Filed Pursuant to Rule 424(b)(2)
Registration No. 333-65460
PROSPECTUS SUPPLEMENT
(To Prospectus dated January 15, 2002)
$300,000,000
SOUTH CAROLINA ELECTRIC & GAS COMPANY
FIRST MORTGAGE BONDS
6.625% SERIES DUE FEBRUARY 1, 2032
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South Carolina Electric & Gas Company will pay interest on the New Bonds on
February 1 and August 1 of each year. SCE&G will make the first interest payment
on August 1, 2002. The New Bonds may be redeemed at any time at the option of
SCE&G, in whole or in part, at a redemption price equal to the sum of (i) the
principal amount of the New Bonds being redeemed, plus accrued interest to the
redemption date, and (ii) the Make-Whole Amount, if any. See "DESCRIPTION OF THE
NEW BONDS -- Optional Redemption."
SCE&G has its principal office at 1426 Main Street, Columbia, South
Carolina 29201, telephone (803) 217-9000.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
PER NEW BOND TOTAL
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Price to Public(1).................................... 99.201% $297,603,000
Underwriting Discount................................. .875% $ 2,625,000
Proceeds, before expenses, to SCE&G(1)................ 98.326% $294,978,000
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(1) Plus accrued interest, if any, from January 31, 2002.
We expect the New Bonds will be ready for delivery in book-entry form only
through The Depository Trust Company on or about January 31, 2002.
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Joint Book-Running Managers
UBS WARBURG
CREDIT SUISSE FIRST BOSTON
BANC OF AMERICA SECURITIES LLC
WACHOVIA SECURITIES
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THE DATE OF THIS PROSPECTUS SUPPLEMENT IS JANUARY 24, 2002.
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR TO
WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS DIFFERENT. THIS DOCUMENT MAY ONLY BE USED WHERE IT IS LEGAL
TO SELL THESE SECURITIES. THE INFORMATION IN THIS DOCUMENT MAY ONLY BE ACCURATE
ON THE DATE OF THIS DOCUMENT.
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TABLE OF CONTENTS
PAGE
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PROSPECTUS SUPPLEMENT
Use of Proceeds............................................. S-3
Description of the New Bonds................................ S-3
Basis for Issuance of the New Bonds......................... S-4
Underwriting................................................ S-4
Experts..................................................... S-6
Validity of the New Bonds................................... S-6
PROSPECTUS
About This Prospectus....................................... 2
Where You Can Find More Information......................... 2
South Carolina Electric & Gas Company....................... 3
Ratio of Earnings to Fixed Charges.......................... 3
Use of Proceeds............................................. 3
Description of the New Bonds................................ 4
Book-Entry System........................................... 13
Plan of Distribution........................................ 16
Experts..................................................... 17
Validity of the New Bonds................................... 17
S-2
USE OF PROCEEDS
SCE&G will use the net proceeds from the sale of the New Bonds for the
repayment of short-term debt primarily incurred as a result of our construction
program, redemption of its First and Refunding Mortgage Bonds, 8 7/8% Series due
August 15, 2021, and for general corporate purposes.
DESCRIPTION OF THE NEW BONDS
SCE&G will issue the First Mortgage Bonds, 6.625% Series due February 1,
2032 (the "New Bonds") under the Indenture dated as of April 1, 1993, as
supplemented (the "Mortgage"), made by SCE&G to The Bank of New York, successor
to NationsBank of Georgia, National Association, as trustee (the "Trustee"). The
following information concerning the New Bonds supplements and should be read in
conjunction with the statements under "Description of the New Bonds" in the
accompanying prospectus.
FORM AND DENOMINATION
The New Bonds will be issued as one or more global bonds in the name of
Cede & Co., as nominee for The Depository Trust Company, New York, New York, and
will be available only in book-entry form. See "Book-Entry System" in the
accompanying prospectus.
INTEREST AND MATURITY
SCE&G will pay interest on the New Bonds from January 31, 2002, at the rate
of 6.625% per annum (based upon a 360-day year of twelve 30-day months),
semiannually on February 1 and August 1 of each year commencing on August 1,
2002, to holders of record on the preceding January 15 and July 15,
respectively. The New Bonds will mature February 1, 2032. SCE&G will pay
principal and interest on the New Bonds at the office or agency it maintains for
payments in Atlanta, Georgia (currently, the Trustee). The New Bonds will be
limited to $300,000,000 in aggregate principal amount.
OPTIONAL REDEMPTION
The New Bonds may be redeemed at any time at the option of SCE&G, in whole
or in part, at a redemption price equal to the sum of (i) the principal amount
of the New Bonds being redeemed, plus accrued interest thereon to the redemption
date, and (ii) the Make-Whole Amount, if any, with respect to such New Bonds
(the "Redemption Price").
"Make-Whole Amount" means the excess, if any, of (i) the aggregate present
value as of the date of any optional redemption of each dollar of principal
being redeemed and the amount of interest (exclusive of interest accrued to the
date of redemption) that would have been payable in respect of such dollar of
principal if such redemption had not been made, determined by discounting, on a
semi-annual basis, such principal and interest at the Reinvestment Rate
(determined on the third Business Day preceding the date notice of such
redemption is given) from the respective dates on which such principal and
interest would have been payable if such redemption had not been made, over (ii)
the aggregate principal amount of the New Bonds being redeemed.
S-3
"Reinvestment Rate" means .20% (twenty one-hundredths of one percent) plus
the arithmetic mean of the yields under the respective headings "This Week" and
"Last Week" published in the Statistical Release under the caption "Treasury
Constant Maturities" for the maturity (rounded to the nearest month)
corresponding to the remaining life to maturity, as of the payment date of the
principal being redeemed. If no maturity exactly corresponds to such maturity,
yields for the two published maturities most closely corresponding to such
maturity shall be calculated pursuant to the immediately preceding sentence and
the Reinvestment Rate shall be interpolated or extrapolated from such yields on
a straight-line basis, rounding in each of such relevant periods to the nearest
month. For purposes of calculating the Reinvestment Rate, the most recent
Statistical Release published prior to the date of determination of the
Make-Whole Amount shall be used.
"Statistical Release" means the statistical release designated "H.15(519)"
or any successor publication which is published weekly by the Federal Reserve
System and which establishes yields on actively traded United States government
securities adjusted to constant maturities or, if such statistical release is
not published at the time of any determination, then such other reasonably
comparable index which shall be designated by SCE&G.
BASIS FOR ISSUANCE OF THE NEW BONDS
SCE&G will issue the New Bonds upon the basis of $300,000,000 of Class A
Bonds held by the Trustee and designated by SCE&G as the basis for such
issuance. After the issuance of the New Bonds, SCE&G will be able to issue
$215,035,000 of additional Bonds on the basis of a like principal amount of
Class A Bonds held by the Trustee and available for such purpose. See
"Description of the New Bonds" in the accompanying prospectus.
UNDERWRITING
Subject to the terms and conditions contained in the Underwriting Agreement
between SCE&G and the Underwriters named below, SCE&G has agreed to sell to the
Underwriters, and each of the Underwriters has agreed to purchase from SCE&G,
the respective principal amount of New Bonds set forth opposite its name. In the
Underwriting Agreement, the Underwriters have agreed, subject to the terms and
conditions set forth therein, to purchase the entire aggregate principal amount
of the New Bonds if any New Bonds are purchased.
PRINCIPAL AMOUNT
UNDERWRITERS OF NEW BONDS
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UBS Warburg LLC............................................. $ 75,000,000
Credit Suisse First Boston Corporation...................... 75,000,000
Banc of America Securities LLC.............................. 75,000,000
First Union Securities, Inc................................. 75,000,000
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Total............................................. $300,000,000
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First Union Securities, Inc. ("FUSI"), a subsidiary of Wachovia
Corporation, conducts its investment banking, institutional, and capital markets
businesses under the trade name of Wachovia Securities. Any references to
"Wachovia Securities" in this
S-4
prospectus supplement, however, do not include Wachovia Securities, Inc., a
separate broker-dealer subsidiary of Wachovia Corporation and sister affiliate
of FUSI which may or may not be participating as a separate selling dealer in
the distribution of the securities.
SCE&G has been advised by the Underwriters that they propose initially to
offer the New Bonds to the public at the public offering price set forth on the
cover page of this prospectus supplement, and to certain dealers at such price
less a concession not in excess of .375% of the principal amount of the New
Bonds. The Underwriters may allow and such dealers may reallow a concession not
in excess of .250% of the principal amount. After the initial public offering,
the public offering price and the concessions may be changed.
The New Bonds are a new issue of securities with no established trading
market. SCE&G does not intend to apply for listing of the New Bonds on a
national securities exchange. The Underwriters have told SCE&G that they
presently intend to make a market in the New Bonds, as permitted by applicable
laws and regulations. The Underwriters are not obligated, however, to make a
market in the New Bonds. Any market making by the Underwriters may be
discontinued at any time at the sole discretion of the Underwriters. No
assurance can be given as to whether a trading market for the New Bonds will
develop or as to the liquidity of any trading market.
In connection with the offering, the Underwriters are permitted to engage
in certain transactions that stabilize the price of the New Bonds. Possible
transactions consist of bids or purchases for the purpose of pegging, fixing or
maintaining the price of the New Bonds.
If the Underwriters create a short position in the New Bonds in connection
with this offering, that is, if they sell a greater aggregate principal amount
of New Bonds than is set forth on the cover page of this prospectus supplement,
the Underwriters may reduce that short position by purchasing New Bonds in the
open market. The Underwriters may also impose a penalty bid on certain selling
group members. This means that if an Underwriter purchases New Bonds in the open
market to reduce its short position or to stabilize the price of the New Bonds,
it may reclaim the amount of the selling concession from the selling group
members who sold those New Bonds as part of the offering.
In general, purchases of a security for the purposes of stabilization or to
reduce a short position could cause the price of the security to be higher than
it might be in the absence of such purchases. The imposition of a penalty bid
might also have an effect on the price of a New Bond to the extent that it were
to discourage resales of the New Bonds.
Neither SCE&G nor the Underwriters make any representation or prediction as
to the direction or magnitude of any effect that the transactions described
above might have on the price of the New Bonds. In addition, neither SCE&G nor
the Underwriters make any representation that the Underwriters will engage in
such transactions. Such transactions, once commenced, may be discontinued
without notice.
SCE&G has agreed to indemnify the Underwriters against certain liabilities,
including liabilities under the Securities Act of 1933, as amended, or to
contribute to payments that the Underwriters may be required to make in respect
thereof.
S-5
The Underwriters and their affiliates have from time to time performed, and
may continue to perform in the future, investment banking services for SCE&G,
for which customary compensation has been received.
It is expected that delivery of the New Bonds will be made against payment
therefor on or about the date specified in the last paragraph of the cover page
of this prospectus supplement, which is the fifth business day following the
date hereof. Under Rule 15c6-1 of the Securities and Exchange Commission under
the Securities Exchange Act of 1934, trades in the secondary market generally
are required to settle in three business days, unless the parties to any such
trade expressly agree otherwise. Accordingly, purchasers who wish to trade New
Bonds on the date hereof or the next succeeding business day will be required,
by virtue of the fact that New Bonds initially will settle in T+5, to specify an
alternate settlement cycle at the time of any such trade to prevent a failed
settlement and should consult their own advisor.
SCE&G estimates that its total expenses relating to the offering, not
including the underwriting discount, will be approximately $100,000.
EXPERTS
The statements made under "Description of the New Bonds" in the
accompanying prospectus, as to matters of law and legal conclusions, have been
reviewed by H. Thomas Arthur, Esq., our Senior Vice President and General
Counsel or Sarena D. Burch, Esq., our Deputy General Counsel, and such
statements are made upon the authority of such counsel as an expert.
VALIDITY OF THE NEW BONDS
The validity of the New Bonds will be passed on for SCE&G by McNair Law
Firm, P.A., of Columbia, South Carolina, and H. Thomas Arthur, Esq., or Sarena
D. Burch, Esq., both of Columbia, South Carolina, and for the Underwriters by
Thelen Reid & Priest LLP, of New York, New York. Thelen Reid & Priest LLP will
rely as to all matters of South Carolina law upon the opinion of H. Thomas
Arthur, Esq. or Sarena D. Burch, Esq. From time to time, Thelen Reid & Priest
LLP renders legal services to us.
At December 31, 2001, H. Thomas Arthur, Esq., and Sarena D. Burch, Esq.,
owned beneficially 16,002 and 3,040, respectively, and options to purchase
27,938 and 9,571, respectively, shares of SCANA Corporation's Common Stock,
including shares acquired by the trustee under its Stock Purchase-Savings
Program by use of contributions made by Mr. Arthur and Ms. Burch and earnings
thereon and including shares purchased by the trustee by use of SCANA
contributions and earnings thereon.
S-6
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$300,000,000
SOUTH CAROLINA ELECTRIC & GAS COMPANY
FIRST MORTGAGE BONDS
6.625% SERIES DUE FEBRUARY 1, 2032
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PROSPECTUS SUPPLEMENT
JANUARY 24, 2002
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UBS WARBURG
CREDIT SUISSE FIRST BOSTON
BANC OF AMERICA SECURITIES LLC
WACHOVIA SECURITIES
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