Exhibit 4.3.2
PSE&G TRANSITION FUNDING II LLC,
Issuer
and
THE BANK OF NEW YORK,
Trustee
--------------------------
2005-1 SERIES SUPPLEMENT
Dated as of September 23, 2005
--------------------------
2005-1 SERIES SUPPLEMENT dated as of Septemeber 23, 2005 (this
"Supplement"), by and between PSE&G TRANSITION Funding II LLC, a Delaware
limited liability company (the "Issuer"), and THE BANK OF NEW YORK, a New York
banking corporation (the "Trustee"), as Trustee under the Indenture dated as
of Septemeber 23, 2005, between the Issuer and the Trustee (the "Indenture").
PRELIMINARY STATEMENT
Section 9.01 of the Indenture provides, among other things, that the
Issuer and the Trustee may at any time and from time to time enter into one or
more indentures supplemental to the Indenture for the purposes of authorizing
the issuance by the Issuer of a Series of BGS Transition Bonds and specifying
the terms thereof. The Issuer has duly authorized the execution and delivery
of this Supplement and the creation of a Series of BGS Transition Bonds with
an initial aggregate principal amount of $102,700,000 to be known as the
Issuer's BGS Transition Bonds, Series 2005-1 (the "Series 2005-1 BGS
Transition Bonds"). All acts and all things necessary to make the Series
2005-1 BGS Transition Bonds, when duly executed by the Issuer and
authenticated by the Trustee as provided in the Indenture and this Supplement
and issued by the Issuer, the valid, binding and legal obligations of the
Issuer and to make this Supplement a valid and enforceable supplement to the
Indenture have been done, performed and fulfilled and the execution and
delivery hereof have been in all respects duly and lawfully authorized. The
Issuer and the Trustee are executing and delivering this Supplement in order
to provide for the Series 2005-1 BGS Transition Bonds.
In order to secure the payment of principal of and interest on the
Series 2005-1 BGS Transition Bonds issued and to be issued under the Indenture
and/or any Series Supplement, the Issuer hereby confirms the Grant to the
Trustee for the benefit of the Holders of the Series 2005-1 BGS Transition
Bonds from time to time issued and Outstanding, of all of the Issuer's right,
title and interest in, to and under the Collateral, including, without
limitation, the BGS Bondable Transition Property transferred by the Seller to
the Issuer as of the Initial Transfer Date pursuant to the Sale Agreement and
all proceeds thereof.
The Trustee, on behalf of the Holders of the Series 2005-1 BGS
Transition Bonds, acknowledges the confirmation of such Grant, accepts the
trusts hereunder in accordance with the provisions hereof and agrees to
perform its duties required in the Indenture and this Supplement.
SECTION 1. Definitions.
All terms used in this Supplement that are defined in the Indenture,
either directly or by reference therein, have the meanings assigned to them
therein, except to the extent such terms are defined or modified in this
Supplement or the context clearly requires otherwise.
SECTION 2. Other Definitional Provisions.
"Authorized Denominations" shall mean $1,000 and integral multiples
of $1.00 above that amount, provided, however, that one BGS Transition Bond of
each Class may have a denomination of less than $1,000.
"Calculation Period" means, with respect to a Payment Date, the
period from and including the preceding Payment Date to but excluding such
Payment Date, or in the case of the first Calculation Period, from and
including the Series Issuance Date to but excluding the initial Payment Date.
"Expected Sinking Fund Amortization Schedule" means Schedule A to
this Supplement.
"Expected Final Payment Date" means, with respect to any Class of the
Series 2005-1 BGS Transition Bonds, the expected final Payment Date therefor,
as specified in Section 4 of this Supplement.
"Final Maturity Date" means, with respect to any Class of the Series
2005-1 BGS Transition Bonds, the final Payment Date thereof, as specified in
Section 4 of this Supplement.
"Interest Rate" has the meaning set forth in Section 4 of this
Supplement.
"Overcollateralization Amount" has the meaning set forth in Section
5(d) of this Supplement.
"Payment Date" has the meaning set forth in Section 5(a) of this
Supplement.
"Rating Agency" means any Rating Agency (as defined in the Indenture)
rating the Series 2005-1 BGS Transition Bonds as of the Series Issuance Date.
"Record Date" shall mean, with respect to any Payment Date, the
Business Day prior to such Payment Date or, with respect to any Definitive BGS
Transition Bonds, the last Business Day of the month preceding such Payment
Date.
"Required Capital Amount" has the meaning set forth in Section 5(e)
of this Supplement.
"Series Issuance Date" has the meaning set forth in Section 3(b) of
this Supplement.
SECTION 3. Designation; Series Issuance Dates.
(a) Designation. The Series 2005-1 BGS Transition Bonds shall be
designated generally as the Issuer's BGS Transition Bonds, Series 2005-1, and
further denominated as Class A-1, Class A-2, Class A-3 and Class A-4.
(b) Series Issuance Date. The Series 2005-1 BGS Transition Bonds that
are authenticated and delivered by the Trustee to or upon the order of the
Issuer on Septemeber 23, 2005 (the "Series Issuance Date") shall have as their
date of authentication Septemeber 23, 2005.
SECTION 4. Initial Principal Amount; Interest Rate; Expected Final
Payment Date; Final Maturity Dates.
The BGS Transition Bonds of each Class of the Series 2005-1 BGS
Transition Bonds shall have the initial principal amounts, bear interest at
the Interest Rates and have Expected Final Payment Dates and Final Maturity
Dates as set forth below:
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Initial
Principal Interest Expected Final Final
Class Amount Rate Payment Date Maturity Date
-------- ------------- ----------- ------------------- --------------------
A-1 $ 25,200,000 4.18% December 15, 2008 December 15, 2010
A-2 $ 35,000,000 4.34% June 15, 2012 June 16, 2014
A-3 $ 20,000,000 4.49% December 16, 2013 December 15, 2015
A-4 $ 22,500,000 4.57% June 15, 2015 June 15, 2017
SECTION 5. Payment Dates; Expected Sinking Fund Amortization Schedule
for Principal; Interest; Overcollateralization Amount; Required Capital
Amount.
(a) Payment Dates. The Payment Dates for each Class of the Series
2005-1 BGS Transition Bonds are December 15 and June 15 of each year or, if
any such date is not a Business Day, the next succeeding Business Day,
commencing on June 15, 2006 and continuing until the earlier of repayment of
such Class in full and the applicable Final Maturity Date.
(b) Expected Sinking Fund Amortization Schedule for Principal. Unless
an Event of Default has occurred and is continuing and the unpaid principal
amount of all Series of BGS Transition Bonds has been declared to be due and
payable together with accrued and unpaid interest thereon, on each Payment
Date the Trustee shall distribute to the Series 2005-1 BGS Transition
Bondholders of record as of the related Record Date amounts payable in respect
of the Series 2005-1 BGS Transition Bonds pursuant to Section 8.02(g) of the
Indenture as principal, in accordance with the Expected Sinking Fund
Amortization Schedule. Notwithstanding the foregoing, if one or more Classes
did not receive principal on any prior Payment Date in accordance with the
Expected Sinking Fund Amortization Schedule, such shortfalls of principal
shall be paid prior to the payment of principal scheduled to be paid on the
current Payment Date and shall be paid in the order in which such amounts were
scheduled to be paid previously pursuant to the Expected Sinking Fund
Amortization Schedule; provided, however, that in no event shall a principal
payment pursuant to this Section 5(b) on any Class on a Payment Date be
greater than the amount that reduces the Outstanding Amount of such Class of
Series 2005-1 BGS Transition Bonds to the amount specified in the Expected
Sinking Fund Amortization Schedule for such Class and Payment Date.
(c) Interest. On each Payment Date after the initial Payment Date,
interest will be payable on the Series 2005-1 BGS Transition Bonds in an
amount equal to, with respect to the Series 2005-1 BGS Transition Bonds, Class
A-1, Class A-2, Class A-3 and Class A-4 the number of days (determined on the
basis of a 360-day year of twelve 30-day months and assuming that the 15th day
is also a Business Day) from and including the preceding Payment Date to, but
excluding, the current Payment Date, divided by 360, times the product of:
(i) the applicable Interest Rate times
(ii) the Outstanding Amount of the related Class of Series
2005-1 BGS Transition Bonds as of the close of business on the
preceding Payment Date after giving
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effect to all payments of principal made to the Holders of the
related Class of Series 2005-1 BGS Transition Bonds on such preceding
Payment Date.
With respect to the initial Payment Date, interest will be payable in
an amount equal to, with respect to the Series 2005-1 BGS Transition Bonds,
Class A-1, Class A-2, Class A-3 and Class A-4 the number of days (determined
on the basis of a 360-day year of twelve 30-day months) from and including the
Series Issuance Date to, but excluding, the initial Payment Date, divided by
360, times the product of:
(i) the applicable Interest Rate for such Class times
(ii) the original principal amount of such Class of Series
2005-1 BGS Transition Bonds as of the Series Issuance Date.
(d) Overcollateralization Amount. The Overcollateralization Amount
for the Series 2005-1 BGS Transition Bonds shall be zero.
(e) Required Capital Amount; Series 2005-1 Capital Subaccount. (i)
The Required Capital Amount for the Series 2005-1 BGS Transition Bonds shall
be $513,500.
(ii) Solely for tracing deposits to and withdrawals from the
Series 2005-1 Capital Subaccount, the Series 2005-1 Capital
Subaccount shall comprise two sub-subaccounts, designated "Capital
Subaccount - A" and "Capital Subaccount - B". The original deposit to
the Series 2005-1 Capital Subaccount in the amount of $513,500 shall
be deposited to Capital Subaccount - A. No additional deposits shall
be made to Capital Subaccount - A. Any additional deposits to the
Series 2005-1 Capital Subaccount shall be made to Capital Subaccount
- B. Any withdrawals from the Series 2005-1 Capital Subaccount shall
be made from Capital Subaccount - B until no funds remain in Capital
Subaccount - B and thereafter shall be made from Capital Subaccount -
A.
SECTION 6. Authorized Denominations. The Series 2005-1 BGS Transition
Bonds shall be issuable in the Authorized Denominations.
SECTION 7. Redemption. The Series 2005-1 BGS Transition Bonds shall
not be subject to mandatory or optional redemption.
SECTION 8. Credit Enhancement. No credit enhancement (other than the
Overcollateralization Amount, the Required Capital Amount and any adjustments
to the BGS Transition Bond Charge approved by the BPU as contemplated in the
Servicing Agreement) is provided for the Series 2005-1 BGS Transition Bonds.
SECTION 9. Trustee Policies. If at any time withdrawals from Capital
Subaccount - A of the Series 2005-1 Capital Subaccount exceed in the aggregate
$100,000, the Issuer shall, upon the written request of the Trustee, within
thirty days after the date of such request, deliver to the Trustee and keep in
force until this Indenture ceases to be of any further effect, one or more
policies of insurance, surety bonds and/or letters of credit in the aggregate
face amount of $5,000,000, which policies, surety bonds and/or letters of
credit are sufficient to provide coverage for, and to ensure to the Trustee
the payment of, all amounts due and owing to the
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Trustee under this Indenture (collectively, the "Trustee Policies"), subject
to reasonable commercial availability and provided that the premiums or fees
for the Trustee Policies shall not exceed $50,000 during any calendar year.
The terms and conditions of the Trustee Policies shall be in form and
substance reasonably acceptable to the Trustee and shall be issued by one or
more carriers or issuers reasonably acceptable to the Trustee.
SECTION 10. Delivery and Payment for the Series 2005-1 BGS Transition
Bonds; Form of the Series 2005-1 BGS Transition Bonds. The Trustee shall
deliver the Series 2005-1 BGS Transition Bonds to the Issuer when
authenticated in accordance with Section 2.02 of the Indenture. The Series
2005-1 BGS Transition Bonds of Class A-1, Class A-2, Class A-3 and Class A-4
shall be in the form of Exhibit A hereto.
SECTION 11. Administration Fee. The Administrator shall be paid by
the Issuer a fee of $62,500 on each Payment Date with respect to the Series
2005-1 BGS Transition Bonds.
SECTION 12. Confirmation of Indenture. As supplemented by this
Supplement, the Indenture is in all respects ratified and confirmed and the
Indenture, as so supplemented by this Supplement, shall be read, taken, and
construed as one and the same instrument.
SECTION 13. Counterparts. This Supplement may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all of such counterparts shall together constitute but one and
the same instrument.
SECTION 14. Governing Law. This Supplement shall be construed in
accordance with the laws of the State of New Jersey, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
IN WITNESS WHEREOF, the Issuer and the Trustee have caused this
Supplement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first above written.
PSE&G TRANSITION FUNDING II LLC, as Issuer
By: /s/ XXXXXX X. XXXXXXX
-----------------------------------------
Name: XXXXXX X. XXXXXXX
Title: VICE PRESIDENT and TREASURER
and CHIEF FINANCIAL OFFICER
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THE BANK OF NEW YORK, not in its individual
capacity but solely as Trustee on behalf of the
BGS Transition Bondholders,
By: /s/ XXXXXXXXX XXXXXXXX
-----------------------------------------
Name: XXXXXXXXX XXXXXXXX
Title: Assistant Vice President
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SCHEDULE A
Expected Sinking Fund Amortization Schedule
Scheduled Amortization Requirement
All amounts are in United States Dollars
Class A-1 Class A-2 Class A-3 Class A-4
Payment Date Balance Balance Balance Balance
------------ ------- ------- ------- -------
Closing Date $25,200,000 $35,000,000 $20,000,000 $22,500,000
June 2006 21,895,688 35,000,000 20,000,000 22,500,000
December 2006 17,494,585 35,000,000 20,000,000 22,500,000
June 2007 13,197,021 35,000,000 20,000,000 22,500,000
December 2007 8,099,690 35,000,000 20,000,000 22,500,000
June 2008 3,473,104 35,000,000 20,000,000 22,500,000
December 2008 - 33,298,504 20,000,000 22,500,000
June 2009 - 28,493,039 20,000,000 22,500,000
December 2009 - 23,077,240 20,000,000 22,500,000
June 2010 - 18,043,929 20,000,000 22,500,000
December 2010 - 12,419,882 20,000,000 22,500,000
June 2011 - 7,163,343 20,000,000 22,500,000
December 2011 - 1,315,120 20,000,000 22,500,000
June 2012 - - 15,827,419 22,500,000
December 2012 - - 9,749,547 22,500,000
June 2013 - - 4,019,834 22,500,000
December 2013 - - - 20,203,248
June 2014 - - - 14,224,538
December 2014 - - - 7,660,270
June 2015 - - - -
A-1
