Nevada Power gets consent of 8½% bondholders to dividend change

New York, Jan. 14 - Nevada Power Co. (Ba2/BB) said that it had received the consent of the holders of its 8½% series Z first mortgage bonds due 2023 to amend the dividend restriction contained in the indenture of the company's mortgage on certain facilities which it took out in October 1953 with Deutsche Bank Trust Co. Americas.

Nevada Power - a Las Vegas-based electric utility subsidiary of Reno, Nev.-based electric utility operator Sierra Pacific Resources Corp. - said in a filing with the Securities and Exchange Commission that it received the consent of the bondholders to the indenture change on Jan. 12. The company issued $45 million of the bonds in January 1993.

The indenture provision being changed, section 8.13, limits the cumulative amount of dividends and other distributions that Nevada Power may pay on its capital stock to the cumulative net earnings of Nevada Power since 1953, the date of the mortgage, subject to adjustments for the net proceeds of sales of capital stock since 1953.

Because of this provision, Nevada Power is currently barred from making payments of dividends to Sierra Pacific Resources.

The indenture amendment approved by the bondholders would change the starting point for the measurement of cumulative net earnings available for the payment of dividends on Nevada Power's capital stock to July 28, 1999, the date of the company's merger with and into Sierra Pacific Resources, from March 31, 1953.

It would also permit Nevada Power to include in its calculation of proceeds available for dividends and other distributions the capital contributions made to Nevada Power by Sierra Pacific Resources.

Prior to receiving the consent of the holders of the series Z first mortgage bonds, Nevada Power had already obtained the consent of the holders of each of the other series of its first mortgage bonds whose consent would have to be obtained in order to amend the mortgage indenture.

The mortgage indenture amendment will take effect upon the satisfaction of certain procedural requirements under the indenture and other applicable financing agreements.

Nevada Power's other existing dividend restrictions will continue to apply.

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