ARIZONA PUBLIC SERVICE COMPANY UNDERWRITING AGREEMENT
EXHIBIT 1.1
July 31, 2006
Dear Sir or Madam:
1. Introduction. Arizona Public Service Company, an Arizona corporation (the
“Company”), proposes to issue and sell from time to time up to $400,000,000 in aggregate principal
amount of its unsecured debentures, notes or other evidences of indebtedness (the “Securities”)
registered under the registration statement referred to in Section 2(a). The Securities will be
issued under the Indenture, dated as of January 15, 1998 (the “Original Indenture”), between the
Company and JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank and formerly known as
The Chase Manhattan Bank), as trustee (the “Trustee”), as amended and supplemented by one or more
Supplemental Indentures between the Company and the Trustee (each, a “Supplemental Indenture”) (the
Original Indenture as amended and supplemented by such Supplemental Indentures, including the Tenth
Supplemental Indenture (as defined below) being sometimes hereinafter referred to as the
“Indenture”). The Securities will be issued in one or more series, which series may vary as to
interest rates, maturities, redemption provisions, selling prices, and other terms, with all such
terms for any particular issue of the Securities being determined at the time of sale. Particular
issues of the Securities may be sold from time to time to one or more of the firms to whom this
Agreement is addressed, and to such other purchasers as the Company shall designate and as shall
agree in writing to comply with the terms and conditions of this Agreement, for resale in
accordance with the terms of offering set forth in the Pricing Disclosure Package (as defined
below). The Securities involved in any such offering are hereinafter referred to as the “Purchased
Securities,” the party or parties that agree to purchase the same are hereinafter referred to as
the “Underwriters” of such Purchased Securities, and the representatives of the underwriters, if
any, specified in a Terms Agreement referred to in Section 3 are hereinafter referred to as the
“Representatives.”
2. Representations and Warranties of the Company. In connection with each offering of
the Purchased Securities, the Company represents and warrants to, and agrees with, the Underwriters
as follows (each representation, warranty or agreement relating to information in the Registration
Statement shall be deemed to relate only to information concerning the Company included therein):
(a) A registration statement on Form S-3 relating to the Purchased Securities has (i) been
prepared by the Company in conformity with the requirements of the Securities Act of 1933, as
amended (the “Act”), and the rules and regulations (the “Rules and Regulations”) of the Securities
and Exchange Commission (the “Commission”) thereunder; (ii) been filed with the Commission under
the Act; and (iii) become effective under the Act. Copies of such registration statement and any
amendment thereto have been delivered, if requested, by the Company to the Representatives. As
used in this Agreement:
(i) “Applicable Time” shall have the meaning set forth in the applicable Terms Agreement;
(ii) “Effective Date” means the date as of which any part of the Registration Statement is
deemed to have become effective under the Act in accordance with Rule 430B of the Rules and
Regulations;
(iii) “Issuer Free Writing Prospectus” means each “free writing prospectus” (as defined in
Rule 405 of the Rules and Regulations) prepared by or on behalf of the Company or used or referred
to by the Company in connection with the offering of the Purchased Securities;
(iv) “Preliminary Prospectus” means any preliminary prospectus relating to the Purchased
Securities included in such registration statement or filed with the Commission pursuant to Rule
424(b) of the Rules and Regulations, including any preliminary prospectus supplement relating to
the Purchased Securities;
(v) “Pricing Disclosure Package” means, as of the Applicable Time, the most recent Preliminary
Prospectus, together with each Issuer Free Writing Prospectus set forth on Schedule 2(a)(v) hereto;
(vi) “Prospectus” means the final prospectus relating to the Purchased Securities, including
any prospectus supplement thereto relating to the Purchased Securities, as filed with the
Commission pursuant to Rule 424(b) of the Rules and Regulations; and
(vii) “Registration Statement” means, collectively, the various parts of such registration
statement, each as amended as of the Effective Date for such part, including any Preliminary
Prospectus or the Prospectus and all exhibits to such registration statement.
Any reference to any Preliminary Prospectus or the Prospectus shall be deemed to include any
documents incorporated by reference therein pursuant to Form S-3 under the Act as of the date of
such Preliminary Prospectus or the Prospectus, as the case may be. Any reference to the “most
recent Preliminary Prospectus” shall be deemed to refer to the latest Preliminary Prospectus
included in the Registration Statement or filed pursuant to Rule 424(b) on or prior to the date
hereof (including, for purposes hereof, any documents incorporated by reference therein on or prior
to the date hereof). Any reference to any amendment or supplement to any Preliminary Prospectus or
the Prospectus shall be deemed to include any document filed under the Securities Exchange Act of
1934, as amended (the “Exchange Act”), after the date of such Preliminary Prospectus or the
Prospectus, as the case may be, and incorporated by reference in such Preliminary Prospectus or the
Prospectus, as the case may be. The Commission has not issued any order preventing or suspending
the use of any Preliminary Prospectus or the Prospectus or suspending the effectiveness of the
Registration Statement, and, to the knowledge of the Company, no proceeding or examination for such
purpose has been instituted or threatened by the Commission. The Commission has not notified the
Company of any objection to the use of the form of the Registration Statement.
(b) The Company was at the time of initial filing of the Registration Statement, has been at
all relevant determination dates thereafter (as provided in clause (2) of the definition of
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“well-known seasoned issuer” in Rule 405), is on the date hereof and will be on the date of
the Terms Agreement and on the Closing Date (as defined in the Terms Agreement) a “well-known
seasoned issuer” (as defined in Rule 405), including not having been an “ineligible issuer” (as
defined in Rule 405) at any such time or date. The Registration Statement is an “automatic shelf
registration statement” (as defined in Rule 405) and was filed not earlier than the date
that is three years prior to the Closing Date. The conditions for use of Form S-3, as set forth in
the General Instructions thereto, have been satisfied.
(c) The Registration Statement relating to the Purchased Securities, on the Effective Date and
the Closing Date, conformed and will conform in all material respects, and any amendments to the
Registration Statement filed after the date hereof and on or prior to the Closing Date will conform
in all material respects, when filed, to the requirements of the Act, the Trust Indenture Act of
1939 (the “Trust Indenture Act”) and the Rules and Regulations. The Preliminary Prospectus
conformed or will conform, and the Prospectus will conform, in all material respects when filed
with the Commission pursuant to Rule 424(b) and on the Closing Date to the requirements of the Act
and the Rules and Regulations. The documents incorporated by reference in any Preliminary
Prospectus or the Prospectus conformed, and any further documents so incorporated will conform,
when filed with the Commission, in all material respects to the requirements of the Exchange Act
and the rules and regulations of the Commission thereunder.
(d) The Registration Statement did not, as of the Effective Date, contain an untrue statement
of a material fact or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; provided that no representation or warranty is made as
to information contained in or omitted from the Registration Statement in reliance upon and in
conformity with written information furnished to the Company through the Representatives by or on
behalf of any Underwriter specifically for inclusion therein, which information is specified in
Section 7(b), or with respect to any Statement of Eligibility (Form T-1) under the Trust Indenture
Act filed as an exhibit thereto.
(e) The Prospectus will not, as of its date and on the Closing Date, contain an untrue
statement of a material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances under which they were
made, not misleading; provided that no representation or warranty is made as to information
contained in or omitted from the Prospectus in reliance upon and in conformity with written
information furnished to the Company through the Representatives by or on behalf of any
Underwriter specifically for inclusion therein, which information is specified in Section 7(b).
(f) The documents incorporated by reference in any Preliminary Prospectus or the Prospectus
did not, and any further documents filed and incorporated by reference therein will not, when filed
with the Commission, contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(g) The Pricing Disclosure Package will not, as of the Applicable Time, contain an untrue
statement of a material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances under which they were
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made, not misleading; provided that no representation or warranty is made as to information
contained in or omitted from the Pricing Disclosure Package in reliance upon and in conformity with
written information furnished to the Company through the Representatives by or on behalf of any
Underwriter specifically for inclusion therein, which information is specified in Section 7(b).
The Company hereby consents to the use of the Pricing Disclosure Package in connection with the
sale and distribution of the Purchased Securities by the Underwriters.
(h) Each Issuer Free Writing Prospectus (including, without limitation, any road show that is
a free writing prospectus under Rule 433), when considered together with the Pricing Disclosure
Package as of the Applicable Time, will not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading; provided that no
representation or warranty is made as to information contained in or omitted from any Issuer Free
Writing Prospectus in reliance upon and in conformity with written information furnished to the
Company through the Representatives by or on behalf of any Underwriter specifically for inclusion
therein, which information is specified in Section 7(b).
(i) Each Issuer Free Writing Prospectus conformed or will conform in all material respects to
the requirements of the Act and the Rules and Regulations on the date of first use, and the Company
has complied with any filing requirements applicable to such Issuer Free Writing Prospectus
pursuant to the Rules and Regulations. The Company has not, on or prior to the date hereof, made
any offer relating to the Purchased Securities that would constitute an Issuer Free Writing
Prospectus, except as set forth on Schedule 2(i) hereto. The Company has retained in accordance
with the Rules and Regulations all Issuer Free Writing Prospectuses that were not required to be
filed pursuant to the Rules and Regulations.
(j) The Company has not distributed and, prior to the later of the Closing Date and completion
of the distribution of the Purchased Securities, will not distribute any offering material in
connection with the offering and sale of the Purchased Securities other than any Preliminary
Prospectus, the Prospectus and each Issuer Free Writing Prospectus set forth on Schedule 2(i) or
any Issuer Free Writing Prospectus to which the Representatives have consented in accordance with
Section 4(e).
(k) The consummation of the transactions herein contemplated and the fulfillment of the terms
hereof will not conflict with, or result in a breach of, or constitute a default under, any
indenture or mortgage or other material agreement, instrument or deed of trust to which the Company
is now a party or violate the Articles of Incorporation or by-laws of the Company or any law,
administrative regulation or, to the knowledge of the Company, court decree applicable to the
Company in such a way that could impact the validity of the Purchased Securities.
(l) The Original Indenture has been duly qualified under the Trust Indenture Act and has been
duly authorized, executed and delivered by the Company and is a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms, subject to applicable
bankruptcy, insolvency or similar laws affecting creditors’ rights generally and general principles
of equity.
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(m) The Tenth Supplemental Indenture, to be dated as of August 1, 2006, establishing the terms
of the Purchased Securities (the “Tenth Supplemental Indenture”) has been duly authorized by the
Company and, when executed and delivered by the Company, will be a valid and binding agreement of
the Company, enforceable against the Company in accordance with its terms, subject to applicable
bankruptcy, insolvency or similar laws affecting creditors’ rights generally and general principles
of equity.
(n) The Purchased Securities have been duly authorized and, when executed and authenticated in
accordance with the provisions of the Indenture and delivered to and paid for by the Underwriters
in accordance with the terms of this Agreement, will be entitled to the benefits of the Indenture,
will be valid and binding obligations of the Company, in each case enforceable against the Company
in accordance with their respective terms, subject to applicable bankruptcy, insolvency or similar
laws affecting creditors’ rights generally and general principles of equity and will conform to the
description of the Purchased Securities contained in each of the most recent Preliminary Prospectus
and the Prospectus.
(o) An order of the Arizona Corporation Commission has been granted authorizing the issuance
and sale of the Purchased Securities on the terms and conditions herein and in the Pricing
Disclosure Package, the Prospectus and the Terms Agreement referred to in Section 3 relating to the
Purchased Securities. No other approval or consent of any public body or governmental authority is
necessary for such issuance and sale of the Purchased Securities, except the registration of the
Purchased Securities under the Act, the qualification of the Indenture under the Trust Indenture
Act, and such consents, approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the purchase and distribution
of the Purchased Securities by the Underwriters.
(p) With certain exceptions, the Company is required to obtain certificates of convenience and
necessity from the Arizona Corporation Commission under A.R.S. Section 40-281.A for construction
of its lines, plant, services, or systems, or any extensions thereof, within the State of Arizona,
and to obtain franchises or similar consents or permits from counties and incorporated
municipalities under A.R.S. Section 40-283.A for the construction, operation, and maintenance of
transmission lines within the State of Arizona; the Company holds such valid franchises,
certificates of convenience and necessity, consents, and permits pursuant to such statutory
provisions as are necessary with respect to the maintenance and operation of its property and
business as now conducted, except that (i) the Company from time to time makes minor extensions of
its system prior to the time a related franchise, certificate, license, or permit is procured, (ii)
from time to time communities already being served by the Company become incorporated and
considerable time may elapse before a franchise, license or permit is procured, (iii) certain
franchises, licenses or permits may have expired prior to the renegotiation thereof, (iv) certain
minor defects and exceptions may exist which, individually and in the aggregate, are not deemed
material and (v) the Company does not make any representation regarding the geographical scope of
any franchise, certificate, license, or permit that is not specific as to its geographical scope.
(q) This Agreement has been, and the Terms Agreement will be, duly authorized, executed and
delivered by the Company.
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(r) The Company is not an “investment company” or entity “controlled” by an “investment
company,” as such terms are defined in the United States Investment Company Act of 1940, as amended
(the “1940 Act”).
(s) The Company is a corporation duly formed under the laws of the State of Arizona, is in
good standing in the State of Arizona, and has the power to enter into and has duly authorized, by
proper corporate action, the execution and delivery of this Agreement and the Terms Agreement and
all other documents contemplated hereby to be executed by the Company.
(t) The financial statements of the Company referred to, incorporated by reference or
contained in the most recent Preliminary Prospectus, the Pricing Disclosure Package and the
Prospectus present fairly in all material respects the financial position of the Company as of the
dates indicated and the results of its operations for the periods specified, and the financial
statements have been prepared in conformity with generally accepted accounting principles
consistently applied in all material respects with respect to the periods involved except as stated
therein; and the Company maintains systems of internal accounting controls and processes sufficient
to provide reasonable assurance that (i) transactions are executed in accordance with management’s
general or specific authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted accounting principles;
and (iii) assets are safeguarded from loss or unauthorized use.
3. Purchase and Offering. The obligation of the Underwriters to purchase, and the
obligation of the Company to sell, the Purchased Securities will be evidenced by the execution and
delivery of a Terms Agreement substantially in the form of Exhibit A hereto (the “Terms Agreement”)
at the time the Company determines to sell the Purchased Securities. The Terms Agreement shall
specify the party or parties that will be Underwriters, the principal amount to be purchased by
each, the purchase price to be paid by the Underwriters, any compensation or commissions to be paid
to Underwriters, the offering price, and the terms of the Purchased Securities not already
specified in the Indenture, including, but not limited to, interest rates, maturity, redemption
provisions, and sinking fund requirements, if any. The Terms Agreement shall also specify the
Applicable Time, the time and date of delivery and payment (the “Closing Date”), the place of
delivery and payment, and details of the material terms of offering that should be reflected in the
Pricing Disclosure Package and the Prospectus relating to the offering of the Purchased Securities.
It is understood that the Underwriters will offer the Purchased Securities for sale as set forth
in the Pricing Disclosure Package and the Prospectus. The obligations of the Underwriters to
purchase the Purchased Securities shall be several and not joint. Except as may otherwise be set
forth in the Terms Agreement, the Purchased Securities will be in definitive form and in such
denominations and registered in such names as the Underwriters may request.
4. Covenants of the Company. In connection with each offering of Purchased
Securities, the Company covenants and agrees with the several Underwriters that:
(a) The Company will file any Preliminary Prospectus and the Prospectus with the Commission
pursuant to and in accordance with Rule 424(b) under the Act not later than the second business day
following date of first use thereof. The Company will prepare a final term sheet, containing
solely a description of the Purchased Securities, in a form approved by the
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Representatives and will file such final term sheet pursuant to Rule 433(d) under the Act
within the time required by such Rule. The Company will file all other material required to be
filed by the Company with the Commission pursuant to Rule 433(d) under the Act.
(b) The Company will advise the Representatives promptly of any proposed amendment or
supplementation of the Registration Statement, any Preliminary Prospectus, the Pricing Disclosure
Package or the Prospectus which it proposes to make in the period between the date of the Terms
Agreement and the Closing Date (other than any periodic report to be filed by the Company under the
Exchange Act during such period). The Company will provide the Underwriters and their counsel with
a draft of such amendment or supplement prior to filing and will reasonably consider any changes
proposed in writing by counsel to the Underwriters based on legal grounds. The Company will also
advise the Representatives, or if there are no Representatives, the Underwriters of the
institution by the Commission of any stop order or of any order preventing or suspending the use of
any Preliminary Prospectus, the Prospectus or any Issuer Free Writing Prospectus or of the
initiation or threatening of any proceeding or examination for such purpose known to the Company,
or of any notice from the Commission objecting to the use of the form of the Registration Statement
or any post-effective amendment thereto and will use its best efforts to prevent the issuance of
any such stop order or of any order preventing the use of any Preliminary Prospectus, the
Prospectus or any Issuer Free Writing Prospectus and to obtain as soon as possible its lifting, if
issued.
(c) The Company will pay the applicable Commission filing fees relating to the Purchased
Securities within the time required by Rule 456(b)(1) without regard to the proviso thereof.
(d) If, at any time when a prospectus relating to the Purchased Securities is required to be
delivered under the Act, any event occurs as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact, or omit to state any material
fact necessary to make the statements therein, in the light of the circumstances under which they
were made, not misleading, or if it is necessary at any time to amend or supplement the
Registration Statement or the Prospectus to comply with applicable law, the Company promptly will
notify the Underwriters of such event and will promptly prepare and file with the Commission, an
amendment or supplement that will correct such statement or omission or an amendment that will
effect such compliance. Neither the Representatives’ consent to, nor the Underwriters’ delivery
of, any such amendment or supplement shall constitute a waiver of any conditions set forth in
Section 6 hereof.
(e) The Company will not make any offer relating to the Purchased Securities that would
constitute an Issuer Free Writing Prospectus without the prior written consent of the
Representatives.
(f) The Company will retain in accordance with the Rules and Regulations all Issuer Free
Writing Prospectuses not required to be filed pursuant to the Rules and Regulations; and if, at any
time when a prospectus relating to the Purchased Securities is required to be delivered under the
Act (including in circumstances where such requirement can be satisfied pursuant to Rule 172), any
events shall have occurred as a result of which any Issuer Free Writing Prospectus, as then amended
or supplemented, would conflict with the information in the
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Registration Statement, the most recent Preliminary Prospectus or the Prospectus or would
include an untrue statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under which they were made,
not misleading, or, if for any other reason it shall be necessary to amend or supplement any Issuer
Free Writing Prospectus, the Company will notify the Representatives and will amend or supplement
such Issuer Free Writing Prospectus to correct such conflict, statement or omission and the Company
will comply with any filing requirements applicable to such amended or supplemented Issuer Free
Writing Prospectus in accordance with the Rules and Regulations.
(g) The Company, at its expense, will furnish or cause to be furnished to the Underwriters,
copies of any Preliminary Prospectus, the Prospectus and any Issuer Free Writing Prospectus and all
amendments and supplements thereto, in each case as soon as available and in such quantities as the
Representatives or Underwriters may reasonably request.
(h) As soon as practicable, but not later than 18 months, after the date of the Terms
Agreement relating to the Purchased Securities, the Company will make generally available to its
security holders an earning statement or statements (which need not be audited) covering a period
of at least 12 months beginning after the effective date of the Registration Statement (as defined
in Rule 158(c) under the Act), which will satisfy the provisions of Section 11(a) of the Act and
the Rules and Regulations.
(i) The Company will furnish to the Representatives such copies of the Registration Statement
(including one copy of the Registration Statement for the counsel for the Underwriters, which is
signed and includes all exhibits), including all amendments or supplements thereto, as may be
reasonably requested.
(j) The Company will arrange or cooperate in arrangements for the qualification of the
Purchased Securities for sale under the securities or blue sky laws of such jurisdictions as the
Representatives or, if there are no Representatives, the Underwriters, designate and will continue
such qualifications in effect so long as required for the distribution of the Purchased Securities,
provided that the Company shall not be required to qualify as a foreign corporation in any State,
to consent to service of process in any State other than with respect to claims arising out of the
offering or sale of the Purchased Securities, or to meet other requirements deemed by it to be
unduly burdensome.
(k) The Company will pay all expenses incident to the performance of its obligations under
this Agreement, and will reimburse the Underwriters for any reasonable expenses (including
reasonable fees and disbursements of counsel) incurred by them in connection with the qualification
of the Purchased Securities with respect to which the Terms Agreement relating to the Purchased
Securities has been entered for sale under the securities or blue sky laws of such jurisdictions as
the Representatives or, if there are no Representatives, the Underwriters designate, and the
printing of memoranda relating thereto, and for any fees charged by investment rating agencies for
the rating of the Purchased Securities. It is understood, however, that, except as provided in
this Section 4(k) and Section 7 and 8, the Underwriters will pay all of their own costs and
expenses.
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(l) The Company will not, for a period beginning at the time of execution of the Terms
Agreement relating to the Purchased Securities and ending on the Closing Date, offer, sell,
contract to sell, pledge or otherwise dispose of, directly or indirectly, or file with the
Commission a registration statement under the Act relating to any additional debt securities of the
Company (or warrants to purchase debt securities of the Company) that mature more than one year
after the Closing Date and that are substantially similar to the Purchased Securities, without the
prior written consent of the Representatives or, if there are no Representatives, the Underwriters.
(m) During the period of two years after the date of the Terms Agreement, the Company will
furnish to the Representatives and, upon request, each of the other Underwriters, (i) as soon as
practicable after the end of each fiscal year, a balance sheet and statements of income and changes
in common stock equity of the Company as at the end of and for such year, all in reasonable detail
and certified by independent registered public accountants, and (ii) (A) as soon as practicable
after the end of each quarterly fiscal period (except for the last quarterly fiscal period of each
fiscal year), a balance sheet and statement of income of the Company as at the end of and for such
period, all in reasonable detail and certified by a principal financial or accounting officer of
the Company, (B) as soon as available, a copy of each report of the Company filed with the
Commission, and (C) from time to time, such other information concerning the Company as may
reasonably be requested. So long as the Company has active subsidiaries, such financial statements
will be on a consolidated basis to the extent the accounts of the Company and its subsidiaries are
consolidated. Information required to be delivered pursuant to this provision will be deemed to
have been delivered on the date on which information has been posted on the Company’s parent’s
website at xxx.xxxxxxxxxxxx.xxx or on the Commission’s public website, or at any other
website accessible by the Representatives and identified in a notice sent by the Company to the
Representatives.
5. Underwriter Free Writing Prospectus. Each Underwriter hereby agrees that, except
for one or more term sheets containing the information set forth in the form of term sheet attached
to the Terms Agreement, it will not use, authorize use of, refer to, or participate in the use of,
any “free writing prospectus”, as defined in Rule 405 under the Act (which term includes use of any
written information furnished to the Commission by the Company and not incorporated by reference
into the Registration Statement and any press release issued by the Company) other than (i) one or
more term sheets relating to the Purchased Securities which are not Issuer Free Writing
Prospectuses and which contain preliminary terms of the Purchased Securities and related customary
information not inconsistent with the final term sheet filed by the Company pursuant to Section
4(a) hereof, (ii) a free writing prospectus that contains no “issuer information” (as defined in
Rule 433(h)(2) under the Act) that was not included (including through incorporation by reference)
in any Preliminary Prospectus or a previously filed Issuer Free Writing Prospectus, (iii) any
Issuer Free Writing Prospectus prepared pursuant to Section 4(a) hereof, or (iv) any free writing
prospectus prepared by such Underwriter and approved by the Company in advance in writing.
6. Conditions of the Obligations of the Underwriters. The obligations of the
Underwriters to purchase and pay for the Purchased Securities will be subject to the accuracy of
the representations and warranties on the part of the Company herein, to the accuracy of the
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statements of Company officers made pursuant to the provisions hereof, to the performance by
the Company of its obligations hereunder, and to the following additional conditions precedent:
(a) On the date of the Terms Agreement, the Underwriters shall have received a letter from
Deloitte & Touche LLP, dated the date of the Terms Agreement, confirming that they are independent
registered public accountants within the meaning of the Act and the applicable published Rules and
Regulations thereunder, and stating in effect that.
(i) in their opinion the financial statements and financial statement schedule audited by them
and incorporated by reference in the Pricing Disclosure Package and the Prospectus comply as to
form in all material respects with the applicable accounting requirements of the Act and the
related published Rules and Regulations;
(ii) they have performed the procedures specified by the American Institute of Certified
Public Accountants for a review of interim financial information as described in Statement of
Auditing Standards No. 100, Interim Financial Information, on any unaudited financial statements,
if any, included in the Pricing Disclosure Package and the Prospectus;
(iii) on the basis of the review referred to in clause (ii) above, a reading of the latest
available interim financial statements of the Company, inquiries of officials of the Company who
have responsibility for financial and accounting matters and other specified procedures, nothing
came to their attention that caused them to believe that:
(A) the unaudited financial statements, if any, included in the Pricing Disclosure Package and
the Prospectus do not comply as to form in all material respects with the applicable accounting
requirements of the Act and the related published Rules and Regulations or any material
modifications should be made to such unaudited financial statements and summary of earnings for
them to be in conformity with generally accepted accounting principles;
(B) if any unaudited “capsule” information is contained in the Pricing Disclosure Package or
the Prospectus, the unaudited operating revenues, gross income, net income and net income per share
amounts or other amounts constituting such “capsule” information and described in such letter do
not agree with the corresponding amounts set forth in the unaudited financial statements or were
not determined on a basis substantially consistent with that of the corresponding amounts in the
audited statements of income;
(C) at the date of the latest available balance sheet read by such accountants, or at a
subsequent specified date not more than three business days prior to the date of such letter, there
was any change in the amounts of common stock, including additional paid-in-capital (“Common
Stock”), redeemable preferred stock, or non-redeemable preferred stock of the Company or any
increase, exceeding $10,000,000, in long-term debt of the Company or, at the date of the most
recent available unaudited financial statements there was any decrease in net current assets or
common stock equity as compared with amounts shown in the most recent financial statements included
in the Pricing Disclosure Package and the Prospectus, except in all cases for changes, increases or
decreases which result from the declaration or payment of dividends; or
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(D) for the period from the closing date of the latest income statement included in the
Pricing Disclosure Package and the Prospectus to the closing date of the latest available income
statement read by such accountants there were any decreases, as compared with the corresponding
period of the previous year and with the period of corresponding length ended the date of the
latest income statement included in the Pricing Disclosure Package and the Prospectus, in the
amounts of total revenues or net income;
except in all cases set forth in clauses (C) and (D) above for changes, increases or
decreases which the Pricing Disclosure Package and the Prospectus disclose have occurred or
may occur or which are described in such letter; and
(iv) they have compared specified dollar amounts (or percentages derived from such
dollar amounts) and other financial information contained in the Pricing Disclosure Package
and the Prospectus (in each case to the extent that such dollar amounts, percentages and
other financial information are derived from the general accounting records of the Company
and its subsidiaries subject to the internal controls of the Company’s accounting system or
are derived directly from such records by analysis or computation) with the results obtained
from inquiries, a reading of such general accounting records and other procedures specified
in such letter and have found such dollar amounts, percentages and other financial
information to be in agreement with such results, except as otherwise specified in such
letter.
All financial statements and schedules included in material incorporated by reference into the
Pricing Disclosure Package and the Prospectus shall be deemed included in the Pricing Disclosure
Package and the Prospectus for purposes of this subsection.
(b) Any Preliminary Prospectus and the Prospectus shall have been timely filed with the
Commission in accordance with Section 4(a); the Company shall have complied with all filing
requirements applicable to any Issuer Free Writing Prospectus used or referred to after the date
hereof; no stop order suspending the effectiveness of the Registration Statement or preventing or
suspending the use of the Prospectus or any Issuer Free Writing Prospectus shall have been issued,
no proceeding or examination for such purpose shall have been initiated or threatened by the
Commission and no order directed to the adequacy of any document incorporated by reference in any
Preliminary Prospectus or the Prospectus shall have been issued; and any request of the Commission
for inclusion of additional information in the Registration Statement or the Prospectus or
otherwise shall have been complied with or resolved to the reasonable satisfaction of the
Representatives; and the Commission shall not have notified the Company of any objection to the use
of the form of the Registration Statement.
(c) Subsequent to the execution of the Terms Agreement relating to the Purchased Securities
and prior to the Closing Date, (i) there shall not have occurred any change, or any development
involving a prospective change, in or affecting particularly the financial position, business or
properties of the Company and its subsidiaries taken as a whole which, in the reasonable judgment
of the Representatives, materially impairs the investment quality of the Purchased Securities, (ii)
there shall not have occurred a suspension or material limitation in trading in securities
generally on the New York Stock Exchange or in the Company’s securities, (iii) there shall not have
occurred any downgrading or withdrawal in the rating of any of the
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Company’s debt securities, and there shall have been no public announcement that any such debt
securities have been placed on CreditWatch, Watchlist, or under any similar surveillance or review,
in each case with negative implications, by Standard & Poor’s, a division of The XxXxxx-Xxxx
Companies, Inc. or Xxxxx’x Investor Service’s, Inc., (iv) there shall not have occurred a general
moratorium on commercial banking activities in New York declared by either Federal or New York
State authorities, (v) there shall not have occurred any material disruption of settlements of
securities or clearance services in the United States, and (vi) there shall not have occurred any
outbreak or escalation of major hostilities in which the United States is involved, any declaration
of war by Congress or any other substantial national or international calamity or emergency if, in
the judgment of the Representatives, the effect of any such outbreak, escalation, declaration,
calamity or emergency makes it impractical or inadvisable to proceed with completion of the sale of
and payment for the Purchased Securities. If the Underwriters elect not to purchase the Purchased
Securities as a result of the occurrence of one of the events specified in this Section 6(c), the
Representatives will promptly notify the Company.
(d) The Underwriters shall have received an opinion of Xxxxx & Xxxxxx L.L.P., counsel for the
Company, dated the Closing Date, to the effect that:
(i) The Company is a corporation duly organized, validly existing, and in good standing under
the laws of the State of Arizona with corporate power and authority to carry on its business as
described in the Prospectus; and the Company is duly qualified as a foreign corporation to do
business in the States of New Mexico, California, Oregon, Washington, Wyoming, and Texas;
(ii) The Purchased Securities have been duly authorized, executed, authenticated, issued, and
delivered, constitute valid and legally binding obligations of the Company entitled to the benefits
provided by the Indenture (except as the same may be limited by (A) bankruptcy, insolvency,
fraudulent conveyance, moratorium, reorganization or other similar laws affecting enforcement of
creditors rights, (B) general equitable principles (whether considered in a proceeding in equity or
at law), and (C) concepts of materiality, reasonableness, good faith and fair dealing and the
discretion of the court before which any matter is brought);
(iii) The Indenture has been duly authorized, executed, and delivered, has been duly qualified
under the Trust Indenture Act, and constitutes a valid and binding instrument enforceable in
accordance with its terms (except as the same may be limited by (A) bankruptcy, insolvency,
fraudulent conveyance, moratorium, reorganization or other similar laws affecting enforcement of
creditors rights, (B) general equitable principles (whether considered in a proceeding in equity or
at law), and (C) concepts of materiality, reasonableness, good faith and fair dealing and the
discretion of the court before which any matter is brought);
(iv) With certain exceptions, a public service corporation is required to obtain certificates
of convenience and necessity from the Arizona Corporation Commission under A.R.S. Section 40-281.A
for construction of its lines, plant, services, or systems, or any extensions thereof, within the
State of Arizona, and to obtain franchises or similar consents or permits from counties and
incorporated municipalities under A.R.S. Section 40-283.A for the construction, operation, and
maintenance of transmission lines within the State of Arizona; to
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such counsel’s knowledge after due inquiry, the Company holds such valid franchises,
certificates of convenience and necessity, consents, and permits pursuant to such statutory
provisions as are necessary with respect to the maintenance and operation of its property and
business as now conducted, except that (A) the Company from time to time makes minor extensions of
its system prior to the time a related franchise, certificate, license, or permit is procured, (B)
from time to time communities already being served by the Company become incorporated and
considerable time may elapse before a franchise, license or permit is procured, (C) certain
franchises, licenses or permits may have expired prior to the renegotiation thereof, (D) certain
minor defects and exceptions may exist which, individually and in the aggregate, are not deemed
material, and (E) such counsel need not be required to express any opinion regarding the
geographical scope of any franchise, certificate, license, or permit that is not specific as to its
geographical scope;
(v) The Company is organized and operating in the State of Arizona, and its securities issues,
including the issuance and sale of the Purchased Securities, are regulated by the ACC under the
laws of the State of Arizona. The issuance and sale of the Purchased Securities on the terms and
conditions set forth or contemplated herein and in the Pricing Disclosure Package and the Terms
Agreement relating to the Purchased Securities and the execution and delivery of the Supplemental
Indenture relating to the Purchased Securities have been duly authorized by the Arizona Corporation
Commission, said Commission had jurisdiction in the premises, and no further approval,
authorization, or consent of any other public board or body is necessary to the validity of such
issuance and sale of such Purchased Securities or the execution and delivery of such Supplemental
Indenture, except as may be required under state securities or blue sky laws, as to which laws such
counsel shall not be required to express an opinion, and the registration under the Act of the
Purchased Securities and the qualification of the Indenture under the Trust Indenture Act;
(vi) The Registration Statement, as of the latest Effective Date, and the Prospectus (as
amended by the Company’s Current Report on Form 8-K, to be filed with the Commission prior to the
Closing Date, attaching this Agreement, the Supplemental Indenture, a form of the Purchased
Security, a calculation of the ratio of earnings to fixed charges for the six months ended June 30,
2006 and an opinion of Xxxxx & Xxxxxx L.L.P.) as of the Closing Date (in each case other than
financial statements and schedules and other financial, statistical or accounting data included or
incorporated by reference therein or omitted therefrom, as to which such counsel expresses no
opinion), appear on their face to be appropriately responsive in all material respects to the
requirements of the Act and the Rules and Regulations thereunder. Although such counsel does not
assume any responsibility for the accuracy, completeness or fairness of the statements contained in
the Registration Statement, the Pricing Disclosure Package or the Prospectus, and has not
independently verified any such statement, such counsel has no reason to believe that
(A) the Registration Statement, as of the date as of which any part of the Registration
Statement is deemed to have become effective under the Act in accordance with Rule 430B of the
Rules and Regulations, contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary in order to make the statements therein
not misleading;
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(B) the Pricing Disclosure Package, as of the Applicable Time, contained any untrue statement
of a material fact or omitted to state any material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not misleading; or
(C) the Prospectus, as of its date or at the date of such counsel’s opinion, contained or
contains any untrue statement of a material fact or omitted or omits to state any material fact
necessary in order to make the statements therein, in light of the circumstances under which they
were made, not misleading;
excluding in all cases financial statements and schedules and other financial, statistical or
accounting data included or incorporated by reference therein or omitted therefrom, as to which
such counsel expresses no opinion. Such counsel need express no opinion as to the statements of
eligibility and qualification of the Trustee under the Indenture.
(vii) To such counsel’s knowledge, there are no legal or governmental proceedings required to
be described in the Prospectus that are not described as required, nor any contracts or documents
of a character required to be described in the Registration Statement or the Prospectus or to be
filed as exhibits to the Registration Statement that are not described and filed as required (it
being understood that such counsel need express no opinion as to the statements of eligibility and
qualification of the Trustee under the Indenture);
(viii) This Agreement and the Terms Agreement have been duly authorized, executed, and
delivered by the Company;
(ix) The Company is not and, after giving effect to the offering and sale of the Purchased
Securities, will not be an “investment company” or an entity “controlled” by an “investment
company”, as such terms are defined in the 1940 Act; and
(x) Neither the execution nor delivery by the Company of this Agreement or the Terms
Agreement, nor the consummation by the Company of the transactions therein contemplated, nor the
fulfillment by the Company of the terms, conditions or provisions thereof (1) violates or results
in a breach of any law, administrative regulation or, to the knowledge of such counsel, court
decree applicable to the Company, (2) contravenes or constitutes a default under any of the terms,
conditions or provisions of the Articles of Incorporation or by-laws of the Company or of any
material agreement or instrument listed in a certificate provided by the Company, to which the
Company is a party or by which it is bound, or (3) will result in the creation or imposition of any
lien, charge or encumbrance of any nature whatsoever upon any of the properties or assets of the
Company, except as contemplated therein. In giving the opinion expressed in the first sentence of
this clause (x), such counsel need express no opinion with respect to the anti-fraud provisions of
federal securities laws or regarding compliance by the Company with any financial covenants
required to be maintained by the Company; and
Whenever the opinions required by this Agreement are stated to be “to the knowledge of such
counsel” or “to such counsel’s knowledge”, such statements are intended to signify that those
attorneys in the firm responsible for preparing the opinion or who have given substantive attention
to the transactions contemplated by this Agreement, after consultation with such other
14
attorneys in such firm who have worked on legal matters related to the Company and its subsidiaries
as they considered appropriate, do not have current actual knowledge of the inaccuracy of such
statement. However, except where expressly stated otherwise, such counsel need not undertake any
special or independent investigation to determine the existence or absence of such facts, and no
inference as to such counsel’s knowledge of the existence or absence of such facts should be drawn
from its representation of the Company in connection with this transaction or otherwise.
In giving such opinion, Xxxxx & Xxxxxx L.L.P. may rely to the extent such counsel deems
appropriate upon certificates of the Company as to any factual matters upon which any such opinions
are based and may rely upon the opinion of Xxxxxxx & XxXxxx, P.A., referred to below, as to all
matters governed by the laws of the State of New Mexico, and may rely on the opinion of Pillsbury
Xxxxxxxx Xxxx Xxxxxxx LLP, counsel for the Underwriters, as to all matters governed by the law of
the State of New York, and further may rely upon the opinion of Xxxxxx, Xxxxx & Bockius LLP,
delivered to you and on which it is stated you may rely at the Closing Date, as to all matters
under the Public Utility Holding Company Act of 2005 and the Federal Power Act, as amended.
(e) The Underwriters shall have received evidence that the Purchased Securities have been
rated Baa2 or higher by Xxxxx’x Investors Service and BBB- or higher by Standard & Poor’s
Corporation.
(f) The Underwriters shall have received an opinion of Xxxxxxx & XxXxxx, P.A., New Mexico
counsel for the Company, dated the Closing Date, to the effect that:
(i) The Company is duly qualified as a foreign corporation to do business and is in good
standing in the State of New Mexico and has full corporate power and authority to engage in the
State of New Mexico in the business now conducted by it therein; and
(ii) The activities of the Company in the State of New Mexico to date do not constitute it a
“public utility” as that term is defined in the relevant laws of the State of New Mexico, and
accordingly, no public utility franchises or certificates of convenience and necessity are
necessary under New Mexico law with respect to the maintenance and operation of the Company’s
property and business as now conducted in the State of New Mexico and no approval, authorization,
or consent of the New Mexico Public Regulation Commission or any other public board or body of the
State of New Mexico is required for the issuance and sale of the Purchased Securities on the terms
and conditions herein and in the Prospectus set forth or contemplated or for the execution of the
Supplemental Indenture relating to the Purchased Securities, except as may be required under New
Mexico state securities or blue sky laws, as to which laws such counsel shall not be required to
express an opinion.
In giving such opinion, Xxxxxxx & XxXxxx, P.A. may rely to the extent such counsel deems
appropriate upon certificates of the Company as to any factual matters upon which any such opinions
are based and may rely upon the certificates of public officials concerning the legal existence and
good standing of the Company.
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(g) The Underwriters shall have received from Pillsbury Xxxxxxxx Xxxx Xxxxxxx LLP, counsel for
the Underwriters, an opinion or opinions, dated the Closing Date, with respect to such matters as
they may reasonably require and the Company shall have furnished to such counsel such documents as
they request for the purpose of enabling them to pass upon such matters In rendering such opinion,
such counsel may rely as to the incorporation of the Company and all matters governed by the laws
of the States of Arizona and New Mexico upon the opinions of Xxxxx & Xxxxxx L.L.P. and Xxxxxxx &
XxXxxx, P.A., referred to above.
(h) The Underwriters shall have received a certificate of the President or any Vice President
and a principal financial or accounting officer of the Company, dated the Closing Date, in which
such officers, to the best of their knowledge after reasonable investigation, shall state that the
representations and warranties of the Company in this Agreement are true and correct, that the
Company has complied with all agreements and satisfied all conditions on its part to be performed
or satisfied at or prior to such Closing Date, that no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings or examinations for that purpose have
been instituted or are contemplated by the Commission and the Commission has not notified the
Company of any objection to the use of the form of the Registration Statement or any post-effective
amendment thereto, and that, subsequent to the date of the most recent financial statements in the
most recent Preliminary Prospectus, there has been no material adverse change in the financial
position or results of operations of the Company and its subsidiaries, taken as a whole, except as
set forth or contemplated in the Pricing Disclosure Package or as described in such certificate.
(i) The Underwriters shall have received a letter of Deloitte & Touche LLP, dated the Closing
Date, which meets the requirements of subsection (a) of this Section, except that the specified
date referred to in such subsection will be a date not more than five days prior to the Closing
Date for the purposes of this subsection.
The Company will furnish the Underwriters with such conformed copies of such opinions,
certificates, letters, and documents as may be reasonably requested.
7. Indemnification.
(a) The Company will indemnify and hold harmless each Underwriter, its directors and officers
and each person, if any, who controls such Underwriter within the meaning of the Act, against any
losses, claims, damages or liabilities, joint or several, to which such Underwriter or such
controlling person may become subject, under the Act or otherwise, insofar as such losses, claims,
damages, or liabilities (or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the Registration Statement,
any Preliminary Prospectus, the Prospectus, any Issuer Free Writing Prospectus or in any amendment
or supplement thereto, or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the statements therein,
not misleading; and will reimburse each Underwriter and each such controlling person for any legal
or other expenses reasonably incurred by such Underwriter or such controlling person, as incurred,
in connection with investigating or defending any such loss, claim, damage, liability, or action;
provided, however, that the Company will not be liable in any such case to the extent that any such
loss, claim, damage, or
16
liability arises out of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in any of such documents in reliance upon and in conformity with
written information furnished to the Company by any Underwriter through the Representatives
specifically for use therein, which information consists solely of the information specified in
Section 7(b). This indemnity agreement will be in addition to any liability which the Company may
otherwise have.
(b) Each Underwriter will severally indemnify and hold harmless the Company, each of its
directors, each of its officers who have signed the Registration Statement, and each person, if
any, who controls the Company within the meaning of the Act, against any losses, claims, damages,
or liabilities to which the Company or any such director, officer, or controlling person may become
subject, under the Act or otherwise, insofar as such losses, claims, damages, or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement, any Preliminary Prospectus,
the Prospectus, any Issuer Free Writing Prospectus, or any amendment or supplement thereto, or
arise out of or are based upon the omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the Representatives specifically
for use therein; and will reimburse any legal or other expenses reasonably incurred, as incurred,
by the Company or any such director, officer, or controlling person in connection with
investigating or defending any such loss, claim, damage, liability, or action. This indemnity
agreement will be in addition to any liability which such Underwriter may otherwise have. The
Company acknowledges that the statements set forth in the last paragraph of text on the cover page
of the Preliminary Prospectus and the Prospectus and in the fourth paragraph, the third and fourth
sentences of the sixth paragraph, the seventh, eighth, ninth and twelfth paragraphs of text under
the caption “Underwriting” in the Preliminary Prospectus and the Prospectus constitute the only
information furnished in writing by or on behalf of the several Underwriters for inclusion in the
Registration Statement, the Preliminary Prospectus, any Prospectus and any Issuer Free Writing
Prospectus.
(c) Promptly after receipt by an indemnified party under this Section of notice of the
commencement of any action, such indemnified party will, if a claim in respect thereof is to be
made against an indemnifying party under this Section, notify the indemnifying party of the
commencement thereof; but the failure to notify the indemnifying party shall not relieve it from
any liability that it may have under subsection (a) or (b) above except to the extent that it has
been materially prejudiced (including through the forfeiture of substantive rights or defenses) by
such failure; and provided further that the failure to notify the indemnifying party shall not
relieve it from any liability that it may have to an indemnified party otherwise than under
subsection (a) or (b) above. In case any such action is brought against any indemnified party, and
it notifies the indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to
such indemnified party (who shall not, without the consent of the indemnified party, be counsel to
the indemnifying party), and after notice from the indemnifying party to such indemnified party of
its assumption of the defense thereof, the indemnifying party will not be liable to such
17
indemnified party under this Section for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof other than reasonable costs of
investigation. Notwithstanding the indemnifying party’s election to appoint counsel to represent
the indemnified party in an action, the indemnified party shall have the right to employ separate
counsel (including local counsel), and the indemnifying party shall bear the reasonable fees, costs
and expenses of such separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of interest, (ii) the
actual or potential defendants in, or targets of, any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have reasonably concluded that
there may be legal defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the indemnifying party shall
not have employed counsel satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after notice of the institution of such action or (iv) the indemnifying
party shall authorize the indemnified party to employ separate counsel at the expense of the
indemnifying party. It is understood that the indemnifying party shall not, in respect of the
legal expenses of any indemnified party in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in
addition to any local counsel) for all such indemnified parties. Such firm shall be designated in
writing by the Representatives, in the case of parties indemnified pursuant to Section 7(a) above,
and by the Company, in the case of parties indemnified pursuant to Section 7(b) above. An
indemnifying party shall not be liable for any settlement of a claim or action effected without its
written consent, which shall not be unreasonably withheld.
(d) If the indemnification provided for in this Section is unavailable or insufficient to hold
harmless an indemnified party for any loss, claim, damage, liability, or action described in
subsection (a) or (b) above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or liabilities
referred to in subsection (a) or (b) above on the following basis: (i) if such loss, claim, damage,
liability, or action arises under subsection (a) above, then (A) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one hand and the
Underwriters on the other from the offering of the Purchased Securities or (B) if the allocation
provided by clause (A) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (A) above but also the
relative fault of the Company on the one hand and the Underwriters on the other in connection with
the statements or omissions which resulted in such losses, claims, damages or liabilities as well
as any other relevant equitable considerations; and (ii) if such loss, claim, damage, liability, or
action arises under subsection (b) above, then in such proportion as is appropriate to reflect the
relative fault of the Company on the one hand and the Underwriter on the other in connection with
the statements or omissions which resulted in such losses, claims, damages or liabilities as well
as any other relevant equitable considerations. For the purposes of clause (i) above, the relative
benefits received by the Company on the one hand and the Underwriters on the other shall be deemed
to be in the same proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total underwriting discounts and commissions received
by the Underwriters. For the purposes of clauses (i) and (ii) above, the relative fault shall be
determined by reference to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact relates to
18
information supplied by the Company or the Underwriters and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such untrue statement or
omission. The Company and each of the Underwriters agree that it would not be just and equitable
if contribution pursuant to this subsection (d) were determined by pro rata allocation or by any
other method of allocation which does not take account of the equitable considerations referred to
above in this subsection (d). The amount paid by an indemnified party as a result of the losses,
claims, damages or liabilities referred to in the first sentence of this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any action or claim which is the subject of this
subsection (d). Notwithstanding the provisions of this subsection (d), no Underwriter shall be
required to contribute any amount in excess of the amount by which the total price at which the
Purchased Securities underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
The Underwriters’ obligations in this subsection (d) to contribute are several in proportion to
their respective underwriting obligations and not joint.
8. Default of Underwriters; Termination by Underwriters. If any Underwriter or
Underwriters default in their obligations to purchase Purchased Securities pursuant to this
Agreement and the Terms Agreement and the principal amount of Purchased Securities that such
defaulting Underwriter or Underwriters agreed but failed to purchase is ten percent (10%) or less
of the principal amount of Purchased Securities to which such Terms Agreement relates, the
Representatives or, if there are no Representatives, the Underwriters, may make arrangements
satisfactory to the Company for the purchase of such Purchased Securities by other persons,
including any of the Underwriters, but if no such arrangements are made by the Closing Date the
non-defaulting Underwriters shall be obligated severally, in proportion to their respective
commitments hereunder and under such Terms Agreement, to purchase the Purchased Securities that
such defaulting Underwriter or Underwriters agreed but failed to purchase. If any Underwriter or
Underwriters so default and the aggregate principal amount of Purchased Securities with respect to
which such default or defaults occur is more than the above-described amount and arrangements
satisfactory to the remaining Underwriters and the Company for the purchase of such Purchased
Securities by other persons are not made within thirty-six hours after such default, the Terms
Agreement will terminate without liability on the part of any non-defaulting Underwriter or the
Company, except as provided in Section 9. In any such case either the Representatives or the
Company shall have the right to postpone the Closing Date, but in no event for longer than seven
days, in order that the required changes, if any, in the Registration Statement and the Prospectus
or any other documents or arrangement may be effected. As used in this Agreement, the term
“Underwriter” includes any person substituted for an Underwriter under this Section. Nothing
herein will relieve a defaulting Underwriter from liability for its default.
If this Agreement shall be terminated by the Underwriters because of any failure or refusal on
the part of the Company to comply with the terms or to fulfill any of the conditions of this
Agreement, or if for any reason the Company shall be unable to perform its obligations under this
Agreement, the Company shall not be liable to any Underwriter or to any member of
19
any selling group for the loss of anticipated profits from the transactions contemplated by
this Agreement. However, in such an event, the Company will reimburse the Underwriters for all out
of pocket expenses (including reasonable fees and disbursements of their counsel) reasonably
incurred by the Underwriters in connection with this Agreement and the offering contemplated
hereunder; provided, however, that if the Purchased Securities are not delivered by or on behalf of
the Company solely as a result of the failure to satisfy the condition set forth in Section 6(c)
hereof, the Company shall have no liability to the Underwriters except as provided in Sections 4(k)
and 7 of this Agreement.
9. Survival of Certain Representations and Obligations. The respective indemnities,
agreements, representations, warranties, and other statements of the Company or its officers and of
the Underwriters set forth in or made pursuant to this Agreement will remain in full force and
effect regardless of any investigation, or statement as to the results thereof, made by or on
behalf of the Underwriters or the Company or any of its officers or directors or any controlling
person, and will survive delivery of and payment for the Purchased Securities. If any Terms
Agreement is terminated pursuant to Section 8, or if for any reason a purchase pursuant to any
Terms Agreement is not consummated, the Company shall remain responsible for the expenses to be
paid or reimbursed by it pursuant to Section 4 and the respective obligations of the Company and
the Underwriters pursuant to Section 7 shall remain in effect.
10. Notices. All communications hereunder relating to any offering of Purchased
Securities will be in writing, and, if sent to the Underwriters, may be mailed, delivered, or
telecopied and confirmed to the Representatives named in the Terms Agreement relating to such
Purchased Securities at the address furnished to the Company in writing for the purpose of
communications, or, if there are no Representatives, to the Underwriters at their addresses
furnished to the Company in writing for the purpose of communications; provided, however, that any
notice to an Underwriter pursuant to Section 7 will be mailed, delivered, or telecopied and
confirmed to each such Underwriter at its own address. All communications hereunder to the Company
shall be mailed to the Company, Attention: Treasurer, at X.X. Xxx 00000, Xxxxxxx, Xxxxxxx
00000-0000, or delivered, or telecopied and confirmed to the Company at 000 Xxxxx Xxxxx Xxxxxx,
Xxxxxxx, Xxxxxxx 00000; facsimile no. (000) 000-0000.
11. Successors. This Agreement will inure to the benefit of and be binding upon the
parties hereto and the Underwriter or Underwriters as are named in any Terms Agreement and their
respective successors and the officers and directors and controlling persons referred to in Section
7, and no other person will have any right or obligation hereunder.
12. Representation of Underwriters. The Representatives, if any, may act for the
Underwriters in connection with any offering to which a Terms Agreement may relate, and any action
under this Agreement or such Terms Agreement taken by the Representatives jointly or the
Representatives named in such Terms Agreement in such capacity will be binding upon the
Underwriters of Purchased Securities to which such Terms Agreement relates.
13. Execution in Counterpart. This Agreement and any Terms Agreement may be executed
in one or more counterparts, each of which shall be deemed to be an original, but all such
respective counterparts shall together constitute a single instrument.
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14. Applicable Law. This Agreement shall be governed by and construed in accordance
with the internal laws of the State of New York.
15. Headings. The headings of the sections of this Agreement have been inserted for
convenience of reference only and shall not be deemed a part of this Agreement.
16. No Fiduciary Duty. The Company acknowledges and agrees that in connection with
this offering, sale of the Purchased Securities or any other services the Underwriters may be
deemed to be providing hereunder, notwithstanding any pre-existing relationship, advisory or
otherwise, between the parties or any oral representations or assurances previously or subsequently
made by the Underwriters: (i) no fiduciary or agency relationship between the Company and any
other person, on the one hand, and the Underwriters, on the other, exists; (ii) the Underwriters
are not acting as advisors, expert or otherwise, to the Company, including, without limitation,
with respect to the determination of the public offering price of the Purchased Securities, and
such relationship between the Company, on the one hand, and the Underwriters, on the other, is
entirely and solely commercial and is based on arms-length negotiations; (iii) any duties and
obligations that the Underwriters may have to the Company shall be limited to those duties and
obligations specifically stated herein; and (iv) the Underwriters and their respective affiliates
may have interests that differ from those of the Company. The Company hereby waives any claims
that the Company may have against the Underwriters with respect to any breach of fiduciary duty in
connection with this offering.
21
If the foregoing is in accordance with your understanding of our agreement, kindly sign and
return to us the enclosed duplicate hereof, whereupon it will become a binding agreement between
the Company and the Underwriters in accordance with its terms.
Very truly yours, | ||||||
ARIZONA PUBLIC SERVICE COMPANY | ||||||
By: | /s/ Xxxxxxx X. Xxxxx | |||||
Title: Vice President and Treasurer |
The foregoing Underwriting Agreement is hereby confirmed and accepted as of the date first above
written.
CITIGROUP GLOBAL MARKETS INC. | ||||
By: |
/s/ Xxxxx X. Xxxxxxxxx | |||
Title: Director | ||||
X.X. XXXXXX SECURITIES INC. | ||||
By: |
/s/ Xxxxxx Xxxxxxxxx | |||
Name: Xxxxxx Xxxxxxxxx | ||||
Title: Vice President |
On their own behalf and, if applicable, as Representatives of the Underwriters named in a Terms
Agreement.
22
Schedule 2(a)(v)
Free Writing Prospectuses Included in the Pricing Disclosure Package
• Final Pricing Term Sheet related to the Purchased Securities dated July 31, 2006
Schedule 2(i)
Issuer Free Writing Prospectuses Used by the Issuer on or Prior to the Date of the
Underwriting Agreement
Underwriting Agreement
• Final Pricing Term Sheet related to the Purchased Securities dated July 31, 2006
EXHIBIT A
TERMS AGREEMENT
July 31, 2006
Attention: Treasurer
Ladies and Gentlemen:
Arizona Public Service Company (the “Company”) hereby agrees to sell to the several
Underwriters (the “Underwriters”) named on Schedule I hereto and listed in the Prospectus
$250,000,000 in aggregate principal amount of its 6.250% Notes due 2016 (the “notes due 2016”) and
$150,000,000 in aggregate principal amount of its 6.875% Notes due 2036 (the “notes due 2036” and,
together with the, notes due 2016, the “Purchased Securities”), and the Underwriters hereby agree
to purchase, severally and not jointly, the principal amount of the Purchased Securities set forth
opposite such Underwriter’s name in Schedule I hereto in the principal amount and at the prices set
forth therein. The sale of the Purchased Securities by the Company and the purchase thereof by the
Underwriters shall be made on the basis of the representations, warranties, and agreements
contained in the Underwriting Agreement (the “Underwriting Agreement”), dated July 31, 2006,
relating to the issuance and sale of the Purchased Securities under the Company’s Indenture, and
shall be subject to the terms and conditions set forth in such Underwriting Agreement. The
provisions of the Underwriting Agreement are incorporated herein by reference. Certain terms of
the Purchased Securities and details of the material terms of the offering are described in the
form of term sheet attached hereto, which forms part of the Pricing Disclosure Package.
For all purposes of the Underwriting Agreement, “Applicable Time” means 3:30 p.m.
(New York City time) on the date of this Terms Agreement.
On August 3, 2006 the Company will deliver the Purchased Securities to the Underwriters in
book-entry form through the facilities of The Depository Trust Company at the office of the
Company, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxx 00000, against payment of the purchase price by
transfer of funds by Fed Wire from the Underwriters to the Company’s account at a bank in Phoenix,
Arizona designated by the Company. Closing shall occur at the office of the Company, 000 Xxxxx
Xxxxx Xxxxxx, Xxxxxxx, Arizona, at 7:00 a.m. Phoenix time, on August 3, 2006, or at such other time
and date as the Underwriters and the Company may agree upon in writing, such time and date being
referred to as the “Closing Date.” All of the Purchased Securities referred to in this paragraph
shall be in global form and registered in the name of Cede & Co. and deposited with The Depository
Trust Company, as depositary.
All notices hereunder or under the Underwriting Agreement relating to the offering of
Purchased Securities will be in writing, and, if sent to the Underwriters, may be mailed,
delivered, or telecopied and confirmed to the Representatives at the following addresses: 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: General Counsel Department (fax:
000-000-0000), in the case of Citigroup Global Markets Inc., and 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: High Grade Syndicate Desk – 8th Floor (fax: 000-000-0000), in the case of
X.X. Xxxxxx Securities Inc.; provided, however, that any notice to an Underwriter pursuant to
Section 7 of the Underwriting Agreement will be mailed, delivered, or telecopied and confirmed to
each Underwriter at their addresses furnished to the Company in writing for the purpose of
communications.
26
If the foregoing is acceptable to you, please sign below and transmit evidence of such signing
to Citigroup Global Markets Inc. and X.X. Xxxxxx Securities Inc., the Representatives, at your
earliest convenience. At that point, the agreement signified hereby will constitute the Terms
Agreement, as described in the Underwriting Agreement.
All capitalized terms herein, not otherwise defined herein, are used as defined in the
Underwriting Agreement. This agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original, but all of such respective counterparts shall together
constitute a single instrument.
Very truly yours, | ||||||
CITIGROUP GLOBAL MARKETS INC. | ||||||
By: | ||||||
Title: | ||||||
X.X. XXXXXX SECURITIES INC. | ||||||
By: | ||||||
Name: | ||||||
Title: | ||||||
As Representatives of the Several Underwriters. |
Confirmed and accepted as
of the date first above written.
of the date first above written.
ARIZONA PUBLIC SERVICE COMPANY | ||||
By: |
||||
Name: Xxxxxxx X. Xxxxx | ||||
Title: Vice President and Treasurer |
27
SCHEDULE I
Principal | Purchase | Principal | Purchase | |||||||||||||
Amount of | Price for | Amount of | Price for | |||||||||||||
Notes due | Notes due | Notes due | Notes due | |||||||||||||
Underwriter | 2016 | 2016* | 2036 | 2036** | ||||||||||||
Citigroup Global Markets Inc. |
$ | 75,000,000 | $ | 74,106,000 | $ | 45,000,000 | $ | 44,538,300 | ||||||||
X.X. Xxxxxx Securities Inc. |
$ | 75,000,000 | $ | 74,106,000 | $ | 45,000,000 | $ | 44,538,300 | ||||||||
Barclays Capital Inc. |
$ | 20,000,000 | $ | 19,761,600 | $ | 12,000,000 | $ | 11,876,880 | ||||||||
Credit Suisse Securities
(USA) LLC |
$ | 20,000,000 | $ | 19,761,600 | $ | 12,000,000 | $ | 11,876,880 | ||||||||
McDonald Investments Inc. |
$ | 20,000,000 | $ | 19,761,600 | $ | 12,000,000 | $ | 11,876,880 | ||||||||
Xxxxxx Brothers Inc. |
$ | 20,000,000 | $ | 19,761,600 | $ | 12,000,000 | $ | 11,876,880 | ||||||||
Xxxxx Fargo Securities, LLC |
$ | 20,000,000 | $ | 19,761,600 | $ | 12,000,000 | $ | 11,876,880 | ||||||||
Total |
$ | 250,000,000 | $ | 247,020,000 | $ | 150,000,000 | $ | 148,461,000 |
* | Reflecting a purchase price of 98.808% of the principal amount of the notes due 2016. | |
** | Reflecting a purchase price of 98.974% of the principal amount of the notes due 2036. |
Form of Term Sheet
Filed Pursuant to Rule 433
Registration No. 333-134206
July 31, 2006
Registration No. 333-134206
July 31, 2006
PRICING TERM SHEETS | ||||
6.250% Notes due 2016 | ||||
Issuer:
|
Arizona Public Service Company | |||
Security:
|
6.250% Notes due 2016 | |||
Size:
|
$ 250,000,000 | |||
Maturity Date:
|
August 1, 2016 | |||
Coupon:
|
6.250% | |||
Interest Payment Dates:
|
February 1 and August 1, commencing February 1, 2007 | |||
Price to Public:
|
99.458 % | |||
Spread to Benchmark Treasury:
|
+133 bp | |||
Benchmark Treasury:
|
5.125% due May 15, 2016 | |||
Benchmark Treasury Yield:
|
4.994% | |||
Make-Whole Call:
|
T+25 bp | |||
Expected Settlement Date:
|
August 3, 2006 | |||
CUSIP:
|
040555 CJ 1 | |||
Anticipated Ratings:
|
Baa2 (Outlook Negative) by Xxxxx’x Investors Service, Inc. | |||
BBB- (Outlook Stable) by Standard & Poor’s Ratings Services | ||||
Joint Book-Running Managers:
|
Citigroup Global Markets Inc. | |||
X.X. Xxxxxx Securities Inc. | ||||
Co-Managers:
|
Barclays Capital Inc. | |||
Credit Suisse Securities (USA) LLC | ||||
KeyBanc Capital Markets, a division of McDonald Investments, Inc. | ||||
Xxxxxx Brothers Inc. | ||||
Xxxxx Fargo Securities, LLC | ||||
6.875% Notes due 2036 | ||||
Issuer:
|
Arizona Public Service Company | |||
Security:
|
6.875% Notes due 2036 | |||
Size:
|
$ 150,000,000 | |||
Maturity Date:
|
August 1, 2036 | |||
Coupon:
|
6.875% | |||
Interest Payment Dates:
|
February 1 and August 1, commencing February 1, 2007 | |||
Price to Public:
|
99.849 % | |||
Spread to Benchmark Treasury:
|
+175 bp | |||
Benchmark Treasury:
|
5.375% due February 15, 2031 | |||
Benchmark Treasury Yield:
|
5.137% |
Make-Whole Call:
|
T+30 bp | |||
Expected Settlement Date:
|
August 3, 2006 | |||
CUSIP:
|
040555 CK 8 | |||
Anticipated Ratings:
|
Baa2 (Outlook Negative) by Xxxxx’x Investors Service, Inc. | |||
BBB- (Outlook Stable) by Standard & Poor’s Ratings Services | ||||
Joint Book-Running Managers:
|
Citigroup Global Markets Inc. | |||
X.X. Xxxxxx Securities Inc. | ||||
Co-Managers:
|
Barclays Capital Inc. | |||
Credit Suisse Securities (USA) LLC | ||||
KeyBanc Capital Markets, a division of McDonald Investments, Inc. | ||||
Xxxxxx Brothers Inc. | ||||
Xxxxx Fargo Securities, LLC |
Note: A securities rating is not a recommendation to buy, sell or hold securities and may be
subject to revision or withdrawal at any time.
The issuer has filed a registration statement (including a prospectus) with the SEC for the
offering to which this communication relates. Before you invest, you should read the prospectus in
that registration statement and other documents the issuer has filed with the SEC for more complete
information about the issuer and this offering.
You may get these documents for free by visiting XXXXX on the SEC Web site at xxx.xxx.xxx.
Alternatively, the issuer, any underwriter or any dealer participating in the offering will arrange
to send you the prospectus if you request it by calling Citigroup Global Markets Inc. toll free at
1-877-858-5407 or X.X. Xxxxxx Securities Inc. collect at (000) 000-0000.
30
TERMS AGREEMENT
July 31, 2006
Attention: Treasurer
Ladies and Gentlemen:
Arizona Public Service Company (the “Company”) hereby agrees to sell to the several
Underwriters (the “Underwriters”) named on Schedule I hereto and listed in the Prospectus
$250,000,000 in aggregate principal amount of its 6.250% Notes due 2016 (the “notes due 2016”) and
$150,000,000 in aggregate principal amount of its 6.875% Notes due 2036 (the “notes due 2036” and,
together with the, notes due 2016, the “Purchased Securities”), and the Underwriters hereby agree
to purchase, severally and not jointly, the principal amount of the Purchased Securities set forth
opposite such Underwriter’s name in Schedule I hereto in the principal amount and at the prices set
forth therein. The sale of the Purchased Securities by the Company and the purchase thereof by the
Underwriters shall be made on the basis of the representations, warranties, and agreements
contained in the Underwriting Agreement (the “Underwriting Agreement”), dated July 31, 2006,
relating to the issuance and sale of the Purchased Securities under the Company’s Indenture, and
shall be subject to the terms and conditions set forth in such Underwriting Agreement. The
provisions of the Underwriting Agreement are incorporated herein by reference. Certain terms of
the Purchased Securities and details of the material terms of the offering are described in the
form of term sheet attached hereto, which forms part of the Pricing Disclosure Package.
For all purposes of the Underwriting Agreement, “Applicable Time” means 3:30 p.m.
(New York City time) on the date of this Terms Agreement.
On August 3, 2006 the Company will deliver the Purchased Securities to the Underwriters in
book-entry form through the facilities of The Depository Trust Company at the office of the
Company, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxx 00000, against payment of the purchase price by
transfer of funds by Fed Wire from the Underwriters to the Company’s account at a bank in Phoenix,
Arizona designated by the Company. Closing shall occur at the office of the Company, 000 Xxxxx
Xxxxx Xxxxxx, Xxxxxxx, Arizona, at 7:00 a.m. Phoenix time, on August 3, 2006, or at such other time
and date as the Underwriters and the Company may agree upon in writing, such time and date being
referred to as the “Closing Date.” All of the Purchased Securities referred to in this paragraph
shall be in global form and registered in the name of Cede & Co. and deposited with The Depository
Trust Company, as depositary.
All notices hereunder or under the Underwriting Agreement relating to the offering of
Purchased Securities will be in writing, and, if sent to the Underwriters, may be mailed,
delivered, or telecopied and confirmed to the Representatives at the following addresses: 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: General Counsel Department (fax:
000-000-0000), in the case of Citigroup Global Markets Inc., and 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: High Grade Syndicate Desk – 8th Floor (fax: 000-000-0000), in the case of
X.X. Xxxxxx Securities Inc.; provided, however, that any notice to an Underwriter pursuant to
Section 7 of the Underwriting Agreement will be mailed, delivered, or telecopied and confirmed to
each Underwriter at their addresses furnished to the Company in writing for the purpose of
communications.
2
If the foregoing is acceptable to you, please sign below and transmit evidence of such signing
to Citigroup Global Markets Inc. and X.X. Xxxxxx Securities Inc., the Representatives, at your
earliest convenience. At that point, the agreement signified hereby will constitute the Terms
Agreement, as described in the Underwriting Agreement.
All capitalized terms herein, not otherwise defined herein, are used as defined in the
Underwriting Agreement. This agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original, but all of such respective counterparts shall together
constitute a single instrument.
Very truly yours, | ||||||
CITIGROUP GLOBAL MARKETS INC. | ||||||
By: | /s/ Xxxxx X. Xxxxxxxxx | |||||
Title: Director | ||||||
X.X. XXXXXX SECURITIES INC. | ||||||
By: | /s/ Xxxxxx Xxxxxxxxx | |||||
Name: Xxxxxx Xxxxxxxxx | ||||||
Title: Vice President | ||||||
As Representatives of the Several Underwriters. |
Confirmed and accepted as
of the date first above written.
of the date first above written.
ARIZONA PUBLIC SERVICE COMPANY | ||||
By: |
/s/ Xxxxxxx X. Xxxxx | |||
Name: Xxxxxxx X. Xxxxx | ||||
Title: Vice President and Treasurer |
SCHEDULE I
Principal | Purchase | Principal | Purchase | |||||||||||||
Amount of | Price for | Amount of | Price for | |||||||||||||
Notes due | Notes due | Notes due | Notes due | |||||||||||||
Underwriter | 2016 | 2016* | 2036 | 2036** | ||||||||||||
Citigroup Global Markets Inc. |
$ | 75,000,000 | $ | 74,106,000 | $ | 45,000,000 | $ | 44,538,300 | ||||||||
X.X. Xxxxxx Securities Inc. |
$ | 75,000,000 | $ | 74,106,000 | $ | 45,000,000 | $ | 44,538,300 | ||||||||
Barclays Capital Inc. |
$ | 20,000,000 | $ | 19,761,600 | $ | 12,000,000 | $ | 11,876,880 | ||||||||
Credit Suisse Securities
(USA) LLC |
$ | 20,000,000 | $ | 19,761,600 | $ | 12,000,000 | $ | 11,876,880 | ||||||||
McDonald Investments Inc. |
$ | 20,000,000 | $ | 19,761,600 | $ | 12,000,000 | $ | 11,876,880 | ||||||||
Xxxxxx Brothers Inc. |
$ | 20,000,000 | $ | 19,761,600 | $ | 12,000,000 | $ | 11,876,880 | ||||||||
Xxxxx Fargo Securities, LLC |
$ | 20,000,000 | $ | 19,761,600 | $ | 12,000,000 | $ | 11,876,880 | ||||||||
Total |
$ | 250,000,000 | $ | 247,020,000 | $ | 150,000,000 | $ | 148,461,000 |
* | Reflecting a purchase price of 98.808% of the principal amount of the notes due 2016. | |
** | Reflecting a purchase price of 98.974% of the principal amount of the notes due 2036. |
Form of Term Sheet
Filed Pursuant to Rule 433
Registration No. 333-134206
July 31, 2006
Registration No. 333-134206
July 31, 2006
PRICING TERM SHEETS | ||||
6.250% Notes due 2016 | ||||
Issuer:
|
Arizona Public Service Company | |||
Security:
|
6.250% Notes due 2016 | |||
Size:
|
$ 250,000,000 | |||
Maturity Date:
|
August 1, 2016 | |||
Coupon:
|
6.250% | |||
Interest Payment Dates:
|
February 1 and August 1, commencing February 1, 2007 | |||
Price to Public:
|
99.458 % | |||
Spread to Benchmark Treasury:
|
+133 bp | |||
Benchmark Treasury:
|
5.125% due May 15, 2016 | |||
Benchmark Treasury Yield:
|
4.994% | |||
Make-Whole Call:
|
T+25 bp | |||
Expected Settlement Date:
|
August 3, 2006 | |||
CUSIP:
|
040555 CJ 1 | |||
Anticipated Ratings:
|
Baa2 (Outlook Negative) by Xxxxx’x Investors Service, Inc. | |||
BBB- (Outlook Stable) by Standard & Poor’s Ratings Services | ||||
Joint Book-Running Managers:
|
Citigroup Global Markets Inc. | |||
X.X. Xxxxxx Securities Inc. | ||||
Co-Managers:
|
Barclays Capital Inc. | |||
Credit Suisse Securities (USA) LLC | ||||
KeyBanc Capital Markets, a division of McDonald Investments, Inc. | ||||
Xxxxxx Brothers Inc. | ||||
Xxxxx Fargo Securities, LLC | ||||
6.875% Notes due 2036 | ||||
Issuer:
|
Arizona Public Service Company | |||
Security:
|
6.875% Notes due 2036 | |||
Size:
|
$ 150,000,000 | |||
Maturity Date:
|
August 1, 2036 | |||
Coupon:
|
6.875% | |||
Interest Payment Dates:
|
February 1 and August 1, commencing February 1, 2007 | |||
Price to Public:
|
99.849 % | |||
Spread to Benchmark Treasury:
|
+175 bp | |||
Benchmark Treasury:
|
5.375% due February 15, 2031 | |||
Benchmark Treasury Yield:
|
5.137% |
Make-Whole Call:
|
T+30 bp | |||
Expected Settlement Date:
|
August 3, 2006 | |||
CUSIP:
|
040555 CK 8 | |||
Anticipated Ratings:
|
Baa2 (Outlook Negative) by Xxxxx’x Investors Service, Inc. | |||
BBB- (Outlook Stable) by Standard & Poor’s Ratings Services | ||||
Joint Book-Running Managers:
|
Citigroup Global Markets Inc. | |||
X.X. Xxxxxx Securities Inc. | ||||
Co-Managers:
|
Barclays Capital Inc. | |||
Credit Suisse Securities (USA) LLC | ||||
KeyBanc Capital Markets, a division of McDonald Investments, Inc. | ||||
Xxxxxx Brothers Inc. | ||||
Xxxxx Fargo Securities, LLC |
Note: A securities rating is not a recommendation to buy, sell or hold securities and may be
subject to revision or withdrawal at any time.
The issuer has filed a registration statement (including a prospectus) with the SEC for the
offering to which this communication relates. Before you invest, you should read the prospectus in
that registration statement and other documents the issuer has filed with the SEC for more complete
information about the issuer and this offering.
You may get these documents for free by visiting XXXXX on the SEC Web site at xxx.xxx.xxx.
Alternatively, the issuer, any underwriter or any dealer participating in the offering will arrange
to send you the prospectus if you request it by calling Citigroup Global Markets Inc. toll free at
1-877-858-5407 or X.X. Xxxxxx Securities Inc. collect at (000) 000-0000.