|
|
Duke Energy Corp | 7.10% Cumulative Quarterly Income Preferred Securities, Series A (FPC.PRA)
Prospectus excerpt: If you purchase the Series A QUIPS, you are entitled to receive cumulative cash distributions at an annual rate of 7.10% (the "Securities Rate") of the liquidation amount of $25 per Series A QUIPS. Distributions will accumulate from the date the Trust issues the Series A QUIPS (the "Issue Date") and will be paid quarterly in arrears on February 15, May 15, August 15 and November 15 of each year (each, a "Distribution Date"), beginning May 15, 1999. So long as no Junior Subordinated Indenture Event of Default (as defined below) has occurred and is continuing, Funding Corp. can, on one or more occasions, defer interest payments on the Series A QUIDS for up to 20 consecutive quarterly periods. A deferral of interest payments cannot extend, however, beyond the maturity date of the Series A QUIDS (which is May 15, 2039). If Funding Corp. defers interest payments on the Series A QUIDS, the Trust will also defer distributions on the Series A QUIPS. During this deferral period, distributions will continue to accrue on the Series A QUIPS at an annual rate of 7.10% of the liquidation amount of $25 per Series A QUIPS. Also, the deferred distributions will themselves accrue interest at an annual rate of 7.10% (to the extent permitted by law). If Funding Corp. makes all deferred interest payments on the Series A QUIDS, with accrued interest, it can again defer interest payments on the Series A QUIDS. During any period in which Funding Corp. defers interest payments on the Series A QUIDS, neither Florida Progress nor Funding Corp. will be permitted to (with limited exceptions): pay a dividend or make any distributions on its capital stock or redeem, purchase, acquire or make a liquidation payment on any of its capital stock; or make an interest, principal or premium payment on, or repurchase or redeem, any of its debt securities that rank equally with or junior to the Series A QUIDS or the Series A QUIDS Guarantee (as defined below), or make any guarantee payments with respect to any guarantee by it of debt securities of any of its subsidiaries if the guarantee is equal to or junior in right of payment to the Series A QUIDS or the Series A QUIDS Guarantee. If Funding Corp. defers payments of interest on the Series A QUIDS, the Series A QUIDS will, from the time of deferral, be treated as having been reissued with original issue discount ("OID") for United States federal income tax purposes. This means that you will be required to accrue interest income and include the amounts of this income in your gross income for United States federal income tax purposes even though you will not have received any cash distributions relating to this interest income, and even though you may use the cash method of accounting. See "United States Federal Income Tax Considerations--Original Issue Discount." The Trust must redeem all of the outstanding Series A QUIPS and Common Securities when the Series A QUIDS are paid at maturity on May 15, 2039. In addition, if Funding Corp. redeems any Series A QUIDS before their maturity, the Trust will use the cash it receives from the redemption to redeem, on a pro rata basis, Series A QUIPS and Series A Common Securities (collectively, the "Series A Trust Securities") having a combined liquidation amount equal to the principal amount of the Series A QUIDS redeemed. Funding Corp. can redeem some or all of the Series A QUIDS before their maturity at 100% of their principal amount on one or more occasions any time on or after April 13, 2004. Funding Corp. also has the option to redeem the Series A QUIDS, in whole, but not in part, at any time if specific changes in tax or investment company law occur and other conditions are satisfied, as more fully described under "Description of the Series A QUIPS--Special Event Redemption or Distribution." In any case, Funding Corp. will pay accrued interest to the date of redemption. Full Prospectus PDF », Secondary Prospectus PDF », DUK Page »
|
|