinated
Indenture, Section 104).
Resignation
and Removal of Subordinated Indenture Trustee. The
Subordinated Indenture Trustee may resign at any time with respect to any series
of Subordinated Indenture Securities by giving written notice of its resignation
to FPL Group Capital and FPL Group in the case of the FPL Group Capital
Subordinated Indenture, or FPL Group in the case of the FPL Group Subordinated
Indenture. Also, the registered owners of a majority in principal amount of
the
outstanding Subordinated Indenture Securities of one or more series of
Subordinated Indenture Securities may remove the Subordinated Indenture Trustee
at any time with respect to the Subordinated Indenture Securities of that
series, by delivering an instrument evidencing this action to the Subordinated
Indenture Trustee, FPL Group Capital and FPL Group in the case of the FPL Group
Capital Subordinated Indenture, and to FPL Group in the case of the FPL Group
Subordinated Indenture. However, if Junior Subordinated Debentures were issued
in connection with the issuance of Trust Securities, so long as any Preferred
Trust Securities remain outstanding, the Trust cannot deliver an instrument
evidencing this action without the consent of the holders of a majority in
aggregate liquidation preference of Preferred Trust Securities outstanding.
(Subordinated Indenture, Section 910). The resignation or removal of the
Subordinated Indenture Trustee and the appointment of a successor trustee will
not become effective until a successor trustee accepts its
appointment.
Except
with respect to a Subordinated Indenture Trustee appointed by the registered
owners of Subordinated Indenture Securities, the Subordinated Indenture Trustee
will be deemed to have resigned and the successor will be deemed to have been
appointed as trustee in accordance with the Subordinated Indenture
if:
|
(1)
|
no
event of default under the Subordinated Indenture or event that,
after
notice or lapse of time, or both, would become an event of default
under
the Subordinated Indenture exists,
and
|
|
(2)
|
FPL
Group Capital and FPL Group in the case of the FPL Group Capital
Subordinated Indenture, or FPL Group in the case of the FPL Group
Subordinated Indenture, have delivered to the Subordinated Indenture
Trustee resolutions of their Boards of Directors appointing a successor
trustee and that successor trustee has accepted that appointment
in
accordance with the terms of the Subordinated Indenture. (Subordinated
Indenture, Section 910).
|
Notices.
Notices
to registered owners of Subordinated Indenture Securities will be sent by mail
to the addresses of those registered owners as they appear in the security
register for those Subordinated Indenture Securities. (Subordinated Indenture,
Section 106).
Title.
The
person in whose name a Subordinated Indenture Security is registered may be
treated as the absolute owner of that Subordinated Indenture Security, whether
or not that Subordinated Indenture Security is overdue, for the purpose of
making payments and for all other purposes, regardless of any notice to the
contrary. (Subordinated Indenture, Section 308).
Governing
Law.
The
Subordinated Indenture and the Subordinated Indenture Securities will be
governed by, and construed in accordance with, the laws of the State of New
York, without regard to New York’s conflict of law principles, except to the
extent that the law of any other jurisdiction is mandatorily applicable.
(Subordinated Indenture, Section 112).
FPL
Group
and its subsidiaries, including FPL Group Capital, also maintain various banking
and trust relationships with The Bank of New York. In addition to acting as
Subordinated Indenture Trustee, security registrar and paying agent under the
FPL Group Capital Subordinated Indenture, The Bank of New York acts, or would
act, as (i) Indenture Trustee, security registrar and paying agent under
the Indenture described under “Description of FPL Group Capital Senior Debt
Securities” above, (ii) Guarantee Trustee under the Guarantee Agreement
described under “Description of the FPL Group Capital Senior Debt Securities
Guarantee” above, (iii) purchase contract agent under a purchase contract
agreement described under “Description of Stock Purchase Contracts and Stock
Purchase Units” above, (iv) Preferred Trust Securities Guarantee Trustee
under the Preferred Trust Securities Guarantee Agreement described under
“Description of the Preferred Trust Securities Guarantee” above, (v) Property
Trustee under the Trust Agreement and (vi) Subordinated Indenture Trustee,
security registrar and paying agent under the FPL Group Subordinated Indenture.
In addition, The Bank of New York acts as preferred trust securities trustee
and
property trustee with respect to FPL Group Capital Trust I’s preferred
trust securities. The Bank of New York (Delaware) acts as the Delaware Trustee
under the Trust Agreement and as Delaware trustee under the Trust Agreement
entered into in connection with FPL Group Capital Trust I’s preferred trust
securities.
FPL
Group, FPL Group Capital and the Trust may sell the securities offered pursuant
to this prospectus (“Offered Securities”):
|
(1)
|
through
underwriters or dealers,
|
|
(2)
|
through
agents, or
|
|
(3)
|
directly
to one or more purchasers.
|
Through
Underwriters or Dealers.
If FPL
Group, FPL Group Capital and/or the Trust uses underwriters in the sale of
the
Offered Securities, the underwriters will acquire the Offered Securities for
their own account. The underwriters may resell the Offered Securities 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 underwriters
may
sell the Offered Securities directly or through underwriting syndicates
represented by managing underwriters. Unless otherwise stated in the prospectus
supplement relating to the Offered Securities, the obligations of the
underwriters to purchase those Offered Securities will be subject to certain
conditions, and the underwriters will be obligated to purchase all of those
Offered Securities if they purchase any of them. If FPL Group, FPL Group Capital
and/or the Trust uses a dealer in the sale, FPL Group, FPL Group Capital and/or
the Trust will sell the Offered Securities to the dealer as principal. The
dealer may then resell those Offered Securities at varying prices determined
at
the time of resale.
Any
initial public offering price and any discounts or concessions allowed or
reallowed or paid to dealers may be changed from time to time.
Through
Agents.
FPL
Group, FPL Group Capital and/or the Trust may designate one or more agents
to
sell the Offered Securities. Unless otherwise stated in a prospectus supplement,
the agents will agree to use their best efforts to solicit purchases for the
period of their appointment.
Directly.
FPL
Group, FPL Group Capital and/or the Trust may sell the Offered Securities
directly to one or more purchasers. In this case, no underwriters, dealers
or
agents would be involved.
General
Information.
A
prospectus supplement will state the name of any underwriter, dealer or agent
and the amount of any compensation, underwriting discounts or concessions paid,
allowed or reallowed to them. A prospectus supplement will also state the
proceeds to FPL Group, FPL Group Capital and/or the Trust from the sale of
the
Offered Securities, any initial public offering price and other terms of the
offering of those Offered Securities.
FPL
Group, FPL Group Capital and/or the Trust may authorize underwriters, dealers
or
agents to solicit offers by certain institutions to purchase the Offered
Securities from FPL Group, FPL Group Capital and/or the Trust at the public
offering price and on the terms described in the related prospectus supplement
pursuant to delayed delivery contracts providing for payment and delivery on
a
specified date in the future.
The
Offered Securities may also be offered and sold, if so indicated in the
applicable prospectus supplement, in connection with a remarketing upon their
purchase, in accordance with a redemption or repayment pursuant to their terms,
or otherwise, by one or more firms, which are referred to herein as the
“remarketing firms,” acting as principals for their own accounts or as our agent
or the applicable trust’s agents, as applicable. Any remarketing firm will be
identified and the terms of its agreement, if any, with FPL Group, FPL Group
Capital and/or the Trust and its compensation will be described in the
applicable prospectus supplement. Remarketing firms may be deemed to be
underwriters, as that term is defined in the Securities Act of 1933, in
connection with the securities remarketed thereby.
FPL
Group, FPL Group Capital and/or the Trust may enter into derivative transactions
with third parties, or sell securities not covered by this prospectus to third
parties in privately negotiated transactions. If the applicable prospectus
supplement indicates, in connection with those derivatives, the third parties
may sell securities covered by this prospectus and the applicable prospectus
supplement, including in short sale transactions. If so, the third party may
use
securities pledged by FPL Group, FPL Group Capital and/or the Trust or borrowed
from any of them or others to settle those sales or to close out any related
open borrowings of securities, and may use securities received from FPL Group,
FPL Group Capital and/or the Trust in settlement of those derivatives to close
out any related open borrowings of securities. The third party in such sale
transactions will be an underwriter and, if not identified in this prospectus,
will be identified in the applicable prospectus supplement.
FPL
Group, FPL Group Capital and/or the Trust may have agreements to indemnify
underwriters, dealers and agents against, or to contribute to payments which
the
underwriters, dealers and agents may be required to make in respect of, certain
civil liabilities, including liabilities under the Securities Act of
1933.
The
consolidated financial statements and management’s report on the effectiveness
of internal control over financial reporting incorporated in this prospectus
by
reference from FPL Group’s Annual Report on Form 10-K for the year ended
December 31, 2005, have been audited by Deloitte & Touche LLP, an
independent registered public accounting firm, as stated in their reports,
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.
Squire,
Sanders & Dempsey L.L.P., Miami, Florida, and Thelen Reid & Priest LLP,
New York, New York, co-counsel to FPL Group, FPL Group Capital and the Trust,
will pass upon the legality of the Offered Securities for FPL Group, FPL Group
Capital and the Trust. Hunton & Williams LLP, New York, New York, will pass
upon the legality of the Offered Securities for any underwriter, dealer or
agent. Certain matters of Delaware law relating to the validity of the Preferred
Trust Securities, the enforceability of the Trust Agreement and the creation
of
the Trust
will
be
passed upon by Morris, James, Hitchens & Williams LLP, special Delaware
counsel to FPL Group, FPL Group Capital and the Trust. Thelen Reid & Priest
LLP and Hunton & Williams LLP may rely as to all matters of Florida law upon
the opinion of Squire, Sanders & Dempsey L.L.P., and on the opinion of
Morris, James, Hitchens & Williams LLP, as to matters involving the law of
the State of Delaware in connection with the Preferred Trust Securities. Squire,
Sanders & Dempsey L.L.P. may rely as to all matters of New York law upon the
opinion of Thelen Reid & Priest LLP, and on the opinion of Morris, James,
Hitchens & Williams LLP, as to matters involving the law of the State of
Delaware in connection with the Preferred Trust Securities.
___________________________________
You
should rely only on the information incorporated by reference or provided in
this prospectus or any prospectus supplement or in any written communication
from FPL Group, FPL Group Capital or the Trust specifying the final terms of
a
particular offering of securities. Neither FPL Group, FPL Group Capital nor
the
Trust has authorized anyone else to provide you with additional or different
information. Neither FPL Group, FPL Group Capital nor the Trust is making an
offer of these securities in any jurisdiction where the offer is not permitted.
You should not assume that the information in this prospectus or any prospectus
supplement is accurate as of any date other than the date on the front of those
documents or that the information incorporated by reference is accurate as
of
any date other than the date of the document incorporated by
reference.
53
$350,000,000
Series
A Enhanced Junior Subordinated Debentures due 2066
The
Series A Enhanced Junior Subordinated Debentures
will
be Fully and Unconditionally Guaranteed
by
FPL
GROUP, INC.
___________
PROSPECTUS
SUPPLEMENT
September
12,
2006
___________Citigroup
Merrill
Lynch & Co.
Morgan
Stanley
UBS
Investment Bank
Wachovia
Securities
___________
A.G.
Edwards
Lehman
Brothers
Raymond
James
Wells
Fargo Securities