|
Filed
pursuant to Rule 424(b)(2). Based upon the registration of
$350,000,000 aggregate principal amount of FPL Group Capital
Inc’s Series
E Junior Subordinated Debentures due 2067 to be offered by means
of this
prospectus supplement and the accompanying prospectus under Registration
Statement Nos. 333‑137120, 333‑137120‑01, 333‑137120‑02, 333‑137120‑03,
333‑137120‑04, 333‑137120‑05, 333‑137120‑06, 333‑137120‑07 and
333‑137120‑08 (“Registration Statement No. 333‑137120”), a filing fee of
$10,745 has been calculated in accordance with Rule
457(r). This filing fee will be offset against the $440,356
aggregate registration fee previously paid. No additional
registration fee has been paid with respect to this
offering. In accordance with Rules 456(b) and 457(r), the
registrants will have $372,206 remaining available for future
registration
fees, being the sum of (a) $17,446 from the $123,046 that has
already been
paid with respect to $1,337,450,000 aggregate amount of securities
that
were previously registered pursuant to Registration Statement
Nos. 333‑102173, 333‑102173‑01, 333‑102173‑02 and 333‑102173‑03,
which registration statement was filed with the Securities and
Exchange
Commission on December 23, 2002, and were not issued or sold
thereunder
and (b) $354,760 from the $354,760 that has already been paid
with respect
to $2,800,000,000 aggregate amount of securities that were previously
registered pursuant to Registration Statement Nos. 333‑116209,
333‑116209‑01,
333‑116209‑02,
333‑116209‑03,
333‑116209‑04
and 333‑116209‑05,
which registration
statement was filed with the Securities and Exchange Commission
on June 4,
2004, and were not issued or sold thereunder. This paragraph
shall be deemed to update the “Calculation of Registration Fee” table in
Registration Statement
No. 333‑137120.
|
(To
prospectus dated May 3, 2007)
$350,000,000
Series E
Junior Subordinated Debentures due 2067
The
Series E Junior Subordinated Debentures will
be
Fully and Unconditionally Guaranteed by
FPL
GROUP, INC.
________________
The
Series E Junior Subordinated Debentures will bear interest at 7.45%
per year. FPL Group Capital will pay interest on the securities on
March 1, June 1, September 1 and December 1 of each year, beginning December
1,
2007. The securities will be issued in registered form and in
denominations of $25 and integral multiples thereof. The securities
will mature on September 1, 2067.
FPL
Group
Capital may defer interest payments on the securities on one or more occasions
for up to 10 consecutive years as described in this prospectus
supplement. Deferred interest payments will accrue additional
interest at a rate equal to the interest rate on the securities, to the extent
permitted by applicable law.
FPL
Group
Capital may redeem the securities at its option at the times and the prices
described in this prospectus supplement.
FPL
Group
Capital intends to apply to list the securities on the New York Stock
Exchange. Trading on the New York Stock Exchange is expected to
commence within 30 days after the securities are first issued.
See
“Risk Factors” beginning on page S-9 to read about certain factors you should
consider before making an investment in the securities.
________________
Neither
the Securities and Exchange Commission nor any state securities commission
has
approved or disapproved of the securities or determined if this prospectus
supplement or the accompanying prospectus is truthful or
complete. Any representation to the contrary is a criminal
offense.
________________
|
Per
Junior
Subordinated
Debenture
|
Total
|
|||||||
|
Price
to Public (1)
|
$ |
25.00
|
$ |
350,000,000
|
||||
|
Underwriting
Discount (2)
|
$ |
0.7875
|
$ |
11,025,000
|
||||
|
Proceeds
to FPL Group Capital (before expenses) (2)
|
$ |
24.2125
|
$ |
338,975,000
|
||||
(1) Plus
accrued interest, if any, from the date the securities are originally issued,
if
settlement occurs after that date.
(2) Underwriting
commissions of $0.7875 per security (or up to $11,025,000 for all securities)
will be deducted from the proceeds paid to FPL Group Capital by the
underwriters. However, the commission will be $0.50 per security for
sales to institutions and, to the extent of such sales, the total underwriting
discount will be less than the amount set forth herein. As
a
result of sales to institutions, the total proceeds to FPL Group Capital
increased by $236,900. Other expenses of the offering will be paid
by FPL Group Capital except as discussed under “Underwriting” in this prospectus
supplement.
The
securities are expected to be delivered in book-entry only form through The
Depository Trust Company for the accounts of its participants, including
Euroclear and Clearstream, Luxembourg, on or about September 18,
2007.
________________
Wachovia
Capital Markets, LLC acted as structuring advisor for this
transaction.
Joint
Book-Running Managers
|
Citi
|
Merrill
Lynch & Co.
|
Morgan
Stanley
|
|||
|
UBS
Investment Bank
|
Wachovia
Securities
|
||||
|
Junior
Co-Managers
|
||
|
A.G.
Edwards
|
Banc
of America Securities LLC
|
Lehman
Brothers
|
|
Raymond
James
|
RBC
Capital
Markets
|
||||
________________
The
date
of this prospectus supplement is September 11, 2007.
The
accompanying prospectus is part of a registration statement filed with the
Securities and Exchange Commission. You should rely only on the
information incorporated by reference or provided in this prospectus supplement
and in the accompanying prospectus and in any written communication from
FPL
Group Capital, FPL Group or the underwriters specifying the final terms of
the
offering. None of FPL Group Capital, FPL Group or the underwriters
has authorized anyone else to provide you with additional or different
information. None of FPL Group Capital, FPL Group or the underwriters
is making an offer of these securities in any jurisdiction where the offer
is
not permitted. You should not assume that the information in this
prospectus supplement or in the accompanying prospectus is accurate as of
any
date other than the date on the front of those documents or that the information
incorporated by reference is accurate as of any date other than the date
of the
document incorporated by reference.
_________________________
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You
should read the following summary in conjunction with the more detailed
information incorporated by reference or provided in this prospectus supplement
or in the accompanying prospectus. This prospectus supplement and the
accompanying prospectus contain forward-looking statements (as that term
is
defined in the Private Securities Litigation Reform Act of
1995). Forward-looking statements should be read with the cautionary
statements in the accompanying prospectus under the heading “Forward-Looking
Statements” and the important factors discussed in this prospectus supplement
and in the incorporated documents. To the extent the following
information is inconsistent with the information in the accompanying prospectus,
you should rely on the following information. You should pay special
attention to the “Risk Factors” section beginning on page S-9 of this prospectus
supplement to determine whether an investment in these securities is appropriate
for you.
FPL
GROUP CAPITAL AND FPL GROUP
FPL
Group Capital
FPL
Group
Capital was incorporated in 1985 as a Florida corporation and is a wholly-owned
subsidiary of FPL Group. FPL Group Capital holds the capital stock or
other ownership interests of, and provides funding for, FPL Group’s operating
subsidiaries other than Florida Power & Light Company. These
operating subsidiaries’ business activities primarily consist of FPL Energy,
LLC’s competitive energy business.
FPL
Group
FPL
Group
is a holding company incorporated in 1984 as a Florida
corporation. FPL Group’s principal subsidiary, Florida Power &
Light Company, is a rate-regulated utility engaged primarily in the generation,
transmission, distribution and sale of electric energy. Other
operations are conducted through FPL Group Capital.
Both
FPL
Group Capital’s and FPL Group’s principal executive offices are located at 700
Universe Boulevard, Juno Beach, Florida 33408, telephone number (561) 694-4000,
and their mailing address is P.O. Box 14000, Juno Beach, Florida
33408-0420.
SUMMARY—Q&A
What
securities are being offered pursuant to this prospectus
supplement?
FPL
Group
Capital is offering $350,000,000 aggregate principal amount of its Series E
Junior Subordinated Debentures due 2067, which will be referred to as the
“Junior Subordinated Debentures” in this prospectus supplement. FPL
Group Capital’s corporate parent, FPL Group, has agreed to fully and
unconditionally guarantee the payment of principal, interest and premium,
if
any, on the Junior Subordinated Debentures. The Junior Subordinated
Debentures will be issued in denominations of $25 and integral multiples
thereof.
What
interest will be paid by FPL Group Capital?
The Junior
Subordinated Debentures will bear interest at 7.45% per year. Subject
to FPL Group Capital’s right to defer interest payments as described below,
interest is payable quarterly in arrears on March 1, June 1, September 1
and
December 1 of each year, beginning December 1, 2007.
For
a
more complete description of interest payable on the Junior Subordinated
Debentures, see “Specific Terms of the Junior Subordinated Debentures—Interest
and Maturity.”
What
are the record dates for the payment of interest?
So
long
as all of the Junior Subordinated Debentures remain in book-entry only form,
the
record date for each interest payment date will be the close of business
on the
business day (as defined below under “Specific Terms of the Junior Subordinated
Debentures—Interest and Maturity”) immediately preceding the applicable interest
payment date. If any of the Junior Subordinated Debentures do not
remain in book-entry only form, the record date for each interest payment
date
will be the close of business on the fifteenth calendar day immediately
preceding the applicable interest payment date.
When
can payment of interest be deferred?
So
long
as there is no event of default under the subordinated indenture pursuant
to
which the Junior Subordinated Debentures will be issued, FPL Group Capital
may
defer interest payments on the Junior Subordinated Debentures, from time
to
time, for one or more periods (each, an “Optional Deferral Period”) of up to
10 consecutive years per Optional Deferral Period. In other
words, FPL Group Capital may declare at its discretion up to a 10-year interest
payment moratorium on the Junior Subordinated Debentures, and may choose
to do
that on more than one occasion. FPL Group Capital may not defer
payments beyond the maturity date of the Junior Subordinated Debentures (which
is September 1, 2067). Any deferred interest on the Junior
Subordinated Debentures will accrue additional interest at a rate equal to
the
interest rate on the Junior Subordinated Debentures, to the extent permitted
by
applicable law. Once all accrued and unpaid interest on the Junior
Subordinated Debentures has been paid, FPL Group Capital can begin a new
Optional Deferral Period. However, FPL Group Capital has no current
intention of deferring interest payments on the Junior Subordinated
Debentures.
For
a
more complete description of FPL Group Capital’s ability to defer the payment of
interest, see “Specific Terms of the Junior Subordinated Debentures—Option to
Defer Interest Payments” and “Specific Terms of the Junior Subordinated
Debentures—Modification of the Subordinated Indenture” in this prospectus
supplement and “Description of the FPL Group and FPL Group Capital Junior
Subordinated Debentures and the FPL Group Subordinated Guarantee—Option to Defer
Interest Payments” in the accompanying prospectus.
What
restrictions are imposed on FPL Group Capital and FPL Group during an Optional
Deferral Period?
During
any period in which FPL Group Capital defers interest payments on the Junior
Subordinated Debentures, neither FPL Group nor FPL Group Capital will, and
each
will cause their majority-owned subsidiaries not to, do any of the following
(with limited exceptions):
|
|
·
|
declare
or pay any dividend or distribution on FPL Group’s or FPL Group Capital’s
capital stock;
|
|
|
·
|
redeem,
purchase, acquire or make a liquidation payment with respect to
any of FPL
Group’s or FPL Group Capital’s capital
stock;
|
|
|
·
|
pay
any principal, interest or premium on, or repay, repurchase or
redeem any
of FPL Group’s or FPL Group Capital’s debt securities that are equal or
junior in right of payment with the Junior Subordinated Debentures
or FPL
Group’s guarantee (the “Subordinated Guarantee”) of FPL Group Capital’s
payment obligations under the Junior Subordinated Debentures (as
the case
may be); or
|
|
|
·
|
make
any payments with respect to any FPL Group or FPL Group Capital
guarantee
of debt securities if such guarantee is equal or junior in right
of
payment to the Junior Subordinated Debentures or the Subordinated
Guarantee (as the case may be).
|
See
“Specific Terms of the Junior Subordinated Debentures—Option to Defer Interest
Payments” and “Specific Terms of the Junior Subordinated Debentures—Modification
of the Subordinated Indenture” (which describes the right of FPL Group and FPL
Group Capital to modify the restrictions described above) in this prospectus
supplement and “Description of the FPL Group and FPL Group Capital Junior
Subordinated Debentures and the FPL Group Subordinated Guarantee—Option to Defer
Interest Payments” (which includes a description of the limited exceptions to
the restrictions described above) in the accompanying prospectus.
Even
though you will not receive any interest payments on your Junior Subordinated
Debentures during an Optional Deferral Period, you will be required to accrue
interest income and include original issue discount in your gross income
for
United States federal income tax purposes on an economic accrual basis, even
if
you are a cash basis taxpayer. You should consult with your own tax
advisor regarding the tax consequences of an investment in the Junior
Subordinated Debentures. See “Material United States Federal Income
Tax Consequences—U.S. Holders—Interest” in this prospectus
supplement.
If
FPL
Group Capital defers interest for a period of 10 consecutive years from the
commencement of an Optional Deferral Period, FPL Group Capital will be required
to pay all accrued and unpaid interest at the conclusion of the 10-year period,
and to the extent it does not do so, FPL Group will be required to make
guarantee payments in accordance with the Subordinated Guarantee with respect
thereto. If FPL Group Capital fails to pay in full all accrued and
unpaid interest at the conclusion of the 10-year period, such failure continues
for 30 days and FPL Group fails to make guarantee payments with respect thereto,
an event of default that gives rise to acceleration of principal and interest
on
the Junior Subordinated Debentures will occur under the subordinated indenture
pursuant to which the Junior Subordinated Debentures will be
issued. See “Description of the FPL Group and FPL Group Capital
Junior Subordinated Debentures and the FPL Group Subordinated Guarantee—Events
of Default” and “Description of the FPL Group and FPL Group Capital Junior
Subordinated Debentures and the FPL Group Subordinated Guarantee—Remedies” in
the accompanying prospectus.
When
can FPL Group Capital redeem the Junior Subordinated
Debentures?
FPL
Group
Capital may redeem the Junior Subordinated Debentures at its option before
their
maturity:
|
|
·
|
in
whole or in part on one or more occasions before September 1, 2012
at 100%
of their principal amount plus accrued and unpaid interest plus
any
applicable “make-whole premium,”
|
|
|
·
|
in
whole or in part on one or more occasions on or after September
1, 2012 at
100% of their principal amount plus accrued and unpaid
interest,
|
|
|
·
|
in
whole, but not in part, before September 1, 2012 at 100% of their
principal amount plus accrued and unpaid interest, if certain changes
in
tax laws, regulations or interpretations occur,
or
|
|
|
·
|
in
whole or in part on one or more occasions before September 1, 2012
at 100%
of their principal amount plus accrued and unpaid interest plus
any
applicable “rating agency event make-whole premium,” if a rating agency
makes certain changes in the equity credit criteria for securities
such as
the Junior Subordinated Debentures.
|
The
circumstances under which the Junior Subordinated Debentures may be redeemed,
and the redemption prices, are more fully described below under the captions
“Specific Terms of the Junior Subordinated Debentures—Redemption,” “Specific
Terms of the Junior Subordinated Debentures—Right to Redeem Upon a Tax Event”
and “Specific Terms of the Junior Subordinated Debentures—Right to Redeem Upon a
Rating Agency Event” in this prospectus supplement.
What
is the Replacement Capital Covenant?
Around
the time of the initial issuance of the Junior Subordinated Debentures, FPL
Group Capital and FPL Group will enter into a Replacement Capital Covenant,
as
described below under “Certain Terms of the Replacement Capital Covenant,” in
which FPL Group Capital and FPL Group will covenant for the benefit of holders
of a designated series of FPL Group Capital’s unsecured long-term indebtedness,
other than the Junior Subordinated Debentures, or in certain limited cases
a
designated series of unsecured long-term indebtedness of FPL Group,
that
|
|
·
|
FPL
Group Capital will not redeem or purchase, or satisfy, discharge
or
defease (collectively, “defease”) the Junior Subordinated
Debentures,
|
|
|
·
|
FPL
Group will not purchase the Junior Subordinated Debentures,
and
|
|
|
·
|
FPL
Group and FPL Group Capital will cause their majority-owned subsidiaries
not to purchase the Junior Subordinated
Debentures
|
in
each
case on or before September 1, 2037, unless, subject to certain limitations,
a
specified amount shall have been raised from the issuance, during the 180
days
prior to the date of that redemption, purchase or defeasance, of qualifying
securities that have equity-like characteristics that are the same as, or
more
equity-like than, the applicable characteristics of the Junior Subordinated
Debentures at the time of redemption, purchase or defeasance. See
“Certain Terms of the Replacement Capital Covenant” below.
The
Replacement Capital Covenant is not intended for the benefit of holders of
the
Junior Subordinated Debentures and may not be enforced by them, and the
Replacement Capital Covenant is not a term of the subordinated indenture
pursuant to which the Junior Subordinated Debentures will be issued, the
Subordinated Guarantee or the Junior Subordinated Debentures.
What
is the ranking of the Junior Subordinated Debentures and the Subordinated
Guarantee?
FPL
Group
Capital’s payment obligation under the Junior Subordinated Debentures will be
unsecured and will rank junior and be subordinated in right of payment and
upon
liquidation to all of FPL Group Capital’s Senior Indebtedness, and FPL Group’s
payment obligation under the Subordinated Guarantee will be unsecured and
will
rank junior and be subordinated in right of payment and upon liquidation
to all
of FPL Group’s Senior Indebtedness. Senior Indebtedness of FPL Group
Capital and FPL Group are defined below under “Specific Terms of the Junior
Subordinated Debentures—Ranking of the Junior Subordinated Debentures and the
Subordinated Guarantee.” However, the Junior Subordinated Debentures and the
Subordinated Guarantee will rank equally in right of payment with any Pari
Passu
Securities, as defined below under “Specific Terms of the Junior Subordinated
Debentures—Ranking of the Junior Subordinated Debentures and the Subordinated
Guarantee.”
FPL
Group
Capital is a holding company that derives substantially all of its income
from
its operating subsidiaries. FPL Group Capital’s subsidiaries are
separate and distinct legal entities and have no obligation to pay any amounts
on the Junior Subordinated Debentures or to make any funds available for
such
payment. Therefore, the Junior Subordinated Debentures will be
effectively subordinated to all indebtedness and other liabilities, including
trade payables, debt and preferred stock incurred or issued by FPL Group
Capital’s subsidiaries. In addition to trade liabilities, many of FPL
Group Capital’s operating subsidiaries incur debt in order to finance their
business activities. All of this indebtedness will be effectively
senior to the Junior Subordinated Debentures. The subordinated
indenture pursuant to which the Junior Subordinated Debentures will be issued
does not place any limit on the amount of Senior Indebtedness that FPL Group
Capital may issue, guarantee or otherwise incur or the amount
of
liabilities, including debt or preferred stock, that FPL Group Capital’s
subsidiaries may issue, guarantee or otherwise incur. FPL Group
Capital expects from time to time to incur additional indebtedness and other
liabilities that will be senior to the Junior Subordinated
Debentures. At August 31, 2007, FPL Group Capital’s Senior
Indebtedness, on an unconsolidated basis, totaled approximately $3.2
billion.
FPL
Group
is a holding company that derives substantially all of its income from its
operating subsidiaries. FPL Group’s subsidiaries are separate and
distinct legal entities and, other than FPL Group Capital, have no obligation
to
pay any amounts on the Junior Subordinated Debentures or to make any funds
available for such payment. Therefore, the Subordinated Guarantee
will be effectively subordinated to all indebtedness and other liabilities,
including trade payables, debt and preferred stock incurred or issued by
FPL
Group’s subsidiaries. In addition to trade liabilities, many of FPL
Group’s operating subsidiaries incur debt in order to finance their business
activities. All of this indebtedness will be effectively senior to
the Subordinated Guarantee. The subordinated indenture pursuant to
which the Junior Subordinated Debentures will be issued does not place any
limit
on the amount of Senior Indebtedness that FPL Group may issue, guarantee
or
otherwise incur or the amount of liabilities, including debt or preferred
stock,
that FPL Group’s subsidiaries may issue, guarantee or otherwise
incur. FPL Group expects from time to time to incur additional
indebtedness and other liabilities that will be senior to the Subordinated
Guarantee. At August 31, 2007, FPL Group’s Senior Indebtedness, on an
unconsolidated basis, totaled approximately $3.2 billion, which amount consisted
solely of FPL Group’s guarantees of FPL Group Capital indebtedness referred to
in the paragraph above.
Will
the Junior Subordinated Debentures be listed on a stock
exchange?
FPL
Group
Capital intends to apply to list the Junior Subordinated Debentures on the
New
York Stock Exchange. If approved for listing, trading of the Junior
Subordinated Debentures is expected to begin within 30 days after they are
first issued.
In
what form will the Junior Subordinated Debentures be
issued?
The
Junior Subordinated Debentures will be represented by one or more global
certificates and registered in the name of The Depository Trust Company (“DTC”)
or its nominee, and deposited with the subordinated indenture trustee on
behalf
of DTC. This means that you will not receive a certificate for your
Junior Subordinated Debentures and that your broker will maintain your position
in the Junior Subordinated Debentures. FPL Group Capital expects that
the Junior Subordinated Debentures will be ready for delivery through DTC
on or
about the date indicated on the cover of this prospectus
supplement. You may elect to hold interests in the Junior
Subordinated Debentures through DTC (in the United States), or through either
Clearstream, Luxembourg, or Euroclear (outside of the United States), if
you are
a participant in any of these systems, or indirectly through an organization
which is a participant in these systems. See “Specific Terms of the
Junior Subordinated Debentures—Book-Entry Only Issuance” in this prospectus
supplement for additional information.
What
are the expected credit ratings on the Junior Subordinated
Debentures?
FPL
Group
Capital expects that the Junior Subordinated Debentures will be rated “A3”
(Stable Outlook), “BBB+” (Stable Outlook) and “A-” (Stable Outlook) by Moody’s
Investors Service, Inc., Standard & Poor’s Ratings Services, a division of
The McGraw-Hill Companies, Inc., and Fitch Ratings,
respectively. Credit ratings are not a recommendation to buy, sell or
hold these securities. Each rating may be subject to revision or
withdrawal at any time by the assigning rating organization, and should be
evaluated independently of any other rating.
What
are the principal United States federal income tax consequences related to
the
Junior Subordinated Debentures?
In
connection with the issuance of the Junior Subordinated Debentures, FPL Group
Capital and FPL Group will receive an opinion from Thelen Reid Brown Raysman
& Steiner LLP that, for United States federal income tax purposes, the
Junior Subordinated Debentures will be classified as indebtedness (although
there is no controlling authority directly on point). This opinion is
subject to certain customary conditions. See “Material United States
Federal Income Tax Consequences.”
Each
holder of Junior Subordinated Debentures will, by accepting the Junior
Subordinated Debentures or a beneficial interest therein, be deemed to have
agreed that the holder intends that the Junior Subordinated Debentures
constitute indebtedness and will treat the Junior Subordinated Debentures
as
indebtedness for all United States federal, state and local tax
purposes. FPL Group Capital intends to treat the Junior Subordinated
Debentures in the same manner.
If
FPL
Group Capital elects to defer interest on the Junior Subordinated Debentures
for
one or more Optional Deferral Periods, the holders of the Junior Subordinated
Debentures will be required to accrue income for United States federal income
tax purposes in the amount of the accrued and unpaid interest payments on
the
Junior Subordinated Debentures, in the form of original issue discount, even
though cash interest payments are deferred and even though they may be cash
basis taxpayers.
CONCURRENT
OFFERING
In
addition to the securities offered by this prospectus supplement, FPL Group
Capital is concurrently offering $250 million principal amount of its Series
D
Junior Subordinated Debentures due 2067 by a separate prospectus
supplement. The offerings are not contingent upon each
other.
Before
purchasing the securities, investors should carefully consider the following
risk factors together with the risk factors and other information incorporated
by reference or provided in this prospectus supplement or in the accompanying
prospectus in order to evaluate an investment in the
securities.
Risks
Relating to FPL Group’s and FPL Group Capital’s Business
See
the
“Risk Factors” section beginning on page 2 of the accompanying prospectus to
read about certain factors regarding FPL Group’s and FPL Group Capital’s
business that you should consider before making an investment in the Junior
Subordinated Debentures.
Risks
Relating to the Junior Subordinated Debentures
FPL
Group Capital can defer interest payments on the Junior Subordinated Debentures
for one or more periods of up to 10 years each. This may affect the
market price of the Junior Subordinated Debentures.
So
long
as there is no event of default under the subordinated indenture pursuant
to
which the Junior Subordinated Debentures will be issued, FPL Group Capital
may
defer interest payments on the Junior Subordinated Debentures, from time
to
time, for one or more Optional Deferral Periods of up to 10 consecutive
years. At the end of an Optional Deferral Period, if all amounts due
are paid, FPL Group Capital could start a new Optional Deferral Period of
up to
10 consecutive years. During any Optional Deferral Period, interest
on the Junior Subordinated Debentures would be deferred but would accrue
additional interest at a rate equal to the interest rate on the Junior
Subordinated Debentures, to the extent permitted by applicable
law. No Optional Deferral Period may extend beyond the maturity date
of the Junior Subordinated Debentures. During an Optional Deferral
Period, interest payments would not be due and payable and, therefore, FPL
Group
would not be obligated to make payments under the Subordinated
Guarantee. If FPL Group Capital exercises this interest deferral
right, the market price of the Junior Subordinated Debentures is likely to
be
affected. See “Specific Terms of the Junior Subordinated
Debentures—Option to Defer Interest Payments” and “Specific Terms of the Junior
Subordinated Debentures—Modification of the Subordinated Indenture” in this
prospectus supplement and “Description of the FPL Group and FPL Group Capital
Junior Subordinated Debentures and the FPL Group Subordinated Guarantee—Option
to Defer Interest Payments” in the accompanying prospectus.
If
FPL
Group Capital exercises its right to defer interest payments, the Junior
Subordinated Debentures may trade at a price that does not fully reflect
the
value of accrued but unpaid interest on the Junior Subordinated Debentures
or
that is otherwise less than the price at which the Junior Subordinated
Debentures may have been traded if FPL Group Capital had not exercised such
right. In addition, as a result of FPL Group Capital’s right to defer
interest payments, the market price of the Junior Subordinated Debentures
may be
more volatile than other securities that do not have these rights.
FPL
Group Capital is not permitted to pay current interest on the Junior
Subordinated Debentures until FPL Group Capital has paid all outstanding
deferred interest, and this could have the effect of extending interest deferral
periods.
During
an
Optional Deferral Period, FPL Group Capital will be prohibited from paying
current interest on the Junior Subordinated Debentures and FPL Group will
be
prohibited from making such payment pursuant to the Subordinated Guarantee
until
FPL Group Capital, or FPL Group pursuant to the Subordinated Guarantee, has
paid
all accrued and unpaid deferred interest plus any accrued interest
thereon. As a result, FPL Group Capital may not be able to pay
current interest on the Junior Subordinated Debentures if FPL Group Capital
does
not have available funds to pay all accrued and unpaid interest plus any
accrued
interest thereon.
FPL
Group Capital’s right to redeem, purchase or defease the Junior Subordinated
Debentures, FPL Group’s right to purchase the Junior Subordinated Debentures and
the right of any majority-owned subsidiary of FPL Group Capital or FPL Group
to
purchase the Junior Subordinated Debentures are limited by a covenant that
FPL
Group Capital and FPL Group are making in favor of certain of FPL Group
Capital’s debtholders.
FPL
Group
Capital has the right to redeem the Junior Subordinated Debentures under
circumstances and on terms specified in this prospectus
supplement. However, around the time of the initial issuance of the
Junior Subordinated Debentures, FPL Group Capital and FPL Group will enter
into
a Replacement Capital Covenant, which is described below under “Certain Terms of
the Replacement Capital Covenant,” that will limit (1) FPL Group Capital’s
ability to redeem, purchase or defease the Junior Subordinated Debentures,
(2)
FPL Group’s ability to purchase the Junior Subordinated Debentures and (3) the
ability of any majority-owned subsidiary of FPL Group Capital or FPL Group
to
purchase the Junior Subordinated Debentures. In the Replacement
Capital Covenant, FPL Group Capital and FPL Group will covenant for the benefit
of holders of a designated series of FPL Group Capital’s unsecured long-term
indebtedness that ranks senior to the Junior Subordinated Debentures, or
in
certain limited cases holders of a designated series of unsecured long-term
indebtedness of FPL Group, that (a) FPL Group Capital will not redeem, purchase
or defease the Junior Subordinated Debentures, (b) FPL Group will not purchase
the Junior Subordinated Debentures and (c) FPL Group and FPL Group Capital
will
cause their majority-owned subsidiaries not to purchase the Junior Subordinated
Debentures, in each case on or before September 1, 2037, unless, subject
to
certain limitations, a specified amount shall have been raised from the
issuance, during the 180 days prior to the date of that redemption, purchase
or
defeasance, of qualifying securities that have equity-like characteristics
that
are the same as, or more equity-like than, the applicable characteristics
of the
Junior Subordinated Debentures at the time of redemption, purchase or
defeasance.
The
ability to raise amounts from the issuance of qualifying securities during
the
180 days prior to a proposed redemption, purchase or defeasance by FPL Group
Capital, purchase by FPL Group or purchase by any of the majority-owned
subsidiaries of FPL Group or FPL Group Capital will depend on, among other
things, market conditions at that time as well as the acceptability to
prospective investors of the terms of those qualifying
securities. Accordingly, there could be circumstances where FPL Group
Capital would wish to redeem, purchase or defease some or all of the Junior
Subordinated Debentures, or FPL Group or a majority-owned subsidiary of FPL
Group or FPL Group Capital would wish to purchase some or all of the Junior
Subordinated Debentures, including as a result of a Tax Event or a Rating
Agency
Event, and sufficient cash is available for that purpose, but FPL Group Capital,
FPL Group and majority-owned subsidiaries of FPL Group or FPL Group Capital
are
restricted from doing so because of the inability to obtain proceeds from
the
sale of qualifying securities.
The
obligations of FPL Group Capital under the Junior Subordinated Debentures
and
FPL Group under the Subordinated Guarantee are
subordinated.
The
obligations of FPL Group Capital under the Junior Subordinated Debentures
are
unsecured and will rank junior in right of payment to FPL Group Capital’s Senior
Indebtedness. This means that FPL Group Capital cannot make any
payments on the Junior Subordinated Debentures until all holders of Senior
Indebtedness of FPL Group Capital have been paid in full, or provision has
been
made for such payment, if (i) certain events of bankruptcy, insolvency or
reorganization of FPL Group Capital have occurred, (ii) any Senior Indebtedness
of FPL Group Capital is not paid when due (after the expiration of any
applicable grace period) and that default continues without a waiver, or
(iii)
any other default has occurred and continues without waiver (after the
expiration of any applicable grace period) pursuant to which the holders
of
Senior Indebtedness of FPL Group Capital are permitted to accelerate the
maturity of such Senior Indebtedness. FPL Group Capital is a holding
company that derives substantially all of its income from its operating
subsidiaries. FPL Group Capital’s subsidiaries are separate and
distinct legal entities and have no obligation to pay any amounts on the
Junior
Subordinated Debentures or to make any funds available for such
payment. Therefore, the Junior Subordinated Debentures will be
effectively subordinated to all indebtedness and other liabilities, including
trade payables, debt and preferred stock incurred or issued by FPL Group
Capital’s subsidiaries. In addition to trade liabilities, many of FPL
Group Capital’s operating subsidiaries incur debt in order to finance their
business activities. All of this indebtedness will be effectively
senior to the Junior Subordinated Debentures. The subordinated
indenture pursuant to which the Junior Subordinated Debentures will be issued
does not place any limit on the amount of Senior Indebtedness that FPL Group
Capital may issue, guarantee or otherwise incur or the amount of liabilities,
including debt or preferred stock, that FPL
Group
Capital’s subsidiaries may issue, guarantee or otherwise incur. FPL
Group Capital expects from time to time to incur additional indebtedness
and
other liabilities that will be senior to the Junior Subordinated
Debentures. At August 31, 2007, FPL Group Capital’s Senior
Indebtedness, on an unconsolidated basis, totaled approximately
$3.2 billion.
The
obligations of FPL Group under the Subordinated Guarantee are unsecured and
will
rank junior in right of payment to FPL Group’s Senior
Indebtedness. This means that FPL Group cannot make any payments
under the Subordinated Guarantee until all holders of Senior Indebtedness
of FPL
Group have been paid in full, or provision has been made for such payment,
if
(i) certain events of bankruptcy, insolvency or reorganization of FPL Group
have
occurred, (ii) any Senior Indebtedness of FPL Group is not paid when due
(after
the expiration of any applicable grace period) and that default continues
without a waiver, or (iii) any other default has occurred and continues without
waiver (after the expiration of any applicable grace period) pursuant to
which
the holders of Senior Indebtedness of FPL Group are permitted to accelerate
the
maturity of such Senior Indebtedness. FPL Group is a holding company
that derives substantially all of its income from its operating
subsidiaries. FPL Group’s subsidiaries are separate and distinct
legal entities and, other than FPL Group Capital, have no obligation to pay
any
amounts on the Junior Subordinated Debentures or to make any funds available
for
such payment. Therefore, the Subordinated Guarantee will be
effectively subordinated to all indebtedness and other liabilities, including
trade payables, debt and preferred stock incurred or issued by FPL Group’s
subsidiaries. In addition to trade liabilities, many of FPL Group’s
operating subsidiaries incur debt in order to finance their business
activities. All of this indebtedness will be effectively senior to
the Subordinated Guarantee. The subordinated indenture pursuant to
which the Junior Subordinated Debentures will be issued does not place any
limit
on the amount of Senior Indebtedness FPL Group may issue, guarantee or otherwise
incur or the amount of liabilities, including debt or preferred stock, that
FPL
Group’s subsidiaries may issue, guarantee or otherwise incur. FPL
Group expects from time to time to incur additional indebtedness and other
liabilities that will be senior to the Subordinated Guarantee. The
FPL Group consolidated financial statements that are incorporated by reference
in the accompanying prospectus show the aggregate amount of FPL Group subsidiary
debt as of the date of those statements. See “Specific Terms of the
Junior Subordinated Debentures—Ranking of the Junior Subordinated Debentures and
the Subordinated Guarantee” in this prospectus supplement. At August
31, 2007, FPL Group’s Senior Indebtedness, on an unconsolidated basis, totaled
approximately $3.2 billion, which amount consisted solely of FPL Group’s
guarantees of FPL Group Capital indebtedness referred to in the paragraph
above.
If
FPL Group Capital defers interest payments on the Junior Subordinated
Debentures, there will be United States federal income tax consequences to
holders of the Junior Subordinated Debentures.
If
FPL
Group Capital defers interest payments on the Junior Subordinated Debentures
for
one or more Optional Deferral Periods, you will be required to accrue interest
income as original issue discount, referred to in this prospectus supplement
as
“original issue discount,” in respect of the deferred interest on your Junior
Subordinated Debentures. As a result, for United States federal
income tax purposes you will include that original issue discount in gross
income before you receive interest payments, regardless of your regular method
of accounting for United States federal income taxes.
If
you
sell your Junior Subordinated Debentures before the record date for the payment
of interest at the end of an Optional Deferral Period, you will not receive
such
interest. Instead, the accrued interest will be paid to the holder of
record on the record date regardless of who the holder of record may have
been
on any other date during the Optional Deferral Period. Moreover, the
accrued original issue discount will be added to your adjusted tax basis
in the
Junior Subordinated Debentures but may not be reflected in the amount you
realize on the sale. To the extent the amount realized on a sale is
less than your adjusted tax basis, you will recognize a capital loss for
United
States federal income tax purposes. The deductibility of capital
losses is subject to limitations. See “Material United States Federal
Income Tax Consequences—U.S. Holders—Sale, Exchange, Redemption or Retirement of
the Junior Subordinated Debentures” in this prospectus supplement.
Rating
agencies may change rating methodologies, including their views on “notching”
practices. This may affect the market price of the Junior
Subordinated Debentures.
The
rating agencies that currently or may in the future publish a rating for
FPL
Group Capital or FPL Group, including Moody’s Investors Service, Inc., Standard
& Poor’s Ratings Services, a division of The
McGraw-Hill
Companies, Inc., and Fitch Ratings, each of which is expected to initially
publish a rating of the Junior Subordinated Debentures, may, from time to
time
in the future, change the way they analyze securities with features similar
to
the Junior Subordinated Debentures. This may include, for example,
changes to the relationship between ratings assigned to an issuer’s senior
securities and ratings assigned to securities with features similar to the
Junior Subordinated Debentures, sometimes called “notching.” If the
rating agencies change their practices for rating these types of securities
in
the future, and the ratings of the Junior Subordinated Debentures are
subsequently lowered, that could have a negative impact on the trading price
of
the Junior Subordinated Debentures.
Holders
of the Junior Subordinated Debentures will have limited rights of
acceleration.
The
holders of the Junior Subordinated Debentures and the subordinated indenture
trustee may accelerate payment of the principal, interest and premium, if
any,
on the Junior Subordinated Debentures only upon the occurrence and continuation
of certain events of default. Payment of principal, interest and
premium, if any, on the Junior Subordinated Debentures may be accelerated
upon
the occurrence of an event of default under the subordinated indenture related
to failure to pay interest within 30 days after it is due (other than interest
deferred pursuant to one or more Optional Deferral Periods), failure to pay
principal and premium, if any, on the Junior Subordinated Debentures when
due,
certain events of bankruptcy, insolvency or reorganization with respect to
FPL
Group Capital or FPL Group and, with certain exceptions, the cessation of
effectiveness of the Subordinated Guarantee or the finding by any judicial
proceeding that the Subordinated Guarantee is unenforceable or invalid or
denial
by FPL Group of its obligations under the Subordinated
Guarantee. Holders of the Junior Subordinated Debentures and the
subordinated indenture trustee will not have the right to accelerate payment
of
the principal, interest and premium, if any, on the Junior Subordinated
Debentures upon the breach of any other covenant in the subordinated
indenture. Other series of junior subordinated debentures issued
under the subordinated indenture prior to the issuance of the Junior
Subordinated Debentures and
the
Series D Junior Subordinated Debentures due 2067 which are being offered
by FPL
Group Capital concurrently herewith have the right to accelerate payment
of the principal, interest and premium, if any, on those junior subordinated
debentures upon the breach of other covenants in the subordinated indenture
in
certain circumstances.
The
following material, which is presented in this prospectus supplement solely
to
furnish limited introductory information, is qualified in its entirety by,
and
should be considered in conjunction with, the more detailed information
incorporated by reference or provided in this prospectus supplement or in
the
accompanying prospectus. In the opinion of FPL Group, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
financial statement presentation of the results of operations for the six
months
ended June 30, 2007 and 2006 have been made. The results of
operations for an interim period generally will not give a true indication
of
results for the year.
|
Six
Months Ended
June
30,
|
Years
Ended December 31,
|
|||||||||||||||||||
|
2007
|
2006(a)
|
2006
|
2005(a)
|
2004(a)
|
||||||||||||||||
|
(In
Millions, Except Earnings Per Share and Ratios)
|
||||||||||||||||||||
|
(Unaudited)
|
||||||||||||||||||||
|
Operating
revenues
|
$ |
7,004
|
$ |
7,393
|
$ |
15,710
|
$ |
11,846
|
$ |
10,522
|
||||||||||
|
Net
income
|
$ |
555
|
$ |
487
|
$ |
1,281
|
$ |
901
|
$ |
896
|
||||||||||
|
Weighted-average
common shares
outstanding
(assuming dilution)
|
400.0
|
394.9
|
396.5
|
385.7
|
361.7
|
|||||||||||||||
|
Earnings
per share of common
stock
(assuming dilution)
|
$ |
1.39
|
$ |
1.23
|
$ |
3.23
|
$ |
2.34
|
$ |
2.48
|
||||||||||
|
Ratio
of earnings to fixed charges
|
2.91
|
2.77
|
3.11
|
2.80
|
2.98
|
|||||||||||||||
|
(a)
|
Adjusted
to reflect the retrospective application of Financial Accounting
Standards
Board Staff Position AUG AIR-1, “Accounting for Planned Major Maintenance
Activities.”
|
The
following table shows FPL Group’s consolidated capitalization as of June 30,
2007, and as adjusted to reflect the issuance of the Junior Subordinated
Debentures. This table, which is presented in this prospectus
supplement solely to provide limited introductory information, is qualified
in
its entirety by, and should be considered in conjunction with, the more detailed
information incorporated by reference or provided in this prospectus supplement
or in the accompanying prospectus.
|
Adjusted(a)
|
|||||||||
|
June
30, 2007
|
Amount
|
Percent
|
|||||||
|
(Unaudited)
|
|||||||||
|
(In
Millions)
|
|||||||||
|
Common
shareholders’
equity
|
$ |
10,201
|
$ |
10,201
|
48.9%
|
||||
|
Long-term
debt (excluding current
maturities)
|
10,322
|
10,672 |
51.1%
|
||||||
|
Total
capitalization
|
$ |
20,523
|
$ | 20,873 |
100.0%
|
||||
|
(a)
|
To
give effect to the issuance of the Junior Subordinated Debentures
offered
by this prospectus supplement. Adjusted amounts do not reflect
the deduction of any discounts or commissions in connection with
the
issuance of the Junior Subordinated Debentures. Adjusted
amounts also do not reflect (i) the anticipated issuance of
$250 million principal amount of FPL Group Capital’s Series D Junior
Subordinated Debentures due 2067 in a separate September 2007
offering and
(ii) any possible issuance and sale of additional securities
by FPL Group
and its subsidiaries from time to time after the date of this
prospectus
supplement.
|
The
information in this section adds to the information in the “Use of Proceeds”
section on page 6 of the accompanying prospectus. Please read these
two sections together.
FPL
Group
Capital will add the net proceeds from the sale of the Junior Subordinated
Debentures to its general funds.
FPL
Group
Capital expects to use its general funds to repay a portion of commercial
paper
issued to fund investments by FPL Group Capital in independent power
projects. As of August 31, 2007, FPL Group Capital had $766.2 million
of commercial paper outstanding, which had maturities of up to 45 days and
which
had annual interest rates ranging from 5.33% to 5.60%. FPL Group
Capital will temporarily invest in short term instruments any proceeds that
are
not immediately used for such repayment of commercial paper.
The
information in this section adds to the information in the “Description of the
FPL Group and FPL Group Capital Junior Subordinated Debentures and the FPL
Group
Subordinated Guarantee” section beginning on page 37 of the accompanying
prospectus. Please read these two sections together.
General. FPL
Group Capital will issue the Junior Subordinated Debentures under an indenture,
dated as of September 1, 2006, among FPL Group Capital, FPL Group, as
guarantor, and The Bank of New York, as subordinated indenture trustee, and
referred to in this prospectus supplement as the “Subordinated
Indenture.” An officer’s certificate will supplement the Subordinated
Indenture and establish the specific terms of the Junior Subordinated
Debentures. Under the Subordinated Indenture, FPL Group Capital may
issue an unlimited amount of additional subordinated debt
securities. The Subordinated Indenture does not limit the aggregate
amount of indebtedness FPL Group Capital, FPL Group or their respective
subsidiaries may issue, guarantee or incur.
Interest
and Maturity. Unless an earlier redemption has occurred, the
entire principal amount of the Junior Subordinated Debentures will mature
and
become due and payable, together with any accrued and unpaid
interest,
on September 1, 2067. The Junior Subordinated Debentures will bear
interest at 7.45% per year. Subject to FPL Group Capital’s right to
defer interest payments as described below, interest is payable quarterly
in
arrears on March 1, June 1, September 1 and December 1 of each year, beginning
December 1, 2007. If interest payments are deferred
or otherwise not paid, they will accrue and compound until paid at the same
rate
at which the Junior Subordinated Debentures bear interest to the extent
permitted by applicable law. The amount of interest payable for any
quarterly interest accrual period will be computed on the basis of a 360-day
year consisting of twelve 30-day months. The amount of interest
payable for any period shorter than a full quarterly period for which interest
is computed will be computed on the basis of the number of days in the period
using 30-day calendar months.
In
this
prospectus supplement the term “interest” includes quarterly interest payments
and applicable interest on interest payments accrued but not paid on the
applicable interest payment date.
A
“business day” is any day that is not a Saturday, a Sunday, a day on which
banking institutions or trust companies in New York City are generally
authorized or required by law or executive order to remain closed.
If
an
interest payment date, a redemption date or the maturity date of the Junior
Subordinated Debentures falls on a day that is not a business day, the payment
of interest and principal will be made on the next succeeding business day,
and
no interest on such payment will accrue for the period from and after the
interest payment date, the redemption date or the maturity date, as
applicable.
So
long
as all of the Junior Subordinated Debentures remain in book-entry only form,
the
record date for each interest payment date will be the close of business
on the
business day immediately preceding the applicable interest payment date.
If any
of the Junior Subordinated Debentures do not remain in book-entry only form,
the
record date for each interest payment date will be the close of business
on the
fifteenth calendar day immediately preceding the applicable interest payment
date.
Ranking
of the Junior Subordinated Debentures and the Subordinated
Guarantee. FPL Group Capital’s payment obligation under the
Junior Subordinated Debentures will be unsecured and will rank junior and
be
subordinated in right of payment and upon liquidation to all of FPL Group
Capital’s Senior Indebtedness, and FPL Group’s payment obligation under the
Subordinated Guarantee will be unsecured and will rank junior and be
subordinated in right of payment and upon liquidation to all of FPL Group’s
Senior Indebtedness. However, the Junior Subordinated Debentures and
the Subordinated Guarantee will rank equally in right of payment with any
Pari
Passu Securities.
“Senior
Indebtedness,” when used with respect to FPL Group Capital or FPL Group, means
all of FPL Group Capital’s or FPL Group’s obligations, as the case may be,
whether presently existing or from time to time hereafter incurred, created,
assumed or existing, to pay principal, premium, interest, penalties, fees
and
any other payment in respect of any of the following:
|
|
·
|
obligations
for borrowed money, including without limitation, such obligations
as are
evidenced by credit agreements, notes, debentures, bonds or other
securities or instruments;
|
|
|
·
|
capitalized
lease obligations;
|
|
|
·
|
all
obligations of the types referred to in the two preceding bullet
points of
others which FPL Group or FPL Group Capital, as the case may be,
has
assumed, endorsed, guaranteed, contingently agreed to purchase
or provide
funds for the payment of, or otherwise becomes liable for, under
any
agreement; or
|
|
|
·
|
all
renewals, extensions or refundings of obligations of the kinds
described
in any of the preceding categories.
|
Any
such
obligation, indebtedness, renewal, extension or refunding, however, will
not be
Senior Indebtedness if the instrument creating or evidencing it or the
assumption or guarantee of it provides that it is not superior in right of
payment to or is equal in right of payment with the Junior Subordinated
Debentures or the Subordinated Guarantee,
as
the
case may be. Furthermore, trade accounts payable and accrued
liabilities arising in the ordinary course of business will not be Senior
Indebtedness. Senior Indebtedness will be entitled to the benefits of
the subordination provisions in the Subordinated Indenture irrespective of
the
amendment, modification or waiver of any term of the Senior
Indebtedness.
No
payment of the principal (including redemption and sinking fund payments)
of, or
interest, or premium, if any, on the Junior Subordinated Debentures may be
made
by FPL Group Capital until all holders of Senior Indebtedness have been paid
in
full (or provision has been made for such payment), if any of the following
occurs:
|
|
·
|
certain
events of bankruptcy, insolvency or reorganization of FPL Group
Capital;
|
|
|
·
|
any
Senior Indebtedness of FPL Group Capital is not paid when due (after
the
expiration of any applicable grace period) and that default continues
without waiver; or
|
|
|
·
|
any
other default has occurred and continues without waiver (after
the
expiration of any applicable grace period) pursuant to which the
holders
of Senior Indebtedness of FPL Group Capital are permitted to accelerate
the maturity of such Senior
Indebtedness.
|
Upon
any
distribution of assets of FPL Group Capital to creditors in connection with
any
insolvency, bankruptcy or similar proceeding, all principal of, and premium,
if
any, and interest due or to become due on all Senior Indebtedness of FPL
Group
Capital must be paid in full before the holders of the Junior Subordinated
Debentures are entitled to receive or retain any payment from such
distribution. See “Description of the FPL Group and FPL Group Capital
Junior Subordinated Debentures and the FPL Group Subordinated
Guarantee—Subordination” in the accompanying prospectus.
“Pari
Passu Securities” means:
|
|
·
|
indebtedness
and other securities that, among other things, by its terms ranks
equally
with the Junior Subordinated Debentures, with respect to FPL Group
Capital, and the Subordinated Guarantee, with respect to FPL Group,
in
right of payment and upon liquidation;
and
|
|
|
·
|
guarantees
of indebtedness or other securities described in the preceding
bullet
point.
|
“Pari
Passu Securities” also includes FPL Group Capital’s trade accounts payable and
accrued liabilities arising in the ordinary course of business, but does
not
include junior subordinated debentures previously issued by FPL Group Capital
or
the subordinated guarantee previously issued by FPL Group of those junior
subordinated debentures in connection with the outstanding preferred trust
securities of FPL Group Capital Trust I, which will rank senior to the
Junior Subordinated Debentures and the Subordinated Guarantee. “Pari
Passu Securities” includes the $700 million aggregate principal amount of junior
subordinate debentures issued by FPL Group Capital, and guaranteed by FPL
Group,
in September 2006, the $400 million aggregate principal amount of junior
subordinated debentures issued by FPL Group Capital, and guaranteed by FPL
Group, in June 2007,
and the
$250 million aggregate principal amount of FPL Group Capital’s Series D Junior
Subordinated Debentures due 2067 being offered concurrently
herewith.
FPL
Group
Capital is a holding company that derives substantially all of its income
from
its operating subsidiaries. FPL Group Capital’s subsidiaries are
separate and distinct legal entities and have no obligation to pay any amounts
on the Junior Subordinated Debentures or to make any funds available for
such
payment. Therefore, the Junior Subordinated Debentures will be
effectively subordinated to all indebtedness and other liabilities, including
trade payables, debt and preferred stock incurred or issued by FPL Group
Capital’s subsidiaries. In addition to trade liabilities, many of FPL
Group Capital’s operating subsidiaries incur debt in order to finance their
business activities. All of this indebtedness will be effectively
senior to the Junior Subordinated Debentures. The Subordinated
Indenture does not place any limit on the amount of Senior Indebtedness that
FPL
Group Capital may issue, guarantee or otherwise incur or the amount of
liabilities, including debt or preferred stock, that FPL Group Capital’s
subsidiaries may issue, guarantee or otherwise incur. FPL Group
Capital expects from time to time to incur additional indebtedness and other
liabilities that will be senior to the Junior Subordinated
Debentures. At
August
31, 2007, FPL Group Capital’s Senior Indebtedness, on an unconsolidated basis,
totaled approximately $3.2 billion.
FPL
Group
is a holding company that derives substantially all of its income from its
operating subsidiaries. FPL Group’s subsidiaries are separate and
distinct legal entities and, other than FPL Group Capital, have no obligation
to
pay any amounts on the Junior Subordinated Debentures or to make any funds
available for such payment. Therefore, the Subordinated Guarantee
will be effectively subordinated to all indebtedness and other liabilities,
including trade payables, debt and preferred stock incurred or issued by
FPL
Group’s subsidiaries. In addition to trade liabilities, many of FPL
Group’s operating subsidiaries incur debt in order to finance their business
activities. All of this indebtedness will be effectively senior to
the Subordinated Guarantee. The Subordinated Indenture does not place
any limit on the amount of Senior Indebtedness that FPL Group may issue,
guarantee or otherwise incur or the amount of liabilities, including debt
or
preferred stock, that FPL Group’s subsidiaries may issue, guarantee or otherwise
incur. FPL Group expects from time to time to incur additional
indebtedness and other liabilities that will be senior to the Subordinated
Guarantee. At August 31, 2007, FPL Group’s Senior Indebtedness, on an
unconsolidated basis, totaled approximately $3.2 billion, which amount consisted
solely of FPL Group’s guarantees of FPL Group Capital indebtedness referred to
in the paragraph above.
Redemption. FPL
Group Capital may redeem any or all of the Junior Subordinated Debentures
at
100% of their principal amount plus accrued and unpaid interest thereon,
if any,
at any time or from time to time on or after September 1, 2012. FPL
Group Capital will give notice of its intent to redeem, any or all of the
Junior
Subordinated Debentures at least 30 but no more than 60 days prior to the
date
scheduled for redemption (a “Redemption Notice”).
Before
September 1, 2012, FPL Group Capital may redeem, upon a Redemption Notice,
any
or all of the Junior Subordinated Debentures, at its option, at any time
or from
time to time (each a “Redemption Date”) at a redemption price (“Redemption
Price”) equal to the sum of: (1) 100% of the
principal
amount of the Junior Subordinated Debentures being redeemed plus (2) accrued
and
unpaid interest thereon, if any, to the Redemption Date plus (3) any
applicable “make-whole premium.” The Redemption Price for the Junior
Subordinated Debentures will never be less than 100% of the
principal
amount of those Junior Subordinated Debentures plus accrued and unpaid interest
on those Junior Subordinated Debentures to the Redemption Date.
The
amount of the make-whole premium with respect to any Junior Subordinated
Debentures to be redeemed in accordance with the foregoing paragraph will
be
equal to the excess, if any, of:
(1) the
sum of the present values, calculated as of the Redemption Date,
of:
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(a)
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each
interest payment that, but for such redemption, would have been
payable on
the Junior Subordinated Debentures being redeemed on each interest
payment
date occurring during the period from the Redemption Date to September
1,
2012 (excluding any accrued interest for the period prior to the
Redemption Date); and
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(b)
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the
principal amount that, but for such redemption, would have been
payable at
the final maturity of the Junior Subordinated Debentures being
redeemed;
over
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(2) the
principal amount of the Junior Subordinated Debentures being
redeemed.
The
present values of interest and principal payments referred to in clause (1)
above will be determined in accordance with generally accepted principles
of
financial analysis. Such present values will be calculated by
discounting the amount of each payment of interest or principal from the
date
that each such payment would have been payable, but for the redemption, to
the
Redemption Date at a discount rate equal to the Treasury Yield (as defined
below) plus 45 basis points.
FPL
Group
Capital will appoint an independent investment banking institution of national
standing to calculate the make-whole premium; provided that
Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Morgan Stanley & Co. Incorporated, UBS Securities LLC or
Wachovia Capital Markets, LLC
will
make
such calculation if (1) FPL Group Capital fails to make such appointment at
least 30 days prior to the Redemption Date, or (2) the institution so appointed
is unwilling or unable to make such calculation. If Citigroup Global
Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan
Stanley & Co. Incorporated, UBS Securities LLC or Wachovia Capital Markets,
LLC is to make such calculation but is unwilling or unable to do so, then
the
subordinated indenture trustee will appoint an independent investment banking
institution of national standing to make such calculation. In any
case, the institution making such calculation is referred to in this prospectus
supplement as an “Independent Investment Banker.”
For
purposes of determining the make-whole premium, “Treasury Yield” means a rate of
interest per year equal to the weekly average yield to maturity of United
States
Treasury Notes that have a constant maturity that corresponds to the remaining
term to September 1, 2012 of the Junior Subordinated Debentures to be redeemed,
calculated to the nearest 1/12th of a year (the “Remaining
Term”). The Independent Investment Banker will determine the Treasury
Yield as of the third business day immediately preceding the applicable
Redemption Date.
The
Independent Investment Banker will determine the weekly average yields of
United
States Treasury Notes by reference to the most recent statistical release
published by the Federal Reserve Bank of New York and designated “H.15(519)
Selected Interest Rates” or any successor release (the “H.15 Statistical
Release”). If the H.15 Statistical Release sets forth a weekly
average yield for United States Treasury Notes having a constant maturity
that
is the same as the Remaining Term, then the Treasury Yield will be equal
to such
weekly average yield. In all other cases, the Independent Investment
Banker will calculate the Treasury Yield by interpolation, on a straight-line
basis, between the weekly average yields on the United States Treasury Notes
that have a constant maturity closest to and greater than the Remaining Term
and
the United States Treasury Notes that have a constant maturity closest to
and
less than the Remaining Term (in each case as set forth in the H.15 Statistical
Release). The Independent Investment Banker will round any weekly
average yields so calculated to the nearest 1/100th of 1%, and
will round
upward for any figure of 1/200th of 1% or
above. If weekly average yields for United States Treasury Notes are
not available in the H.15 Statistical Release or otherwise, then the Independent
Investment Banker will select comparable rates and calculate the Treasury
Yield
by reference to those rates.
If
FPL
Group Capital at any time elects to redeem some but not all of the Junior
Subordinated Debentures, the subordinated indenture trustee will select the
particular Junior Subordinated Debentures to be redeemed using any method
that
it deems fair and appropriate. However, if the Junior Subordinated
Debentures are solely registered in the name of Cede & Co. and traded
through DTC, then DTC will select the Junior Subordinated Debentures to be
redeemed in accordance with its practices as described below in “—Book
Entry-Only Issuance—DTC.”
If
at the
time notice of redemption is given, the redemption moneys are not on deposit
with the subordinated indenture trustee, then the redemption shall be subject
to
their receipt on or before the Redemption Date and such notice shall be of
no
effect unless such moneys are received.
Right
to Redeem Upon a Tax Event. Before September 1, 2012, FPL
Group Capital may redeem, upon a Redemption Notice, in whole, but not in
part,
the Junior Subordinated Debentures, at any time within 90 days after there
is a
Tax Event (as defined below), at the redemption price equal to the sum of:
(1)
100% of the
principal amount of the Junior Subordinated Debentures being redeemed plus
(2)
accrued and unpaid interest thereon, if any, to the date fixed for redemption
(“Tax Event Redemption Date”).
If
at the
time notice of redemption is given, the redemption moneys are not on deposit
with the subordinated indenture trustee, then the redemption shall be subject
to
their receipt on or before the Tax Event Redemption Date and such notice
shall
be of no effect unless such moneys are received at any time within 90 days
after
there is a Tax Event.
A
“Tax
Event” happens when FPL Group or FPL Group Capital has received an opinion of
counsel experienced in tax matters that, as a result of:
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any
amendment to, clarification of, or change, including any announced
prospective change, in the laws or treaties of the United States
or any of
its political subdivisions or taxing authorities, or any regulations
under
those laws or treaties;
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·
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an
administrative action, which means any judicial decision or any
official
administrative pronouncement, ruling, regulatory procedure, notice
or
announcement including any notice or announcement of intent to
issue or
adopt any administrative pronouncement, ruling, regulatory procedure
or
regulation; or
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·
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any
amendment to, clarification of, or change in the official position
or the
interpretation of any administrative action or judicial decision
or any
interpretation or pronouncement that provides for a position
with respect to an administrative action or judicial decision
that differs
from the previously generally accepted position, in each case
by any
legislative body, court, governmental authority or regulatory
body,
regardless of the time or manner in which that amendment, clarification
or
change is introduced or made
known,
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which
amendment, clarification, or change is effective or the administrative action
is
taken or judicial decision, interpretation or pronouncement is issued after
the
date of this prospectus supplement, there is more than an insubstantial risk
that interest payable by FPL Group Capital on the Junior Subordinated Debentures
is not deductible, or within 90 days would not be deductible, in whole or
in
part, by FPL Group Capital for United States federal income tax
purposes.
Right
to Redeem Upon a Rating Agency Event. Before September 1,
2012, FPL Group Capital may redeem, upon a Redemption Notice, in whole or
in
part, the Junior Subordinated Debentures, on one or more occasions, at any
time
following the occurrence and continuation of a Rating Agency Event (as defined
below), at a redemption price (“Rating Agency Event Redemption Price”) equal to
the sum of: (1) 100% of the
principal
amount of the Junior Subordinated Debentures being redeemed plus (2) accrued
and
unpaid interest thereon, if any, to the date fixed for redemption (“Rating
Agency Event Redemption Date”) plus (3) any applicable “rating agency event
make-whole premium.” The Rating Agency Event Redemption Price for the
Junior Subordinated Debentures will never be less than 100% of the
principal
amount of those Junior Subordinated Debentures plus accrued and unpaid interest
on those Junior Subordinated Debentures to the Rating Agency Event Redemption
Date.
The
amount of the rating agency event make-whole premium with respect to the
Junior
Subordinated Debentures to be redeemed will be calculated by the Independent
Investment Banker and will be equal to the excess, if any, of:
(1) the
sum of the present values, calculated as of the Rating Agency Redemption
Date,
of:
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(a)
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each
interest payment that, but for such redemption, would have been
payable on
the Junior Subordinated Debentures being redeemed on each interest
payment
date occurring during the period from the Rating Agency Event Redemption
Date to September 1, 2012 (excluding
any
accrued interest for the period prior to the Rating Agency Event
Redemption Date); and
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(b)
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the
principal amount that, but for such redemption, would have been
payable at
the final maturity of the Junior Subordinated Debentures being
redeemed;
over
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(2) the
principal amount of the Junior Subordinated Debentures being
redeemed.
The
present values of interest and principal payments referred to in clause (1)
above will be determined in accordance with generally accepted principles
of
financial analysis. Such present values will be calculated by
discounting the amount of each payment of interest or principal from the
date
that each such payment would have been payable, but for the redemption, to
the
Rating Agency Event Redemption Date at a discount rate equal to the Treasury
Yield plus 50 basis points.
The
Independent Investment Banker will determine the Treasury Yield in the manner
described above under “Specific Terms of the Junior Subordinated
Debentures—Redemption.”
If
at the
time notice of redemption is given, the redemption moneys are not on deposit
with the subordinated indenture trustee, then the redemption shall be subject
to
their receipt on or before the Rating Agency Event Redemption Date and such
notice shall be of no effect unless such moneys are received.
“Rating
Agency Event” means a change in the methodology employed by any nationally
recognized statistical rating organization within the meaning of Section
3(a)(62) of the Securities Exchange Act of 1934 (sometimes referred to in
this
prospectus supplement as a “rating agency”) that currently publishes a rating
for FPL Group Capital or FPL Group in assigning equity credit to securities
such
as the Junior Subordinated Debentures, as such
methodology is in effect on the date of issuance of this prospectus supplement
(the “current criteria”), which change results in (a) the length of time for
which such current criteria are scheduled to be in effect being shortened
with
respect to the Junior Subordinated Debentures, or (b) a lower or higher equity
credit being assigned by such rating agency to the Junior Subordinated
Debentures as of the date of such change than the equity credit that would
have
been assigned to the Junior Subordinated Debentures as of the date of such
change by such rating agency pursuant to its current criteria.
Option
to Defer Interest Payments. So long as there is no event of
default under the Subordinated Indenture, FPL Group Capital may defer interest
payments on the Junior Subordinated Debentures, from time to time, for one
or
more Optional Deferral Periods of up to 10 consecutive years per Optional
Deferral Period. However, a deferral of interest payments cannot
extend beyond the maturity date of the Junior Subordinated
Debentures. During an Optional Deferral Period, interest will
continue to accrue on the Junior Subordinated Debentures, compounded quarterly,
and deferred interest payments will accrue additional interest at a rate
equal
to the interest rate on the Junior Subordinated Debentures, to the extent
permitted by applicable law. No interest will be due and payable on
the Junior Subordinated Debentures until the end of the Optional Deferral
Period
except upon a redemption of the Junior Subordinated Debentures during the
deferral period.
FPL
Group
Capital may pay at any time all or any portion of the interest accrued to
that
point during an Optional Deferral Period. At the end of the Optional
Deferral Period or on any redemption date, FPL Group Capital will be obligated
to pay all accrued and unpaid interest.
Once
all
accrued and unpaid interest on the Junior Subordinated Debentures has been
paid,
FPL Group Capital again can defer interest payments on the Junior Subordinated
Debentures as described above, provided that an Optional Deferral Period
cannot
extend beyond the maturity date of the Junior Subordinated
Debentures.
If
FPL
Group Capital defers interest for a period of 10 consecutive years from the
commencement of an Optional Deferral Period, FPL Group Capital will be required
to pay all accrued and unpaid interest at the conclusion of the 10-year period,
and to the extent it does not do so, FPL Group will be required to make
guarantee payments in accordance with the Subordinated Guarantee with respect
thereto. If FPL Group Capital fails to pay in full all accrued and
unpaid interest at the conclusion of the 10-year period, such failure continues
for 30 days and FPL Group fails to make guarantee payments with respect thereto,
an event of default that gives rise to acceleration of principal and interest
on
the Junior Subordinated Debentures will occur under the Subordinated
Indenture. See “Description of the FPL Group and FPL Group Capital
Junior Subordinated Debentures and the FPL Group Subordinated Guarantee—Events
of Default” and “Description of the FPL Group and FPL Group Capital Junior
Subordinated Debentures and the FPL Group Subordinated Guarantee—Remedies” in
the accompanying prospectus.
During
any period in which FPL Group Capital defers interest payments on the Junior
Subordinated Debentures, neither FPL Group nor FPL Group Capital will, and
each
will cause their majority-owned subsidiaries not to, do any of the following
(with limited exceptions):
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declare
or pay any dividend or distribution on FPL Group’s or FPL Group Capital’s
capital stock;
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redeem,
purchase, acquire or make a liquidation payment with respect to
any of FPL
Group’s or FPL Group Capital’s capital
stock;
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pay
any principal, interest or premium on, or repay, repurchase or
redeem any
of FPL Group’s or FPL Group Capital’s debt securities that are equal or
junior in right of payment with the Junior Subordinated Debentures
or the
Subordinated Guarantee (as the case may be);
or
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make
any payments with respect to any FPL Group or FPL Group Capital
guarantee
of debt securities if such guarantee is equal or junior in right
of
payment to the Junior Subordinated Debentures or the Subordinated
Guarantee (as the case may be).
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See
“Specific Terms of the Junior Subordinated Debentures—Modification of the
Subordinated Indenture” (which describes the right of FPL Group and FPL Group
Capital to modify the restrictions described above) in this prospectus
supplement and “Description of the FPL Group and FPL Group Capital Junior
Subordinated Debentures and the FPL Group Subordinated Guarantee—Option to Defer
Interest Payments” (which includes a description of the limited exceptions to
the restrictions described above) in the accompanying prospectus.
Limitation
on Remedies. Each of the following
constitutes an event of default under the Subordinated Indenture with respect
to
the Junior Subordinated Debentures:
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(1)
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failure
to pay interest on the Junior Subordinated Debentures within 30
days after
it is due (provided, however, that a failure to pay interest during
a
valid Optional Deferral Period will not constitute an event of
default),
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(2)
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failure
to pay principal or premium, if any, on the Junior Subordinated
Debentures
when it is due,
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(3)
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failure
to comply with any other covenant in the Subordinated Indenture,
other
than a covenant that does not apply to the Junior Subordinated
Debentures,
that continues for 90 days after FPL Group Capital and FPL Group
receive
written notice of such failure to comply from the subordinated
indenture
trustee, or FPL Group Capital, FPL Group and the subordinated indenture
trustee receive written notice of such failure to comply from the
registered owners of at least 33% in principal amount of the Junior
Subordinated Debentures,
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(4)
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certain
events of bankruptcy, insolvency or reorganization of FPL Group
Capital or
FPL Group, and
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(5)
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with
certain exceptions, the Subordinated Guarantee ceases to be effective,
is
found by a judicial proceeding to be unenforceable or invalid or
is denied
or disaffirmed by FPL Group.
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See
“Description of the FPL Group and FPL Group Capital Junior Subordinated
Debentures and the FPL Group Subordinated Guarantee—Events of Default” in the
accompanying prospectus for discussion of the applicable grace
periods.
With
respect to the Junior Subordinated Debentures,
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if
any event of default, other than an event of default listed in
item (3)
above exists, and such event of default is not applicable to all
outstanding securities issued under the Subordinated Indenture
(the
“Subordinated Indenture Securities”), then either the subordinated
indenture trustee or the registered owners of at least 33% in aggregate
principal amount of the Subordinated Indenture Securities of each
of the
affected series may declare the principal of and accrued but unpaid
interest on all the Subordinated Indenture Securities of that series
to be
due and payable immediately; or
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·
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if
any event of default, other than an event of default listed in
item (3)
above, is applicable to all outstanding Subordinated Indenture
Securities,
then only the subordinated indenture trustee or the registered
owners of
at least 33% in aggregate principal amount of all outstanding Subordinated
Indenture Securities of all series, voting as one class, and not
the
registered owners of any one series, may make a declaration of
acceleration.
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Accordingly,
if an event of default listed in item (3) above exists, the registered owners
of
the Junior Subordinated Debentures will not be entitled to vote to make a
declaration of acceleration (and the Junior Subordinated Debentures will
not be
considered outstanding for the purpose of determining whether the required
vote,
described in the bullet points above, has been obtained), and the subordinated
indenture trustee will not have a right to make such declaration with respect
to
the Junior Subordinated Debentures.
The
exception to the right to accelerate payment of the principal of and accrued
but
unpaid interest on Subordinated Indenture Securities for an event of default
listed in item (3) above does not apply to any series of Subordinated Indenture
Securities issued prior to the issuance of the Junior Subordinated Debentures
and
the Series D Junior Subordinated Debentures due 2067 which are being
offered by FPL Group Capital concurrently herewith. Payment on
each series of Subordinated Indenture Securities issued prior to the issuance
of
the Junior Subordinated Debentures and
the
Series D Junior Subordinated Debentures due 2067 and currently
outstanding can be accelerated in the manner discussed above, upon the
occurrence of each event of default listed above, and applicable to that
series,
including an event of default listed in item (3) above. See
“Description of the FPL Group and FPL Group Capital Junior Subordinated
Debentures and the FPL Group Subordinated Guarantee—Remedies” in the
accompanying prospectus for a discussion of remedies available to the registered
owners of the Subordinated Indenture Securities (modified, as described above,
for the Junior Subordinated Debentures and
the
Series D Junior Subordinated Debentures due 2067).
Modification
of the Subordinated Indenture. FPL Group and FPL Group
Capital have reserved the right to amend the Subordinated Indenture without
the
consent or action of the holders of any junior subordinated debentures issued
after October 1, 2006, including the Junior Subordinated Debentures, to modify
the exceptions to the restrictions described above under “—Option to Defer
Interest Payments” applicable during any period in which FPL Group Capital
defers interest payments on such junior subordinated debentures (including
the
Junior Subordinated Debentures) to allow payments with respect to any preferred
trust securities or debt securities, or any guarantee thereof (including
the
Subordinated Guarantee), executed and delivered by FPL Group, FPL Group Capital
or any of their subsidiaries, in each case that rank equal in right of payment
to such junior subordinated debentures or the related guarantee, as the case
may
be, so long as the amount of payments made on account of such securities
or
guarantees is paid on all such securities or guarantees then outstanding
on a
pro rata basis in proportion to the full payment to which each series of
such
securities or guarantees is then entitled if paid in full.
Book-Entry
Only Issuance. The Junior Subordinated
Debentures will trade through DTC. The Junior Subordinated Debentures
will be represented by one or more global certificates and registered in
the
name of Cede & Co., DTC’s nominee. Upon issuance of the global
securities, DTC or its nominee will credit, on its book-entry registration
and
transfer system, the respective principal amount of the Junior Subordinated
Debentures represented by such global securities to the accounts of institutions
that have an account with DTC or its participants. The accounts to be
credited shall be designated by the underwriters. Ownership of
beneficial interests in the global securities will be limited to participants
or
persons that may hold interests through participants. The global
certificates will be deposited with the subordinated indenture trustee as
custodian for DTC.
Investors
may hold interests in Junior Subordinated Debentures in global form through
DTC’s participants or persons that hold interests through participants,
including Clearstream Banking, société anonyme (“Clearstream,
Luxembourg”) or Euroclear Bank S.A./N.V. (“Euroclear”). Clearstream,
Luxembourg and Euroclear will hold interests on behalf of their participants
through customers’ securities accounts in Clearstream, Luxembourg’s and
Euroclear’s names on the books of their respective depositaries, which in turn
will hold such interests in customers’ securities accounts in the depositaries’
names on the books of DTC.
DTC. DTC
is a New York clearing corporation and a clearing agency registered under
Section 17A of the Securities Exchange Act of 1934. DTC holds
securities for its participants. DTC also facilitates the post-trade
settlement of securities transactions among its participants through electronic
computerized book-entry transfers and pledges in the participants’
accounts. This eliminates the need for physical movement of
securities certificates. The participants include securities brokers
and dealers, banks, trust companies, clearing corporations and certain other
organizations. DTC is a wholly-owned subsidiary of The Depository
Trust & Clearing Corporation (“DTCC”). DTCC, in turn, is owned by
a number of participants of DTC, members of other clearing corporations and
by
The New York Stock Exchange, Inc., the American Stock Exchange LLC, and the
National Association of Securities
Dealers,
Inc. Others who maintain a custodial relationship with a participant
can use the DTC system. The rules that apply to DTC and those using
its systems are on file with the Securities and Exchange
Commission.
Purchases
of the Junior Subordinated Debentures within the DTC system must be made
through
participants, which will receive a credit for the Junior Subordinated Debentures
on DTC’s records. The beneficial ownership interest of each purchaser
will be recorded on the appropriate participant’s records. Beneficial
owners will not receive written confirmation from DTC of their purchases,
but
beneficial owners should receive written confirmations of the transactions,
as
well as periodic statements of their holdings, from the participants through
which they purchased Junior Subordinated Debentures. Transfers of
ownership in the Junior Subordinated Debentures are to be accomplished by
entries made on the books of the participants acting on behalf of beneficial
owners. Beneficial owners will not receive certificates for their
Junior Subordinated Debentures, except if use of the book-entry system for
the
Junior Subordinated Debentures is discontinued.
To
facilitate subsequent transfers, all Junior Subordinated Debentures deposited
by
participants with DTC are registered in the name of DTC’s nominee, Cede &
Co. The deposit of the Junior Subordinated Debentures with DTC and
their registration in the name of Cede & Co. effects no change in beneficial
ownership. DTC has no knowledge of the actual beneficial owners of
the Junior Subordinated Debentures. DTC’s records reflect only the
identity of the participants to whose accounts such Junior Subordinated
Debentures are credited. These participants may or may not be the
beneficial owners. Participants will remain responsible for keeping
account of their holdings on behalf of their customers.
Conveyance
of notices and other communications by DTC to participants, and by participants
to beneficial owners, will be governed by arrangements among them, subject
to
any statutory or regulatory requirements as may be in effect from time to
time. Beneficial owners of Junior Subordinated Debentures may wish to
take certain steps to augment transmission to them of notices of significant
events with respect to the Junior Subordinated Debentures, such as redemptions,
tenders, defaults and proposed amendments to the Subordinated
Indenture. Beneficial owners of the Junior Subordinated Debentures
may wish to ascertain that the nominee holding the Junior Subordinated
Debentures has agreed to obtain and transmit notices to the beneficial
owners.
Redemption
notices will be sent to Cede & Co., as registered holder of the Junior
Subordinated Debentures. If less than all of the Junior Subordinated
Debentures are being redeemed, DTC’s practice is to determine by lot the amount
of Junior Subordinated Debentures of each participant to be
redeemed.
Neither
DTC nor Cede & Co. will itself consent or vote with respect to Junior
Subordinated Debentures, unless authorized by a participant in accordance
with
DTC’s procedures. Under its usual procedures, DTC would mail an
omnibus proxy to FPL Group Capital as soon as possible after the record
date. The omnibus proxy assigns the consenting or voting rights of
Cede & Co. to those participants to whose accounts the Junior Subordinated
Debentures are credited on the record date. FPL Group Capital and FPL
Group believe that these arrangements will enable the beneficial owners to
exercise rights equivalent in substance to the rights that can be directly
exercised by a registered holder of the Junior Subordinated
Debentures.
Payments
of redemption proceeds, principal of, and interest on the Junior Subordinated
Debentures will be made to Cede & Co., or such other nominee as may be
requested by DTC. DTC’s practice is to credit participants’ accounts
upon DTC’s receipt of funds and corresponding detail information from FPL Group
Capital or its agent, on the payable date in accordance with their respective
holdings shown on DTC’s records. Payments by participants to
beneficial owners will be governed by standing instructions and customary
practices. Payments will be the responsibility of participants and
not of DTC, The Bank of New York (the subordinated indenture trustee), FPL
Group
Capital or FPL Group, subject to any statutory or regulatory requirements
as may
be in effect from time to time. Payment of redemption proceeds,
principal and interest to Cede & Co. (or such other nominee as may be
requested by DTC) is the responsibility of FPL Group
Capital. Disbursement of payments to participants is the
responsibility of DTC, and disbursement of payments to the beneficial owners
is
the responsibility of participants.
Except
as
provided in this prospectus supplement, a beneficial owner will not be entitled
to receive physical delivery of the Junior Subordinated
Debentures. Accordingly, each beneficial owner must rely on the
procedures of DTC to exercise any rights under the Junior Subordinated
Debentures.
DTC
may
discontinue providing its services as securities depositary with respect
to the
Junior Subordinated Debentures at any time by giving reasonable notice to
FPL
Group Capital. In the event no successor securities depositary is
obtained, certificates for the Junior Subordinated Debentures will be printed
and delivered. FPL Group Capital and FPL Group may decide to replace
DTC or any successor depositary. Additionally, subject to the
procedures of DTC, FPL Group Capital and FPL Group may decide to discontinue
use
of the system of book-entry transfers through DTC (or a successor depositary)
with respect to some or all of the Junior Subordinated Debentures. In
that event, certificates for such Junior Subordinated Debentures will be
printed
and delivered. If certificates for Junior Subordinated Debentures are printed
and delivered,
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the
Junior Subordinated Debentures will be issued in fully registered
form
without coupons;
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a
holder of certificated Junior Subordinated Debentures would be
able to
exchange those Junior Subordinated Debentures, without charge,
for an
equal aggregate principal amount of Junior Subordinated Debentures
of the
same series, having the same issue date and with identical terms
and
provisions; and
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a
holder of certificated Junior Subordinated Debentures would be
able to
transfer those Junior Subordinated Debentures without cost to another
holder, other than for applicable stamp taxes or other governmental
charges.
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Clearstream,
Luxembourg. Clearstream, Luxembourg advises that it is
incorporated under the laws of Luxembourg as a professional
depositary. Clearstream, Luxembourg holds securities for its
participating organizations (“Clearstream participants”) and facilitates the
clearance and settlement of securities transactions between Clearstream
participants through electronic book-entry changes in accounts of Clearstream
participants, thereby eliminating the need for physical movement of
certificates. Clearstream, Luxembourg provides to Clearstream
participants, among other things, services for safekeeping, administration,
clearance and settlement of internationally traded securities and securities
lending and borrowing. Clearstream, Luxembourg interfaces with
domestic markets in several countries. As a professional depositary,
Clearstream, Luxembourg is subject to regulation by the Luxembourg Commission
for the Supervision of the Financial Sector (Commission de Surveillance du
Secteur Financier). Clearstream participants are recognized
financial institutions around the world, including underwriters, securities
brokers and dealers, banks, trust companies, clearing corporations and certain
other organizations and may include the underwriters. Indirect access
to Clearstream, Luxembourg is also available to others, such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a Clearstream participant, either directly or
indirectly.
Distributions
with respect to interests in the Junior Subordinated Debentures held
beneficially through Clearstream, Luxembourg will be credited to cash accounts
of Clearstream participants in accordance with its rules and procedures,
to the
extent received by the U.S. depositary for Clearstream, Luxembourg.
Euroclear. Euroclear
advises that it was created in 1968 to hold securities for participants of
Euroclear (“Euroclear participants”) and to clear and settle transactions
between Euroclear participants through simultaneous electronic book-entry
delivery against payment, thereby eliminating the need for physical movement
of
certificates and any risk from lack of simultaneous transfers of securities
and
cash. Euroclear includes various other services, including securities
lending and borrowing and interfaces with domestic markets in several
countries. Euroclear is operated by Euroclear Bank S.A./N.V. (the
“Euroclear Operator”). All operations are conducted by the Euroclear
Operator, and all Euroclear securities clearance accounts and Euroclear cash
accounts are accounts with the Euroclear Operator. Euroclear
participants include banks (including central banks), securities brokers
and
dealers and other professional financial intermediaries and may include the
underwriters. Indirect access to Euroclear is also available to other
firms that clear through or maintain a custodial relationship with a Euroclear
participant, either directly or indirectly.
Securities
clearance accounts and cash accounts with the Euroclear Operator are governed
by
the Terms and Conditions Governing Use of Euroclear and the related Operating
Procedures of the Euroclear system, and applicable Belgian law (collectively,
the “Terms and Conditions”). The Terms and Conditions govern
transfers of securities and cash within the Euroclear system, withdrawals
of
securities and cash from the Euroclear system, and
receipts
of payments with respect to securities in the Euroclear system. All
securities in the Euroclear system are held on a fungible basis without
attribution of specific certificates to specific securities clearance
accounts. The Euroclear Operator acts under the Terms and Conditions
only on behalf of Euroclear participants, and has no records of or relationship
with persons holding through Euroclear participants.
Distributions
with respect to the Junior Subordinated Debentures held beneficially through
the
Euroclear system will be credited to the cash accounts of Euroclear participants
in accordance with the Terms and Conditions, to the extent received by the
U.S.
depositary for the Euroclear system.
Global
Clearance and Settlement Procedures. Settlement for the Junior
Subordinated Debentures will be made in immediately available
funds. Secondary market trading between DTC participants will occur
in the ordinary
way in accordance with DTC rules and will be settled in immediately available
funds using DTC’s Same-Day Funds Settlement System. Secondary market
trading between Clearstream participants and/or Euroclear participants will
occur in the ordinary way in accordance with the applicable rules and operating
procedures of Clearstream, Luxembourg and the Euroclear system, as
applicable.
Cross-market
transfers between persons holding directly or indirectly through DTC on the
one
hand, and directly or indirectly through Clearstream participants or Euroclear
participants, on the other, will be effected through DTC in accordance with
DTC
rules on behalf of the relevant European international clearing system by
its
U.S. depositary; however, such cross-market transactions will require delivery
of instructions to the relevant European international clearing system by
the
counterparty in such system in accordance with its rules and procedures and
within its established deadlines (European time). The relevant
European international clearing system will, if the transaction meets its
settlement requirements, deliver instructions to its U.S. depositary to take
action to effect final settlement on its behalf by delivering or receiving
securities in DTC, and making or receiving payment in accordance with normal
procedures for same-day funds settlement applicable to
DTC. Clearstream participants and Euroclear participants may not
deliver instructions directly to their respective U.S.
depositaries.
Because
of time-zone differences, credits of the Junior Subordinated Debentures received
in Clearstream, Luxembourg or the Euroclear system as a result of a transaction
with a DTC participant will be made during subsequent securities settlement
processing and dated the business day following the DTC settlement
date. Such credits or any transactions in such Junior Subordinated
Debentures settled during such processing will be reported to the relevant
Euroclear participant or Clearstream participant on such business
day. Cash received in Clearstream, Luxembourg or the Euroclear system
as a result of sales of the Junior Subordinated Debentures by or through
a
Clearstream participant or a Euroclear participant to a DTC participant will
be
received on the DTC settlement date but will be available in the relevant
Clearstream, Luxembourg or the Euroclear system cash account only as of the
business day following settlement in DTC.
The
information in this section concerning DTC and DTC’s book-entry system,
Clearstream, Luxembourg and the Euroclear system has been obtained from sources
that FPL Group Capital and FPL Group believe to be reliable. None of
FPL Group Capital, FPL Group or the underwriters take any responsibility
for the
accuracy of this information.
Agreement
by Holders of Certain Tax Treatment. Each holder of the
Junior Subordinated Debentures will, by accepting the Junior Subordinated
Debentures or a beneficial interest therein, be deemed to have agreed that
the
holder intends that the Junior Subordinated Debentures constitute indebtedness
and will treat the Junior Subordinated Debentures as indebtedness for all
United
States federal, state and local tax purposes.
This
section briefly summarizes some of the provisions of the Replacement Capital
Covenant. This summary does not contain a complete description of the
Replacement Capital Covenant. You should read this summary together
with the Replacement Capital Covenant for a complete understanding of all
the
provisions. The Replacement Capital Covenant is available from FPL
Group or FPL Group Capital upon request.
At
or
around the time of the issuance of the Junior Subordinated Debentures, FPL
Group
Capital and FPL Group will covenant in the Replacement Capital Covenant for
the
benefit of holders of a designated series of FPL Group Capital’s unsecured
long-term indebtedness that ranks senior to the Junior Subordinated Debentures,
or in certain limited cases holders of a designated series of unsecured
long-term indebtedness of FPL Group, that
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FPL
Group Capital will not redeem, purchase or defease the Junior Subordinated
Debentures,
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FPL
Group will not purchase the Junior Subordinated Debentures,
and
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FPL
Group and FPL Group Capital will cause their majority-owned subsidiaries
not to purchase the Junior Subordinated
Debentures
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on
or
before September 1, 2037, unless, subject to certain limitations, a specified
amount shall have been raised from the issuance, during the 180 days prior
to
the date of that redemption, purchase or defeasance, of qualifying securities
that have equity-like characteristics that are the same as, or more equity-like
than, the applicable characteristics of the Junior Subordinated Debentures
at
the time of redemption, purchase or defeasance. The determination of
the equity-like characteristics of the Junior Subordinated Debentures may
result
in the issuance of an amount of new securities that may be less than the
principal amount of the Junior Subordinated Debentures, depending upon, among
other things, the nature of the new securities issued and the equity-like
characteristics attributed by a rating agency to the Junior Subordinated
Debentures and the new securities.
The
covenants of FPL Group Capital and FPL Group in the Replacement Capital Covenant
run only to the benefit of holders of the designated series of FPL Group
Capital’s unsecured long-term indebtedness or the unsecured long-term
indebtedness of FPL Group, as applicable. The Replacement Capital
Covenant is not intended for the benefit of holders of the Junior Subordinated
Debentures and may not be enforced by them, and the Replacement Capital Covenant
is not a term of the Subordinated Indenture, the Subordinated Guarantee or
the
Junior Subordinated Debentures.
The
ability to raise amounts from the issuance of qualifying securities during
the
180 days prior to a proposed redemption, purchase or defeasance of the Junior
Subordinated Debentures will depend on, among other things, market conditions
at
that time as well as the acceptability to prospective investors of the terms
of
those qualifying securities.
FPL
Group
Capital and FPL Group may amend or supplement the Replacement Capital Covenant
from time to time with the consent of the holders of a majority in aggregate
outstanding principal amount of the designated series of indebtedness benefiting
from the Replacement Capital Covenant, except that no such consent will be
required (i) for certain specified types of changes to the types of securities
qualifying as replacement capital securities, (ii) if the effect of such
amendment or supplement is solely to impose additional restrictions on the
ability of (x) the Corporation to redeem, purchase or defease the Junior
Subordinated Debentures or (y) the Guarantor or any majority-owned subsidiary
of
either FPL Group Capital or FPL Group to purchase the Junior Subordinated
Debentures, and, in each case, an officer of FPL Group Capital has delivered
to
the holders of the then-effective series of covered debt a written certificate
to that effect, (iii) if such amendment or supplement extends the September
1,
2017 stepdown date or the September 1, 2037 termination date for the Replacement
Capital Covenant, or both, or (iv) if such amendment or supplement is not
adverse to the holders of the then-effective series of covered debt, and
an
officer of FPL Group Capital has delivered to the holders of the then-effective
series of covered debt a written certificate stating that, in his or her
determination, such amendment or supplement is not adverse to the holders
of the
then-effective series of covered debt.
The
Replacement Capital Covenant will remain in effect until the earliest date
to
occur of (i) September 1, 2037, or if earlier, the date on which the Junior
Subordinated Debentures are otherwise paid, redeemed, defeased, or purchased
in
full (in compliance with the Replacement Capital Covenant), (ii) the date,
if
any, on which the holders of at least a majority of the outstanding principal
amount of the designated series of indebtedness then benefiting from the
Replacement Capital Covenant agree to the termination of the obligations
of FPL
Group and FPL Group Capital under the Replacement Capital Covenant, (iii)
the
date on which neither FPL Group Capital nor FPL Group has any eligible covered
debt and (iv) the date on which the Junior Subordinated Debentures are
accelerated as a
result
of
an event of default under the Subordinated Indenture. For a
description of the events of default under the Subordinated Indenture, see
“Description of the FPL Group and FPL Group Capital Junior Subordinated
Debentures and the FPL Group Subordinated Guarantee—Events of Default” in the
accompanying prospectus.
The
following is a general discussion of the material U.S. federal income tax
considerations relating to the purchase, ownership and disposition of the
Junior
Subordinated Debentures. This discussion only applies to Junior
Subordinated Debentures that are held as capital assets by holders who purchase
the Junior Subordinated Debentures in the initial offering at their “issue
price,” which will equal the first price to the public (not including bond
houses, brokers or similar persons or organizations acting in the capacity
of
underwriters, placement agents or wholesalers) at which a substantial amount
of
the Junior Subordinated Debentures are sold for money. This
discussion does not describe
all of the material tax considerations that may be relevant to holders in
light
of their particular circumstances or to holders subject to special rules,
such
as certain financial institutions, banks, insurance companies, tax-exempt
entities, certain former citizens or residents of the United States, dealers
in
securities, traders in securities that elect to use a mark-to-market method
of
accounting, partnerships and other pass-through entities (and persons holding
the Junior Subordinated Debentures through a partnership or other pass-through
entity), persons holding the Junior Subordinated Debentures as part of a
hedge,
straddle, constructive sale, conversion transaction or other integrated
transaction, holders whose functional currency is not the U.S. dollar, passive
foreign investment companies, controlled foreign corporations and corporations
that accumulate earnings to avoid U.S. federal income tax. In
addition, this discussion does not address the effect of any state, local,
foreign or other tax laws or any U.S. federal estate, gift or alternative
minimum tax considerations. This discussion is based on the Internal
Revenue Code of 1986, as amended (the “Code”), administrative pronouncements,
judicial decisions and final, temporary and proposed Treasury regulations,
all
as in effect on the date hereof, and all of which are subject to change,
possibly with retroactive effect.
As
used
in this prospectus supplement, the term “U.S. holder” means a beneficial owner
of a Junior Subordinated Debenture that is for U.S. federal income tax
purposes:
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an
individual citizen or resident of the United
States;
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a
corporation (or other entity taxable as a corporation for U.S.
federal
income tax purposes) created or organized in or under the laws
of the
United States or of any state thereof or the District of
Columbia;
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an
estate the income of which is subject to U.S. federal income taxation
regardless of its source; or
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a
trust if (i) a court within the United States is able to exercise
primary
supervision over its administration and one or more U.S. persons
have the
authority to control all substantial decisions of the trust, or
(ii) that
trust was in existence on August 1, 1996 and has a valid election
in
effect under applicable U.S. Treasury regulations to be treated
as a
domestic trust.
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As
used
in this prospectus supplement, the term “non-U.S. holder” means a beneficial
owner of a Junior Subordinated Debenture that is neither a U.S. holder nor
a
partnership (or other entity treated as a partnership for U.S. federal income
tax purposes).
Persons
considering the purchase of the Junior Subordinated Debentures should consult
their own tax advisors as to the U.S. federal income tax considerations relating
to the purchase, ownership and disposition of the Junior Subordinated Debentures
in light of their particular circumstances, as well as the effect of any
state,
local, foreign or other tax laws.
Classification
of the Junior Subordinated Debentures
The
determination of whether a security should be classified as indebtedness
or
equity for U.S. federal income tax purposes requires a judgment based on
all
relevant facts and circumstances. There is no statutory, judicial or
administrative authority that directly addresses the U.S. federal income
tax
treatment of securities similar
to
the
Junior Subordinated Debentures. Based upon an analysis of the
relevant facts and circumstances, including certain assumptions made by them
and
representations provided by FPL Group Capital and FPL Group to them, Thelen
Reid
Brown Raysman & Steiner LLP will provide FPL Group Capital and FPL Group
with an opinion generally to the effect that under then current law and assuming
full compliance with the terms of the Subordinated Indenture and other relevant
documents, and based on the facts and assumptions contained in such opinion,
the
Junior Subordinated Debentures will be treated as indebtedness of FPL Group
Capital for U.S. federal income tax purposes (although there is no controlling
authority directly on point). This opinion is not binding on the
Internal Revenue Service (“IRS”) or any court and there can be no assurance that
the IRS or a court will agree with this opinion. If the IRS were to
successfully challenge the classification of the Junior Subordinated Debentures
as indebtedness, interest payments on the Junior Subordinated Debentures
would
be treated for U.S. federal income tax purposes as dividends to the extent
of
FPL Group Capital’s current or accumulated earnings and profits. In
the case of non-U.S. holders, distributions treated as dividends would be
subject to withholding of U.S. income tax, except to the
extent provided by an applicable income tax treaty. FPL Group Capital
agrees, and by acquiring an interest in a Junior Subordinated Debenture each
beneficial owner of a Junior Subordinated Debenture will agree, to treat
the
Junior Subordinated Debentures as indebtedness for U.S. federal income tax
purposes, and the remainder of this discussion assumes this
treatment. Holders should consult their own tax advisors regarding
the tax consequences that will arise if the Junior Subordinated Debentures
are
not treated as indebtedness for U.S. federal income tax purposes.
U.S.
Holders
Interest
Pursuant
to applicable U.S. Treasury regulations, the possibility that interest on
the
Junior Subordinated Debentures might be deferred could result in the Junior
Subordinated Debentures being treated as issued with original issue discount,
unless the likelihood of a deferral is remote within the meaning of the
regulations. FPL Group Capital believes that the likelihood of
interest deferral is remote and therefore that the possibility of a deferral
will not result in the Junior Subordinated Debentures being treated as issued
with original issue discount. Similarly, in certain circumstances
(see “Specific Terms of the Junior Subordinated Debentures—Redemption” and
“Specific Terms of the Junior Subordinated Debentures—Right to Redeem Upon a
Rating Agency Event”), FPL Group Capital may be obligated to pay amounts in
excess of stated interest on or principal of the Junior Subordinated
Debentures. Such excess payments will not affect the amount of
interest income that a U.S. holder recognizes if there is only a remote
likelihood that such payments will be made. FPL Group Capital
believes that the likelihood that it will make any of such payments is
remote. Accordingly, interest paid on the Junior Subordinated
Debentures should be taxable to a U.S. holder as ordinary interest income
at the
time it accrues or is received, in accordance with that U.S. holder’s method of
accounting for U.S. federal income tax purposes. However, there can
be no assurance that the IRS or a court will agree with this
position. The meaning of the term “remote” in the U.S. Treasury
regulations has not yet been addressed in any rulings or other guidance by
the
IRS or any court. If the possibility of interest deferral or excess
payments were determined not to be remote, or if interest were in fact deferred
or excess payments were in fact made, a U.S. holder would be required to
accrue
interest income on its Junior Subordinated Debentures using a constant yield
method, regardless of that holder’s regular method of accounting and before that
U.S. holder actually receives any cash payment attributable to that
interest. Additionally, if a holder were to dispose of its Junior
Subordinated Debentures prior to the end of an Optional Deferral Period or
prior
to the end of the period during which a redemption of the Junior Subordinated
Debentures would require the payment of a make-whole premium, and the
possibility of such interest deferral or the payment of a make-whole premium
were determined not to have been remote as of the date the Junior Subordinated
Debentures were originally issued, the holder would be required to treat
as
ordinary income rather than as capital gain any income realized on the taxable
disposition of a Junior Subordinated Debenture.
Sale,
Exchange, Redemption or Retirement of the Junior Subordinated
Debentures
Upon
the
sale, exchange, redemption or retirement of a Junior Subordinated Debenture,
a
U.S. holder will generally recognize gain or loss equal to the difference
between the amount realized on the sale, exchange, redemption or retirement
and
that U.S. holder’s adjusted tax basis in the Junior Subordinated
Debenture. For these purposes, the amount realized does not include
any amount attributable to accrued but unpaid interest, which will constitute
ordinary income if not previously included in income. Assuming that
there are no deferred payments of
interest
on the Junior Subordinated Debentures and that the Junior Subordinated
Debentures are not deemed to be issued with original issue discount, a U.S.
holder’s adjusted tax basis in the Junior Subordinated Debentures generally will
be its initial purchase price. If the Junior Subordinated Debentures
are deemed to be issued with original issue discount, a U.S. holder’s tax basis
in the Junior Subordinated Debentures generally will be its initial purchase
price, increased by original issue discount previously includible in that
U.S.
holder’s gross income through the date of disposition and decreased by payments
received by that U.S. holder on the Junior Subordinated Debentures since
and
including the date that the Junior Subordinated Debentures were deemed to
be
issued with original issue discount. Gain or loss realized on the
sale, exchange, redemption or retirement of a Junior Subordinated Debenture
will
generally be capital gain or loss and will be long-term capital gain or loss
if
at the time of the sale, exchange, redemption or retirement the Junior
Subordinated Debenture has been held by that U.S. holder for more than one
year. A U.S. holder that is an individual is generally entitled to
preferential treatment for net long-term capital gains. The ability
of a U.S. holder to deduct capital losses is limited.
If
FPL
Group Capital defers interest payments on the Junior Subordinated Debentures
for
one or more Optional Deferral Periods, holders will be required to accrue
interest income as original issue discount in respect of the deferred interest
on the holder’s Junior Subordinated Debentures. As a result, for U.S.
federal income tax purposes, holders will include that original issue discount
in gross income before receiving interest payments, regardless of their regular
method of accounting for U.S. federal income taxes.
If
a
holder sells Junior Subordinated Debentures before the record date for the
payment of interest at the end of an Optional Deferral Period, the holder
will
not receive such interest. Instead, the accrued interest will be paid
to the holder of record on the record date regardless of who the holder of
record may have been on any other date during the Optional Deferral
Period. Moreover, the accrued original issue discount will be added
to the holder’s adjusted tax basis in the Junior Subordinated Debentures but may
not be reflected in the amount realized on the sale. To the extent
the amount realized on a sale is less than a holder’s adjusted tax basis, the
holder will recognize a capital loss for U.S. federal income tax
purposes. The deductibility of capital losses is subject to
limitations.
Backup
Withholding and Information Reporting
Information
reporting requirements generally apply in connection with payments on the
Junior
Subordinated Debentures to, and proceeds from a sale or other disposition
of the
Junior Subordinated Debentures by, non-corporate U.S. holders. A U.S.
holder will be subject to backup withholding tax on interest paid on the
Junior
Subordinated Debentures and proceeds from a sale or other disposition of
the
Junior Subordinated Debentures if the U.S. holder fails to provide its correct
taxpayer identification number to the paying agent in the manner required
under
U.S. federal income tax law, fails to comply with applicable backup withholding
tax rules or does not otherwise establish an exemption from backup
withholding. Any amounts withheld under the backup withholding rules
will entitle that U.S. holder to a credit against that U.S. holder’s U.S.
federal income tax liability and may entitle that U.S. holder to a refund,
provided that the required information is timely and properly furnished to
the
IRS.
U.S.
holders should consult their tax advisors regarding the application of backup
withholding in their particular situation, the availability of an exemption
from
backup withholding and the procedure for obtaining such an exemption, if
available.
Non-U.S.
Holders
Assuming
that the Junior Subordinated Debentures will be treated as indebtedness for
U.S.
federal income tax purposes, no withholding of U.S. federal income tax will
apply to interest paid on a Junior Subordinated Debenture to a non-U.S. holder
under the “portfolio interest exemption,” provided that:
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the
interest is not effectively connected with the non-U.S. holder’s conduct
of a trade or business in the United
States;
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the
non-U.S. holder does not actually or constructively own 10% or
more of the
total combined voting power of all classes of FPL Group Capital’s stock
entitled to vote;
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the
non-U.S. holder is not a controlled foreign corporation that is
related
directly or constructively to FPL Group Capital through stock ownership;
and
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the
non-U.S. holder provides to the withholding agent, in accordance
with
specified procedures, a statement to the effect that that such
non-U.S.
holder is not a United States person (generally by providing a
properly
executed IRS Form W-8BEN).
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If
a
non-U.S. holder cannot satisfy the requirements of the portfolio interest
exemption described above, interest paid on the Junior Subordinated Debentures
(including payments in respect of original issue discount, if any, on the
Junior
Subordinated Debentures) made to a non-U.S. holder will be subject to a 30%
U.S.
federal withholding tax, unless that non-U.S. holder provides the withholding
agent with a properly executed statement (i) claiming an exemption
from or reduction of withholding under an applicable U.S. income tax treaty
or
(ii) stating that the interest is not subject to withholding tax because
it is
effectively connected with that non-U.S. holder’s conduct of a trade or business
in the United States.
If
a
non-U.S. holder is engaged in a trade or business in the United States (or,
if
an applicable U.S. income tax treaty applies, if the non-U.S. holder maintains
a
permanent establishment within the United States) and the interest is
effectively connected with the conduct of that trade or business (or, if
an
applicable U.S. income tax treaty applies, attributable to that permanent
establishment), that non-U.S. holder will be subject to U.S. federal income
tax
on the interest on a net income basis in the same manner as if that non-U.S.
holder were a U.S. holder. In addition, a non-U.S. holder that is a
foreign corporation engaged in a trade or business in the United States may
be
subject to a 30% (or, if an applicable U.S. income tax treaty applies, a
lower
rate as provided) branch profits tax.
Any
gain
realized on the disposition of a Junior Subordinated Debenture generally
will
not be subject to U.S. federal income tax unless:
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that
gain is effectively connected with the non-U.S. holder’s conduct of a
trade or business in the United States (or, if an applicable U.S.
income
tax treaty applies, is attributable to a permanent establishment
maintained by the non-U.S. holder within the United States);
or
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the
non-U.S. holder is an individual who is present in the United States
for
183 days or more in the taxable year of the disposition and certain
other
conditions are met.
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In
general, backup withholding and information reporting will not apply to interest
paid on a Junior Subordinated Debenture to a non-U.S. holder, or to proceeds
from the disposition of a Junior Subordinated Debenture by a non-U.S. holder,
in
each case, if the non-U.S. holder certifies under penalties of perjury that
it
is a non-U.S. holder and neither FPL Group Capital nor the paying agent has
actual knowledge (or reason to know) to the contrary. Any amounts
withheld under the backup withholding rules will entitle such non-U.S. holder
to
a credit against U.S. federal income tax liability and may entitle
such non-U.S. holder to a refund, provided that the required information
is
timely and properly furnished to the IRS. In general, if a Junior
Subordinated Debenture is not held through a qualified intermediary, the
amount
of payments made on that Junior Subordinated Debenture, the name and address
of
the beneficial owner and the amount, if any, of tax withheld may be reported
to
the IRS.
Non-U.S.
holders should consult their tax advisors regarding the application of backup
withholding in their particular situation, the availability of an exemption
from
backup withholding and the procedure for obtaining such an exemption, if
available.
The
U.S. federal income tax discussion set forth above is included for general
information only and may not be applicable depending upon a holder’s particular
situation. Holders should consult their tax advisors regarding the
tax consequences to them of the purchase, ownership and disposition of the
Junior Subordinated Debentures, including the tax consequences under state,
local, foreign and other tax laws.
The
information in this section adds to the information in the “Plan of
Distribution” section beginning on page 53 of the accompanying
prospectus. Please read these two sections together.
FPL
Group
Capital is selling the Junior Subordinated Debentures to the underwriters
named
in the table below pursuant to an underwriting agreement among FPL Group
Capital, FPL Group and the underwriters named below, for whom Citigroup Global
Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan
Stanley & Co. Incorporated, UBS Securities LLC and Wachovia Capital Markets,
LLC are acting as representatives. Subject to certain conditions, FPL
Group Capital has agreed to sell to each of the underwriters, and each of
the
underwriters has severally agreed to purchase, the principal amount of Junior
Subordinated Debentures set forth opposite that underwriter’s name in the table
below:
|
Underwriter
|
Principal
Amount
of
Junior
Subordinated
Debentures
|
|||
|
Citigroup
Global Markets Inc.
|
$ |
57,750,000
|
||
|
Merrill
Lynch, Pierce, Fenner & Smith
Incorporated
|
57,750,000
|
|||
|
Morgan
Stanley & Co. Incorporated
|
57,750,000
|
|||
|
UBS
Securities LLC
|
57,750,000
|
|||
|
Wachovia
Capital Markets, LLC
|
57,750,000
|
|||
|
A.G.
Edwards & Sons, Inc.
|
7,000,000
|
|||
|
Banc
of America Securities LLC
|
7,000,000
|
|||
|
Lehman
Brothers Inc.
|
7,000,000
|
|||
|
Raymond
James & Associates, Inc.
|
7,000,000
|
|||
|
RBC
Dain Rauscher Inc.
|
7,000,000
|
|||
|
BB&T
Capital Markets, a division of
Scott
& Stringfellow, Inc.
|
1,750,000
|
|||
|
Bear,
Stearns & Co. Inc.
|
1,750,000
|
|||
|
Charles
Schwab & Co., Inc.
|
1,750,000
|
|||
|
D.A.
Davidson & Co.
|
1,750,000
|
|||
|
H&R
Block Financial Advisors, Inc.
|
1,750,000
|
|||
|
Janney
Montgomery Scott LLC
|
1,750,000
|
|||
|
J.J.B.
Hillard, W.L. Lyons, Inc.
|
1,750,000
|
|||
|
Keefe,
Bruyette & Woods, Inc.
|
1,750,000
|
|||
|
Oppenheimer
& Co. Inc.
|
1,750,000
|
|||
|
Pershing
LLC
|
1,750,000
|
|||
|
Robert
W. Baird & Co. Incorporated
|
1,750,000
|
|||
|
Samuel
A. Ramirez & Co., Inc.
|
1,750,000
|
|||
|
TD
Waterhouse Investor Services, Inc.
|
1,750,000
|
|||
|
Wells
Fargo Securities, LLC
|
1,750,000
|
|||
|
The
Williams Capital Group, L.P.
|
1,750,000
|
|||
|
Total
|
$ |
350,000,000
|
||
Under
the
terms and conditions of the underwriting agreement, the underwriters
must buy
all of the Junior Subordinated Debentures if they buy any of
them. The underwriting agreement provides that the obligations of the
underwriters pursuant thereto are subject to certain conditions. In
the event of a default by an underwriter, the underwriting agreement
provides
that, in certain circumstances, the purchase commitment of the non-defaulting
underwriters may be increased or the underwriting agreement may be
terminated. The underwriters will sell the Junior Subordinated
Debentures to the public when and if the underwriters buy the Junior
Subordinated Debentures from FPL Group Capital.
Commissions
and Discounts
FPL
Group
Capital will compensate the underwriters by selling the Junior Subordinated
Debentures to them at a price that is less than the price to the public
by the
amount of the “Underwriting Discount” set forth on the cover page of this
prospectus supplement. The underwriters will sell the Junior
Subordinated Debentures to the public at the price to the public set
forth on
the cover page of this prospectus supplement and may sell the Junior
Subordinated Debentures to certain dealers at a price that represents
a
concession not in excess of $0.50 per Junior Subordinated Debenture under
the
price to the public; provided that the concession will be $0.30 per Junior
Subordinated Debenture for sales to institutions. Any underwriter may
allow, and the dealers may reallow, a concession not in excess of $0.45
per
Junior Subordinated Debenture to other underwriters or to other dealers,
provided that there will be no concession with respect to sales to
institutions.
An
underwriter may reject offers for the Junior Subordinated
Debentures. After the initial public offering of the Junior
Subordinated Debentures, the underwriters may change the offering price and
other selling terms of the Junior Subordinated Debentures.
New
Issue
The
Junior Subordinated Debentures are a new issue of securities with no established
trading market. FPL Group Capital intends to apply to list the Junior
Subordinated Debentures on the New York Stock Exchange, and trading of the
Junior Subordinated Debentures on the New York Stock Exchange is expected
to
begin within a 30-day period after the Junior Subordinated Debentures are
first
issued. The underwriters have advised FPL Group Capital that they
intend to make a market in the Junior Subordinated Debentures prior to the
commencement of trading on the New York Stock Exchange but are not obligated
to
do so and may discontinue such market-making activities at any time without
notice. FPL Group Capital cannot give any assurance as to the
maintenance of the trading market for, or the liquidity of, the Junior
Subordinated Debentures.
Price
Stabilization and Short Positions
In
connection with the offering, Citigroup Global Markets Inc., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. Incorporated,
UBS Securities LLC and Wachovia Capital Markets, LLC on behalf of the
underwriters may purchase and sell the Junior Subordinated Debentures in
the
open market. These transactions may include over-allotment, syndicate
covering transactions and stabilizing transactions. Over-allotment
includes syndicate sales of Junior Subordinated Debentures in excess of the
principal amount of Junior Subordinated Debentures to be purchased by the
underwriters in the offering, which creates a syndicate short
position. Syndicate covering transactions involve purchases of the
Junior Subordinated Debentures in the open market after the distribution
has
been completed in order to cover syndicate short
positions. Stabilizing transactions consist of certain bids or
purchases of Junior Subordinated Debentures made for the purpose of preventing
or retarding a decline in the market price of the Junior Subordinated Debentures
while the offering is in progress.
The
underwriters may also impose a penalty bid. Penalty bids permit the
underwriters to reclaim an initial dealers’ concession from a syndicate member
when Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Morgan Stanley & Co. Incorporated, UBS Securities LLC or
Wachovia Capital Markets, LLC in covering syndicate short positions or making
stabilizing purchases, repurchases the Junior Subordinated Debentures originally
sold by that syndicate member.
Any
of
these activities may cause the price of the Junior Subordinated Debentures
to be
higher than the price that otherwise would exist in the open market in
the
absence of such transactions. These transactions may be effected in
the over-the-counter market or otherwise and, if commenced, may be discontinued
at any time.
Selling
Restrictions
General
The
Junior Subordinated Debentures are being offered for sale in the United
States
and in certain jurisdictions outside the United States, subject to applicable
law.
Each
of
the underwriters has agreed that it will not offer, sell or deliver any
of the
Junior Subordinated Debentures, directly or indirectly, or distribute
this
prospectus supplement or the accompanying prospectus or any other offering
material relating to the Junior Subordinated Debentures, in or from any
jurisdiction outside the United States except under circumstances that
will, to
the best knowledge and belief of such underwriter, result in compliance
with the
applicable laws and regulations thereof and which will not impose any
obligations on FPL Group Capital or FPL Group.
United
Kingdom
Each
underwriter has represented and agreed that: (i) it has only communicated
or
caused to be communicated and will only communicate or cause to be communicated
an invitation or inducement to engage in investment activity (within the
meaning
of Section 21 of the Financial Services and Markets Act 2000, known as “FSMA”)
received by it in connection with the issue or sale of the Junior Subordinated
Debentures in circumstances in which Section 21(1) of the FSMA does not apply
to
FPL Group Capital or FPL Group and (ii) it has complied and will comply with
all
applicable provisions of the FSMA with respect to anything done by it in
relation to the Junior Subordinated Debentures in, from or otherwise involving
the United Kingdom.
European
Union Prospectus Directive
In
relation to each Member State of the European Economic Area (the member states
of the European Union as well as Iceland, Norway and Liechtenstein) which
has
implemented the Prospectus Directive (each a “Relevant Member State”), each
underwriter has represented and agreed that effective from and including
the
date on which the Prospectus Directive was implemented in that Relevant Member
State (the “Relevant Implementation Date”), it has not made and will not make an
offer of the Junior Subordinated Debentures to the public in that Relevant
Member State prior to the publication of a prospectus in relation to the
Junior
Subordinated Debentures which
has
been approved by the competent authority in that Relevant Member State or,
where
appropriate, approved in another Relevant Member State and notified to the
competent authority in that Relevant Member State, all in accordance with
the
Prospectus Directive, except that it may, effective from and including the
Relevant Implementation Date, make an offer of Junior Subordinated Debentures
to
the public in that Relevant Member State at any time:
|
|
·
|
to
legal entities which are authorized or regulated to operate in
the
financial markets or, if not so authorized or regulated, whose
corporate
purpose is solely to invest in
securities;
|
|
|
·
|
to
any legal entity which has two or more of (1) an average of at
least 250
employees during the last fiscal year; (2) a total balance sheet
of more
than €43,000,000 and (3) an annual net turnover of more than €50,000,000,
as shown in its last annual or consolidated accounts;
or
|
|
|
·
|
in
any other circumstances falling within Article 3(2) of the Prospectus
Directive,
|
provided
that no such offer of Junior Subordinated Debentures shall result in a
requirement for the publication by FPL Group Capital or FPL Group of a
prospectus pursuant to Article 3 of the Prospectus Directive.
For
the
purposes of this provision, the expression “an offer of the Junior Subordinated
Debentures to the public” in relation to any Junior Subordinated Debentures in
any Relevant Member State means the communication in any form and by
any means
of sufficient information on the terms of the offer and the Junior Subordinated
Debentures to be offered so as to enable an investor to decide to purchase
or
subscribe for the Junior Subordinated Debentures, as the same may be
varied in
that Member State by any measure implementing the Prospectus Directive
in that
Member State, and the expression “Prospectus Directive” means Directive
2003/71/EC and includes any relevant implementing measure in each Relevant
Member State.
Expenses
and Indemnification
FPL
Group
Capital estimates that its expenses in connection with the sale of the
Junior
Subordinated Debentures, other than underwriting discounts, will be
$400,000. This estimate includes expenses relating to printing,
rating agency fees, trustee’s fees and legal fees, among other
expenses. The Underwriters have agreed to make a payment to FPL Group
Capital in lieu of reimbursement of a portion of FPL Group Capital’s expenses in
connection with this offering.
FPL
Group
Capital and FPL Group have agreed to indemnify the underwriters against,
or to
contribute to payments the underwriters may be required to make in respect
of,
certain liabilities, including liabilities under the Securities Act of
1933.
Certain
Relationships
The
underwriters and their affiliates engage in transactions with, and perform
services for, FPL Group, its subsidiaries (including FPL Group Capital) and
its
affiliates in the ordinary course of business and have engaged, and may engage
in the future, in commercial banking and investment banking transactions
with
FPL Group, its subsidiaries and its affiliates.
FPL
GROUP, INC.
Common
Stock, Preferred Stock, Senior Debt Securities, Junior Subordinated
Debentures,
Stock
Purchase Contracts and Stock Purchase Units
__________________________
FPL
GROUP CAPITAL INC
Senior
Debt Securities, Junior Subordinated Debentures and Preferred
Stock
Guaranteed
as described in this prospectus by
FPL
GROUP, INC.
__________________________
FPL
GROUP CAPITAL TRUST II
FPL
GROUP CAPITAL TRUST III
FPL
GROUP TRUST I
FPL
GROUP TRUST II
Preferred
Trust Securities
Guaranteed
as described in this prospectus by
FPL
GROUP, INC.
__________________________
Each
of
FPL Group, Inc., FPL Group Capital Inc, FPL Group Capital Trust II, FPL
Group Capital Trust III, FPL Group Trust I and FPL Group Trust II
may offer any combination of the securities described in this prospectus
in one
or more offerings from time to time in amounts authorized from time to
time.
FPL
Group, FPL Group Capital, FPL Group Capital Trust II, FPL Group Capital
Trust III, FPL Group Trust I and FPL Group Trust II will provide
specific terms of the securities, including the offering prices, in supplements
to this prospectus. The supplements may also add, update or change
information contained in this prospectus. You should read this
prospectus and any supplements carefully before you invest.
FPL
Group’s common stock is listed on the New York Stock Exchange and trades under
the symbol “FPL.”
FPL
Group, FPL Group Capital, FPL Group Capital Trust II, FPL Group Capital
Trust III, FPL Group Trust I and FPL Group Trust II may offer
these securities directly or through underwriters, agents or
dealers. The supplements to this prospectus will describe the terms
of any particular plan of distribution, including any underwriting
arrangements. The “Plan of Distribution” section beginning on page 53
of this prospectus also provides more information on this topic.
See
“Risk Factors” beginning on page 2 of this prospectus to read about certain
factors you should consider before purchasing any of the securities being
offered.
FPL
Group’s, FPL Group Capital’s, FPL Group Capital Trust II’s, FPL Group
Capital Trust III’s, FPL Group Trust I’s and FPL Group Trust II’s
principal executive offices are located at 700 Universe Boulevard, Juno
Beach,
Florida 33408, telephone number (561) 694-4000, and their mailing address
is P.O. Box 14000, Juno Beach, Florida 33408-0420.
__________________________
Neither
the Securities and Exchange Commission nor any state securities commission
has
approved or disapproved of these securities or determined if this prospectus
is
truthful or complete. Any representation to the contrary is a
criminal offense.
May
3,
2007
This
prospectus is part of a registration statement, as amended, that FPL
Group, FPL
Group Capital, FPL Group Capital Trust II, FPL Group Capital
Trust III, FPL Group Trust I and FPL Group Trust II, among other
registrants, have filed with the Securities and Exchange Commission (“SEC”)
using a “shelf” registration process. FPL Group Capital Trust II
and FPL Group Capital Trust III are each referred to in this prospectus as
“FPL Group Capital Trust” and FPL Group Trust I and FPL Group Trust II
are each referred to in this prospectus as “FPL Group Trust.” In
addition, FPL Group Capital Trust and FPL Group Trust are each referred
to in
this prospectus as the “Trust.”
Under
this shelf registration process, FPL Group, FPL Group Capital and/or
the Trust
may issue and sell any combination of the securities described in this
prospectus in one or more offerings from time to time. As of the date
of this prospectus, FPL Group, FPL Group Capital and/or the Trust are
each
authorized to issue securities up to a maximum aggregate offering price
of
$2,000,000,000, provided that the aggregate amount of all such securities
or
combinations of such securities offered by FPL Group, FPL Group Capital
and the
Trust under the registration statement as of this date may not exceed
$2,000,000,000. The aggregate amount of securities which FPL Group,
FPL Group Capital and/or the Trust are authorized to issue pursuant to
this
registration statement may be increased in the future. FPL Group may
offer any of the following securities: common stock, preferred stock,
senior
debt securities or subordinated debt securities, each of which may be
convertible or exchangeable into FPL Group common stock, stock purchase
contracts, stock purchase units and guarantees related to the preferred
trust
securities which the Trust may offer and guarantees related to the preferred
stock, senior debt securities and subordinated debt securities FPL Group
Capital
may offer. FPL Group Capital may offer any of the following
securities: preferred stock, senior debt securities or subordinated debt
securities. The Trust may offer preferred trust
securities.
This
prospectus provides you with a general description of the securities
that FPL
Group, FPL Group Capital and/or the Trust may offer. Each time FPL
Group, FPL Group Capital and/or the Trust sells securities, FPL Group,
FPL Group
Capital and/or the Trust will provide a prospectus supplement that will
contain
specific information about the terms of that offering. Material
United States federal income tax considerations applicable to the offered
securities will be discussed in the applicable prospectus supplement
if
necessary. The prospectus supplement may also add, update or change
information contained in this prospectus. You should read both this
prospectus and any prospectus supplement together with additional information
described under the headings “Where You Can Find More Information” and
“Incorporation by Reference.”
For
more
detailed information about the securities, you can read the exhibits
to the
registration statement. Those exhibits have been either filed with
the registration statement or incorporated by reference to earlier SEC
filings
listed in the registration statement.
Before
purchasing the securities, investors should carefully consider the following
risk factors together with the risk factors and other information incorporated
by reference or provided in this prospectus or in a prospectus supplement
in
order to evaluate an investment in the securities.
FPL
Group and FPL Group Capital are subject to complex laws and regulations
and to
changes in laws and regulations as well as changing governmental policies
and
regulatory actions, including initiatives regarding deregulation and
restructuring of the energy industry and environmental
matters. Florida Power & Light Company holds franchise agreements
with local municipalities and counties, and must renegotiate expiring
agreements. These factors may have a negative impact on the business
and results of operations of FPL Group and FPL Group
Capital.
FPL
Group
and FPL Group Capital are subject to complex laws and regulations, and
to
changes in laws or regulations, including the Public Utility Regulatory
Policies
Act of 1978, the Public Utility Holding Company Act of 2005, the Federal
Power
Act, the Atomic Energy Act of 1954, the Energy Policy Act of 2005 and
certain
sections of the Florida statutes relating to public utilities, changing
governmental policies and regulatory actions, including those of the
Federal
Energy Regulatory Commission, the Florida Public Service Commission and
the
legislatures and utility commissions of other states in which FPL Group
and FPL
Group Capital have operations, and the U.S. Nuclear Regulatory Commission,
with respect to, among other things, allowed rates of return, industry
and
rate
structure,
operation of nuclear power facilities, operation and construction of
plant
facilities, operation and construction of transmission facilities, acquisition,
disposal, depreciation and amortization of assets and facilities, recovery
of
fuel and purchased power costs, decommissioning costs, return on common
equity
and equity ratio limits, and present or prospective wholesale and retail
competition (including but not limited to retail wheeling and transmission
costs). The Florida Public Service Commission has the authority to
disallow recovery by Florida Power & Light Company of any and all costs that
it considers excessive or imprudently incurred. The regulatory
process generally restricts Florida Power & Light Company’s ability to grow
earnings and does not provide any assurance as to achievement of earnings
levels.
FPL
Group
and FPL Group Capital are subject to extensive federal, state and local
environmental statutes as well as the effect of changes in or additions
to
applicable statutes, rules and regulations relating to air quality, water
quality, climate change, waste management, wildlife mortality, natural
resources
and health and safety that could, among other things, restrict or limit
the
output of certain facilities or the use of certain fuels required for
the
production of electricity and/or require additional pollution control
equipment
and otherwise increase costs. There are significant capital,
operating and other costs associated with compliance with these environmental
statutes, rules and regulations, and those costs could be even more significant
in the future.
FPL
Group
and FPL Group Capital operate in a changing market environment influenced
by
various legislative and regulatory initiatives regarding deregulation,
regulation or restructuring of the energy industry, including deregulation
or
restructuring of the production and sale of electricity. FPL Group
and its subsidiaries will need to adapt to these changes and may face
increasing
competitive pressure.
FPL
Group’s results of operations could be affected by Florida Power & Light
Company’s ability to renegotiate franchise agreements with municipalities and
counties in Florida.
The
operation and maintenance of power generation facilities, including nuclear
facilities, involve significant risks that could adversely affect the
results of
operations and financial condition of FPL Group and FPL Group
Capital.
The
operation and maintenance of power generation facilities involve many
risks,
including, but not limited to, start up risks, breakdown or failure of
equipment, transmission lines or pipelines, the inability to properly
manage or
mitigate known equipment defects throughout our generation fleets unless
and
until such defects are remediated, use of new technology, the dependence
on a
specific fuel source, including the supply and transportation of fuel,
or the
impact of unusual or adverse weather conditions (including natural disasters
such as hurricanes), as well as the risk of performance below expected
or
contracted levels of output or efficiency. This could result in lost
revenues and/or increased expenses, including, but not limited to, the
requirement to purchase power in the market at potentially higher prices
to meet
contractual obligations. Insurance, warranties or performance
guarantees may not cover any or all of the lost revenues or increased
expenses,
including the cost of replacement power. In addition to these risks,
FPL Group’s and FPL Group Capital’s nuclear units face certain risks that are
unique to the nuclear industry including, but not limited to, the ability
to
store and/or dispose of spent nuclear fuel and the potential payment
of
significant retrospective insurance premiums, as well as additional regulatory
actions up to and including shutdown of the units stemming from public
safety
concerns, whether at FPL Group’s and FPL Group Capital’s plants, or at the
plants of other nuclear operators. Breakdown or failure of an
operating facility of FPL Energy, LLC, a subsidiary of FPL Group Capital,
may
prevent the facility from performing under applicable power sales agreements
which, in certain situations, could result in termination of the agreement
or
incurring a liability for liquidated damages.
The
construction of, and capital improvements to, power generation facilities
involve substantial risks. Should construction or capital improvement
efforts be unsuccessful, the results of operations and financial condition
of
FPL Group and FPL Group Capital could be adversely
affected.
FPL
Group’s and FPL Group Capital’s ability to successfully and timely complete
their power generation facilities currently under construction, those
projects
yet to begin construction or capital improvements to existing facilities
within
established budgets is contingent upon many variables and subject to
substantial
risks. Should any such efforts be unsuccessful, FPL Group and FPL
Group Capital could be subject to additional costs, termination payments
under
committed contracts, and/or the write-off of their investment in the
project or
improvement.
The
use of derivative contracts by FPL Group and FPL Group Capital in the
normal
course of business could result in financial losses that negatively impact
the
results of operations of FPL Group and FPL Group Capital.
FPL
Group
and FPL Group Capital use derivative instruments, such as swaps, options
and
forwards to manage their commodity and financial market risks. FPL
Group and FPL Group Capital provide full energy and capacity requirements
services and engage in trading activities. FPL Group and FPL Group
Capital could recognize financial losses as a result of volatility in
the market
values of these contracts, or if a counterparty fails to perform. In
the absence of actively quoted market prices and pricing information
from
external sources, the valuation of these derivative instruments involves
management’s judgment or use of estimates. As a result, changes in
the underlying assumptions or use of alternative valuation methods could
affect
the reported fair value of these contracts. In addition, Florida
Power & Light Company’s use of such instruments could be subject to prudency
challenges and if found imprudent, cost recovery could be disallowed
by the
Florida Public Service Commission.
FPL
Group’s competitive energy business is subject to risks, many of which are
beyond the control of FPL Group and FPL Group Capital, that may reduce
the
revenues and adversely impact the results of operations and financial
condition
of FPL Group and FPL Group Capital.
There
are
other risks associated with FPL Group’s and FPL Group Capital’s competitive
energy business. In addition to risks discussed elsewhere, risk
factors specifically affecting FPL Energy’s success in competitive wholesale
markets include the ability to efficiently develop and operate generating
assets, the successful and timely completion of project restructuring
activities, maintenance of the qualifying facility status of certain
projects,
the price and supply of fuel (including transportation), transmission
constraints, competition from new sources of generation, excess generation
capacity and demand for power. There can be significant volatility in
market prices for fuel and electricity, and there are other financial,
counterparty and market risks that are beyond the control of FPL
Energy. FPL Energy’s inability or failure to effectively hedge its
assets or positions against changes in commodity prices, interest rates,
counterparty credit risk or other risk measures could significantly impair
FPL
Group’s and FPL Group Capital’s future financial results. In keeping
with industry trends, a portion of FPL Energy’s power generation facilities
operate wholly or partially without long-term power purchase
agreements. As a result, power from these facilities is sold on the
spot market or on a short-term contractual basis, which may affect the
volatility of FPL Group’s and FPL Group Capital’s financial
results. In addition, FPL Energy’s business depends upon transmission
facilities owned and operated by others; if transmission is disrupted
or
capacity is inadequate or unavailable, FPL Energy’s ability to sell and deliver
its wholesale power may be limited.
FPL
Group’s and FPL Group Capital’s ability to successfully identify, complete and
integrate acquisitions is subject to significant risks, including the
effect of
increased competition for acquisitions resulting from the consolidation
of the
power industry.
FPL
Group
and FPL Group Capital are likely to encounter significant competition
for
acquisition opportunities that may become available as a result of the
consolidation of the power industry, in general, as well as the passage
of the
Energy Policy Act of 2005. In addition, FPL Group and FPL Group
Capital may be unable to identify attractive acquisition opportunities
at
favorable prices and to successfully and timely complete and integrate
them.
Because
FPL Group and FPL Group Capital rely on access to capital markets, the
inability
to maintain current credit ratings and access capital markets on favorable
terms
may limit the ability of FPL Group and FPL Group Capital to grow their
businesses and would likely increase interest costs.
FPL
Group, FPL Group Capital and Florida Power & Light Company rely on access to
capital markets as a significant source of liquidity for capital requirements
not satisfied by operating cash flows. The inability of FPL Group,
FPL Group Capital and Florida Power & Light Company to maintain their
current credit ratings could affect their ability to raise capital on
favorable
terms, particularly during times of uncertainty in the capital markets,
which,
in turn, could impact FPL Group’s and FPL Group Capital’s ability to grow their
businesses and would likely increase their interest costs.
Customer
growth in Florida Power & Light Company’s service area affects FPL Group’s
results of operations.
FPL
Group’s results of operations are affected by the growth in customer accounts
in
Florida Power & Light Company’s service area. Customer growth can
be affected by population growth as well as economic factors in Florida,
including job and income growth, housing starts and new home
prices. Customer growth directly influences the demand for
electricity and the need for additional power generation and power delivery
facilities at Florida Power & Light Company.
Weather
affects FPL Group’s and FPL Group Capital’s results of
operations.
FPL
Group’s and FPL Group Capital’s results of operations are affected by changes in
the weather. Weather conditions directly influence the demand for
electricity and natural gas and affect the price of energy commodities,
and can
affect the production of electricity at wind and hydro-powered
facilities. FPL Group’s and FPL Group Capital’s results of operations
can be affected by the impact of severe weather which can be destructive,
causing outages and/or property damage, may affect fuel supply, and could
require additional costs to be incurred. At Florida Power & Light
Company, recovery of these costs is subject to Florida Public Service
Commission
approval.
FPL
Group and FPL Group Capital are subject to costs and other effects of
legal
proceedings as well as changes in or additions to applicable tax laws,
rates or
policies, rates of inflation, accounting standards, securities laws and
corporate governance requirements.
FPL
Group
and FPL Group Capital are subject to costs and other effects of legal
and
administrative proceedings, settlements, investigations and claims, as
well as
the effect of new, or changes in, tax laws, rates or policies, rates
of
inflation, accounting standards, securities laws and corporate governance
requirements.
Threats
of terrorism and catastrophic events that could result from terrorism
may impact
the operations of FPL Group and FPL Group Capital in unpredictable
ways.
FPL
Group
and FPL Group Capital are subject to direct and indirect effects of terrorist
threats and activities. Generation and transmission facilities, in
general, have been identified as potential targets. The effects of
terrorist threats and activities include, among other things, terrorist
actions
or responses to such actions or threats, the inability to generate, purchase
or
transmit power, the risk of a significant slowdown in growth or a decline
in the
U.S. economy, delay in economic recovery in the U.S., and the increased
cost and
adequacy of security and insurance.
The
ability of FPL Group and FPL Group Capital to obtain insurance and the
terms of
any available insurance coverage could be affected by national, state
or local
events and company-specific events.
FPL
Group’s and FPL Group Capital’s ability to obtain insurance, and the cost of and
coverage provided by such insurance, could be affected by national, state
or
local events as well as company-specific events.
FPL
Group and FPL Group Capital are subject to employee workforce factors
that could
affect the businesses and financial condition of FPL Group and FPL Group
Capital.
FPL
Group
and FPL Group Capital are subject to employee workforce factors, including
loss
or retirement of key executives, availability of qualified personnel,
collective
bargaining agreements with union employees and work stoppage that could
affect
the businesses and financial condition of FPL Group and FPL Group
Capital.
FPL
Group
is a holding company incorporated in 1984 as a Florida
corporation. FPL Group’s principal subsidiary, Florida Power &
Light Company, is a rate-regulated utility engaged primarily in the generation,
transmission, distribution and sale of electric energy. Other
operations are conducted through FPL Group Capital.
FPL
Group
Capital was incorporated in 1985 as a Florida corporation and is a wholly-owned
subsidiary of FPL Group. FPL Group Capital holds the capital stock or
other ownership interests of, and provides funding for,
FPL
Group’s operating subsidiaries other than Florida Power & Light
Company. These operating subsidiaries’ business activities primarily
consist of FPL Energy, LLC’s competitive energy business.
FPL
GROUP TRUST I AND FPL GROUP TRUST II
FPL
Group
Capital Trust II, FPL Group Capital Trust III, FPL Group Trust I
and FPL Group Trust II are Delaware statutory trusts created pursuant to
separate trust agreements among FPL Group as depositor of the Trust,
The Bank of
New York as the Property Trustee, The Bank of New York (Delaware) as
the
Delaware Trustee and one or more Administrative Trustees appointed by
FPL
Group. The trust agreements will be amended and restated
substantially in the form filed as an exhibit to the registration
statement. Each trust agreement, as so amended and restated, is
referred to in this prospectus as the “Trust Agreement.” FPL Group
Capital Trust exists only to issue its preferred trust securities and
common
trust securities and to hold the junior subordinated debentures of FPL
Group
Capital as trust assets. FPL Group Trust exists only to issue its
preferred trust securities and common trust securities and to hold the
junior
subordinated debentures of FPL Group as trust assets. All of the
common trust securities will be owned by FPL Group. Unless otherwise
stated in a prospectus supplement, the common trust securities will represent
at
least 3% of the total capital of the Trust. Payments on any
distribution payment date or redemption date will be made on the common
trust
securities pro rata with the preferred trust securities, except that
the common
trust securities’ right to payment will be subordinated to the rights of the
preferred trust securities if there is a default under the Trust
Agreement. The Trust will have a term as stated in the applicable
prospectus supplement, but may dissolve earlier as provided in the Trust
Agreement.
The
Trust’s business and affairs will be conducted by its Administrative
Trustees. The office of the Delaware Trustee in the State of Delaware
is White Clay Center, Route 273, Newark, Delaware 19711. The
principal place of business of the Trust is 700 Universe Boulevard, Juno
Beach,
Florida 33408, and the telephone number is (561) 694-4000.
Unless
otherwise stated in a prospectus supplement, FPL Group and FPL Group
Capital
will each add the net proceeds from the sale of their securities to its
respective general funds. FPL Group uses its general funds for
corporate purposes, including to provide funds for its subsidiaries and
to
repurchase common stock. FPL Group Capital uses its general funds for
corporate purposes, including to repay short-term borrowings and to repay,
redeem or repurchase outstanding long-term debt obligations. FPL
Group and FPL Group Capital will each temporarily invest any proceeds
that it
does not need to use immediately in short-term instruments.
FPL
Group
Capital Trust will use the proceeds from the sale of preferred trust
securities
and common trust securities to invest in junior subordinated debentures
issued
by FPL Group Capital. FPL Group Capital will add the net proceeds
from the sale of such junior subordinated debentures to its general funds,
which
will be used as described above.
FPL
Group
Trust will use the proceeds from the sale of preferred trust securities
and
common trust securities to invest in junior subordinated debentures issued
by
FPL Group. FPL Group will add the net proceeds from the sale of such
junior subordinated debentures to its general funds, which will be used
as
described above.
COMBINED
FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The
following table shows FPL Group’s consolidated ratio of earnings to fixed
charges and consolidated ratio of earnings to combined fixed charges
and
preferred stock dividends for each of its last five fiscal years:
|
Years
Ended December 31,
|
||||
|
2006
|
2005
|
2004
|
2003
|
2002
|
|
3.11
|
2.80
|
2.98
|
3.32
|
2.97
|
FPL
Group’s consolidated ratio of earnings to fixed charges and consolidated ratio
of earnings to combined fixed charges and preferred stock dividends for
the
three months ended March 31, 2007 was 2.14.
FPL
Group
files annual, quarterly and other reports and other information with
the
SEC. You can read and copy any information filed by FPL Group with
the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington,
D.C. 20549. You can obtain additional information about the Public
Reference Room by calling the SEC at 1-800-SEC-0330.
In
addition, the SEC maintains an Internet site (www.sec.gov) that contains
reports, proxy and information statements, and other information regarding
issuers that file electronically with the SEC, including FPL
Group. FPL Group also maintains an Internet site
(www.fplgroup.com).
FPL
Group
Capital does not file reports or other information with the SEC. FPL
Group includes summarized financial information relating to FPL Group
Capital in
some of its reports filed with the SEC. FPL Group does not intend to
include any separate financial information with respect to FPL Group
Capital in
its consolidated financial statements because FPL Group and FPL Group
Capital
have determined that this information is not material to the holders
of FPL
Group Capital’s debt securities.
No
separate financial statements of the Trust are included in this
prospectus. FPL Group and the Trust do not consider those financial
statements to be material to holders of the preferred trust securities
because
(1) the Trust is a special purpose entity and has no operating history or
independent operations, and (2) the Trust is not engaged in and does not
propose to engage in any activity other than holding as trust assets
the junior
subordinated debentures of FPL Group Capital, in the case of FPL Group
Capital
Trust, and the junior subordinated debentures of FPL Group in the case
of FPL
Group Trust, and issuing its preferred trust securities and common trust
securities. FPL Group and the Trust do not expect the Trust to file
periodic reports under Sections 13 or 15(d) of the Securities Exchange
Act of
1934.
The
SEC
allows FPL Group, FPL Group Capital and the Trust to “incorporate by reference”
the information that FPL Group files with the SEC, which means that FPL
Group,
FPL Group Capital and the Trust may, in this prospectus, disclose important
information to you by referring you to those documents. The
information incorporated by reference is an important part of this
prospectus. Information that FPL Group files in the future with the
SEC will automatically update and supersede this information. FPL
Group, FPL Group Capital and the Trust are incorporating by reference
the
documents listed below and any future filings FPL Group makes with the
SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934 after
the date of this prospectus until FPL Group, FPL Group Capital and/or
the Trust
sell all of these securities:
|
|
(1)
|
FPL
Group’s Annual Report on Form 10-K for the year ended December 31,
2006;
|
|
|
(2)
|
FPL
Group’s Quarterly Report on Form 10-Q for the quarter ended March
31,
2007; and
|
|
|
(3)
|
FPL
Group’s Current Reports on Form 8-K filed with the SEC on February
21,
2007, March 20, 2007 and April 5,
2007
|
You
may
request a copy of these documents, at no cost to you, by writing or calling
Robert J. Reger, Jr., Esq., Thelen Reid Brown Raysman & Steiner LLP,
875 Third Avenue, New York, New York 10022, (212) 603-2000. FPL
Group will provide to each person, including any beneficial owner, to
whom this
prospectus is delivered, a copy of any or all of the information that
has been
incorporated by reference in this prospectus but not delivered with this
prospectus.
In
connection with the safe harbor provisions of the Private Securities
Litigation
Reform Act of 1995, FPL Group, FPL Group Capital and the Trust are hereby
filing
cautionary statements identifying important factors that could cause
FPL Group’s
and FPL Group Capital’s actual results to differ materially from those projected
in forward-looking statements (as such term is defined in the Private
Securities
Litigation Reform Act of 1995) made by or on behalf of FPL Group, FPL
Group
Capital and the Trust in this prospectus or any supplement to
this
prospectus,
in presentations, in response to questions or otherwise. Any
statements that express, or involve discussions as to, expectations,
beliefs,
plans, objectives, assumptions or future events or performance (often,
but not
always, through the use of words or phrases such as “will likely result,” “are
expected to,” “will continue,” “is anticipated,” “believe,” “could,”
“estimated,” “may,” “plan,” “potential,” “projection,” “target,” “outlook”) are
not statements of historical facts and may be
forward-looking. Forward-looking statements involve estimates,
assumptions and uncertainties. Accordingly, any such statements are
qualified in their entirety by reference to, and are accompanied by,
the
specific factors discussed in “Risk Factors” herein and in FPL Group’s reports
that are incorporated herein by reference (in addition to any assumptions
and
other factors referred to specifically in connection with such forward-looking
statements) that could have a significant impact on FPL Group’s and FPL Group
Capital’s operations and financial results, and could cause FPL Group’s or FPL
Group Capital’s actual results to differ materially from those contained in
forward-looking statements made by or on behalf of FPL Group, FPL Group
Capital
or the Trust.
Any
forward-looking statement speaks only as of the date on which that statement
is
made, and neither FPL Group, FPL Group Capital nor the Trust undertakes
any
obligation to update any forward-looking statement to reflect events
or
circumstances, including unanticipated events, after the date on which
that
statement is made. New factors emerge from time to time and it is not
possible for management to predict all of those factors, nor can it assess
the
impact of each of those factors on the business or the extent to which
any
factor, or combination of factors, may cause actual results to differ
materially
from those contained in any forward-looking statement.
The
issues and associated risks and uncertainties discussed in “Risk Factors” herein
and in the reports that are incorporated herein by reference are not
the only
ones FPL Group or FPL Group Capital may face. Additional issues may
arise or become material as the energy industry evolves. The risks
and uncertainties associated with those additional issues could impair
FPL
Group’s and FPL Group Capital’s businesses in the future.
General. FPL
Group Capital will issue its debt securities (other than the FPL Group
Capital
Junior Subordinated Debentures (as defined below under “Description of the FPL
Group and FPL Group Capital Junior Subordinated Debentures and the FPL
Group
Subordinated Guarantee”)), in one or more series, under an Indenture, dated as
of June 1, 1999, between FPL Group Capital and The Bank of New York, as
trustee. This Indenture, as it may be amended and supplemented from
time to time, is referred to in this prospectus as the
“Indenture.” The Bank of New York, as trustee under the Indenture, is
referred to in this prospectus as the “Indenture Trustee.” These debt
securities are referred to in this prospectus as the “Offered Senior Debt
Securities.”
The
Indenture provides for the issuance from time to time of debentures,
notes or
other debt by FPL Group Capital in an unlimited amount. The Offered
Senior Debt Securities and all other debentures, notes or other debt
of FPL
Group Capital issued under the Indenture are collectively referred to
in this
prospectus as the “Senior Debt Securities.”
This
section briefly summarizes some of the terms of the Offered Senior Debt
Securities and some of the provisions of the Indenture. This summary
does not contain a complete description of the Offered Senior Debt Securities
or
the Indenture. You should read this summary together with the
Indenture and the officer’s certificates or other documents establishing the
Offered Senior Debt Securities for a complete understanding of all the
provisions and for the definitions of some terms used in this
summary. The Indenture, the form of officer’s certificate that may be
used to establish a series of Offered Senior Debt Securities and a form
of
Offered Senior Debt Securities have been previously filed with the SEC,
and are
exhibits to the registration statement filed with the SEC of which this
prospectus is a part. In addition, the Indenture is qualified under
the Trust Indenture Act of 1939 and is therefore subject to the provisions
of
the Trust Indenture Act of 1939. You should read the Trust Indenture
Act of 1939 for a complete understanding of its provisions.
All
Offered Senior Debt Securities of one series need not be issued at the
same
time, and a series may be re-opened for issuances of additional Offered
Senior
Debt Securities of such series. This means that FPL Group Capital may
from time to time, without notice to, or the consent of the existing
holders of
the Offered Senior Debt Securities of a particular series, create and
issue
additional Offered Senior Debt Securities of such series. Such
additional Offered Senior Debt Securities will have the same terms as
the
Offered Senior Debt Securities of such series in all respects (except
for the
payment of interest accruing prior to the issue date of the additional
Offered
Senior
Debt Securities or except for the first payments of interest following
the issue
date of the additional Offered Senior Debt Securities) so that the additional
Offered Senior Debt Securities may be consolidated and form a single
series with
the Offered Senior Debt Securities of such series.
Each
series of Offered Senior Debt Securities may have different
terms. FPL Group Capital will include some or all of the following
information about a specific series of Offered Senior Debt Securities
in the
prospectus supplement relating to those Offered Senior Debt
Securities:
|
|
(1)
|
the
title of those Offered Senior Debt
Securities,
|
|
|
(2)
|
any
limit upon the aggregate principal amount of those Offered
Senior Debt
Securities,
|
|
|
(3)
|
the
date(s) on which FPL Group Capital will pay the principal of
those Offered
Senior Debt Securities,
|
|
|
(4)
|
the
rate(s) of interest on those Offered Senior Debt Securities,
or how the
rate(s) of interest will be determined, the date(s) from which
interest
will accrue, the dates on which FPL Group Capital will pay
interest and
the record date for any interest payable on any interest payment
date,
|
|
|
(5)
|
the
person to whom FPL Group Capital will pay interest on those
Offered Senior
Debt Securities on any interest payment date, if other than
the person in
whose name those Offered Senior Debt Securities are registered
at the
close of business on the record date for that interest
payment,
|
|
|
(6)
|
the
place(s) at which or methods by which FPL Group Capital will
make payments
on those Offered Senior Debt Securities and the place(s) at
which or
methods by which the registered owners of those Offered Senior
Debt
Securities may transfer or exchange those Offered Senior Debt
Securities
and serve notices and demands to or upon FPL Group
Capital,
|
|
|
(7)
|
the
security registrar and any paying agent or agents for those
Offered Senior
Debt Securities,
|
|
|
(8)
|
any
date(s) on which, the price(s) at which and the terms and conditions
upon
which FPL Group Capital may, at its option, redeem those Offered
Senior
Debt Securities, in whole or in part, and any restrictions
on those
redemptions,
|
|
|
(9)
|
any
sinking fund or other provisions or options held by the registered
owners
of those Offered Senior Debt Securities that would obligate
FPL Group
Capital to repurchase or redeem those Offered Senior Debt
Securities,
|
|
|
(10)
|
the
denominations in which FPL Group Capital may issue those Offered
Senior
Debt Securities, if other than denominations of $1,000 and
any integral
multiple of $1,000,
|
|
|
(11)
|
the
currency or currencies in which FPL Group Capital may pay the
principal of
or premium, if any, or interest on those Offered Senior Debt
Securities
(if other than in U.S. dollars),
|
|
|
(12)
|
if
FPL Group Capital or a registered owner may elect to pay, or
receive,
principal of or premium, if any, or interest on those Offered
Senior Debt
Securities in a currency other than that in which those Offered
Senior
Debt Securities are stated to be payable, the terms and conditions
upon
which that election may be made,
|
|
|
(13)
|
if
FPL Group Capital will, or may, pay the principal of or premium,
if any,
or interest on those Offered Senior Debt Securities in securities
or other
property, the type and amount of those securities or other
property and
the terms and conditions upon which FPL Group Capital or a
registered
owner may elect to pay or receive those
payments,
|
|
|
(14)
|
if
the amount payable in respect of principal of or premium, if
any, or
interest on those Offered Senior Debt Securities may be determined
by
reference to an index or other fact or event ascertainable
outside of the
Indenture, the manner in which those amounts will be
determined,
|
|
|
(15)
|
the
portion of the principal amount of those Offered Senior Debt
Securities
that FPL Group Capital will pay upon declaration of acceleration
of the
maturity of those Offered Senior Debt Securities, if other
than the entire
principal amount of those Offered Senior Debt
Securities,
|
|
|
(16)
|
any
events of default with respect to those Offered Senior Debt
Securities and
any covenants of FPL Group Capital for the benefit of the registered
owners of those Offered Senior Debt Securities, other than
those specified
in the Indenture,
|
|
|
(17)
|
the
terms, if any, pursuant to which those Offered Senior Debt
Securities may
be exchanged for shares of capital stock or other securities
of any other
entity,
|
|
|
(18)
|
a
definition of “Eligible Obligations” under the Indenture with respect to
those Offered Senior Debt Securities denominated in a currency
other than
U.S. dollars, and any other provisions for the reinstatement
of FPL Group
Capital’s indebtedness in respect of those Offered Senior Debt Securities
after their satisfaction and
discharge,
|
|
|
(19)
|
if
FPL Group Capital will issue those Offered Senior Debt Securities
in
global form, necessary information relating to the issuance
of those
Offered Senior Debt Securities in global
form,
|
|
|
(20)
|
if
FPL Group Capital will issue those Offered Senior Debt Securities
as
bearer securities, necessary information relating to the issuance
of those
Offered Senior Debt Securities as bearer
securities,
|
|
|
(21)
|
any
limits on the rights of the registered owners of those Offered
Senior Debt
Securities to transfer or exchange those Offered Senior Debt
Securities or
to register their transfer, and any related service
charges,
|
|
|
(22)
|
any
exceptions to the provisions governing payments due on legal
holidays or
any variations in the definition of business day with respect
to those
Offered Senior Debt Securities,
|
|
|
(23)
|
other
than the Guarantee described under “Description of the FPL Group Capital
Senior Debt Securities Guarantee” below, any collateral security,
assurance, or guarantee for those Offered Senior Debt Securities,
and
|
|
|
(24)
|
any
other terms of those Offered Senior Debt Securities that are
not
inconsistent with the provisions of the Indenture. (Indenture,
Section 301).
|
FPL
Group
Capital may sell Offered Senior Debt Securities at a discount below their
principal amount. Some of the important United States federal income
tax considerations applicable to Offered Senior Debt Securities sold
at a
discount below their principal amount may be discussed in the related
prospectus
supplement. In addition, some of the important United States federal
income tax or other considerations applicable to any Offered Senior Debt
Securities that are denominated in a currency other than U.S. dollars
may be
discussed in the related prospectus supplement.
Except
as
otherwise stated in the related prospectus supplement, the covenants
in the
Indenture would not give registered owners of Offered Senior Debt Securities
protection in the event of a highly-leveraged transaction involving FPL
Group
Capital or FPL Group.
Security
and Ranking. The Offered Senior Debt Securities will be
unsecured obligations of FPL Group Capital. The Indenture does not
limit FPL Group Capital’s ability to provide security with respect to other
Senior Debt Securities. All Senior Debt Securities issued under the
Indenture will rank equally and ratably with all other Senior Debt Securities
issued under the Indenture, except to the extent that FPL Group Capital
elects
to provide security with respect to any Senior Debt Security without
providing
that security to all outstanding Senior Debt Securities as allowed under
the
Indenture. The Offered Senior Debt Securities will rank senior to FPL
Group Capital’s Junior Subordinated Debentures. The Indenture does
not limit FPL Group Capital’s ability to issue other unsecured
debt.
FPL
Group
Capital is a holding company that derives substantially all of its income
from
its operating subsidiaries. Therefore, the Senior Debt Securities
will be effectively subordinated to all indebtedness and other liabilities,
including trade payables, debt and preferred stock, incurred or issued
by FPL
Group Capital’s subsidiaries. The Indenture does not place any limit
on the amounts of liabilities, including debt or preferred stock, that
FPL Group
Capital’s subsidiaries may issue, guarantee or otherwise incur.
Payment
and Paying Agents. Except as stated in the related
prospectus supplement, on each interest payment date FPL Group Capital
will pay
interest on each Offered Senior Debt Security to the person in whose
name that
Offered Senior Debt Security is registered as of the close of business
on the
record date relating to that interest payment date. However, on the
date that the Offered Senior Debt Securities mature, FPL Group Capital
will pay
the interest to the person to whom it pays the principal. Also, if
FPL Group Capital has defaulted in the payment of interest on any Offered
Senior
Debt Security, it may pay that defaulted interest to the registered owner
of
that Offered Senior Debt Security:
|
|
(1)
|
as
of the close of business on a date that the Indenture Trustee
selects,
which may not be more than 15 days or less than 10 days before the
date that FPL Group Capital proposes to pay the defaulted interest,
or
|
|
|
(2)
|
in
any other lawful manner that does not violate the requirements
of any
securities exchange on which that Offered Senior Debt Security
is listed
and that the Indenture Trustee believes is
acceptable. (Indenture,
Section 307).
|
Unless
otherwise stated in the related prospectus supplement, the principal,
premium,
if any, and interest on the Offered Senior Debt Securities at maturity
will be
payable when such Offered Senior Debt Securities are presented at the
main
corporate trust office of The Bank of New York, as paying agent, in The
City of
New York. FPL Group Capital may change the place of payment on the
Offered Senior Debt Securities, appoint one or more additional paying
agents,
including itself, and remove any paying agent. (Indenture, Section
602).
Transfer
and Exchange. Unless otherwise stated in the related
prospectus supplement, Offered Senior Debt Securities may be transferred
or
exchanged at the main corporate trust office of The Bank of New York,
as
security registrar, in The City of New York. FPL Group Capital may
change the place for transfer and exchange of the Offered Senior Debt
Securities
and may designate one or more additional places for that transfer and
exchange.
Except
as
otherwise stated in the related prospectus supplement, there will be
no service
charge for any transfer or exchange of the Offered Senior Debt
Securities. However, FPL Group Capital may require payment of any tax
or other governmental charge in connection with any transfer or exchange
of the
Offered Senior Debt Securities.
FPL
Group
Capital will not be required to transfer or exchange any Offered Senior
Debt
Security selected for redemption. Also, FPL Group Capital will not be
required to transfer or exchange any Offered Senior Debt Security during
a
period of 15 days before selection of Offered Senior Debt Securities
to be
redeemed. (Indenture, Section 305).
Defeasance. FPL
Group Capital may, at any time, elect to have all of its obligations
discharged
with respect to all or a portion of any Senior Debt Securities. To do
so, FPL Group Capital must irrevocably deposit with the Indenture Trustee
or any
paying agent, in trust:
|
|
(1)
|
money
in an amount that will be sufficient to pay all or that portion
of the
principal, premium, if any, and interest due and to become
due on those
Senior Debt Securities, on or prior to their maturity,
or
|
|
|
(2)
|
in
the case of a deposit made prior to the maturity of that series
of Senior
Debt Securities,
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|
|
(a)
|
direct
obligations of, or obligations unconditionally guaranteed by,
the United
States and entitled to the benefit of its full faith and credit
that do
not contain provisions permitting their redemption or other
prepayment at
the option of their issuer, and
|
|
|
(b)
|
certificates,
depositary receipts or other instruments that evidence a direct
ownership
interest in those obligations or in any specific interest or
principal
payments due in respect of those obligations that do not contain
provisions permitting their redemption or other prepayment
at the option
of their issuer, the principal of and the interest on which,
when due,
without any regard to reinvestment of that principal or interest,
will
provide money that, together with any money deposited with
or held by the
Indenture Trustee, will be sufficient to pay all or that portion
of the
principal, premium, if any, and interest due and to become
due on those
Senior Debt Securities, on or prior to their maturity,
or
|
|
|
(3)
|
a
combination of (1) and (2) that will be sufficient to pay all
or that
portion of the principal, premium, if any, and interest due
and to become
due on those Senior Debt Securities, on or prior to their
maturity. (Indenture, Section
701).
|
Limitation
on Liens. So long as any Senior Debt Securities remain
outstanding, FPL Group Capital will not secure any indebtedness with
a lien on
any shares of the capital stock of any of its majority-owned subsidiaries,
which
shares of capital stock FPL Group Capital now or hereafter directly owns,
unless
FPL Group Capital equally secures all Senior Debt
Securities. However, this restriction does not apply to or
prevent:
|
|
(1)
|
any
lien on capital stock created at the time FPL Group Capital
acquires that
capital stock, or within 270 days after that time, to secure all or a
portion of the purchase price for that capital
stock,
|
|
|
(2)
|
any
lien on capital stock existing at the time FPL Group Capital
acquires that
capital stock (whether or not FPL Group Capital assumes the
obligations
secured by the lien and whether or not the lien was created
in
contemplation of the acquisition),
|
|
|
(3)
|
any
extensions, renewals or replacements of the liens described
in (1) and (2)
above, or of any indebtedness secured by those liens; provided,
that,
|
|
|
(a)
|
the
principal amount of indebtedness secured by those liens immediately
after
the extension, renewal or replacement may not exceed the principal
amount
of indebtedness secured by those liens immediately before the
extension,
renewal or replacement, and
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|
|
(b)
|
the
extension, renewal or replacement lien is limited to no more
than the same
proportion of all shares of capital stock as were covered by
the lien that
was extended, renewed or replaced,
or
|
|
|
(4)
|
any
lien arising in connection with court proceedings; provided,
that,
either
|
|
|
(a)
|
the
execution or enforcement of that lien is effectively stayed
within 30 days
after entry of the corresponding judgment (or the corresponding
judgment
has been discharged within that 30 day period) and the claims
secured by
that lien are being contested in good faith by appropriate
proceedings,
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|
|
(b)
|
the
payment of that lien is covered in full by insurance and the
insurance
company has not denied or contested coverage,
or
|
|
|
(c)
|
so
long as that lien is adequately bonded, any appropriate legal
proceedings
that have been duly initiated for the review of the corresponding
judgment, decree or order have not been fully terminated or
the periods
within which those proceedings may be initiated have not
expired.
|
Liens
on
any shares of the capital stock of any of FPL Group Capital’s majority-owned
subsidiaries, which shares of capital stock FPL Group Capital now or
hereafter
directly owns, other than liens described in (1) through (4) above, are
referred
to in this prospectus as “Restricted Liens.” The foregoing limitation
does not apply to the extent that FPL Group Capital creates any Restricted
Liens
to secure indebtedness that, together with all other indebtedness of
FPL Group
Capital secured by Restricted Liens, does not at the time exceed 5% of
FPL Group
Capital’s Consolidated Capitalization. (Indenture, Section
608).
For
this
purpose, “Consolidated Capitalization” means the sum of:
|
|
(1)
|
Consolidated
Shareholders’ Equity;
|
|
|
(2)
|
Consolidated
Indebtedness for borrowed money (exclusive of any amounts which
are due
and payable within one year); and, without
duplication
|
|
|
(3)
|
any
preference or preferred stock of FPL Group Capital or any Consolidated
Subsidiary which is subject to mandatory redemption or sinking
fund
provisions.
|
The
term
“Consolidated Shareholders’ Equity” as used above means the total assets of FPL
Group Capital and its Consolidated Subsidiaries less all liabilities
of FPL
Group Capital and its Consolidated Subsidiaries. As used in this
definition, the term “liabilities” means all obligations which would, in
accordance with generally accepted accounting principles, be classified
on a
balance sheet as liabilities, including without limitation:
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|
(1)
|
indebtedness
secured by property of FPL Group Capital or any of its Consolidated
Subsidiaries whether or not FPL Group Capital or such Consolidated
Subsidiary is liable for the payment thereof unless, in the
case that FPL
Group Capital or such Consolidated Subsidiary is not so liable,
such
property has not been included among the assets of FPL Group
Capital or
such Consolidated Subsidiary on such balance
sheet,
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|
(2)
|
deferred
liabilities, and
|
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|
(3)
|
indebtedness
of FPL Group Capital or any of its Consolidated Subsidiaries
that is
expressly subordinated in right and priority of payment to
other
liabilities of FPL Group Capital or such Consolidated
Subsidiary.
|
As
used
in this definition, “liabilities” includes preference or preferred stock of FPL
Group Capital or any Consolidated Subsidiary only to the extent of any
such
preference or preferred stock that is subject to mandatory redemption
or sinking
fund provisions.
The
term
“Consolidated Indebtedness” means total indebtedness as shown on the
consolidated balance sheet of FPL Group Capital and its Consolidated
Subsidiaries.
The
term
“Consolidated Subsidiary,” means at any date any direct or indirect
majority-owned subsidiary whose financial statements would be consolidated
with
those of FPL Group Capital in FPL Group Capital’s consolidated financial
statements as of such date in accordance with generally accepted accounting
principles. (Indenture, Section 608).
The
foregoing limitation does not limit in any manner the ability of:
|
|
(1)
|
FPL
Group Capital to place liens on any of its assets other than
the capital
stock of directly held, majority-owned
subsidiaries,
|
|
|
(2)
|
FPL
Group Capital or FPL Group to cause the transfer of its assets
or those of
its subsidiaries, including the capital stock covered by the
foregoing
restrictions,
|
|
|
(3)
|
FPL
Group to place liens on any of its assets,
or
|
|
|
(4)
|
any
of the direct or indirect subsidiaries of FPL Group Capital
or FPL Group
(other than FPL Group Capital) to place liens on any of their
assets.
|
Consolidation,
Merger, and Sale of Assets. Under the Indenture, FPL Group
Capital may not consolidate with or merge into any other entity or convey,
transfer or lease its properties and assets substantially as an entirety
to any
entity, unless:
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|
(1)
|
the
entity formed by that consolidation, or the entity into which
FPL Group
Capital is merged, or the entity that acquires or leases FPL
Group
Capital’s property and assets, is an entity organized and existing
under
the laws of the United States, any state or the District of
Columbia and
that entity
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|
|
|
expressly
assumes FPL Group Capital’s obligations on all Senior Debt Securities and
under the Indenture,
|
|
|
(2)
|
immediately
after giving effect to the transaction, no event of default
under the
Indenture and no event that, after notice or lapse of time
or both, would
become an event of default under the Indenture exists,
and
|
|
|
(3)
|
FPL
Group Capital delivers an officer’s certificate and an opinion of counsel
to the Indenture Trustee, as provided in the
Indenture. (Indenture, Section
1101).
|
The
Indenture does not restrict FPL Group Capital in a merger in which FPL
Group
Capital is the surviving entity.
Events
of Default. Each of the following is an event of default
under the Indenture with respect to the Senior Debt Securities of any
series:
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|
(1)
|
failure
to pay interest on the Senior Debt Securities of that series
within 30
days after it is due,
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|
|
(2)
|
failure
to pay principal or premium, if any, on the Senior Debt Securities
of that
series when it is due,
|
|
|
(3)
|
failure
to comply with any other covenant in the Indenture, other than
a covenant
that does not relate to that series of Senior Debt Securities,
that
continues for 90 days after FPL Group Capital receives written
notice of
such failure to comply from the Indenture Trustee, or FPL Group
Capital
and the Indenture Trustee receive written notice of such failure
to comply
from the registered owners of at least 33% in principal amount
of the
Senior Debt Securities of that
series,
|
|
|
(4)
|
certain
events of bankruptcy, insolvency or reorganization of FPL Group
Capital,
and
|
|
|
(5)
|
any
other event of default specified with respect to the Senior
Debt
Securities of that series. (Indenture, Section
801).
|
In
the
case of the third event of default listed above, the Indenture Trustee
may
extend the grace period. In addition, if registered owners of a
particular series have given a notice of default, then registered owners
of at
least the same percentage of Senior Debt Securities of that series, together
with the Indenture Trustee, may also extend the grace period. The
grace period will be automatically extended if FPL Group Capital has
initiated
and is diligently pursuing corrective action. (Indenture, Section
801). An event of default with respect to the Senior Debt Securities
of a particular series will not necessarily constitute an event of default
with
respect to Senior Debt Securities of any other series issued under the
Indenture.
Remedies. If
an event of default applicable to the Senior Debt Securities of one or
more
series, but not applicable to all outstanding Senior Debt Securities,
exists,
then either the Indenture Trustee or the registered owners of at least
33% in
aggregate principal amount of the Senior Debt Securities of each of the
affected
series may declare the principal of and accrued but unpaid interest on
all the
Senior Debt Securities of that series to be due and payable
immediately. However, under the Indenture, some Senior Debt
Securities may provide for a specified amount less than their entire
principal
amount to be due and payable upon that declaration. These Senior Debt
Securities are defined as “Discount Securities” in the Indenture.
If
the
event of default is applicable to all outstanding Senior Debt Securities,
then
only the Indenture Trustee or the registered owners of at least 33% in
aggregate
principal amount of all outstanding Senior Debt Securities of all series,
voting
as one class, and not the registered owners of any one series, may make
a
declaration of acceleration. However, the event of default giving
rise to the declaration relating to any series of Senior Debt Securities
will be
automatically waived, and that declaration and its consequences will
be
automatically rescinded and annulled, if, at any time after that declaration
and
before a judgment or decree for payment of the money due has been
obtained:
|
|
(1)
|
FPL
Group Capital deposits with the Indenture Trustee a sum sufficient
to
pay:
|
|
|
(a)
|
all
overdue interest on all Senior Debt Securities of that
series,
|
|
|
(b)
|
the
principal of and any premium on any Senior Debt Securities
of that series
that have become due for reasons other than that declaration,
and interest
that is then due,
|
|
|
(c)
|
interest
on overdue interest for that series,
and
|
|
|
(d)
|
all
amounts due to the Indenture Trustee under the Indenture,
and
|
|
|
(2)
|
any
other event of default with respect to the Senior Debt Securities
of that
series has been cured or waived as provided in the
Indenture. (Indenture, Section
802).
|
Other
than its obligations and duties in case of an event of default under
the
Indenture, the Indenture Trustee is not obligated to exercise any of
its rights
or powers under the Indenture at the request or direction of any of the
registered owners, unless those registered owners offer reasonable indemnity
to
the Indenture Trustee. (Indenture, Section 903). If they
provide this reasonable indemnity, the registered owners of a majority
in
principal amount of any series of Senior Debt Securities will have the
right to
direct the time, method and place of conducting any proceeding for any
remedy
available to the Indenture Trustee, or exercising any trust or power
conferred
on the Indenture Trustee, with respect to the Senior Debt Securities
of that
series. However, if an event of default under the Indenture relates
to more than one series of Senior Debt Securities, only the registered
owners of
a majority in aggregate principal amount of all affected series of Senior
Debt
Securities, considered as one class, will have the right to make that
direction. Also, the direction must not violate any law or the
Indenture, and may not expose the Indenture Trustee to personal liability
in
circumstances where its indemnity would not, in the Indenture Trustee’s sole
discretion, be adequate. (Indenture, Section 812).
No
registered owner of Senior Debt Securities of any series will have any
right to
institute any proceeding under the Indenture, or any remedy under the
Indenture,
unless:
|
|
(1)
|
that
registered owner has previously given to the Indenture Trustee
written
notice of a continuing event of default with respect to the
Senior Debt
Securities of that series,
|
|
|
(2)
|
the
registered owners of a majority in aggregate principal amount
of the
outstanding Senior Debt Securities of all series in respect
of which an
event of default under the Indenture exists, considered as
one class, have
made written request to the Indenture Trustee, and have offered
reasonable
indemnity to the Indenture Trustee to institute that proceeding
in its own
name as trustee, and
|
|
|
(3)
|
the
Indenture Trustee has failed to institute any proceeding, and
has not
received from the registered owners of a majority in aggregate
principal
amount of the outstanding Senior Debt Securities of all series
in respect
of which an event of default under the Indenture exists, considered
as one
class, a direction inconsistent with that request, within 60
days after
that notice, request and offer. (Indenture,
Section 807).
|
However,
these limitations do not apply to a suit instituted by a registered owner
of a
Senior Debt Security for the enforcement of payment of the principal
of or
premium, if any, or interest on that Senior Debt Security on or after
the
applicable due date specified in that Senior Debt
Security. (Indenture, Section 808).
FPL
Group
Capital is required to deliver to the Indenture Trustee an annual statement
as
to its compliance with all conditions and covenants under the
Indenture. (Indenture, Section 606).
Modification
and Waiver. Without the consent of any registered owner of
Senior Debt Securities, FPL Group Capital and the Indenture Trustee may
amend or
supplement the Indenture for any of the following purposes:
|
|
(1)
|
to
provide for the assumption by any permitted successor to FPL
Group Capital
of FPL Group Capital’s obligations under the Indenture and the Senior Debt
Securities in the case of a merger or consolidation or a conveyance,
transfer or lease of its assets substantially as an
entirety,
|
|
|
(2)
|
to
add covenants of FPL Group Capital or to surrender any right
or power
conferred upon FPL Group Capital by the
Indenture,
|
|
|
(3)
|
to
add any additional events of
default,
|
|
|
(4)
|
to
change, eliminate or add any provision of the Indenture, provided
that if
that change, elimination or addition will materially adversely
affect the
interests of the registered owners of Senior Debt Securities
of any series
or tranche, that change, elimination or addition will become
effective
with respect to that series or tranche
only
|
|
|
(a)
|
when
the required consent of the registered owners of Senior Debt
Securities of
that series or tranche has been obtained,
or
|
|
|
(b)
|
when
no Senior Debt Securities of that series or tranche remain
outstanding
under the Indenture,
|
|
|
(5)
|
to
provide collateral security for all but not a part of the Senior
Debt
Securities,
|
|
|
(6)
|
to
establish the form or terms of Senior Debt Securities of any
other series
or tranche,
|
|
|
(7)
|
to
provide for the authentication and delivery of bearer securities
and the
related coupons and for other matters relating to those bearer
securities,
|
|
|
(8)
|
to
accept the appointment of a successor Indenture Trustee with
respect to
the Senior Debt Securities of one or more series and to change
any of the
provisions of the Indenture as necessary to provide for the
administration
of the trusts under the Indenture by more than one
trustee,
|
|
|
(9)
|
to
add procedures to permit the use of a non-certificated system
of
registration for the Senior Debt Securities of all or any series
or
tranche,
|
|
|
(10)
|
to
change any place where
|
|
|
(a)
|
the
principal of and premium, if any, and interest on all or any
series or
tranche of Senior Debt Securities are
payable,
|
|
|
(b)
|
all
or any series or tranche of Senior Debt Securities may be transferred
or
exchanged, and
|
|
|
(c)
|
notices
and demands to or upon FPL Group Capital in respect of Senior
Debt
Securities and the Indenture may be served,
or
|
|
|
(11)
|
to
cure any ambiguity or inconsistency or to add or change any
other
provisions with respect to matters and questions arising under
the
Indenture, provided those changes or additions may not materially
adversely affect the interests of the registered owners of
Senior Debt
Securities of any series or tranche. (Indenture, Section
1201).
|
The
registered owners of a majority in aggregate principal amount of the
Senior Debt
Securities of all series then outstanding may waive compliance by FPL
Group
Capital with certain restrictive provisions of the
Indenture. (Indenture, Section 607). The registered owners
of a majority in principal amount of the outstanding Senior Debt Securities
of
any series may waive any past default under the Indenture with respect
to that
series, except a default in the payment of principal, premium, if any,
or
interest and a default with respect to certain restrictive covenants
or
provisions of the Indenture that cannot be modified or amended without
the
consent of the registered owner of each outstanding Senior Debt Security
of that
series affected. (Indenture, Section 813).
In
addition to any amendments described above, if the Trust Indenture Act
of 1939
is amended after the date of the Indenture in a way that requires changes
to the
Indenture or in a way that permits changes to, or the elimination of,
provisions
that were previously required by the Trust Indenture Act of 1939, the
Indenture
will be deemed to be amended to conform to that amendment of the Trust
Indenture
Act of 1939 or to make those changes,
additions
or eliminations. FPL Group Capital and the Indenture Trustee may,
without the consent of any registered owners, enter into supplemental
indentures
to make that amendment. (Indenture, Section 1201).
Except
for any amendments described above, the consent of the registered owners
of a
majority in aggregate principal amount of the Senior Debt Securities
of all
series then outstanding, considered as one class, is required for all
other
modifications to the Indenture. However, if less than all of the
series of Senior Debt Securities outstanding are directly affected by
a proposed
supplemental indenture, then the consent only of the registered owners
of a
majority in aggregate principal amount of outstanding Senior Debt Securities
of
all directly affected series, considered as one class, is
required. But, if FPL Group Capital issues any series of Senior Debt
Securities in more than one tranche and if the proposed supplemental
indenture
directly affects the rights of the registered owners of Senior Debt Securities
of less than all of those tranches, then the consent only of the registered
owners of a majority in aggregate principal amount of the outstanding
Senior
Debt Securities of all directly affected tranches, considered as one
class, will
be required. However, none of those amendments or modifications
may:
|
|
(1)
|
change
the dates on which the principal of or interest on a Senior
Debt Security
is due without the consent of the registered owner of that
Senior Debt
Security,
|
|
|
(2)
|
reduce
any Senior Debt Security’s principal amount or rate of interest (or the
amount of any installment of that interest) or change the method
of
calculating that rate without the consent of the registered
owner of that
Senior Debt Security,
|
|
|
(3)
|
reduce
any premium payable upon the redemption of a Senior Debt Security
without
the consent of the registered owner of that Senior Debt
Security,
|
|
|
(4)
|
change
the currency (or other property) in which a Senior Debt Security
is
payable without the consent of the registered owner of that
Senior Debt
Security,
|
|
|
(5)
|
impair
the right to sue to enforce payments on any Senior Debt Security
on or
after the date that it states that the payment is due (or,
in the case of
redemption, on or after the redemption date) without the consent
of the
registered owner of that Senior Debt
Security,
|
|
|
(6)
|
reduce
the percentage in principal amount of the outstanding Senior
Debt Security
of any series or tranche whose owners must consent to an amendment,
supplement or waiver without the consent of the registered
owner of each
outstanding Senior Debt Security of that series or
tranche,
|
|
|
(7)
|
reduce
the requirements for quorum or voting of any series or tranche
without the
consent of the registered owner of each outstanding Senior
Debt Security
of that series or tranche, or
|
|
|
(8)
|
modify
certain of the provisions of the Indenture relating to supplemental
indentures, waivers of certain covenants and waivers of past
defaults with
respect to the Senior Debt Securities of any series or tranche,
without
the consent of the registered owner of each outstanding Senior
Debt
Security affected by the
modification.
|
A
supplemental indenture that changes or eliminates any provision of the
Indenture
that has expressly been included only for the benefit of one or more
particular
series or tranches of Senior Debt Securities, or that modifies the rights
of the
registered owners of Senior Debt Securities of that series or tranche
with
respect to that provision, will not affect the rights under the Indenture
of the
registered owners of the Senior Debt Securities of any other series or
tranche. (Indenture, Section 1202).
The
Indenture provides that, in order to determine whether the registered
owners of
the required principal amount of the outstanding Senior Debt Securities
have
given any request, demand, authorization, direction, notice, consent
or waiver
under the Indenture, or whether a quorum is present at the meeting of
the
registered owners of Senior Debt Securities, Senior Debt Securities owned
by FPL
Group Capital or any other obligor upon the Senior Debt Securities or
any
affiliate of FPL Group Capital or of that other obligor (unless FPL Group
Capital, that affiliate or that obligor owns all Senior Debt Securities
outstanding under the Indenture, determined without regard to this provision)
will be disregarded and deemed not to be outstanding. (Indenture,
Section 101).
If
FPL
Group Capital solicits any action under the Indenture from registered
owners of
Senior Debt Securities, FPL Group Capital may, at its option, by signing
a
written request to the Indenture Trustee, fix in advance a record date
for
determining the registered owners of Senior Debt Securities entitled
to take
that action. However, FPL Group Capital will not be obligated to do
this. If FPL Group Capital fixes such a record date, that action may
be taken before or after that record date, but only the registered owners
of
record at the close of business on that record date will be deemed to
be
registered owners of Senior Debt Securities for the purposes of determining
whether registered owners of the required proportion of the outstanding
Senior
Debt Securities have authorized that action. For these purposes, the
outstanding Senior Debt Securities will be computed as of the record
date. Any action of a registered owner of any Senior Debt Security
under the Indenture will bind every future registered owner of that Senior
Debt
Security, or any Senior Debt Security replacing that Senior Debt Security,
with
respect to anything that the Indenture Trustee or FPL Group Capital do,
fail to
do, or allow to be done in reliance on that action, whether or not that
action
is noted upon that Senior Debt Security. (Indenture, Section
104).
Resignation
and Removal of Indenture Trustee. The Indenture Trustee may
resign at any time with respect to any series of Senior Debt Securities
by
giving written notice of its resignation to FPL Group Capital. Also,
the registered owners of a majority in principal amount of the outstanding
Senior Debt Securities of one or more series of Senior Debt Securities
may
remove the Indenture Trustee at any time with respect to the Senior Debt
Securities of that series, by delivering an instrument evidencing this
action to
the Indenture Trustee and FPL Group Capital. The resignation or
removal of the Indenture Trustee and the appointment of a successor trustee
will
not become effective until a successor trustee accepts its
appointment.
Except
with respect to an Indenture Trustee appointed by the registered owners
of
Senior Debt Securities, the Indenture Trustee will be deemed to have
resigned
and the successor will be deemed to have been appointed as trustee in
accordance
with the Indenture if:
|
|
(1)
|
no
event of default under the Indenture or event that, after notice
or lapse
of time, or both, would become an event of default under the
Indenture
exists, and
|
|
|
(2)
|
FPL
Group Capital has delivered to the Indenture Trustee a resolution
of its
Board of Directors appointing a successor trustee and that
successor
trustee has accepted that appointment in accordance with the
terms of the
Indenture. (Indenture, Section
910).
|
Notices. Notices
to registered owners of Senior Debt Securities will be sent by mail to
the
addresses of those registered owners as they appear in the security register
for
those Senior Debt Securities. (Indenture, Section 106).
Title. FPL
Group Capital, the Indenture Trustee, and any agent of FPL Group Capital
or the
Indenture Trustee, may treat the person in whose name a Senior Debt Security
is
registered as the absolute owner of that Senior Debt Security, whether
or not
that Senior Debt Security is overdue, for the purpose of making payments
and for
all other purposes, regardless of any notice to the
contrary. (Indenture, Section 308).
Governing
Law. The Indenture and the Senior Debt Securities will be
governed by, and construed in accordance with, the laws of the State
of New
York, without regard to New York’s conflict of law principles, except to the
extent that the law of any other jurisdiction is mandatorily
applicable. (Indenture, Section 112).
THE
FPL GROUP CAPITAL SENIOR DEBT SECURITIES
General. This
section briefly summarizes some of the provisions of the Guarantee Agreement,
dated as of June 1, 1999, between FPL Group and The Bank of New York, as
Guarantee Trustee. The Guarantee Agreement was executed for the
benefit of the Indenture Trustee, which holds the Guarantee Agreement
for the
benefit of registered owners of the Senior Debt Securities covered by
the
Guarantee Agreement. This summary does not contain a complete
description of the Guarantee Agreement. You should read this summary
together with the Guarantee Agreement for a complete understanding of
all the
provisions. The Guarantee Agreement has been previously filed with
the SEC and is an exhibit to the registration statement filed with the
SEC of
which this prospectus is a part. In addition, the Guarantee Agreement
is qualified as an indenture under the Trust Indenture Act
of
1939
and is therefore subject to the provisions of the Trust Indenture Act
of
1939. You should read the Trust Indenture Act of 1939 for a complete
understanding of its provisions.
Under
the
Guarantee Agreement, FPL Group absolutely, irrevocably and unconditionally
guarantees the prompt and full payment, when due and payable (including
upon
acceleration or redemption), of the principal, interest and premium,
if any, on
the Senior Debt Securities that are covered by the Guarantee Agreement
to the
registered owners of those Senior Debt Securities, according to the terms
of
those Senior Debt Securities and the Indenture. Pursuant to the
Guarantee Agreement, all of the Senior Debt Securities are covered by
the
Guarantee Agreement except Senior Debt Securities that by their terms
are
expressly not entitled to the benefit of the Guarantee Agreement. All
of the Offered Senior Debt Securities will be covered by the Guarantee
Agreement. This guarantee is referred to in this prospectus as the
“Guarantee.” FPL Group is only required to make these payments if FPL
Group Capital fails to pay or provide for punctual payment of any of
those
amounts on or before the expiration of any applicable grace
periods. (Guarantee Agreement, Section 5.01). In the
Guarantee Agreement, FPL Group has waived its right to require the Guarantee
Trustee, the Indenture Trustee or the registered owners of Senior Debt
Securities covered by the Guarantee Agreement to exhaust their remedies
against
FPL Group Capital prior to bringing suit against FPL
Group. (Guarantee Agreement, Section 5.06).
The
Guarantee is a guarantee of payment when due (i.e., the guaranteed party
may
institute a legal proceeding directly against FPL Group to enforce its
rights
under the Guarantee Agreement without first instituting a legal proceeding
against any other person or entity). The Guarantee is not a guarantee
of collection. (Guarantee Agreement, Section 5.01).
Except
as
otherwise stated in the related prospectus supplement, the covenants
in the
Guarantee Agreement would not give registered owners of the Senior Debt
Securities covered by the Guarantee Agreement protection in the event
of a
highly-leveraged transaction involving FPL Group.
Security
and Ranking. The Guarantee is an unsecured obligation of FPL
Group and will rank equally and ratably with all other unsecured and
unsubordinated indebtedness of FPL Group. The Guarantee will rank
senior to the Preferred Trust Securities Guarantee, the Subordinated
Guarantee
and the FPL Group Junior Subordinated Debentures (each as defined below)
and FPL
Group’s guarantee of FPL Group Capital’s preferred stock. There is no
limit on the amount of other indebtedness, including guarantees, that
FPL Group
may incur or issue.
FPL
Group
is a holding company that derives substantially all of its income from
its
operating subsidiaries. Therefore, the Guarantee is effectively
subordinated to all indebtedness and other liabilities, including trade
payables, debt and preferred stock, incurred or issued by FPL Group’s
subsidiaries. Neither the Indenture nor the Guarantee Agreement
places any limit on the amount of liabilities, including debt or preferred
stock, that FPL Group’s subsidiaries may issue, guarantee or otherwise
incur.
Events
of Default. An event of default under the Guarantee
Agreement will occur upon the failure of FPL Group to perform any of
its payment
obligations under the Guarantee Agreement. (Guarantee Agreement,
Section 1.01). The registered owners of a majority of the
aggregate principal amount of the outstanding Senior Debt Securities
covered by
the Guarantee Agreement have the right to:
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(1)
|
direct
the time, method and place of conducting any proceeding for
any remedy
available to the Guarantee Trustee under the Guarantee Agreement,
or
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(2)
|
direct
the exercise of any trust or power conferred upon the Guarantee
Trustee
under the Guarantee Agreement. (Guarantee Agreement,
Section 3.01).
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The
Guarantee Trustee must give notice of any event of default under the
Guarantee
Agreement known to the Guarantee Trustee to the registered owners of
Senior Debt
Securities covered by the Guarantee Agreement within 90 days after the
occurrence of that event of default, in the manner and to the extent
provided in
subsection (c) of Section 313 of the Trust Indenture Act of 1939, unless
such
event of default has been cured or waived prior to the giving of such
notice. (Guarantee Agreement, Section 2.07). The
registered owners of all outstanding Senior Debt Securities may waive
any past
event of default and its consequences. (Guarantee Agreement, Section
2.06).
The
Guarantee Trustee, the Indenture Trustee and the registered owners of
Senior
Debt Securities covered by the Guarantee Agreement have all of the rights
and
remedies available under applicable law and may sue to enforce the terms
of the
Guarantee Agreement and to recover damages for the breach of the Guarantee
Agreement. The remedies of each of the Guarantee Trustee, the
Indenture Trustee and the registered owners of Senior Debt Securities
covered by
the Guarantee Agreement, to the extent permitted by law, are cumulative
and in
addition to any other remedy now or hereafter existing at law or in
equity. At the option of any of the Guarantee Trustee, the Indenture
Trustee or the registered owners of Senior Debt Securities covered by
the
Guarantee Agreement, that person or entity may join FPL Group in any
lawsuit
commenced by that person or entity against FPL Group Capital with respect
to any
obligations under the Guarantee Agreement. Also, that person or
entity may recover against FPL Group in that lawsuit, or in any independent
lawsuit against FPL Group, without first asserting, prosecuting or exhausting
any remedy or claim against FPL Group Capital. (Guarantee Agreement,
Section 5.06).
FPL
Group
is required to deliver to the Guarantee Trustee an annual statement as
to its
compliance with all conditions under the Guarantee
Agreement. (Guarantee Agreement, Section 2.04).
Modification. FPL
Group and the Guarantee Trustee may, without the consent of any registered
owner
of Senior Debt Securities covered by the Guarantee Agreement, agree to
any
changes to the Guarantee Agreement that do not materially adversely affect
the
rights of registered owners. The Guarantee Agreement also may be
amended with the prior approval of the registered owners of a majority
in
aggregate principal amount of all outstanding Senior Debt Securities
covered by
the Guarantee Agreement. However, the right of any registered owner
of Senior Debt Securities covered by the Guarantee Agreement to receive
payment
under the Guarantee Agreement on the due date of the Senior Debt Securities
held
by that registered owner, or to institute suit for the enforcement of
that
payment on or after that due date, may not be impaired or affected without
the
consent of that registered owner. (Guarantee Agreement, Section
6.01).
Termination
of the Guarantee Agreement. The Guarantee Agreement will
terminate and be of no further force and effect upon full payment of
all Senior
Debt Securities covered by the Guarantee Agreement. (Guarantee
Agreement, Section 5.05).
Governing
Law. The Guarantee Agreement will be governed by and
construed in accordance with the laws of the State of New York, without
regard
to conflict of laws principles thereunder, except to the extent that
the law of
any other jurisdiction is mandatorily applicable. (Guarantee
Agreement, Section 5.07).
FPL
Group
will issue its debt securities (other than the FPL Group Junior Subordinated
Debentures (as defined below under “Description of the FPL Group and FPL Group
Capital Junior Subordinated Debentures and the FPL Group Subordinated
Guarantee”)), in one or more series, under an Indenture, between FPL Group and
The Bank of New York, as trustee. The terms of any offered debt
securities will be described in a supplement to this prospectus.
General. The
following statements describing FPL Group’s common stock are not intended to be
a complete description. For additional information, please see FPL
Group’s Restated Articles of Incorporation, as amended (“Charter”), and its
bylaws, which set forth the terms of the common stock. Please also
see the Mortgage and Deed of Trust, dated as of January 1, 1944, between
Florida Power & Light Company and Deutsche Bank Trust Company Americas, as
trustee, as amended and supplemented (the “Mortgage”), which contains
restrictions which may limit the ability of Florida Power & Light Company to
pay dividends to FPL Group. Each of these documents has been
previously filed with the SEC and they are exhibits to the registration
statement filed with the SEC of which this prospectus is a
part. Reference is also made to the laws of the State of
Florida.
FPL
Group’s authorized capital stock consists of 800,000,000 shares of common stock,
$.01 par value, and 100,000,000 shares of serial preferred stock, $.01
par
value. As of March 31, 2007, 406,415,900 shares of common stock were
issued and outstanding and no shares of serial preferred stock were issued
and
outstanding. The FPL Group common stock has no preemptive,
subscription or conversion rights, and there are no redemption or sinking
fund
provisions applicable thereto. The outstanding shares of common stock
are, and when issued the shares offered
hereby
will be, fully paid and nonassessable. In some cases, the issuance of
preferred stock could make it difficult for another company to acquire
FPL Group and make it harder to remove current management. See
“Description of Preferred Stock and FPL Group Guarantee of FPL Group Capital
Preferred Stock—FPL Group Preferred Stock” below.
All
outstanding FPL Group common stock is listed on the NYSE and trades under
the
symbol “FPL.” The registrar and transfer agent for the FPL Group
common stock is Computershare Investor Services, LLC.
A
number
of provisions that are in FPL Group’s Charter and bylaws will make it difficult
for another company to acquire FPL Group and for a holder of FPL Group
common
stock to receive any related takeover premium for its shares. See
“—Voting Rights and Non-Cumulative Voting” and “Description of Preferred Stock
and FPL Group Guarantee of FPL Group Capital Preferred Stock—FPL Group Preferred
Stock” below.
Dividend
Rights. Each share of common stock is entitled to
participate equally with respect to dividends declared on the common
stock out
of funds legally available for the payment thereof.
FPL
Group’s Charter does not limit the dividends that can be paid on the common
stock. However, as a practical matter, the ability of FPL Group to
pay dividends on the common stock is dependent upon, among other things,
dividends paid to it by its subsidiaries, including Florida Power & Light
Company. Florida Power & Light Company’s ability to pay dividends
is limited by restrictions contained in the Mortgage. However, these
restrictions do not currently limit Florida Power & Light Company’s ability
to pay dividends to FPL Group from its retained earnings.
FPL
Group
Capital has issued junior subordinated debentures in connection with
preferred
trust securities previously issued by FPL Group Capital Trust I, which
junior subordinated debentures are guaranteed by FPL Group. FPL Group
Capital has the right, from time to time, to defer the payment of interest
on
its outstanding junior subordinated debentures for a deferral period
of up to 20
consecutive quarters. FPL Group Capital has also issued two series of
junior subordinated debentures not in connection with preferred trust
securities, which junior subordinated debentures are guaranteed by FPL
Group. FPL Group Capital has the right, from time to time, to defer
the payment of interest on these outstanding junior subordinated debentures
on
one or more occasions for up to 10 consecutive years. FPL Group,
Florida Power & Light Company and/or FPL Group Capital may issue, from time
to time, additional junior subordinated debentures. FPL Group,
Florida Power & Light Company and/or FPL Group Capital may have similar
rights to defer the payment of interest on those additional junior subordinated
debentures. If FPL Group Capital and/or FPL Group exercises any such
right to defer the payment of interest, FPL Group would not be able to
pay
dividends on its common stock or preferred stock during the periods when
such
payments are delayed with certain limited exceptions. If Florida
Power & Light Company exercises any such right to defer the payment of
interest , it would not be able to pay dividends to any holder of its
common
stock or preferred stock, including FPL Group, during the periods when
such
payments are delayed with certain limited exceptions. In addition,
FPL Group, FPL Group Capital and Florida Power & Light Company may issue
other securities in the future that have a similar right to delay interest
or
distribution payments and similar dividend restrictions in the event
of the
exercise of such rights.
In
addition, FPL Group may issue one or more series of its serial preferred
stock,
$.01 par value, without the approval of its shareholders. Each series
may have terms that differ from those of any other series and may provide
for
dividend, liquidation, voting and other rights that are superior or prior
to
those of FPL Group’s common stock.
Voting
Rights and Non-Cumulative Voting. In general, the holders of
FPL Group common stock are entitled to one vote per share for the election
of
directors and for other corporate purposes. The Charter:
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(1)
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permits
the shareholders to remove a director only for cause and only
by the
affirmative vote of 75% in voting power of the outstanding
shares of
common stock and other outstanding voting stock, voting as
a
class;
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(2)
|
provides
that a vacancy on the Board of Directors may be filled only
by the
remaining directors;
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(3)
|
permits
shareholders to take action only at an annual meeting, or a
special
meeting duly called by certain officers, the Board of Directors
or the
holders of a majority in voting power of the outstanding shares
of voting
stock entitled to vote on the
matter;
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(4)
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requires
the affirmative vote of 75% in voting power of the outstanding
shares of
voting stock to approve certain Business Combinations (as defined
below)
with an Interested Shareholder (as defined below) or its affiliate,
unless
approved by a majority of the Continuing Directors (as defined
below) or,
in certain cases, unless certain minimum price and procedural
requirements
are met; and
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(5)
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requires
the affirmative vote of 75% in voting power of the outstanding
shares of
voting stock to amend the bylaws or to amend certain provisions
of the
Charter including those provisions discussed in (1) through
(4)
above.
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Such
provisions may have significant effects on the ability of the shareholders
to
change the composition of an incumbent Board of Directors or to benefit
from
certain transactions which are opposed by an incumbent Board of
Directors.
The
term
“Interested Shareholder” is defined in the Charter to include a security holder
who owns 10% or more in voting power of the outstanding shares of voting
stock,
and the term “Continuing Director” is defined in the Charter to include any
director who is not an affiliate of an Interested Shareholder. The
above provisions dealing with Business Combinations involving FPL Group
and an
Interested Shareholder may discriminate against a security holder who
becomes an
Interested Shareholder by reason of the beneficial ownership of such
amount of
common or other voting stock. The term “Business Combination” is
defined in the Charter to include:
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(1)
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any
merger or consolidation of FPL Group or any direct or indirect
majority-owned subsidiary with (a) an Interested Shareholder or (b)
any other corporation which is, or after such merger or consolidation
would be, an affiliate of an Interested
Shareholder;
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(2)
|
any
sale, lease, exchange, mortgage, pledge, transfer or other
disposition in
one transaction or a series of transactions to or with any
Interested
Shareholder or any affiliate of an Interested Shareholder of
assets of FPL
Group or any direct or indirect majority-owned subsidiary having
an
aggregate fair market value of $10,000,000 or
more;
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(3)
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the
issuance or transfer by FPL Group or any direct or indirect
majority-owned
subsidiary in one transaction or a series of transactions of
any
securities of FPL Group or any subsidiary to any Interested
Shareholder or
any affiliate of any Interested Shareholder in exchange for
cash,
securities or other property, or a combination thereof, having
an
aggregate fair market value of $10,000,000 or
more;
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(4)
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the
adoption of any plan or proposal for the liquidation or dissolution
of FPL
Group proposed by or on behalf of an Interested Shareholder
or an
affiliate of an Interested Shareholder;
or
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(5)
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any
reclassification of securities, including any reverse stock
split, or
recapitalization, of FPL Group, or any merger or consolidation
of FPL
Group with any of its direct or indirect majority-owned subsidiaries
or
any other transaction which has the direct or indirect effect
of
increasing the proportionate share of the outstanding shares
of any class
of equity or convertible securities of FPL Group or any direct
or indirect
wholly-owned subsidiary which is directly or indirectly owned
by any
Interested Shareholder or any affiliate of any Interested
Shareholder.
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The
holders of common stock do not have cumulative voting rights, and therefore
the
holders of more than 50% of a quorum (majority) of the outstanding shares
of
common stock can elect all of FPL Group’s directors. Unless otherwise
provided in the Charter or the bylaws or in accordance with applicable
law, the
affirmative vote of a majority of the total number of shares represented
at a
meeting and entitled to vote is required for shareholder action on a
matter. Voting rights for the election of directors or otherwise, if
any, for any series of the serial preferred stock, will be established
by the
Board of Directors when such series is issued. See “Description of
Preferred Stock and FPL Group Guarantee of FPL Group Capital Preferred
Stock—FPL
Group Preferred Stock” below.
Liquidation
Rights. After satisfaction of creditors and payments due the
holders of serial preferred stock, if any, the holders of common stock
are
entitled to share ratably in the distribution of all remaining
assets. See “Description of Preferred Stock and FPL Group Guarantee
of FPL Group Capital Preferred Stock” below.
General. The
following statements describing FPL Group’s preferred stock and FPL Group
Capital’s preferred stock are not intended to be a complete
description. For additional information, please see FPL Group’s
Charter and its bylaws, and FPL Group Capital’s Articles of Incorporation, as
amended (“FPL Group Capital’s Charter”), and its bylaws,
respectively. You should read this summary together with the articles
of amendment to FPL Group’s Charter or FPL Group Capital’s Charter, as
applicable, which will describe the terms of any preferred stock to be
offered
hereby, for a complete understanding of all the provisions. With
respect to the FPL Group preferred stock and the guarantee of the FPL
Group
Capital preferred stock, please also see the Mortgage, which contains
restrictions which may limit the ability of Florida Power & Light Company to
pay dividends to FPL Group. Each of these documents has been
previously filed with the SEC and each is an exhibit to the registration
statement filed with the SEC of which this prospectus is a
part. Reference is also made to the laws of the State of
Florida.
FPL
Group Preferred Stock. FPL Group may issue one or more
series of its serial preferred stock, $.01 par value, without the approval
of its shareholders.
Some
terms of a series of preferred stock may differ from those of another
series. A prospectus supplement will describe the terms of any
preferred stock being offered. These terms will also be described in
articles of amendment to FPL Group’s Charter, which will establish the terms of
the preferred stock being offered. These terms will include any of
the following that apply to that series:
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(1)
|
the
title of that series of preferred
stock,
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(2)
|
the
number of shares in the series,
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(3)
|
the
dividend rate, or how such rate will be determined, and the
dividend
payment dates for the series,
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(4)
|
whether
the series will be listed on a securities
exchange,
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(5)
|
the
date or dates on which the series of preferred stock may be
redeemed at
the option of FPL Group and any restrictions on such
redemptions,
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(6)
|
any
sinking fund or other provisions that would obligate FPL Group
to
repurchase, redeem or retire the series of preferred
stock,
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(7)
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the
amount payable on the series of preferred stock in case of
the
liquidation, dissolution or winding up of FPL Group and any
additional
amount, or method of determining such amount, payable in case
any such
event is voluntary,
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(8)
|
any
rights to convert the shares of the series of preferred stock
into shares
of another series or into shares of any other class of capital
stock,
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(9)
|
the
voting rights, if any, and
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(10)
|
any
other terms that are not inconsistent with the provisions of
FPL Group’s
Charter.
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In
some
cases, the issuance of preferred stock could make it difficult for another
company to acquire FPL Group and make it harder to remove current
management. See also “Description of FPL Group Common
Stock.”
If
FPL
Group Capital or FPL Group exercises a right to defer the payment of
interest on
junior subordinated debentures, including those junior subordinated debentures
issued in connection with preferred trust
securities,
FPL Group will not be able to pay dividends on its common or preferred
stock
during the periods such payments are delayed with certain limited
exceptions. If the trusts formed by Florida Power & Light Company
issue preferred trust securities and Florida Power & Light Company exercises
a right to defer the payment of interest on junior subordinated debentures
issued in connection with preferred trust securities, Florida Power & Light
Company will not be able to pay dividends on its common stock or preferred
stock
during the periods when such payments are delayed with certain limited
exceptions. In addition, FPL Group, FPL Group Capital and Florida
Power & Light Company may issue other securities in the future that have a
similar right to delay interest or distribution payments and similar
dividend
restrictions in the event of the exercise of such rights. See
“Description of FPL Group Common Stock—Dividend Rights” in this
prospectus.
Shares
of
preferred stock offered hereby by FPL Group will, when issued, be fully
paid and
non-assessable.
FPL
Group Capital Preferred Stock. FPL Group Capital may issue
one or more series of serial preferred stock, $.01 par value, without the
approval of its shareholders. The preferred stock of FPL Group
Capital will be fully and unconditionally guaranteed by FPL Group as
described
below.
Some
terms of a series of preferred stock may differ from those of another
series. A prospectus supplement will describe the terms of any
preferred stock being offered. These terms will also be described in
articles of amendment to FPL Group Capital’s Charter, which will establish the
terms of the preferred stock being offered. These terms will include
any of the following that apply to that series:
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(1)
|
the
title of that series of preferred
stock,
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|
(2)
|
the
number of shares in the series,
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|
(3)
|
the
dividend rate, or how such rate will be determined, and the
dividend
payment dates for the series,
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|
(4)
|
whether
the series will be listed on a securities
exchange,
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(5)
|
the
date or dates on which the series of preferred stock may be
redeemed at
the option of FPL Group Capital and any restrictions on such
redemptions,
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|
(6)
|
any
sinking fund or other provisions that would obligate FPL Group
Capital to
repurchase, redeem or retire the series of preferred
stock,
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|
(7)
|
the
amount payable on the series of preferred stock in case of
the
liquidation, dissolution or winding up of FPL Group Capital
and any
additional amount, or method of determining such amount, payable
in case
any such event is voluntary,
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(8)
|
any
rights to convert the shares of the series of preferred stock
into shares
of another series or into shares of any other class of capital
stock,
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(9)
|
the
voting rights, if any, and
|
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|
(10)
|
any
other terms that are not inconsistent with the provisions of
FPL Group
Capital’s Charter.
|
If
FPL
Group Capital exercises a right to defer the payment of interest on junior
subordinated debentures, including those junior subordinated debentures
issued
in connection with preferred trust securities, FPL Group Capital will
not be
able to pay dividends on its common or preferred stock during the periods
such
payments are delayed with certain limited exceptions. In addition,
FPL Group Capital may issue other securities in the future that have
a similar
right to delay interest or distribution payments and similar dividend
restrictions in the event of the exercise of such rights. See
“Description of FPL Group Common Stock—Dividend Rights” in this
prospectus.
Shares
of
preferred stock offered hereby by FPL Group Capital will, when issued,
be fully
paid and non-assessable.
FPL
Group Guarantee of FPL Group Capital Preferred Stock. FPL
Group will fully, unconditionally and irrevocably guarantee the payment
of
accumulated and unpaid dividends, and payments due on liquidation or
redemption,
as and when due, regardless of any defense, right of set-off or counterclaim
that FPL Group Capital may have or assert. FPL Group’s guarantee of
FPL Group Capital’s preferred stock will be an unsecured obligation of FPL Group
and will rank (1) subordinate and junior in right of payment to all other
liabilities of FPL Group (except those made pari passu or subordinate
by their
terms), (2) equal in right of payment with the most senior preferred
or
preference stock that may be issued by FPL Group and with any other guarantee
that may be entered into by FPL Group in respect of any preferred or
preference
stock of any affiliate of FPL Group, and (3) senior to FPL Group’s common
stock. A prospectus supplement will describe the terms of FPL Group’s
guarantee of FPL Group Capital’s preferred stock. The description
will not necessarily be complete, and reference will be made to the preferred
stock guarantee agreement.
FPL
Group
is a holding company that derives substantially all of its income from
its
operating subsidiaries. Therefore, the FPL Group guarantee of FPL
Group Capital preferred stock will be effectively subordinated to all
indebtedness and other liabilities, including trade payables, debt and
preferred
stock, incurred or issued by FPL Group’s subsidiaries. FPL Group’s
guarantee of FPL Group Capital preferred stock does not place any limit
on the
amount of liabilities, including debt or preferred stock, that FPL Group’s
subsidiaries may issue, guarantee or otherwise incur.
AND
STOCK PURCHASE UNITS
FPL
Group
may issue stock purchase contracts, including contracts that obligate
holders to
purchase from FPL Group, and FPL Group to sell to these holders, a specified
number of shares of common stock or preferred stock at a future date
or
dates. The consideration per share of common stock or preferred stock
may be fixed at the time the stock purchase contracts are issued or may
be
determined by reference to a specific formula set forth in the stock
purchase
contracts. The stock purchase contracts may be issued separately or
as a part of stock purchase units consisting of a stock purchase contract
and
either debt securities of FPL Group Capital, debt securities of FPL Group,
preferred trust securities of one or more FPL Group subsidiary trusts
or other
subsidiary entities (including, but not limited to, Preferred Trust Securities
(as defined herein)), or debt securities of third parties including,
but not
limited to, U.S. Treasury securities, that would secure the holders’ obligations
to purchase the common stock or preferred stock under the stock purchase
contracts. The stock purchase contracts may require FPL Group to make
periodic payments to the holders of some or all of the stock purchase
units or
vice versa, and such payments may be unsecured or prefunded on some
basis. The stock purchase contracts may require holders to secure
their obligations under these stock purchase contracts in a specified
manner.
A
prospectus supplement will describe the terms of any stock purchase contracts
or
stock purchase units being offered. The description in the prospectus
supplement will not necessarily be complete, and reference will be made
to the
stock purchase contracts.
General. The
Trust may issue preferred trust securities and common trust securities
under the
Trust Agreement. The terms of the agreements pursuant to which the
preferred trust securities of FPL Group Capital Trust will be issued
is herein
referred to as the “FPL Group Capital Trust Agreement,” and the Trust Agreement
pursuant to which preferred trust securities of FPL Group Trust will
be issued
is herein referred to as the “FPL Group Trust Agreement;” each of these
agreements is referred to in this prospectus as the “Trust
Agreement.” The terms of the FPL Group Capital Trust Agreement and
the FPL Group Trust Agreement are substantially the same. The
preferred trust securities and common trust securities issued by the
Trust are
referred to in this prospectus as “Preferred Trust Securities” and “Common Trust
Securities,” respectively, and collectively as “Trust
Securities.” These Trust Securities will represent undivided
beneficial interests in the assets of the Trust. In connection with
the issuance of Trust Securities by FPL Group Capital Trust, the related
FPL
Group Capital Junior Subordinated Debentures (as defined below under
“Description of the FPL Group and FPL Group Capital Junior Subordinated
Debentures and the FPL Group Subordinated Guarantee”) will be held by FPL Group
Capital Trust, and in connection with the issuance of Trust Securities
by FPL
Group Trust, the related FPL Group Junior Subordinated Debentures (as
defined
below under “Description of the FPL Group and FPL Group Capital Junior
Subordinated Debentures and the FPL Group Subordinated Guarantee”) will be held
by FPL Group Trust. This section briefly summarizes some of
the
provisions
of the Trust Agreement. This summary does not contain a complete
description of the Trust Agreement. You should read this summary
together with the Trust Agreement for a complete understanding of all
the
provisions. The form of the Trust Agreement has been previously filed
with the SEC and is an exhibit to the registration statement filed with
the SEC
of which this prospectus is a part. In addition, each Trust Agreement
will be qualified as an indenture under the Trust Indenture Act of 1939
and is
therefore subject to the provisions of the Trust Indenture Act of
1939. You should read the Trust Indenture Act of 1939 for a complete
understanding of its provisions.
In
this
section, any discussion of FPL Group Capital Trust, FPL Group Trust,
Preferred
Trust Securities and Common Trust Securities relate only to the applicable
Trust. Holders of Preferred Trust Securities of FPL Group Capital
Trust II, FPL Group Capital Trust III, FPL Group Trust I and FPL
Group Trust II will be entitled to any of the benefits and protections
contained in the Trust Agreement applicable to the particular Trust which
issued
the relevant Trust Securities and not with respect to any other
Trust.
The
Preferred Trust Securities and Common Trust Securities issued by the
Trust will
be substantially the same except that, if there is an event of default
under the
Trust Agreement, as described below, that results from an event of default
under
the Subordinated Indenture (as such term is defined below under “Description of
the FPL Group and FPL Group Capital Junior Subordinated Debentures and
the FPL
Group Subordinated Guarantee—General”), the right of FPL Group, as holder of the
Common Trust Securities, to payment of distributions and upon liquidation
or
redemption will be subordinated to the rights of the holders of the Preferred
Trust Securities. (Trust Agreement, Section 4.03). All of
the Common Trust Securities will be owned by FPL Group. (Trust
Agreement, Section 5.10).
FPL
Group
will fully and unconditionally guarantee payments due on the Preferred
Trust
Securities issued by the Trust through a combination of the
following:
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(1)
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with
respect to the Preferred Trust Securities issued by FPL Group
Capital
Trust only, FPL Group’s guarantee of FPL Group Capital’s payment
obligations under the FPL Group Capital Junior Subordinated
Debentures
(referred to in this prospectus as the “Subordinated
Guarantee”);
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(2)
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with
respect to the Preferred Trust Securities issued by FPL Group
Trust only,
FPL Group’s obligations under the FPL Group Junior Subordinated
Debentures;
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(3)
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the
rights of holders of Preferred Trust Securities to enforce
those
obligations in (1) and (2) above, as
applicable;
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(4)
|
FPL
Group’s agreement to pay the expenses of the Trust;
and
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(5)
|
FPL
Group’s guarantee of payments due on the Preferred Trust Securities
to the
extent of the Trust’s legally available assets (referred to in this
prospectus as the “Preferred Trust Securities
Guarantee”).
|
No
single
one of the applicable documents listed above standing alone or operating
in
conjunction with fewer than all of the other applicable documents constitutes
the guarantee by FPL Group. It is only the combined operation of
these documents that has the effect of providing a full and unconditional,
but
subordinated, guarantee as to payment by FPL Group of the Preferred Trust
Securities.
FPL
Group
Capital Trust will use the proceeds from its sale of the Trust Securities
to
purchase FPL Group Capital Junior Subordinated Debentures, and FPL Group
Trust
will use the proceeds from its sale of the Trust Securities to purchase
FPL
Group Junior Subordinated Debentures. (Trust Agreement, Section
2.05). The FPL Group Capital Junior Subordinated Debentures will be
guaranteed by FPL Group pursuant to the Subordinated Guarantee described
below
and issued under an Indenture, dated as of March 1, 2004, among FPL Group
Capital, FPL Group and The Bank of New York, as trustee, or another subordinated
indenture among FPL Group Capital, FPL Group and The Bank of New York
as
specified in the related prospectus supplement. The FPL Group Junior
Subordinated Debentures will be issued under a subordinated indenture
between
FPL Group and The Bank of New York, as trustee. In connection with
the issuance of Trust Securities, the Junior Subordinated Debentures
(as defined
below under “Description of the FPL Group and FPL Group Capital Junior
Subordinated Debentures and
the
FPL
Group Subordinated Guarantee”) will be held in trust for the benefit of holders
of the applicable Preferred Trust Securities and Common Trust
Securities. (Trust Agreement, Section 2.09).
A
prospectus supplement relating to the Preferred Trust Securities will
include
specific terms of those securities and of the Junior Subordinated Debentures
issued in connection therewith. For a description of some specific
terms that will affect both the Preferred Trust Securities and the Junior
Subordinated Debentures, and holders’ rights under each, see “Description of the
FPL Group and FPL Group Capital Junior Subordinated Debentures and the
FPL Group
Subordinated Guarantee” below.
Distributions. The
only income of the Trust available for distribution to the holders of
Preferred
Trust Securities will be payments on the applicable Junior Subordinated
Debentures. (Trust Agreement, Section 8.01). If neither
FPL Group Capital nor FPL Group makes interest payments on the FPL Group
Capital
Junior Subordinated Debentures, or if FPL Group does not make interest
payments
on the FPL Group Junior Subordinated Debentures, as the case may be,
the Trust
will not have funds available to pay distributions on Preferred Trust
Securities. The payment of distributions, if and to the extent the
Trust has sufficient funds available for the payment of such distributions,
is
guaranteed on a limited basis by FPL Group as described under “Description of
the Preferred Trust Securities Guarantee.”
Unless
otherwise provided in the related prospectus supplement, the issuer of
the
Junior Subordinated Debentures may have the option to defer the payment
of
interest from time to time on the Junior Subordinated Debentures for
one or more
periods, in which case, if the Junior Subordinated Debentures were issued
in
connection with Preferred Trust Securities, distributions on the Preferred
Trust
Securities would be deferred during any such period. Unless otherwise
provided in the related prospectus supplement, distributions would, however,
continue to accumulate. (Trust Agreement,
Section 4.01). During any optional deferral period, or for so
long as an “Event of Default” under the Subordinated Indenture resulting from a
payment default or a payment default under the Preferred Trust Securities
Guarantee has occurred and is continuing, neither FPL Group nor FPL Group
Capital, with respect to deferral of the payment of interest on the FPL
Group
Capital Junior Subordinated Debentures, nor FPL Group, with respect to
the
deferral of the payment of interest on the FPL Group Junior Subordinated
Debentures, may:
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(1)
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declare
or pay any dividend or distribution on its capital
stock;
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(2)
|
redeem,
purchase, acquire or make a liquidation payment with respect
to any of its
capital stock;
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(3)
|
pay
any principal, interest or premium on, or repay, repurchase
or redeem any
debt securities that are equal or junior in right of payment
with the
Junior Subordinated Debentures or the Subordinated Guarantee
(as the case
may be); or
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(4)
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make
any payments with respect to any guarantee of debt securities
if such
guarantee is equal or junior in right of payment to the Junior
Subordinated Debentures or the Subordinated Guarantee (as the
case may
be),
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other
than
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(1)
|
purchases,
redemptions or other acquisitions of its capital stock in connection
with
any employment contract, benefit plan or other similar arrangement
with or
for the benefit of employees, officers, directors or agents
or a stock
purchase or dividend reinvestment plan, or the satisfaction
of its
obligations pursuant to any contract or security outstanding
on the date
that the payment of interest is deferred requiring it to purchase,
redeem
or acquire its capital stock;
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(2)
|
any
payment, repayment, redemption, purchase, acquisition or declaration
of
dividend listed as restricted payments in clauses (1) and (2)
above as a
result of a reclassification of its capital stock or the exchange
or
conversion of all or a portion of one class or series of its
capital stock
for another class or series of its capital
stock;
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(3)
|
the
purchase of fractional interests in shares of its capital stock
pursuant
to the conversion or exchange provisions of its capital stock
or the
security being converted or exchanged, or in connection with
the
settlement of stock purchase
contracts;
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(4)
|
dividends
or distributions paid or made in its capital stock (or rights
to acquire
its capital stock), or repurchases, redemptions or acquisitions
of capital
stock in connection with the issuance or exchange of capital
stock (or of
securities convertible into or exchangeable for shares of its
capital
stock) and distributions in connection with the settlement
of stock
purchase contracts;
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(5)
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redemptions,
exchanges or repurchases of, or with respect to, any rights
outstanding
under a shareholder rights plan or the declaration or payment
thereunder
of a dividend or distribution of or with respect to rights
in the
future;
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(6)
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payments
under any preferred trust securities guarantee or guarantee
of
subordinated debentures executed and delivered by FPL Group
concurrently
with the issuance by a trust of any preferred trust securities,
so long as
the amount of payments made on any preferred trust securities
or
subordinated debentures (as the case may be) is paid on all
preferred
trust securities or subordinated debentures (as the case may
be) then
outstanding on a pro rata basis in proportion to the full distributions
to
which each series of preferred trust securities or subordinated
debentures
(as the case may be) is then entitled if paid in
full;
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(7)
|
payments
under any guarantee of junior subordinated debentures executed
and
delivered by FPL Group (including a FPL Group Subordinated
Guarantee), so
long as the amount of payments made on any junior subordinated
debentures
is paid on all junior subordinated debentures then outstanding
on a pro
rata basis in proportion to the full payment to which each
series of
junior subordinated debentures is then entitled if paid in
full;
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(8)
|
dividends
or distributions by FPL Group Capital on its capital stock
to the extent
owned by FPL Group; or
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(9)
|
redemptions,
purchases, acquisitions or liquidation payments by FPL Group
Capital with
respect to its capital stock to the extent owned by FPL
Group.
|
The
exceptions in (8) and (9) above are not applicable to an optional deferral
period on the FPL Group Junior Subordinated Debentures.
Unless
otherwise provided in the related prospectus supplement, before an optional
deferral period ends, FPL Group Capital or FPL Group, as the case may
be, may
further defer the payment of interest. Unless otherwise provided in
the related prospectus supplement, no optional deferral period may exceed
the
period of time specified in that prospectus supplement. After any
optional deferral period and the payment of all amounts then due, FPL
Group
Capital or FPL Group, as the case may be, may select a new optional deferral
period. No interest period may be deferred beyond the maturity of the
Junior Subordinated Debentures.
Redemption. Whenever
Junior Subordinated Debentures are repaid, whether at maturity or earlier
redemption, the Property Trustee will apply the proceeds to redeem a
like amount
of Preferred Trust Securities and Common Trust Securities. (Trust
Agreement, Section 4.02(a)).
Preferred
Trust Securities will be redeemed at the redemption price plus accrued
and
unpaid distributions with the proceeds from the contemporaneous redemption
or
repayment of Junior Subordinated Debentures. Redemptions of the
Preferred Trust Securities will be made on a redemption date only if
the Trust
has funds available for the payment of the redemption price plus accrued
and
unpaid distributions. (Trust Agreement,
Section 4.02(c)).
Holders
of Preferred Trust Securities will be given not less than 30 nor more
than 60
days’ notice of any redemption. (Trust Agreement,
Section 4.02(b)). On or before the redemption date, the Trust
will irrevocably deposit with the paying agent for Preferred Trust Securities
sufficient funds and will give the paying agent irrevocable instructions
and
authority to pay the redemption price plus accrued and unpaid distributions
to
the
holders
upon surrender of their Preferred Trust Securities. Distributions
payable on or before a redemption date will be payable to the holders
on the
record date for the distribution payment. If notice is given and
funds are deposited as required, then on the redemption date all rights
of
holders of the Preferred Trust Securities called for redemption will
cease,
except the right of the holders to receive the redemption price plus
accrued and
unpaid distributions, and the Preferred Trust Securities will cease to
be
outstanding. No interest will accrue on amounts payable on the
redemption date. In the event that any date fixed for redemption of
Preferred Trust Securities is not a business day, then payment will be
made on
the next business day, except that, if such business day falls in the
next
calendar year, then payment will be made on the immediately preceding
business
day. No interest will be payable because of any such
delay. If payment of Preferred Trust Securities called for redemption
is improperly withheld or refused and not paid either by the Trust or
by FPL
Group pursuant to the Preferred Trust Securities Guarantee, distributions
on
such Preferred Trust Securities will continue to accrue to the date of
payment. In that event, the actual payment date will be considered
the date fixed for redemption for purposes of calculating the redemption
price
plus accrued and unpaid distributions. (Trust Agreement, Section
4.02(d)).
Subject
to applicable law, including United States federal securities laws, FPL
Group or
its affiliates may at any time and from time to time purchase outstanding
Preferred Trust Securities by tender, in the open market or by private
agreement.
If
Preferred Trust Securities are partially redeemed on a redemption date,
a
corresponding percentage of the Common Trust Securities will be
redeemed. The particular Preferred Trust Securities to be redeemed
will be selected not more than 60 days prior to the redemption date by
the
Property Trustee by such method as the Property Trustee shall deem fair,
taking
into account the denominations in which they were issued. The
Property Trustee will promptly notify the Preferred Trust Security registrar
in
writing of the Preferred Trust Securities selected for redemption and,
where
applicable, the partial amount to be redeemed. (Trust Agreement,
Section 4.02(f)).
Subordination
of Common Trust Securities. Payment of distributions on, and
the redemption price, plus accrued and unpaid distributions, of, the
Preferred
Trust Securities and Common Trust Securities shall be made pro rata based
on the
liquidation preference amount of such securities. However, if on any
distribution payment date or redemption date an event of default under
the Trust
Agreement resulting from an event of default under the related Subordinated
Indenture has occurred and is continuing, no payment on any Common Trust
Security shall be made until all payments due on the Preferred Trust
Securities
have been made. In that case, funds available to the Property Trustee
shall first be applied to the payment in full of all distributions on,
or the
redemption price plus accrued and unpaid distributions of, Preferred
Trust
Securities then due and payable. (Trust Agreement,
Section 4.03(a)).
If
an
event of default under the Trust Agreement results from an event of default
under the related Subordinated Indenture, the holder of Common Trust
Securities
cannot take action with respect to the Trust Agreement default until
the effect
of all defaults with respect to the Preferred Trust Securities has been
cured,
waived or otherwise eliminated. Until the event of default under the
Trust Agreement with respect to Preferred Trust Securities has been cured,
waived or otherwise eliminated, the Property Trustee shall, to the fullest
extent permitted by law, act solely on behalf of the holders of Preferred
Trust
Securities and not the holder of the Common Trust Securities, and only
the
holders of Preferred Trust Securities will have the right to direct the
Property
Trustee to act on their behalf. (Trust Agreement, Section
4.03(b)).
Liquidation
Distribution upon Dissolution. The Trust will be dissolved
and liquidated by the Property Trustee on the first to occur of:
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(1)
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the
expiration of the term of the
Trust;
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(2)
|
the
bankruptcy, dissolution or liquidation of FPL
Group;
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(3)
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the
redemption of all of the Preferred Trust Securities of the
Trust;
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(4)
|
the
entry of an order for dissolution of the Trust by a court of
competent
jurisdiction; or
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(5)
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at
any time, at the election of FPL Group. (Trust Agreement,
Sections 9.01 and 9.02).
|
If
a
dissolution of the Trust occurs, the Trust will be liquidated by the
Property
Trustee as expeditiously as the Property Trustee determines to be
appropriate. If a dissolution of the Trust occurs other than by
redemption of all the Preferred Trust Securities, the Property Trustee
will
provide for the satisfaction of liabilities of creditors, if any, and
distribute
to each holder of the Preferred Trust Securities and Common Trust Securities
a
proportionate amount of Junior Subordinated Debentures. If a
distribution of Junior Subordinated Debentures is determined by the Property
Trustee not to be practical, holders of Preferred Trust Securities will
be
entitled to receive, out of the assets of the Trust after adequate provision
for
the satisfaction of liabilities of creditors, if any, an amount equal
to the
aggregate liquidation preference of the Preferred Trust Securities plus
accrued
and unpaid distributions thereon to the date of payment. If this
liquidation distribution can be paid only in part because the Trust has
insufficient assets available to pay in full the aggregate liquidation
distribution, then the amounts payable by the Trust on the Preferred
Trust
Securities shall be paid on a pro rata basis. FPL Group, as holder of
the Common Trust Securities, will be entitled to receive distributions
upon any
dissolution pro rata with the holders of the Preferred Trust Securities,
except
that if an event of default (or event that, with the lapse of time or
giving of
notice, would become such an event of default) has occurred and is continuing
under the related Subordinated Indenture, the Preferred Trust Securities
will
have a preference over the Common Trust Securities. (Trust Agreement,
Section 9.04).
Events
of Default; Notice. Any one of the following events will be
an event of default under the Trust Agreement whether it shall be voluntary
or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body:
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(1)
|
the
occurrence of an event of default as described in the related
Subordinated
Indenture;
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(2)
|
default
by the Trust in the payment of any distribution when it becomes
due and
payable, and continuation of that default for a period of 30
days;
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(3)
|
default
by the Trust in the payment of any redemption price, plus accrued
and
unpaid distributions, of any Preferred Trust Security or Common
Trust
Security when it becomes due and
payable;
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(4)
|
default
in the performance, or breach, in any material respect, of
any covenant or
warranty of the trustees in the Trust Agreement which is not
dealt with
above, and continuation of that default or breach for a period
of 90 days
after written notice to the Trust, the defaulting trustee under
the Trust
Agreement and FPL Group by the holders of Preferred Trust Securities
having at least 33% of the total liquidation preference amount
of the
outstanding Preferred Trust Securities. However, the holders of
Preferred Trust Securities will be deemed to have agreed to
an extension
of the 90 day period if corrective action is initiated by any
of the
trustees within such period and is diligently pursued in good
faith;
or
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(5)
|
the
occurrence of certain events of bankruptcy or insolvency with
respect to
the Trust. (Trust Agreement, Section
1.01).
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Within
90
days after the occurrence of any default known to the Property Trustee,
the
Property Trustee shall transmit to the holders of Preferred Trust Securities,
FPL Group and the Administrative Trustees notice of any such default,
unless
that default shall have been cured or waived. (Trust Agreement,
Section 8.02).
A
holder
of Preferred Trust Securities may directly institute a proceeding to
enforce
payment when due to the holder of the Preferred Trust Securities of the
principal of or interest on Junior Subordinated Debentures having a principal
amount equal to the aggregate liquidation preference amount of the holder’s
Preferred Trust Securities. The holders of Preferred Trust Securities
have no other rights to exercise directly any other remedies available
to the
holder of the Junior Subordinated Debentures unless the trustees under
the Trust
Agreement fail to do so. (Trust Agreement, Section
6.01(a)).
Removal
of Trustees. Unless an event of default under the related
Subordinated Indenture has occurred and is continuing, the holder of
the Common
Trust Securities may remove any trustee under the Trust Agreement at
any
time. If an event of default under the Subordinated Indenture has
occurred and is continuing, the holders of a majority of the total liquidation
preference amount of the outstanding Preferred Trust Securities may remove
the
Property Trustee or the Delaware Trustee, or both of them. The holder
of the Common Trust Securities may remove
any
Administrative Trustee at any time. Any resignation or removal of a
trustee under the Trust Agreement will take effect only on the acceptance
of
appointment by the successor trustee. (Trust Agreement, Section
8.10).
Holders
of Preferred Trust Securities will have no right to appoint or remove
the
Administrative Trustees of the Trust, who may be appointed, removed or
replaced
solely by FPL Group as the holder of the Common Trust
Securities. (Trust Agreement, Section 8.10).
Voting
Rights. Except as provided below and under “Description of
the Preferred Trust Securities Guarantee—Modification and Assignment,” and as
otherwise required by law or the Trust Agreement, the holders of Preferred
Trust
Securities will have no voting rights.
While
Junior Subordinated Debentures are held by the Property Trustee, the
Property
Trustee shall not:
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(1)
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direct
the time, method and place to conduct any proceeding for any
remedy
available to the Subordinated Indenture Trustee (as such term
is defined
below under “Description of the FPL Group and FPL Group Capital Junior
Subordinated Debentures and the FPL Group Subordinated
Guarantee—General”), or execute any trust or power conferred on the
Subordinated Indenture Trustee with respect to the Junior Subordinated
Debentures;
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(2)
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waive
any past default under the related Subordinated
Indenture;
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(3)
|
exercise
any right to rescind or annul a declaration that the principal
of all the
Junior Subordinated Debentures will be due and payable;
or
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(4)
|
consent
to any amendment, modification or termination of the related
Subordinated
Indenture or the Junior Subordinated Debentures, where that
consent will
be required,
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without,
in each case, obtaining the prior approval of the holders of Preferred
Trust
Securities having at least a majority of the aggregate liquidation preference
amount of all outstanding Preferred Trust Securities of the
Trust. Where a consent of each holder of Junior Subordinated
Debentures affected is required, no consent shall be given by the Property
Trustee without the prior consent of each holder of the Preferred Trust
Securities affected. The Property Trustee shall not revoke any action
previously authorized or approved by a vote of the holders of Preferred
Trust
Securities, except pursuant to the subsequent vote of the holders of
Preferred
Trust Securities. (Trust Agreement,
Section 6.01(b)). If the Property Trustee fails to enforce its
rights, as holder, under the Junior Subordinated Debentures or the Trust
Agreement, a holder of the Preferred Trust Securities may institute a
legal
proceeding directly against FPL Group or FPL Group Capital, as the case
may be,
to enforce the Property Trustee’s rights under the Junior Subordinated
Debentures or the Trust Agreement without first instituting any legal
proceeding
against the Property Trustee or anyone else. (Trust Agreement,
Section 6.01(a)). The Property Trustee shall notify all holders
of Preferred Trust Securities of any notice of default received from
the
Subordinated Indenture Trustee. The Property Trustee shall not take
any action approved by the consent of the holders of Preferred Trust
Securities
without an opinion of counsel experienced in those matters to the effect
that
the Trust will be classified as a grantor trust and not as an association
taxable as a corporation for United States federal income tax purposes
on
account of that action. (Trust Agreement,
Section 6.01(b)).
Holders
of Preferred Trust Securities may give any required approval at a meeting
convened for such purpose or by written consent without prior
notice. (Trust Agreement, Section 6.06). The
Administrative Trustees will give notice of any meeting at which holders
of
Preferred Trust Securities are entitled to vote. (Trust Agreement,
Section 6.02).
No
vote
or consent of the holders of Preferred Trust Securities will be required
for the
Trust to redeem and cancel Preferred Trust Securities in accordance with
the
Trust Agreement.
Notwithstanding
that holders of Preferred Trust Securities are entitled to vote or consent
under
any of the circumstances described above, any Preferred Trust Securities
that
are owned by FPL Group Capital, FPL Group, any Administrative Trustee
or any
affiliate of any of them, shall be treated as if they were not outstanding
for
purposes of such vote or consent. (Trust Agreement, Section
1.01).
Amendments. The
Trust Agreement may be amended from time to time by a majority of its
Administrative Trustees and FPL Group, without the consent of any holders
of
Preferred Trust Securities or the other trustees under the Trust Agreement
in
order to:
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(1)
|
cure
any ambiguity; correct or supplement any provision that may
be
inconsistent with any other provision of the Trust Agreement
or amendment
to the Trust Agreement; or make any other provisions with respect
to
matters or questions arising under the Trust
Agreement;
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|
|
(2)
|
change
the name of the Trust; or
|
|
|
(3)
|
modify,
eliminate or add to any provisions of the Trust Agreement to
the extent
necessary to ensure that the Trust will not be classified for
United
States federal income tax purposes other than as a grantor
trust (and not
an association taxable as a corporation) at any time that any
Preferred
Trust Securities and Common Trust Securities are outstanding
or to ensure
the Trust’s exemption from the status of an “investment company” under the
Investment Company Act of 1940.
|
No
amendment described above may materially adversely affect the interests
of any
holder of Preferred Trust Securities or Common Trust Securities without
the
applicable consents required pursuant to the following two
paragraphs. Any of the amendments of the Trust Agreement described in
paragraph (1) above shall become effective when notice of the amendment is
given to the holders of Preferred Trust Securities and Common Trust Securities
in accordance with the provisions of the Trust Agreement. (Trust
Agreement, Section 10.03(a)).
Except
as
provided below, any provision of the Trust Agreement may be amended by
the
Administrative Trustees and FPL Group with:
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|
(1)
|
the
consent of holders of Preferred Trust Securities and Common
Trust
Securities representing not less than a majority in aggregate
liquidation
preference amount of the Preferred Trust Securities and Common
Trust
Securities then outstanding; and
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(2)
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receipt
by the trustees of an opinion of counsel to the effect that
such amendment
or the exercise of any power granted to the trustees in accordance
with
the amendment will not affect the Trust’s status as a grantor trust for
federal income tax purposes (and not an association taxable
as a
corporation) or affect the Trust’s exemption from the status of an
“investment company” under the Investment Company Act of
1940. (Trust Agreement, Section
10.03(b)).
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Each
affected holder of Preferred Trust Securities must consent to any amendment
to
the Trust Agreement that:
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(1)
|
adversely
changes the amount or timing of any distribution with respect
to Preferred
Trust Securities or otherwise adversely affects the amount
of any
distribution required to be made in respect of Preferred Trust
Securities
as of a specified date;
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(2)
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restricts
the right of a holder of Preferred Trust Securities to institute
suit for
the enforcement of any such payment on or after that date;
or
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(3)
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modify
the provisions described in clauses (1) and (2) above. (Trust
Agreement, Section 10.03(c)).
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Form,
Exchange and Transfer. Preferred Trust Securities may be
exchanged for other Preferred Trust Securities in any authorized denomination
and of like tenor and aggregate liquidation preference. (Trust
Agreement, Section 5.04).
Subject
to the terms of the Trust Agreement, Preferred Trust Securities may be
presented
for exchange as provided above or for registration of transfer, duly
endorsed or
accompanied by a duly executed instrument of transfer, at the office
of the
Preferred Trust Security registrar. The Administrative Trustees may
designate FPL Group or FPL Group Capital or any affiliate of either of
them, as
the Preferred Trust Security registrar. The Property Trustee will
initially act as the Preferred Trust Security registrar and transfer
agent. (Trust Agreement, Section 5.08). No service
charge will be made for any registration of transfer or exchange of Preferred
Trust
Securities,
but the Preferred Trust Security registrar may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
with the transfer or exchange. A transfer or exchange will be made
when the Preferred Trust Security registrar and Administrative Trustees
are
satisfied with the documents of title and identity of the person making
the
request. (Trust Agreement, Section 5.04). The
Administrative Trustees may at any time designate another transfer agent
and
registrar or rescind the designation of any transfer agent and registrar
or
approve a change in the office through which any transfer agent and registrar
acts, except that FPL Group will, or will cause the Preferred Trust Security
registrar to, maintain an office or agency in The City of New York where
Preferred Trust Securities may be transferred or exchanged. (Trust
Agreement, Sections 2.07(a) and 5.08).
The
Trust
will not be required to:
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(1)
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issue,
register the transfer of, or exchange any Preferred Trust Securities
during the period beginning at the opening of business 15
calendar days before the mailing of a notice of redemption of any
Preferred Trust Securities called for redemption and ending
at the close
of business on the day the notice is mailed;
or
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(2)
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register
the transfer of or exchange any Preferred Trust Securities
so selected for
redemption, in whole or in part, except the unredeemed portion
of any
Preferred Trust Securities being redeemed in part. (Trust
Agreement, Section 5.04).
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Payment
on Preferred Trust Securities and Paying Agent. Unless
otherwise stated in a prospectus supplement, payments in respect of the
Preferred Trust Securities will be made on the applicable distribution
dates by
check mailed to the address of the holder entitled thereto as such address
appears on the Preferred Trust Security register. (Trust Agreement,
Section 4.04). The paying agent shall initially be the Property
Trustee and any co-paying agent chosen by the Property Trustee that is
acceptable to the Administrative Trustees, FPL Group and, in the case
of
Preferred Trust Securities issued by FPL Group Capital Trust, FPL Group
Capital. The paying agent may resign upon 30 days’ written notice to
the Administrative Trustees, the Property Trustee, FPL Group and, in
the case of
Preferred Trust Securities issued by FPL Group Capital Trust, FPL Group
Capital. In the event that the Property Trustee shall no longer be
the paying agent, the Administrative Trustees shall appoint a successor,
which
shall be a bank, trust company or affiliate of FPL Group reasonably acceptable
to the Property Trustee, FPL Group, and, in the case of Preferred Trust
Securities issued by FPL Group Capital Trust, FPL Group Capital, to act
as
paying agent. (Trust Agreement, Section 5.09).
Duties
of the Trustees. The Delaware Trustee will act as the
resident trustee in the State of Delaware and will have no other significant
duties. The Property Trustee will hold the Junior Subordinated
Debentures on behalf of the Trust and will maintain a payment account
with
respect to the Preferred Trust Securities and Common Trust Securities,
and will
also act as trustee under the Trust Agreement for the purposes of the
Trust
Indenture Act of 1939. (Trust Agreement, Sections 2.06 and
2.07(b)).
The
Administrative Trustees of the Trust are authorized and directed to conduct
the
affairs of the Trust and to operate the Trust so that
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(1)
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the
Trust will not be deemed to be an “investment company” required to be
registered under the Investment Company Act of
1940,
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(2)
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the
Trust will not be taxed as a corporation,
and
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(3)
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in
the case of FPL Group Capital Trust, the FPL Group Capital
Junior
Subordinated Debentures will be treated as indebtedness of
FPL Group
Capital for United States federal income tax purposes and,
in the case of
FPL Group Trust, the FPL Group Junior Subordinated Debentures
will be
treated as indebtedness of FPL Group for United States federal
income tax
purposes.
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In
this
regard, FPL Group and the Administrative Trustees are authorized to take
any
action, not inconsistent with applicable law, the certificate of trust
or the
Trust Agreement, that FPL Group and the Administrative Trustees determine
in
their discretion to be necessary or desirable for those purposes, as
long as
the
action
does not materially adversely affect the interests of the holders of
the
Preferred Trust Securities. (Trust Agreement, Section
2.07(d)).
Miscellaneous. Holders
of the Preferred Trust Securities have no preemptive or similar
rights. (Trust Agreement, Section 5.13).
Notices. Notices
to holders of Preferred Trust Securities will be sent by mail to the
addresses
of those holders as they appear in the security register for those Preferred
Trust Securities. (Trust Agreement, Section 6.02).
Title. The
Property Trustee, the Delaware Trustee, the Administrative Trustees,
and the
Preferred Trust Security registrar and transfer agent, and any agent
of the
Property Trustee, the Delaware Trustee, the Administrative Trustees,
or the
Preferred Trust Security registrar and transfer agent, may treat the
person in
whose name a Preferred Trust Security is registered as the absolute owner
of
that Preferred Trust Security for the purpose of receiving distributions
and all
other purposes, regardless of any notice to the contrary. (Trust
Agreement, Section 5.06).
Governing
Law. The Trust Agreement, the Preferred Trust Securities and
the Common Trust Securities will be governed by and construed in accordance
with
the laws of the State of Delaware, without regard to conflict of laws
principles
thereunder, except to the extent that the law of any other jurisdiction
is
mandatorily applicable. (Trust Agreement, Section
10.05).
DESCRIPTION
OF THE PREFERRED TRUST SECURITIES GUARANTEE
General. This
section briefly summarizes some of the provisions of the Preferred Trust
Securities Guarantee Agreements that FPL Group will execute and deliver
for the
benefit of the holders of the Preferred Trust Securities issued by FPL
Group
Capital Trust and FPL Group Trust. The terms of these agreements are
substantially the same, and they are referred to in this prospectus as
the
“Preferred Trust Securities Guarantee Agreement.” This summary does
not contain a complete description of the Preferred Trust Securities
Guarantee
Agreement. You should read this summary together with the Preferred
Trust Securities Guarantee Agreement for a complete understanding of
all the
provisions. The form of the Preferred Trust Securities Guarantee
Agreement has been previously filed with the SEC and is an exhibit to
the
registration statement filed with the SEC of which this prospectus is
a
part. In addition, the Preferred Trust Securities Guarantee Agreement
will be qualified as an indenture under the Trust Indenture Act of 1939
and is
therefore subject to the provisions of the Trust Indenture Act of
1939. You should read the Trust Indenture Act of 1939 for a complete
understanding of its provisions.
The
Bank
of New York will act as Preferred Trust Securities Guarantee Trustee
under the
Preferred Trust Securities Guarantee Agreement and will hold the Preferred
Trust
Securities Guarantee for the benefit of the holders of the Preferred
Trust
Securities.
General
Terms of the Preferred Trust Securities Guarantee. FPL Group
will absolutely, irrevocably and unconditionally agree to make the guarantee
payments listed below in full to the holders of the Preferred Trust Securities
if they are not made by the Trust, as and when due, regardless of any
defense,
right of set-off or counterclaim that the Trust may have or
assert. (Preferred Trust Securities Guarantee Agreement,
Section 5.01). The following payments will be subject to the
Preferred Trust Securities Guarantee (without duplication):
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(1)
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any
accrued and unpaid distributions required to be paid on Preferred
Trust
Securities, to the extent the Trust has funds in the payment
account maintained by the Property Trustee legally available
for these
payments at such time;
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(2)
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the
redemption price, plus all accrued and unpaid distributions
to the
redemption date, for any Preferred Trust Securities called
for redemption
by the Trust, to the extent the Trust has funds in the payment
account
maintained by the Property Trustee legally available for these
payments at
such time; and
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(3)
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upon
a voluntary or involuntary dissolution, winding-up or termination
of the
Trust (except in connection with the distribution of Junior
Subordinated
Debentures to the holders in exchange for Preferred Trust Securities
as
provided in the Trust Agreement or upon a redemption of all
of
the
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Preferred
Trust Securities upon maturity or redemption of the Junior
Subordinated
Debentures as provided in the Trust Agreement), the lesser
of:
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(a)
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the
aggregate of the liquidation preference amount and all accrued
and unpaid
distributions on Preferred Trust Securities to the date of
payment, to the
extent the Trust has funds in the payment account maintained
by the
Property Trustee legally available for these payments at such
time;
and
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(b)
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the
amount of assets of the Trust remaining available for distribution
to
holders of Preferred Trust Securities in liquidation of the
Trust after
satisfaction of liabilities to creditors of the Trust as required
by
applicable law.
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(Preferred
Trust Securities Guarantee Agreement, Section 1.01). FPL Group’s
obligation to make a guarantee payment may be satisfied by either making
a
direct payment of the required amounts by FPL Group to the holders of
Preferred
Trust Securities or causing the Trust to pay such amounts to those
holders. (Preferred Trust Securities Guarantee Agreement, Section
5.01).
The
Preferred Trust Securities Guarantee will be a guarantee, subject to
certain
subordination provisions, as to payment with respect to the Preferred
Trust
Securities, but will not apply to any payment of distributions if and
to the
extent that the Trust does not have funds legally available to make those
payments. (Preferred Trust Securities Guarantee Agreement, Sections
1.01 and 5.05). If neither FPL Group Capital nor FPL Group makes
interest payments on the FPL Group Capital Junior Subordinated Debentures
held
by a Trust and if FPL Group does not make interest payments on the FPL
Group
Junior Subordinated Debentures held by a Trust, in each case the applicable
Trust will not have funds available to pay distributions on the Preferred
Trust
Securities.
FPL
Group
will fully and unconditionally guarantee payments due on the Preferred
Trust
Securities issued by the Trust through a combination of the
following:
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(1)
|
with
respect to the Preferred Trust Securities issued by FPL Group
Capital
Trust only, the Subordinated
Guarantee;
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(2)
|
with
respect to the Preferred Trust Securities issued by FPL Group
Trust only,
FPL Group’s obligations under the FPL Group Junior Subordinated
Debentures;
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(3)
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the
rights of holders of Preferred Trust Securities to enforce
those
obligations in (1) and (2) above, as
applicable;
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(4)
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FPL
Group’s agreement to pay the expenses of the Trust;
and
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(5)
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the
Preferred Trust Securities
Guarantee.
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No
single
one of the applicable documents listed above standing alone or operating
in
conjunction with fewer than all of the other applicable documents constitutes
the guarantee by FPL Group. It is only the combined operation of
these documents that has the effect of providing a full and unconditional,
but
subordinated, guarantee as to payment by FPL Group of the Preferred Trust
Securities.
Except
as
otherwise stated in the related prospectus supplement, the covenants
in the
Preferred Trust Securities Guarantee Agreement would not give holders
of the
Preferred Trust Securities protection in the event of a highly-leveraged
transaction involving FPL Group.
Security
and Ranking. The Preferred Trust Securities Guarantee will
be an unsecured obligation of FPL Group and will rank:
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(1)
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subordinate
and junior in right of payment to all other liabilities of
FPL Group,
including the Subordinated Guarantee and the Senior Debt Securities
Guarantee (except those made pari passu or subordinate by their
terms);
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(2)
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equal
in right of payment with the most senior preferred or preference
stock
that may be issued by FPL Group and with any guarantee that
may be entered
into by FPL Group in respect of any preferred or preference
stock of any
affiliate of FPL Group; and
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(3)
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senior
to FPL Group common stock. (Preferred Trust Securities
Guarantee Agreement,
Section 6.01).
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The
Preferred Trust Securities Guarantee Agreement does not limit the amount
of
other indebtedness, including guarantees, that FPL Group may issue or
incur or
the amount of preferred or preference stock it may issue.
The
Trust
Agreement provides that by accepting Preferred Trust Securities, a holder
agrees
to the subordination provisions and other terms of the Preferred Trust
Securities Guarantee. (Trust Agreement,
Section 5.02).
The
Preferred Trust Securities Guarantee will be a guarantee of payment and
not of
collection, that is, the guaranteed party may institute a legal proceeding
directly against FPL Group to enforce its rights under the Preferred
Trust
Securities Guarantee without first instituting a legal proceeding against
anyone
else. (Preferred Trust Securities Guarantee Agreement, Sections 5.04
and 5.05).
FPL
Group
is a holding company that derives substantially all of its income from
its
operating subsidiaries. Therefore, the Preferred Trust Securities
Guarantee will be effectively subordinated to all indebtedness and other
liabilities, including trade payables, debt and preferred stock, incurred
or
issued by FPL Group’s subsidiaries. Neither the Subordinated
Indenture nor the Preferred Trust Securities Guarantee Agreement places
any
limit on the amount of liabilities, including debt or preferred stock, that FPL
Group’s subsidiaries may issue, guarantee or otherwise incur.
Events
of Default. An event of default under the Preferred Trust
Securities Guarantee Agreement will occur upon failure of FPL Group to
perform
any of its payment obligations under the Preferred Trust Securities Guarantee
Agreement, which failure has not been cured within 90 days of receipt
of notice
thereof. (Preferred Trust Securities Guarantee Agreement,
Section 1.01). Upon an event of default, the holders of the
Preferred Trust Securities having a majority of the aggregate liquidation
preference of the Preferred Trust Securities have the right to:
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(1)
|
direct
the time, method and place of conducting any proceeding for
any remedy
available to the Preferred Trust Securities Guarantee Trustee
under the
Preferred Trust Securities Guarantee Agreement,
or
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(2)
|
direct
the exercise of any trust or power conferred upon the Preferred
Trust
Securities Guarantee Trustee under the Preferred Trust Securities
Guarantee Agreement. (Preferred Trust Securities Guarantee
Agreement, Section 5.04).
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Any
holder of the Preferred Trust Securities may enforce the Preferred Trust
Securities Guarantee, or institute a legal proceeding directly against
FPL Group
to enforce the Preferred Trust Securities Guarantee Trustee’s rights under the
Preferred Trust Securities Guarantee Agreement without first instituting
a legal
proceeding against the Trust, the Preferred Trust Securities Guarantee
Trustee
or anyone else. (Preferred Trust Securities Guarantee Agreement,
Section 5.04). The holders of the Preferred Trust Securities having a
majority of the aggregate liquidation preference of the Preferred Trust
Securities may waive any past event of default and its
consequences. (Preferred Trust Securities Guarantee Agreement,
Section 2.06).
FPL
Group
will be required to deliver to the Preferred Trust Securities Guarantee
Trustee
an annual statement as to its compliance with all conditions under the
Preferred
Trust Securities Guarantee Agreement. (Preferred Trust Securities
Guarantee Agreement, Section 2.04).
Modification
and Assignment. No consent of holders of Preferred Trust
Securities is required for changes to the Preferred Trust Securities
Guarantee
Agreement that do not materially adversely affect their
rights. Except as provided below, changes to the Preferred Trust
Securities Guarantee Agreement that materially adversely affect the rights
of
Preferred Trust Securities require the prior approval of the holders
of
Preferred Trust Securities having at least a majority of the aggregate
liquidation preference amount of the outstanding Preferred Trust
Securities. Each
affected
holder of Preferred Trust Securities must consent to any amendment to
the
Preferred Trust Securities Guarantee Agreement that impairs the right
of such
holder to receive guarantee payments under the Preferred Trust Securities
Guarantee Agreement or to institute suit for enforcement of any such
payment. (Preferred Trust Securities Guarantee Agreement, Section
8.01).
All
guarantees and agreements contained in the Preferred Trust Securities
Guarantee
Agreement will bind the successors, assigns, receivers, trustees and
representatives of FPL Group and will inure to the benefit of the holders
of the
Preferred Trust Securities then outstanding. (Preferred Trust
Securities Guarantee Agreement, Section 8.02).
Termination
of the Preferred Trust Securities Guarantee. The Preferred
Trust Securities Guarantee Agreement will terminate and be of no further
force
and effect upon:
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(1)
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full
payment of the redemption price, plus accrued and unpaid distributions
to
the redemption date, for all the Preferred Trust
Securities;
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(2)
|
the
distribution of Junior Subordinated Debentures to holders of
the Preferred
Trust Securities in exchange for all of the Preferred Trust
Securities;
or
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|
(3)
|
full
payment of the amounts payable upon liquidation of the
Trust.
|
However,
the Preferred Trust Securities Guarantee will continue to be effective
or will
be reinstated, as the case may be, if at any time, as result of the
subordination provisions or any mistake or any judicial proceeding or
otherwise,
any holder of Preferred Trust Securities must return any sums paid under
the
Preferred Trust Securities or the Preferred Trust Securities
Guarantee. (Preferred Trust Securities Guarantee Agreement, Section
7.01).
Governing
Law. The Preferred Trust Securities Guarantee Agreement
provides that it is to be governed by and construed in accordance with
the laws
of the State of New York, without regard to conflict of laws principles
thereunder, except to the extent that the law of any other jurisdiction
is
mandatorily applicable. (Preferred Trust Securities Guarantee
Agreement, Section 8.06).
JUNIOR
SUBORDINATED DEBENTURES AND THE
FPL
GROUP SUBORDINATED GUARANTEE
General. The
junior subordinated debentures issued by FPL Group Capital are referred
to in
this prospectus as the “FPL Group Capital Junior Subordinated
Debentures.” The junior subordinated debentures issued by FPL Group
are referred to in this prospectus as the “FPL Group Junior Subordinated
Debentures,” and, together with the FPL Group Capital Junior Subordinated
Debentures, are referred to as the “Junior Subordinated
Debentures.” The FPL Group Capital Junior Subordinated Debentures
will be issued by FPL Group Capital in one or more series under an Indenture,
dated as of March 1, 2004, among FPL Group Capital, FPL Group and The Bank
of New York, as trustee, an Indenture, dated as of September 1, 2006, among
FPL Group Capital, FPL Group and The Bank of New York, as trustee, or
another
subordinated indenture among FPL Group Capital, FPL Group and The Bank
of New
York as specified in the related prospectus supplement. The indenture
or indentures pursuant to which FPL Group Capital Junior Subordinated
Debentures
may be issued, as it may be amended from time to time, is referred to
in this
prospectus as the “FPL Group Capital Subordinated Indenture.” The
indenture or indentures pursuant to which FPL Group Junior Subordinated
Debentures may be issued, as it may be amended from time to time, is
referred to
in this prospectus as the “FPL Group Subordinated Indenture.” The FPL
Group Junior Subordinated Debentures will be issued by FPL Group in one
or more
series under an indenture or indentures between FPL Group and The Bank
of New
York, as trustee. In connection with the issuance of Trust
Securities, the Property Trustee will hold the FPL Group Capital Junior
Subordinated Debentures on behalf of FPL Group Capital Trust, or the
FPL Group
Junior Subordinated Debentures on behalf of FPL Group Trust, as the case
may be,
as trust assets. Each of the FPL Group Capital Subordinated Indenture
and the FPL Group Subordinated Indenture, as each may be amended and
supplemented from time to time, is referred to in this prospectus as
the
“Subordinated Indenture.” The Bank of New York, as trustee under each
Subordinated Indenture, is referred to in this prospectus as the “Subordinated
Indenture Trustee.” The Subordinated Indenture provides for the
issuance from time to time of subordinated debt in an unlimited
amount. The Junior Subordinated Debentures and all other subordinated
debt
issued
previously or hereafter under the Subordinated Indenture are collectively
referred to in this prospectus as the “Subordinated Indenture
Securities.”
This
section briefly summarizes some of the terms of the Junior Subordinated
Debentures, the Subordinated Guarantee applicable to the FPL Group Capital
Junior Subordinated Debentures, and some of the provisions of the Subordinated
Indenture. This summary does not contain a complete description of
the Junior Subordinated Debentures, the Subordinated Guarantee or the
Subordinated Indenture. You should read this summary together with
the Subordinated Indenture and the officer’s certificates or other documents
establishing the Junior Subordinated Debentures and the Subordinated
Guarantee
for a complete understanding of all the provisions and for the definitions
of
some terms used in this summary. The Subordinated Indenture (which,
in the case of the FPL Group Capital Subordinated Indenture, contains
the
Subordinated Guarantee), the forms of officer’s certificate that may be used to
establish a series of Junior Subordinated Debentures and the forms of
the Junior
Subordinated Debentures have been previously filed with the SEC, and
are
exhibits to the registration statement. In addition, each
Subordinated Indenture will be qualified under the Trust Indenture Act
of 1939
and is therefore subject to the provisions of the Trust Indenture Act
of
1939. You should read the Trust Indenture Act of 1939 for a complete
understanding of its provisions.
Each
issue of the FPL Group Capital Junior Subordinated Debentures and the
FPL Group
Junior Subordinated Debentures will constitute a separate series under
the
respective Subordinated Indenture. In connection with the issuance of
Trust Securities, the aggregate principal amount of each series will
be limited
to the sum of the aggregate liquidation preference amount of the related
Preferred Trust Securities and the consideration paid by FPL Group for
the
related Common Trust Securities.
All
FPL
Group Capital Junior Subordinated Debentures of one series need not be
issued at
the same time, and a series may be re-opened for issuances of additional
FPL
Group Capital Junior Subordinated Debentures of such series. This
means that FPL Group Capital may from time to time, without notice to,
or the
consent of the existing holders of the FPL Group Capital Junior Subordinated
Debentures of a particular series, create and issue additional FPL Group
Capital
Junior Subordinated Debentures of such series. Such additional FPL
Group Capital Junior Subordinated Debentures will have the same terms
as the FPL
Group Capital Junior Subordinated Debentures of such series in all respects
(except for the payment of interest accruing prior to the issue date
of the
additional FPL Group Capital Junior Subordinated Debentures or except
for the
first payments of interest following the issue date of the additional
FPL Group
Capital Junior Subordinated Debentures) so that the additional FPL Group
Capital
Junior Subordinated Debentures may be consolidated and form a single
series with
the FPL Group Capital Junior Subordinated Debentures of such
series.
Similarly,
all FPL Group Junior Subordinated Debentures of one series need not be
issued at
the same time, and a series may be re-opened for issuances of additional
FPL
Group Junior Subordinated Debentures of such series, in the manner described
in
the paragraph above with respect to FPL Group Capital Junior Subordinated
Debentures.
The
FPL
Group Capital Junior Subordinated Debentures will be unsecured, subordinated
obligations of FPL Group Capital which rank junior to all of FPL Group
Capital’s
Senior Indebtedness. The FPL Group Junior Subordinated Debentures
will be unsecured, subordinated obligations of FPL Group which rank junior
to
all of FPL Group’s Senior Indebtedness. The term “Senior
Indebtedness” with respect to FPL Group Capital or FPL Group, as the case may
be, will be defined in the related prospectus supplement. All Junior
Subordinated Debentures issued under a particular Subordinated Indenture
will
rank equally and ratably with all other Junior Subordinated Debentures
issued
under that Subordinated Indenture, except to the extent that FPL Group
Capital
or FPL Group, as the case may be, elects to provide security with respect
to any
series of Junior Subordinated Debentures without providing that security
to all
outstanding Junior Subordinated Debentures as allowed under the respective
Subordinated Indenture. Junior Subordinated Debentures issued under a
particular Subordinated Indenture may rank senior to, pari passu with,
or junior
to, Junior Subordinated Debentures issued by the same issuer under another
Subordinated Indenture. The FPL Group Capital Junior Subordinated
Debentures will be unconditionally guaranteed by FPL Group as to payment
of
principal, and any interest and premium, pursuant to a Subordinated Guarantee
of
FPL Group, included in the Subordinated Indenture for such FPL Group
Capital
Junior Subordinated Debentures, which Subordinated Guarantee ranks junior
to all
of FPL Group’s Senior Indebtedness, and may rank senior to, pari passu with, or
junior to, FPL Group’s obligations under a separate Subordinated
Guarantee. See “—Subordinated Guarantee” below.
Although
the FPL Group Capital Junior Subordinated Debentures and the FPL Group
Junior
Subordinated Debentures are discussed together in this section of the
prospectus, FPL Group will have no obligation with respect to the FPL
Group
Capital Junior Subordinated Debentures except in connection with the
Subordinated Guarantee and FPL Group Capital will have no obligation
with
respect to the FPL Group Junior Subordinated Debentures.
Each
series of Junior Subordinated Debentures that may be issued under each
Subordinated Indenture may have different terms. FPL Group Capital or
FPL Group, as the case may be, will include some or all of the following
information about a specific series of Junior Subordinated Debentures
in the
prospectus supplement relating to those Junior Subordinated
Debentures:
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(1)
|
the
title of those Junior Subordinated
Debentures,
|
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|
(2)
|
any
limit upon the aggregate principal amount of those Junior Subordinated
Debentures,
|
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|
(3)
|
the
date(s) on which the principal will be
paid,
|
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|
(4)
|
the
rate(s) of interest on those Junior Subordinated Debentures,
or how the
rate(s) of interest will be determined, the date(s) from which
interest
will accrue, the dates on which interest will be paid and the
record date
for any interest payable on any interest payment
date,
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|
|
(5)
|
the
person to whom interest will be paid on any interest payment
date, if
other than the person in whose name those Junior Subordinated
Debentures
are registered at the close of business on the record date
for that
interest payment,
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|
|
(6)
|
the
place(s) at which or methods by which payments will be made
on those
Junior Subordinated Debentures and the place(s) at which or
methods by
which the registered owners of those Junior Subordinated Debentures
may
transfer or exchange those Junior Subordinated Debentures and
serve
notices and demands to or upon FPL Group Capital or FPL Group,
as the case
may be,
|
|
|
(7)
|
the
security registrar and any paying agent or agents for those
Junior
Subordinated Debentures,
|
|
|
(8)
|
any
date(s) on which, the price(s) at which and the terms and conditions
upon
which those Junior Subordinated Debentures may be redeemed
at the option
of the issuer, in whole or in part, and any restrictions on
those
redemptions,
|
|
|
(9)
|
any
sinking fund or other provisions or options held by the registered
owners
of those Junior Subordinated Debentures that would obligate
the issuer to
repurchase or redeem those Junior Subordinated
Debentures,
|
|
|
(10)
|
the
denominations in which those Junior Subordinated Debentures
may be issued,
if other than denominations of $25 and any integral multiple
of
$25,
|
|
|
(11)
|
the
currency or currencies in which the principal of or premium,
if any, or
interest on those Junior Subordinated Debentures may be paid
(if other
than in U.S. dollars),
|
|
|
(12)
|
if
FPL Group Capital, or FPL Group, as the case may be, or a registered
owner
may elect to pay, or receive, principal of or premium, if any,
or interest
on those Junior Subordinated Debentures in a currency other
than that in
which those Junior Subordinated Debentures are stated to be
payable, the
terms and conditions upon which that election may be
made,
|
|
|
(13)
|
if
the principal of or premium, if any, or interest on those Junior
Subordinated Debentures may be paid in securities or other
property, the
type and amount of those securities or other property and the
terms and
conditions upon which FPL Group Capital, or FPL Group, as the
case may be,
or a registered owner may elect to pay or receive those
payments,
|
|
|
(14)
|
if
the amount payable in respect of principal of or premium, if
any, or
interest on those Junior Subordinated Debentures may be determined
by
reference to an index or other fact or
event
|
|
|
|
ascertainable
outside of the Subordinated Indenture, the manner in which
those amounts
will be determined,
|
|
|
(15)
|
the
portion of the principal amount of the Junior Subordinated
Debentures that
will be paid by the issuer upon declaration of acceleration
of the
maturity of those Junior Subordinated Debentures, if other
than the entire
principal amount of those Junior Subordinated
Debentures,
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|
|
(16)
|
any
events of default with respect to those Junior Subordinated
Debentures and
any covenants of FPL Group Capital, or FPL Group, as the case
may be, for
the benefit of the registered owners of those Junior Subordinated
Debentures, other than those specified in the Subordinated
Indenture,
|
|
|
(17)
|
the
terms, if any, pursuant to which those Junior Subordinated
Debentures may
be exchanged for shares of capital stock or other securities
of any other
entity,
|
|
|
(18)
|
a
definition of “Eligible Obligations” under the Subordinated Indenture with
respect to the Junior Subordinated Debentures denominated in
a currency
other than U.S. dollars, and any other provisions for the reinstatement
of
the issuer’s indebtedness in respect of those Junior Subordinated
Debentures after their satisfaction and
discharge,
|
|
|
(19)
|
if
those Junior Subordinated Debentures will be issued in global
form,
necessary information relating to the issuance of those Junior
Subordinated Debentures in global
form,
|
|
|
(20)
|
if
those Junior Subordinated Debentures will be issued as bearer
securities,
necessary information relating to the issuance of those Junior
Subordinated Debentures as bearer
securities,
|
|
|
(21)
|
any
limits on the rights of the registered owners of those Junior
Subordinated
Debentures to transfer or exchange those Junior Subordinated
Debentures or
to register their transfer, and any related service
charges,
|
|
|
(22)
|
any
exceptions to the provisions governing payments due on legal
holidays or
any variations in the definition of business day with respect
to those
Junior Subordinated Debentures,
|
|
|
(23)
|
any
collateral security, assurance, or guarantee for those Junior
Subordinated
Debentures (including, with respect to the FPL Group Capital
Junior
Subordinated Debentures, any security, assurance of guarantee
in addition
to, or any exceptions to, the Subordinated Guarantee described
under
“—Subordinated Guarantee of FPL Group Capital Junior Subordinated
Debentures” below),
|
|
|
(24)
|
the
designation of the trust to which the Junior Subordinated Debentures
are
to be issued, if the Junior Subordinated Debentures are issued
in
connection with the issuance of Trust
Securities,
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|
|
(25)
|
the
terms relating to any additional interest that may be payable
as a result
of any tax, assessment or governmental charges,
and
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|
|
(26)
|
any
other terms of those Junior Subordinated Debentures that are
not
inconsistent with the provisions of the Subordinated
Indenture. (Subordinated Indenture, Section
301).
|
Except
as
otherwise stated in the related prospectus supplement, the covenants
in the
Subordinated Indenture would not give registered owners of Junior Subordinated
Debentures protection in the event of a highly-leveraged transaction
involving
FPL Group Capital, in the case of the FPL Group Capital Junior Subordinated
Debentures, or FPL Group.
Subordination. The
Junior Subordinated Debentures will be subordinate and junior in right
of
payment to all Senior Indebtedness of FPL Group Capital, or FPL Group,
as the
case may be. (FPL Group Capital Subordinated Indenture, Article
Fifteen; FPL Group Subordinated Indenture, Article Fourteen). No
payment of the principal (including redemption and sinking fund payments)
of, or
interest, or premium, if any, on the Junior Subordinated Debentures may
be made
by FPL Group Capital, or FPL Group, as the case may be, until all holders
of
Senior
Indebtedness
of FPL Group Capital, or FPL Group, as the case may be, have been paid
in full
(or provision has been made for such payment), if any of the following
occurs:
|
|
(1)
|
certain
events of bankruptcy, insolvency or reorganization of FPL Group
Capital or
FPL Group, as the case may be;
|
|
|
(2)
|
any
Senior Indebtedness of FPL Group Capital, or of FPL Group,
as the case may
be, is not paid when due (after the expiration of any applicable
grace
period) and that default continues without waiver;
or
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|
|
(3)
|
any
other default has occurred and continues without waiver (after
the
expiration of any applicable grace period) pursuant to which
the holders
of Senior Indebtedness of FPL Group Capital, or FPL Group, as the
case may be, are permitted to accelerate the maturity of such
Senior
Indebtedness. (FPL Group Capital Subordinated Indenture,
Section 1502; FPL Group Subordinated Indenture,
Section 1402).
|
Upon
any
distribution of assets of FPL Group Capital, or of FPL Group, as the
case may
be, to creditors in connection with any insolvency, bankruptcy or similar
proceeding, all principal of, and premium, if any, and interest due or
to become
due on all Senior Indebtedness of FPL Group Capital, or of FPL Group,
as the
case may be, must be paid in full before the holders of the Junior Subordinated
Debentures are entitled to receive or retain any payment from such
distribution. (FPL Group Capital Subordinated Indenture,
Section 1502; FPL Group Subordinated Indenture, Section 1402).
FPL
Group
Capital is a holding company that derives substantially all of its income
from
its operating subsidiaries. Therefore, FPL Group Capital Subordinated
Indenture Securities will be effectively subordinated to all indebtedness
and
other liabilities, including trade payables, debt and preferred stock,
incurred
or issued by FPL Group Capital’s subsidiaries. The FPL Group Capital
Subordinated Indenture does not place any limit on the amount of liabilities
including debt or preferred stock, that FPL Group Capital’s subsidiaries may
issue, guarantee or otherwise incur.
FPL
Group
is a holding company that derives substantially all of its income from
its
operating subsidiaries. Therefore, FPL Group Subordinated Indenture
Securities will be effectively subordinated to all indebtedness and other
liabilities, including trade payables, debt and preferred stock, incurred
or
issued by FPL Group’s subsidiaries. The FPL Group Subordinated
Indenture does not place any limit on the amount of liabilities including
debt
or preferred stock, that FPL Group’s subsidiaries may issue, guarantee or
otherwise incur.
Subordinated
Guarantee of FPL Group Capital Junior Subordinated
Debentures. Pursuant to the Subordinated Guarantee, FPL
Group will unconditionally and irrevocably guarantee the payment of principal
of
and any interest and premium, if any, on the FPL Group Capital Junior
Subordinated Debentures, when due and payable, whether at the stated
maturity
date, by declaration of acceleration, call for redemption or otherwise,
in
accordance with the terms of such FPL Group Capital Junior Subordinated
Debentures and the FPL Group Capital Subordinated Indenture. The
Subordinated Guarantee will remain in effect until the entire principal
of and
any premium, if any, and interest on the FPL Group Capital Junior Subordinated
Debentures has been paid in full or otherwise discharged in accordance
with the
provisions of the FPL Group Capital Subordinated Indenture. (FPL
Group Capital Subordinated Indenture, Article Fourteen).
The
Subordinated Guarantee will be subordinate and junior in right of payment
to all
Senior Indebtedness of FPL Group. (FPL Group Capital Subordinated
Indenture, Section 1402). No payment of the principal (including
redemption and sinking fund payments) of, or interest, or premium, if
any, on,
the FPL Group Capital Junior Subordinated Debentures may be made by FPL
Group
under the Subordinated Guarantee until all holders of Senior Indebtedness
of FPL
Group have been paid in full (or provision has been made for such payment),
if
any of the following occurs:
|
|
(1)
|
certain
events of bankruptcy, insolvency or reorganization of FPL
Group;
|
|
|
(2)
|
any
Senior Indebtedness of FPL Group is not paid when due (after
the
expiration of any applicable grace period) and that default
continues
without waiver; or
|
|
|
(3)
|
any
other default has occurred and continues without waiver (after
the
expiration of any applicable grace period) pursuant to which
the holders
of Senior Indebtedness of FPL Group are permitted to accelerate
the
maturity of such Senior Indebtedness. (FPL Group Capital
Subordinated Indenture, Section
1403).
|
Upon
any
distribution of assets of FPL Group to creditors in connection with any
insolvency, bankruptcy or similar proceeding, all principal of, and premium,
if
any, and interest due or to become due on all Senior Indebtedness of
FPL Group
must be paid in full before the holders of the FPL Group Capital Junior
Subordinated Debentures are entitled to receive or retain any payment
from such
distribution. (FPL Group Capital Subordinated Indenture, Section
1403).
FPL
Group
is a holding company that derives substantially all of its income from
its
operating subsidiaries. Therefore, the Subordinated Guarantee is
effectively subordinated to all indebtedness and other liabilities, including
trade payables, debt and preferred stock, incurred or issued by FPL Group’s
subsidiaries. The FPL Group Capital Subordinated Indenture does not
place any limit on the amount of liabilities, including debt or preferred
stock,
that FPL Group’s subsidiaries may issue, guarantee or otherwise
incur.
Payment
and Paying Agents. Except as stated in the related
prospectus supplement, on each interest payment date FPL Group Capital,
or FPL
Group, as the case may be, will pay interest on each Junior Subordinated
Debenture to the person in whose name that Junior Subordinated Debenture
is
registered as of the close of business on the record date relating to
that
interest payment date. However, on the date that the Junior
Subordinated Debentures mature, FPL Group Capital, or FPL Group, as the
case may
be, will pay the interest to the person to whom it pays the
principal. Also, if FPL Group Capital, or FPL Group, as the case may
be, has defaulted in the payment of interest on any Junior Subordinated
Debenture, it may pay that defaulted interest to the registered owner
of that
Junior Subordinated Debenture:
|
|
(1)
|
as
of the close of business on a date that the Subordinated Indenture
Trustee
selects, which may not be more than 15 days or less than 10
days before
the date that FPL Group Capital, or FPL Group, as the case
may be,
proposes to pay the defaulted interest,
or
|
|
|
(2)
|
in
any other lawful manner that does not violate the requirements
of any
securities exchange on which that Junior Subordinated Debenture
is listed
and that the Subordinated Indenture Trustee believes is
acceptable. (Subordinated Indenture, Section
307).
|
Unless
otherwise stated in the related prospectus supplement, the principal,
premium,
if any, and interest on the Junior Subordinated Debentures at maturity
will be
payable when such Junior Subordinated Debentures are presented at the
main
corporate trust office of The Bank of New York, as paying agent, in The
City of
New York. FPL Group Capital and/or FPL Group with respect to the FPL
Group Capital Junior Subordinated Debentures and FPL Group with respect
to the
FPL Group Junior Subordinated Debentures may change the place of payment
on the
Junior Subordinated Debentures, appoint one or more additional paying
agents,
including itself, and remove any paying agent. (Subordinated
Indenture, Section 602).
Transfer
and Exchange. Unless otherwise stated in the related
prospectus supplement, Junior Subordinated Debentures may be transferred
or
exchanged at the main corporate trust office of The Bank of New York,
as
security registrar, in The City of New York. FPL Group Capital, or
FPL Group, as the case may be, may change the place for transfer and
exchange of
the Junior Subordinated Debentures and may designate one or more additional
places for that transfer and exchange.
Except
as
otherwise stated in the related prospectus supplement, there will be
no service
charge for any transfer or exchange of the Junior Subordinated
Debentures. However, FPL Group Capital, or FPL Group, as the case may
be, may require payment of any tax or other governmental charge in connection
with any transfer or exchange of the Junior Subordinated
Debentures.
FPL
Group
Capital, or FPL Group, as the case may be, will not be required to transfer
or
exchange any Junior Subordinated Debenture selected for
redemption. Also, FPL Group Capital, or FPL Group, as the case may
be, will not be required to transfer or exchange any Junior Subordinated
Debenture during a period of 15 days before selection of Junior Subordinated
Debentures to be redeemed. (Subordinated Indenture, Section
305).
Unless
otherwise stated in the related prospectus supplement, if Junior Subordinated
Debentures are issued in connection with the issuance of Trust Securities
and
are subsequently distributed to holders of Preferred Trust Securities
in a
dissolution of the Trust, the Junior Subordinated Debentures will be
issued in
fully registered certificated form in the denominations and integral
multiples
thereof in which the Preferred Trust Securities have been issued, and
they may
be transferred or exchanged as described above. (Trust Agreement,
Section 9.04).
Defeasance. FPL
Group Capital and FPL Group may, at any time, elect to have all of their
obligations discharged with respect to all or a portion of any Subordinated
Indenture Securities (including the FPL Group Capital Junior Subordinated
Debentures). FPL Group may, at any time, elect to have all of its
obligations discharged with respect to all or a portion of any Subordinated
Indenture Securities (including the FPL Group Junior Subordinated
Debentures). To do so, FPL Group Capital or FPL Group, with respect
to FPL Group Capital Junior Subordinated Debentures, or FPL Group with
respect
to the FPL Group Junior Subordinated Debentures, must irrevocably deposit
with
the Subordinated Indenture Trustee or any paying agent, in trust:
|
|
(1)
|
money
in an amount that will be sufficient to pay all or that portion
of the
principal, premium, if any, and interest due and to become
due on those
Subordinated Indenture Securities, on or prior to their maturity,
or
|
|
|
(2)
|
in
the case of a deposit made prior to the maturity of that series
of
Subordinated Indenture Securities,
|
|
|
(a)
|
direct
obligations of, or obligations unconditionally guaranteed by,
the United
States and entitled to the benefit of its full faith and credit
that do
not contain provisions permitting their redemption or other
prepayment at
the option of their issuer, and
|
|
|
(b)
|
certificates,
depositary receipts or other instruments that evidence a direct
ownership
interest in those obligations or in any specific interest or
principal
payments due in respect of those obligations that do not contain
provisions permitting their redemption or other prepayment
at the option
of their issuer, the principal of and the interest on which,
when due,
without any regard to reinvestment of that principal or interest,
will
provide money that, together with any money deposited with
or held by the
Subordinated Indenture Trustee, will be sufficient to pay all
or that
portion of the principal, premium, if any, and interest due
and to become
due on those Subordinated Indenture Securities, on or prior
to their
maturity, or
|
|
|
(3)
|
a
combination of (1) and (2) that will be sufficient to pay all
or that
portion of the principal, premium, if any, and interest due
and to become
due on those Subordinated Indenture Securities, on or prior
to their
maturity. (Subordinated Indenture, Section
701).
|
Option
to Defer Interest Payments. Unless otherwise provided in a
related prospectus supplement, FPL Group Capital, or FPL Group, as the
case may
be, may have the option to defer the payment of interest from time to
time on
the Junior Subordinated Debentures for one or more periods. As a
consequence, if the Junior Subordinated Debentures are issued in connection
with
Preferred Trust Securities, distributions on the Preferred Trust Securities
would be deferred during any optional deferral period. Interest
would, however, continue to accrue on the Junior Subordinated
Debentures. Unless otherwise provided in a related prospectus
supplement, during any optional deferral period, or for so long as an
“Event of
Default” under the Subordinated Indenture resulting from a payment default (or
a
payment default under the Preferred Trust Securities Guarantee if the
Junior
Subordinated Debentures are issued in connection with Preferred Trust
Securities) has occurred and is continuing, neither FPL Group nor FPL
Group
Capital, with respect to FPL Group Capital Junior Subordinated Debentures,
or
FPL Group, with respect to FPL Group Junior Subordinated Debentures
may:
|
|
(1)
|
declare
or pay any dividend or distribution on its capital
stock;
|
|
|
(2)
|
redeem,
purchase, acquire or make a liquidation payment with respect
to any of its
capital stock;
|
|
|
(3)
|
pay
any principal, interest or premium on, or repay, repurchase
or redeem any
debt securities that are equal or junior in right of payment
with the
Junior Subordinated Debentures or, in the case of FPL Group
Capital Junior
Subordinated Debentures issued in connection with Preferred
Trust
Securities, the Subordinated Guarantee (as the case may be);
or
|
|
|
(4)
|
make
any payments with respect to any guarantee of debt securities
if such
guarantee is equal or junior in right of payment to the Junior
Subordinated Debentures or the Subordinated Guarantee if the
Junior
Subordinated Debentures are issued in connection with Preferred
Trust
Securities (as the case may be),
|
other
than
|
|
(1)
|
purchases,
redemptions or other acquisitions of its capital stock in connection
with
any employment contract, benefit plan or other similar arrangement
with or
for the benefit of employees, officers, directors or agents
or a stock
purchase or dividend reinvestment plan, or the satisfaction
of its
obligations pursuant to any contract or security outstanding
on the date
that the payment of interest is deferred requiring it to purchase,
redeem
or acquire its capital stock;
|
|
|
(2)
|
any
payment, repayment, redemption, purchase, acquisition or declaration
of
dividend listed as restricted payments in clauses (1) and (2)
above as a
result of a reclassification of its capital stock or the exchange
or
conversion of all or a portion of one class or series of its
capital stock
for another class or series of its capital
stock;
|
|
|
(3)
|
the
purchase of fractional interests in shares of its capital stock
pursuant
to the conversion or exchange provisions of its capital stock
or the
security being converted or exchanged, or in connection with
the
settlement of stock purchase
contracts;
|
|
|
(4)
|
dividends
or distributions paid or made in its capital stock (or rights
to acquire
its capital stock), or repurchases, redemptions or acquisitions
of capital
stock in connection with the issuance or exchange of capital
stock (or of
securities convertible into or exchangeable for shares of its
capital
stock) and distributions in connection with the settlement
of stock
purchase contracts;
|
|
|
(5)
|
redemptions,
exchanges or repurchases of, or with respect to, any rights
outstanding
under a shareholder rights plan or the declaration or payment
thereunder
of a dividend or distribution of or with respect to rights
in the
future;
|
|
|
(6)
|
payments
under any preferred trust securities guarantee or guarantee
of
subordinated debentures executed and delivered by FPL Group
concurrently
with the issuance by a trust of any preferred trust securities,
so long as
the amount of payments made on any preferred trust securities
or
subordinated debentures (as the case may be) is paid on all
preferred
trust securities or subordinated debentures (as the case may
be) then
outstanding on a pro rata basis in proportion to the full distributions
to
which each series of preferred trust securities or subordinated
debentures
(as the case may be) is then entitled if paid in
full;
|
|
|
(7)
|
payments
under any guarantee of junior subordinated debentures executed
and
delivered by FPL Group (including a FPL Group Subordinated
Guarantee), so
long as the amount of payments made on any junior subordinated
debentures
is paid on all junior subordinated debentures then outstanding
on a pro
rata basis in proportion to the full payment to which each
series of
junior subordinated debentures is then entitled if paid in
full;
|
|
|
(8)
|
dividends
or distributions by FPL Group Capital on its capital stock
to the extent
owned by FPL Group; or
|
|
|
(9)
|
redemptions,
purchases, acquisitions or liquidation payments by FPL Group
Capital with
respect to its capital stock to the extent owned by FPL
Group. (Subordinated Indenture,
Section 608).
|
The
exceptions in (8) and (9) above are not applicable to an optional deferral
period on the FPL Group Junior Subordinated Debentures.
Unless
otherwise provided in a related prospectus supplement, before an optional
deferral period ends, FPL Group Capital, or FPL Group, as the case may
be, may
further defer the payment of interest. Unless otherwise provided in
the related prospectus supplement, no optional deferral period may exceed
the
period of time specified in that prospectus supplement. After any
optional deferral period and the payment of all amounts then due,
FPL
Group
Capital, or FPL Group, as the case may be, may select a new optional
deferral
period. No interest period may be deferred beyond the maturity of the
Junior Subordinated Debentures. If the Junior Subordinated Debentures
are issued in connection with Preferred Trust Securities, FPL Group Capital,
or
FPL Group, as the case may be, will give the Trust and the Subordinated
Indenture Trustee notice of its election of an optional deferral period
prior to
the earlier of (i) one business day before the record date for the distribution
on the Preferred Trust Securities which would occur if FPL Group Capital,
or FPL
Group, as the case may be, did not make the election to defer or (ii)
the date
the Administrative Trustees are required to give notice to any securities
exchange or any other applicable self-regulatory organization of the
record date
for such a distribution. The Property Trustee shall send notice of
that election to the holders of Preferred Trust Securities.
Additional
Interest. If the Junior Subordinated Debentures are issued
in connection with the issuance of Trust Securities and if the Trust
is required
to pay any taxes, duties, assessments or governmental charges imposed
by the
United States or any other taxing authority on income derived from the
interest
payments on the Junior Subordinated Debentures, then, so long as any
Preferred
Trust Securities remain outstanding, FPL Group Capital, or FPL Group,
as the
case may be, will pay as interest on the Junior Subordinated Debentures
any
additional interest that may be necessary in order that the net amounts
received
and retained by the Trust after the payment of those taxes, duties, assessments
or governmental charges will be the same as the Trust would have had
in the
absence of such payment. (Subordinated Indenture, Section
313).
Redemption. The
redemption terms of the Junior Subordinated Debentures, if any, will
be set
forth in a prospectus supplement. Unless set forth differently in a
prospectus supplement, and except with respect to Junior Subordinated
Debentures
redeemable at the option of the holder, Junior Subordinated Debentures
will be
redeemable upon notice between 30 and 60 days prior to the redemption
date. If less than all of the Junior Subordinated Debentures of any
series or any tranche thereof are to be redeemed, the Subordinated Indenture
Trustee will select the Junior Subordinated Debentures to be
redeemed. In the absence of any provision for selection, the
Subordinated Indenture Trustee will choose a method of random selection
as it
deems fair and appropriate. (Subordinated Indenture, Sections 403 and
404).
Junior
Subordinated Debentures selected for redemption will cease to bear interest
on
the redemption date. The paying agent will pay the redemption price
and any accrued interest once the Junior Subordinated Debentures are
surrendered
for redemption. (Subordinated Indenture, Section 405). If
only part of a Junior Subordinated Debenture is redeemed, the Subordinated
Indenture Trustee will deliver a new Junior Subordinated Debenture of
the same
series for the remaining portion without charge. (Subordinated
Indenture, Section 406).
Any
redemption at the option of FPL Group Capital, or FPL Group, as the case
may be,
may be conditional upon the receipt by the paying agent, on or prior
to the date
fixed for redemption, of money sufficient to pay the redemption
price. If the paying agent has not received such money by the date
fixed for redemption, neither FPL Group Capital nor FPL Group, in the
case of
FPL Group Capital Junior Subordinated Debentures, nor FPL Group, in the
case of
FPL Group Junior Subordinated Debentures, will be required to redeem
such Junior
Subordinated Debentures. (Subordinated Indenture, Section
404).
If
the
Junior Subordinated Debentures are issued in connection with the issuance
of
Trust Securities, for so long as the Trust is the holder of all of the
related
Junior Subordinated Debentures the proceeds of any redemption of Junior
Subordinated Debentures will be used by the Trust to redeem Preferred
Trust
Securities and Common Trust Securities in accordance with their
terms. (Trust Agreement, Section 4.02(a)).
Subject
to applicable law, including United States federal securities laws, FPL
Group or
its affiliates, including FPL Group Capital, may at any time and from
time to
time purchase outstanding Junior Subordinated Debentures by tender, in
the open
market or by private agreement.
Consolidation,
Merger, and Sale of Assets. Under the FPL Group Capital
Subordinated Indenture, neither FPL Group Capital nor FPL Group may,
and under
the FPL Group Subordinated Indenture, FPL Group may not, consolidate
with or
merge into any other entity or convey, transfer or lease its properties
and
assets substantially as an entirety to any entity, unless:
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(1)
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the
entity formed by that consolidation, or the entity into which
FPL Group
Capital or FPL Group, as the case may be, in the case of the
FPL Group
Capital Subordinated Indenture, or FPL Group, in
the
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case
of the FPL Group Subordinated Indenture, is merged, or the
entity that
acquires or leases FPL Group Capital’s or FPL Group’s, as the case may be,
in the case of the FPL Group Capital Subordinated Indenture,
or FPL
Group’s, in the case of the FPL Group Subordinated Indenture, property
and
assets, is an entity organized and existing under the laws
of the United
States, any state or the District of Columbia and that entity
expressly
assumes FPL Group Capital’s or FPL Group’s, as the case may be, in the
case of the FPL Group Capital Subordinated Indenture, or
FPL Group’s, in
the case of the FPL Group Subordinated Indenture, obligations
on all
Subordinated Indenture Securities and under the Subordinated
Indenture,
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(2)
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immediately
after giving effect to the transaction, no event of default
under the
Subordinated Indenture and no event that, after notice or lapse
of time or
both, would become an event of default under the Subordinated
Indenture
exists, and
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(3)
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FPL
Group Capital or FPL Group, as the case may be, in the case
of the FPL
Group Capital Subordinated Indenture, or FPL Group, in the
case of the FPL
Group Subordinated Indenture, delivers an officer’s certificate and an
opinion of counsel to the Subordinated Indenture Trustee, as
provided in
the Subordinated Indenture. (Subordinated Indenture, Section
1101).
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The
Subordinated Indenture does not prevent or restrict:
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(1)
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any
consolidation or merger after the consummation of which FPL
Group Capital
or FPL Group, in the case of the FPL Group Capital Subordinated
Indenture,
or FPL Group, in the case of the FPL Group Subordinated Indenture,
would
be the surviving or resulting
entity;
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(2)
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in
the case of the FPL Group Capital Subordinated Indenture, any
consolidation of FPL Group Capital with FPL Group or any other
entity all
of the outstanding voting securities of which are owned, directly
or
indirectly, by FPL Group, or any merger of any such entity
into any other
of such entities, or any conveyance or other transfer, or lease,
of
properties or assets by any thereof to any other
thereof;
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(3)
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any
conveyance or other transfer, or lease, of any part of the
properties or
assets of FPL Group Capital or FPL Group, in the case of the
FPL Group
Capital Subordinated Indenture, or FPL Group, in the case of
the FPL Group
Subordinated Indenture, which does not constitute the entirety,
or
substantially the entirety, thereof;
or
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(4)
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the
approval by FPL Group Capital or FPL Group, in the case of
the FPL Group
Capital Subordinated Indenture, or FPL Group, in the case of
the FPL Group
Subordinated Indenture, of or the consent by FPL Group Capital
or FPL
Group, in the case of the FPL Group Capital Subordinated Indenture,
or FPL
Group, in the case of the FPL Group Subordinated Indenture,
to any
consolidation or merger to which any direct or indirect subsidiary
or
affiliate of FPL Group may be a party, or any conveyance, transfer
or
lease by any such subsidiary or affiliate of any or all of
its properties
or assets. (Subordinated Indenture, Section
1103).
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Events
of Default. Each of the following is an event of default
under the Subordinated Indenture with respect to the Subordinated Indenture
Securities of any series:
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(1)
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failure
to pay interest on the Subordinated Indenture Securities of
that series
within 30 days after it is due (provided, however, that a failure
to pay
interest during a valid optional deferral period will not constitute
an
event of default),
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(2)
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failure
to pay principal or premium, if any, on the Subordinated Indenture
Securities of that series when it is
due,
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(3)
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failure
to comply with any other covenant in the Subordinated Indenture,
other
than a covenant that does not relate to that series of Subordinated
Indenture Securities, that continues for 90 days after FPL
Group Capital
and FPL Group, in the case of the FPL Group Capital Subordinated
Indenture, or FPL Group, in the case of the FPL Group Subordinated
Indenture, receive written notice of such failure
to
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comply
from the Subordinated Indenture Trustee, or FPL Group Capital,
in the case
of the FPL Group Capital Subordinated Indenture, FPL Group
and the
Subordinated Indenture Trustee receive written notice of
such failure to
comply from the registered owners of at least 33% in principal
amount of
the Subordinated Indenture Securities of that
series,
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(4)
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certain
events of bankruptcy, insolvency or reorganization of FPL Group
Capital or
FPL Group in the case of the FPL Group Capital Subordinated
Indenture, or
FPL Group in the case of the FPL Group Subordinated
Indenture,
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(5)
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with
certain exceptions, the Subordinated Guarantee ceases to be
effective, is
found by a judicial proceeding to be unenforceable or invalid
or is denied
or disaffirmed by FPL Group, and
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(6)
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any
other event of default specified with respect to the Subordinated
Indenture Securities of that series. (Subordinated Indenture,
Section 801).
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In
the
case of the third event of default listed above, the Subordinated Indenture
Trustee may extend the grace period. In addition, if holders of a
particular series have given a notice of default, then holders of at
least the
same percentage of Junior Subordinated Debentures of that series, together
with
the Subordinated Indenture Trustee, may also extend the grace
period. The grace period will be automatically extended if FPL Group
Capital or FPL Group, in the case of the FPL Group Capital Subordinated
Indenture, or FPL Group, in the case of the FPL Group Subordinated Indenture,
has initiated and is diligently pursuing corrective action in good
faith. (Subordinated Indenture, Section 801). An event of
default with respect to the Subordinated Indenture Securities of a particular
series will not necessarily constitute an event of default with respect
to
Subordinated Indenture Securities of any other series issued under the
Subordinated Indenture.
Remedies. If
an event of default applicable to the Subordinated Indenture Securities
of one
or more series, but not applicable to all outstanding Subordinated Indenture
Securities, exists, then either the Subordinated Indenture Trustee or
the
registered owners of at least 33% in aggregate principal amount of the
Subordinated Indenture Securities of each of the affected series may
declare the
principal of and accrued but unpaid interest on all the Subordinated
Indenture
Securities of that series to be due and payable
immediately. (Subordinated Indenture, Section 802).
If
the
event of default is applicable to all outstanding Subordinated Indenture
Securities, then only the Subordinated Indenture Trustee or the registered
owners of at least 33% in aggregate principal amount of all outstanding
Subordinated Indenture Securities of all series, voting as one class,
and not
the registered owners of any one series, may make a declaration of
acceleration. (Subordinated Indenture, Section
802). However, the event of default giving rise to the declaration
relating to any series of Subordinated Indenture Securities will be
automatically waived, and that declaration and its consequences will
be
automatically rescinded and annulled, if, at any time after that declaration
and
before a judgment or decree for payment of the money due has been
obtained:
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(1)
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FPL
Group Capital or FPL Group in the case of the FPL Group Capital
Subordinated Indenture, or FPL Group in the case of the FPL
Group
Subordinated Indenture, deposits with the Subordinated Indenture
Trustee a
sum sufficient to pay:
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(a)
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all
overdue interest on all Subordinated Indenture Securities of
that
series,
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(b)
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the
principal of and any premium on any Subordinated Indenture
Securities of
that series that have become due for reasons other than that
declaration,
and interest that is then due,
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(c)
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interest
on overdue interest for that series,
and
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(d)
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all
amounts due to the Subordinated Indenture Trustee under the
Subordinated
Indenture, and
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(2)
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any
other event of default with respect to the Subordinated Indenture
Securities of that series has been cured or waived as provided
in the
Subordinated Indenture. (Subordinated Indenture, Section
802).
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Other
than its obligations and duties in case of an event of default under
the
Subordinated Indenture, the Subordinated Indenture Trustee is not obligated
to
exercise any of its rights or powers under the Subordinated Indenture
at the
request or direction of any of the registered owners of the Subordinated
Indenture Securities, unless those registered owners offer reasonable
indemnity
to the Subordinated Indenture Trustee. (Subordinated Indenture,
Section 903). If they provide this reasonable indemnity, the
registered owners of a majority in principal amount of any series of
Subordinated Indenture Securities will have the right to direct the time,
method
and place of conducting any proceeding for any remedy available to the
Subordinated Indenture Trustee, or exercising any trust or power conferred
on
the Subordinated Indenture Trustee, with respect to the Subordinated
Indenture
Securities of that series. However, if an event of default under the
Subordinated Indenture relates to more than one series of Subordinated
Indenture
Securities, only the registered owners of a majority in aggregate principal
amount of all affected series of Subordinated Indenture Securities, considered
as one class, will have the right to make that direction. Also, the
direction must not violate any law or the Subordinated Indenture, and
may not
expose the Subordinated Indenture Trustee to personal liability in circumstances
where its indemnity would not, in the Subordinated Indenture Trustee’s sole
discretion, be adequate. (Subordinated Indenture, Section
812).
No
registered owner of Subordinated Indenture Securities of any series will
have
any right to institute any proceeding under the Subordinated Indenture,
or
exercise any remedy under the Subordinated Indenture, unless:
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(1)
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that
registered owner has previously given to the Subordinated Indenture
Trustee written notice of a continuing event of default with
respect to
the Subordinated Indenture Securities of that
series,
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(2)
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the
registered owners of a majority in aggregate principal amount
of the
outstanding Subordinated Indenture Securities of all series
in respect of
which an event of default under the Subordinated Indenture
exists,
considered as one class, have made written request to the Subordinated
Indenture Trustee, and have offered reasonable indemnity to
the
Subordinated Indenture Trustee to institute that proceeding
in its own
name as trustee, and
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(3)
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the
Subordinated Indenture Trustee has failed to institute any
proceeding, and
has not received from the registered owners of a majority in
aggregate
principal amount of the outstanding Subordinated Indenture
Securities of
all series in respect of which an event of default under the
Subordinated
Indenture exists, considered as one class, a direction inconsistent
with
that request, within 60 days after that notice, request and
offer. (Subordinated Indenture, Section
807).
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However,
these limitations do not apply to a suit instituted by a registered owner
of a
Subordinated Indenture Security for the enforcement of payment of the
principal
of or any premium, if any, or interest on that Subordinated Indenture
Security
on or after the applicable due date specified in that Subordinated Indenture
Security. (Subordinated Indenture, Section 808).
Each
of
FPL Group Capital and FPL Group in the case of the FPL Group Capital
Subordinated Indenture, and FPL Group in the case of the FPL Group Subordinated
Indenture, is required to deliver to the Subordinated Indenture Trustee
an
annual statement as to its compliance with all conditions and covenants
applicable to it under the Subordinated Indenture. (Subordinated
Indenture, Section 606).
Enforcement
of Certain Rights by Holders of Preferred Trust
Securities. If the Junior Subordinated Debentures were
issued in connection with the issuance of Trust Securities and if there
is an
event of default with respect to Junior Subordinated Debentures held
by the
Trust, then the holders of Preferred Trust Securities issued by the Trust
will
rely on the Property Trustee or the Subordinated Indenture Trustee, acting
for
the benefit of the Property Trustee, to enforce the Property Trustee’s rights
against FPL Group Capital and FPL Group in the case of the FPL Group
Capital
Subordinated Indenture, or FPL Group in the case of the FPL Group Subordinated
Indenture, as a holder of the Junior Subordinated
Debentures. However, in such a situation, a holder of Preferred Trust
Securities may enforce the Subordinated Indenture directly against FPL
Group
Capital in the case of the FPL Group Capital Subordinated Indenture,
or FPL
Group, in the case of the FPL Group Subordinated Indenture, to the same
extent,
and upon the same conditions, as if the holder of Preferred Trust Securities
held a principal amount of Junior Subordinated Debentures equal to the
aggregate
liquidation amount of its Preferred Trust Securities. (Subordinated
Indenture, Section 610).
Subject
to their right to bring suit to enforce their right to payment, the holders
of
Preferred Trust Securities would not be able to institute any proceeding
with
respect to the Subordinated Indenture unless the Subordinated Indenture
Trustee
has failed to do so for 60 days after a request of the holders of at
least a
majority of the aggregate liquidation amount of outstanding Preferred
Trust
Securities. Upon such failure, the holders of a majority of the
aggregate liquidation amount of the outstanding Preferred Trust Securities
would
have the right to directly institute proceedings for enforcement of all
other
rights of the Subordinated Indenture Trustee against FPL Group Capital
in the
case of the FPL Group Capital Subordinated Indenture, or FPL Group in
the case
of the FPL Group Subordinated Indenture, to the fullest extent permitted
by
law. (Subordinated Indenture, Sections 807, 808 and
812).
Modification
and Waiver. Without the consent of any registered owner of
Subordinated Indenture Securities, FPL Group, the Subordinated Indenture
Trustee
and, in the case of the FPL Group Capital Subordinated Indenture, FPL
Group
Capital, may amend or supplement the Subordinated Indenture for any of
the
following purposes:
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(1)
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to
provide for the assumption by any permitted successor to FPL
Group Capital
or FPL Group of FPL Group Capital’s or FPL Group’s, in the case of the FPL
Group Capital Subordinated Indenture, or by any permitted successor
to FPL
Group of FPL Group’s, in the case of the FPL Group Subordinated Indenture,
obligations with respect to the Subordinated Indenture and
the
Subordinated Indenture Securities in the case of a merger or
consolidation
or a conveyance, transfer or lease of its properties and assets
substantially as an entirety,
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(2)
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to
add covenants of FPL Group Capital or FPL Group in the case
of the FPL
Group Capital Subordinated Indenture, or FPL Group in the case
of the FPL
Group Subordinated Indenture, or to surrender any right or
power conferred
upon FPL Group Capital, in the case of the FPL Group Capital
Subordinated
Indenture, or FPL Group by the Subordinated
Indenture,
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(3)
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to
add any additional events of
default,
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(4)
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to
change, eliminate or add any provision of the Subordinated
Indenture,
provided that if that change, elimination or addition will
materially
adversely affect the interests of the registered owners of
Subordinated
Indenture Securities of any series or tranche, that change,
elimination or
addition will become effective with respect to that series
or tranche
only
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(a)
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when
the required consent of the registered owners of Subordinated
Indenture
Securities of that series or tranche has been obtained,
or
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(b)
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when
no Subordinated Indenture Securities of that series or tranche
remain
outstanding under the Subordinated
Indenture,
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(5)
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to
provide collateral security for all but not a part of the Subordinated
Indenture Securities,
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(6)
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to
establish the form or terms of Subordinated Indenture Securities
of any
other series or tranche,
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(7)
|
to
provide for the authentication and delivery of bearer securities
and the
related coupons and for other matters relating to those bearer
securities,
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(8)
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to
accept the appointment of a successor Subordinated Indenture
Trustee or
co-trustee with respect to the Subordinated Indenture Securities
of one or
more series and to change any of the provisions of the Subordinated
Indenture as necessary to provide for the administration of
the trusts
under the Subordinated Indenture by more than one
trustee,
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(9)
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to
add procedures to permit the use of a non-certificated system
of
registration for the Subordinated Indenture Securities of all
or any
series or tranche,
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(10)
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to
change any place where
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(a)
|
the
principal of and premium, if any, and interest on all or any
series or
tranche of Subordinated Indenture Securities are
payable,
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(b)
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all
or any series or tranche of Subordinated Indenture Securities
may be
transferred or exchanged, and
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(c)
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notices
and demands to or upon FPL Group Capital or FPL Group in the
case of the
FPL Group Capital Subordinated Indenture, or FPL Group in the
case of the
FPL Group Subordinated Indenture, in respect of Subordinated
Indenture
Securities and the Subordinated Indenture may be served,
or
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(11)
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to
cure any ambiguity or inconsistency or to add or change any
other
provisions with respect to matters and questions arising under
the
Subordinated Indenture, provided those changes or additions
may not
materially adversely affect the interests of the registered
owners of
Subordinated Indenture Securities of any series or
tranche. (Subordinated Indenture, Section
1201).
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The
registered owners of a majority in aggregate principal amount of the
Subordinated Indenture Securities of all series then outstanding may
waive
compliance by FPL Group Capital or FPL Group in the case of the FPL Group
Capital Subordinated Indenture, or by FPL Group in the case of the FPL
Group
Subordinated Indenture, with certain restrictive provisions of the Subordinated
Indenture. (Subordinated Indenture, Section 607). The
registered owners of a majority in principal amount of the outstanding
Subordinated Indenture Securities of any series may waive any past default
under
the Subordinated Indenture with respect to that series, except a default
in the
payment of principal, premium, if any, or interest and a default with
respect to
certain restrictive covenants or provisions of the Subordinated Indenture
that
cannot be modified or amended without the consent of the registered owner
of
each outstanding Subordinated Indenture Security of that series
affected. (Subordinated Indenture, Section 813). If the
Trust holds Subordinated Indenture Securities of any series, the Trust
may not
waive compliance, or any default in compliance, by FPL Group Capital
or FPL
Group with any covenant or term contained in, or any past default under,
the
Subordinated Indenture or the Subordinated Indenture Securities of such
series,
without the approval of at least a majority (or such greater percentage
required
by the Trust Agreement) in aggregate liquidation preference amount of
the
outstanding Preferred Trust Securities. (Subordinated Indenture,
Sections 607 and 813).
In
addition to any amendments described above, if the Trust Indenture Act
of 1939
is amended after the date of either Subordinated Indenture in a way that
requires changes to the Subordinated Indenture or in a way that permits
changes
to, or the elimination of, provisions that were previously required by
the Trust
Indenture Act of 1939, the Subordinated Indenture will be deemed to be
amended
to conform to that amendment of the Trust Indenture Act of 1939 or to
make those
changes, additions or eliminations. FPL Group Capital and FPL Group
in the case of the FPL Group Capital Subordinated Indenture, or FPL Group
in the
case of the FPL Group Subordinated Indenture, and the Subordinated Indenture
Trustee may, without the consent of any registered owners, enter into
supplemental indentures to make that amendment. (Subordinated
Indenture, Section 1201).
Except
for any amendments described above, the consent of the registered owners
of a
majority in aggregate principal amount of the Subordinated Indenture
Securities
of all series then outstanding, considered as one class, is required
for all
other modifications to the Subordinated Indenture. However, if less
than all of the series of Subordinated Indenture Securities outstanding
are
directly affected by a proposed supplemental indenture, then the consent
only of
the registered owners of a majority in aggregate principal amount of
outstanding
Subordinated Indenture Securities of all directly affected series, considered
as
one class, is required. But, if FPL Group Capital or FPL Group, as
the case may be, issues any series of Subordinated Indenture Securities
in more
than one tranche and if the proposed supplemental indenture directly
affects the
rights of the registered owners of Subordinated Indenture Securities
of less
than all of those tranches, then the consent only of the registered owners
of a
majority in aggregate principal amount of the outstanding Subordinated
Indenture
Securities of all directly affected tranches, considered as one class,
will be
required. However, none of those amendments or modifications
may:
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(1)
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change
the dates on which the principal of or interest (except as
described above
under “—Option to Defer Interest Payments”) on a Subordinated Indenture
Security is due without the consent of the registered owner
of that
Subordinated Indenture Security,
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(2)
|
reduce
any Subordinated Indenture Security’s principal amount or rate of interest
(or the amount of any installment of that interest) or change
the method
of calculating that rate without the consent of the registered
owner of
that Subordinated Indenture
Security,
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(3)
|
reduce
any premium payable upon the redemption of a Subordinated Indenture
Security without the consent of the registered owner of that
Subordinated
Indenture Security,
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|
(4)
|
change
the currency (or other property) in which a Subordinated Indenture
Security is payable without the consent of the registered owner
of that
Subordinated Indenture Security,
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(5)
|
impair
the right to sue to enforce payments on any Subordinated Indenture
Security on or after the date that it states that the payment
is due (or,
in the case of redemption, on or after the redemption date)
without the
consent of the registered owner of that Subordinated Indenture
Security,
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(6)
|
in
the case of FPL Group Capital Subordinated Indenture, impair
the right to
receive payments under the Subordinated Guarantee or to institute
suit for
enforcement of any such payment under the Subordinated
Guarantee,
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(7)
|
reduce
the percentage in principal amount of the outstanding Subordinated
Indenture Securities of any series or tranche whose owners
must consent to
an amendment, supplement or waiver without the consent of the
registered
owner of each outstanding Subordinated Indenture Security of
that series
or tranche,
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(8)
|
reduce
the requirements for quorum or voting of any series or tranche
without the
consent of the registered owner of each outstanding Subordinated
Indenture
Security of that series or tranche,
or
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|
(9)
|
modify
certain of the provisions of the Subordinated Indenture relating
to
supplemental indentures, waivers of certain covenants and waivers
of past
defaults with respect to the Subordinated Indenture Securities
of any
series or tranche, without the consent of the registered owner
of each
outstanding Subordinated Indenture Security affected by the
modification.
|
A
supplemental indenture that changes or eliminates any provision of the
Subordinated Indenture that has expressly been included only for the
benefit of
one or more particular series or tranches of Subordinated Indenture Securities,
or that modifies the rights of the registered owners of Subordinated
Indenture
Securities of that series or tranche with respect to that provision,
will not
affect the rights under the Subordinated Indenture of the registered
owners of
the Subordinated Indenture Securities of any other series or
tranche. If Junior Subordinated Debentures were issued in connection
with the issuance of Trust Securities, so long as any Preferred Trust
Securities
are outstanding, the Subordinated Indenture Trustee may not consent to
any
supplemental indenture without the prior consent of the holders of a
majority in
aggregate liquidation preference of all outstanding Preferred Trust Securities
affected or, in the case of changes described in clauses (1) through
(9)
immediately above, 100% in aggregate liquidation preference of all such
outstanding Preferred Trust Securities affected. (Subordinated
Indenture, Section 1202).
Each
Subordinated Indenture provides that, in order to determine whether the
registered owners of the required principal amount of the outstanding
Subordinated Indenture Securities have given any request, demand, authorization,
direction, notice, consent or waiver under the Subordinated Indenture,
or
whether a quorum is present at the meeting of the registered owners of
Subordinated Indenture Securities, (a) in the case of the FPL Group Capital
Subordinated Indenture, Subordinated Indenture Securities owned by FPL
Group
Capital, FPL Group or any other obligor upon the Subordinated Indenture
Securities or any affiliate of FPL Group Capital, FPL Group or of that
other
obligor (unless FPL Group Capital, FPL Group, that affiliate or that
obligor
owns all Subordinated Indenture Securities outstanding under the Subordinated
Indenture, determined without regard to this provision) and (b) in the
case of
the FPL Group Subordinated Indenture, Subordinated Indenture Securities
owned by
FPL Group or any other obligor upon the Subordinated Indenture Securities
or any
affiliate of FPL Group or of that other obligor (unless FPL Group, that
affiliate or that obligor owns all Subordinated Indenture Securities
outstanding
under the Subordinated Indenture, determined without regard to this provision),
will be disregarded and deemed not to be outstanding. (Subordinated
Indenture, Section 101).
If
FPL
Group Capital, in the case of the FPL Group Capital Subordinated Indenture,
or
FPL Group solicits any action under the Subordinated Indenture from registered
owners of Subordinated Indenture Securities, each of FPL Group Capital
or FPL
Group in the case of the FPL Group Capital Subordinated Indenture, or
FPL Group
in the case of the FPL Group Subordinated Indenture, may, at its option,
by
signing a written request to the Subordinated Indenture Trustee, fix
in advance
a record date for determining the registered owners of Subordinated Indenture
Securities entitled to take that action. However, neither FPL Group
Capital nor FPL Group will be obligated to do this. If FPL Group
Capital or FPL Group in the case of the FPL Group Capital Subordinated
Indenture, or FPL Group in the case of the FPL Group Subordinated Indenture,
as
the case may be, fixes such a record date, that action may be taken before
or
after that record date, but only the registered owners of record at the
close of
business on that record date will be deemed to be registered owners of
Subordinated Indenture Securities for the purposes of determining whether
registered owners of the required proportion of the outstanding Subordinated
Indenture Securities have authorized that action. For these purposes,
the outstanding Subordinated Indenture Securities will be computed as
of the
record date. Any action of a registered owner of any Subordinated
Indenture Security under the Subordinated Indenture will bind every future
registered owner of that Subordinated Indenture Security, or any Subordinated
Indenture Security replacing that Subordinated Indenture Security, with
respect
to anything that the Subordinated Indenture Trustee, FPL Group Capital
or FPL
Group in the case of the FPL Group Capital Subordinated Indenture, or
FPL Group
in the case of the FPL Group Subordinated Indenture, do, fail to do,
or allow to
be done in reliance on that action, whether or not that action is noted
upon
that Subordinated Indenture Security. (Subordinated Indenture,
Section 104).
Resignation
and Removal of Subordinated Indenture Trustee. The Subordinated
Indenture Trustee may resign at any time with respect to any series of
Subordinated Indenture Securities by giving written notice of its resignation
to
FPL Group Capital and FPL Group in the case of the FPL Group Capital
Subordinated Indenture, or FPL Group in the case of the FPL Group Subordinated
Indenture. Also, the registered owners of a majority in principal
amount of the outstanding Subordinated Indenture Securities of one or
more
series of Subordinated Indenture Securities may remove the Subordinated
Indenture Trustee at any time with respect to the Subordinated Indenture
Securities of that series, by delivering an instrument evidencing this
action to
the Subordinated Indenture Trustee, FPL Group Capital and FPL Group in
the case
of the FPL Group Capital Subordinated Indenture, and to FPL Group in
the case of
the FPL Group Subordinated Indenture. However, if Junior Subordinated
Debentures were issued in connection with the issuance of Trust Securities,
so
long as any Preferred Trust Securities remain outstanding, the Trust
cannot
deliver an instrument evidencing this action without the consent of the
holders
of a majority in aggregate liquidation preference of Preferred Trust
Securities
outstanding. (Subordinated Indenture,
Section 910). The resignation or removal of the Subordinated
Indenture Trustee and the appointment of a successor trustee will not
become
effective until a successor trustee accepts its appointment.
Except
with respect to a Subordinated Indenture Trustee appointed by the registered
owners of Subordinated Indenture Securities, the Subordinated Indenture
Trustee
will be deemed to have resigned and the successor will be deemed to have
been
appointed as trustee in accordance with the Subordinated Indenture
if:
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(1)
|
no
event of default under the Subordinated Indenture or event
that, after
notice or lapse of time, or both, would become an event of
default under
the Subordinated Indenture exists,
and
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(2)
|
FPL
Group Capital and FPL Group in the case of the FPL Group Capital
Subordinated Indenture, or FPL Group in the case of the FPL
Group
Subordinated Indenture, have delivered to the Subordinated
Indenture
Trustee resolutions of their Boards of Directors appointing
a successor
trustee and that successor trustee has accepted that appointment
in
accordance with the terms of the Subordinated
Indenture. (Subordinated Indenture, Section
910).
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Notices. Notices
to registered owners of Subordinated Indenture Securities will be sent
by mail
to the addresses of those registered owners as they appear in the security
register for those Subordinated Indenture Securities. (Subordinated
Indenture, Section 106).
Title. The
person in whose name a Subordinated Indenture Security is registered
may be
treated as the absolute owner of that Subordinated Indenture Security,
whether
or not that Subordinated Indenture Security is overdue, for the purpose
of
making payments and for all other purposes, regardless of any notice
to the
contrary. (Subordinated Indenture, Section 308).
Governing
Law. The Subordinated Indenture and the Subordinated
Indenture Securities will be governed by, and construed in accordance
with, the
laws of the State of New York, without regard to New York’s conflict of law
principles, except to the extent that the law of any other jurisdiction
is
mandatorily applicable. (Subordinated Indenture, Section
112).
FPL
Group
and its subsidiaries, including FPL Group Capital, also maintain various
banking
and trust relationships with The Bank of New York. In addition to
acting as Subordinated Indenture Trustee, security registrar and paying
agent
under the FPL Group Capital Subordinated Indenture, The Bank of New York
acts,
or would act, as (i) Indenture Trustee, security registrar and paying agent
under the Indenture described under “Description of FPL Group Capital Senior
Debt Securities” above, (ii) Guarantee Trustee under the Guarantee Agreement
described under “Description of the FPL Group Capital Senior Debt Securities
Guarantee” above, (iii) purchase contract agent under a purchase contract
agreement described under “Description of FPL Group Stock Purchase Contracts and
Stock Purchase Units” above, (iv) Preferred Trust Securities Guarantee
Trustee under the Preferred Trust Securities Guarantee Agreement described
under
“Description of the Preferred Trust Securities Guarantee” above, (v) Property
Trustee under the Trust Agreement and (vi) Subordinated Indenture Trustee,
security registrar and paying agent under the FPL Group Subordinated
Indenture. In addition, The Bank of New York acts as preferred trust
securities trustee and property trustee with respect to FPL Group Capital
Trust I’s preferred trust securities. The Bank of New York
(Delaware) acts as the Delaware Trustee under the Trust Agreement and
as
Delaware trustee under the Trust Agreement entered into in connection
with FPL
Group Capital Trust I’s preferred trust securities.
FPL
Group, FPL Group Capital and the Trust may sell the securities offered
pursuant
to this prospectus (“Offered Securities”):
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(1)
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through
underwriters or dealers,
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(2)
|
through
agents, or
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(3)
|
directly
to one or more purchasers.
|
Through
Underwriters or Dealers. If FPL Group, FPL Group Capital
and/or the Trust uses underwriters in the sale of the Offered Securities,
the
underwriters will acquire the Offered Securities for their own
account. The underwriters may resell the Offered Securities in one or
more transactions, including negotiated transactions, at a fixed public
offering
price or at varying prices determined at the time of sale. The
underwriters may sell the Offered Securities directly or through underwriting
syndicates represented by managing underwriters. Unless otherwise
stated in the prospectus supplement relating to the Offered Securities,
the
obligations of the underwriters to purchase those Offered Securities
will be
subject to certain conditions, and the underwriters will be obligated
to
purchase all of those Offered Securities if they purchase any of
them. If FPL Group, FPL Group Capital and/or the Trust uses a dealer
in the sale, FPL Group, FPL Group Capital and/or the Trust will sell
the Offered
Securities to the dealer as principal. The dealer may then resell
those Offered Securities at varying prices determined at the time of
resale.
Any
initial public offering price and any discounts or concessions allowed
or
reallowed or paid to dealers may be changed from time to time.
Through
Agents. FPL Group, FPL Group Capital and/or the Trust may
designate one or more agents to sell the Offered Securities. Unless
otherwise stated in a prospectus supplement, the agents will agree to
use their
best efforts to solicit purchases for the period of their
appointment.
Directly. FPL
Group, FPL Group Capital and/or the Trust may sell the Offered Securities
directly to one or more purchasers. In this case, no underwriters,
dealers or agents would be involved.
General
Information. A prospectus supplement will state the name of
any underwriter, dealer or agent and the amount of any compensation,
underwriting discounts or concessions paid, allowed or reallowed to
them. A
prospectus
supplement will also state the proceeds to FPL Group, FPL Group Capital
and/or
the Trust from the sale of the Offered Securities, any initial public
offering
price and other terms of the offering of those Offered Securities.
FPL
Group, FPL Group Capital and/or the Trust may authorize underwriters,
dealers or
agents to solicit offers by certain institutions to purchase the Offered
Securities from FPL Group, FPL Group Capital and/or the Trust at the
public
offering price and on the terms described in the related prospectus supplement
pursuant to delayed delivery contracts providing for payment and delivery
on a
specified date in the future.
The
Offered Securities may also be offered and sold, if so indicated in the
applicable prospectus supplement, in connection with a remarketing upon
their
purchase, in accordance with a redemption or repayment pursuant to their
terms,
or otherwise, by one or more firms, which are referred to herein as the
“remarketing firms,” acting as principals for their own accounts or as our agent
or the applicable trust’s agents, as applicable. Any remarketing firm
will be identified and the terms of its agreement, if any, with FPL Group,
FPL
Group Capital and/or the Trust and its compensation will be described
in the
applicable prospectus supplement. Remarketing firms may be deemed to
be underwriters, as that term is defined in the Securities Act of 1933,
in
connection with the securities remarketed thereby.
FPL
Group, FPL Group Capital and/or the Trust may enter into derivative transactions
with third parties, or sell securities not covered by this prospectus
to third
parties in privately negotiated transactions. If the applicable
prospectus supplement indicates, in connection with those derivatives,
the third
parties may sell securities covered by this prospectus and the applicable
prospectus supplement, including in short sale transactions. If so,
the third party may use securities pledged by FPL Group, FPL Group Capital
and/or the Trust or borrowed from any of them or others to settle those
sales or
to close out any related open borrowings of securities, and may use securities
received from FPL Group, FPL Group Capital and/or the Trust in settlement
of
those derivatives to close out any related open borrowings of
securities. The third party in such sale transactions will be an
underwriter and, if not identified in this prospectus, will be identified
in the
applicable prospectus supplement.
FPL
Group, FPL Group Capital and/or the Trust may have agreements to indemnify
underwriters, dealers and agents against, or to contribute to payments
which the
underwriters, dealers and agents may be required to make in respect of,
certain
civil liabilities, including liabilities under the Securities Act of
1933.
The
consolidated financial statements and management’s report on the effectiveness
of internal control over financial reporting incorporated in this prospectus
by
reference from FPL Group’s Annual Report on Form 10-K for the year ended
December 31, 2006, have been audited by Deloitte & Touche LLP, an
independent registered public accounting firm, as stated in their reports,
which
are incorporated herein by reference, and have been so incorporated in
reliance
upon the reports of such firm given upon their authority as experts in
accounting and auditing.
Squire,
Sanders & Dempsey L.L.P., Miami, Florida, and Thelen Reid Brown Raysman
& Steiner LLP, New York, New York, co-counsel to FPL Group, FPL Group
Capital and the Trust, will pass upon the legality of the Offered Securities
for
FPL Group, FPL Group Capital and the Trust. Hunton & Williams
LLP, New York, New York, will pass upon the legality of the Offered Securities
for any underwriter, dealer or agent. Certain matters of Delaware law
relating to the validity of the Preferred Trust Securities, the enforceability
of the Trust Agreement and the creation of the Trust will be passed upon
by
Morris, James, Hitchens & Williams LLP, special Delaware counsel to FPL
Group, FPL Group Capital and the Trust. Thelen Reid Brown Raysman
& Steiner LLP and Hunton & Williams LLP may rely as to all matters of
Florida law upon the opinion of Squire, Sanders & Dempsey L.L.P., and on the
opinion of Morris, James, Hitchens & Williams LLP, as to matters involving
the law of the State
of
Delaware in connection with the Preferred Trust
Securities. Squire, Sanders & Dempsey L.L.P. may rely as to all
matters of New York law upon the opinion of Thelen Reid Brown Raysman
&
Steiner LLP, and on the opinion of Morris, James, Hitchens & Williams LLP,
as to matters involving the law of the State of Delaware in connection
with the
Preferred Trust Securities.
___________________________________
You
should rely only on the information incorporated by reference or provided
in
this prospectus or any prospectus supplement or in any written communication
from FPL Group, FPL Group Capital or the Trust specifying the final terms
of a
particular offering of securities. Neither FPL Group, FPL Group
Capital nor the Trust has authorized anyone else to provide you with
additional
or different information. Neither FPL Group, FPL Group Capital nor
the Trust is making an offer of these securities in any jurisdiction
where the
offer is not permitted. You should not assume that the information in
this prospectus or any prospectus supplement is accurate as of any date
other
than the date on the front of those documents or that the information
incorporated by reference is accurate as of any date other than the date
of the
document incorporated by reference.
$350,000,000
Series E
Junior Subordinated Debentures due 2067
The
Series E Junior Subordinated Debentures will
be
Fully and Unconditionally Guaranteed by
FPL
GROUP, INC.
___________
PROSPECTUS
SUPPLEMENT
September
11,
2007
___________
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Citi
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Merrill
Lynch & Co.
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Morgan
Stanley
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UBS
Investment Bank
|
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Wachovia
Securities
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___________
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A.G.
Edwards
|
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Banc
of America Securities LLC
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Lehman
Brothers
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Raymond
James
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RBC
Capital
Markets
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