Ameren Illinois to issue new preferreds for six series of Illinois Power preferreds due to merger

By Jennifer Chiou

New York, April 15 - Central Illinois Public Service Co. registered six series of preferred stock to be issued through Ameren Illinois Co. as a result of the approved merger and corporate reorganization of Ameren Corp., according to an S-4 filing with the Securities and Exchange Commission.

Ameren and Central Illinois Public Service do business as AmerenCIPS, and are involved with Central Illinois Light (doing business as AmerenCILCO), Illinois Power Co. (doing business as AmerenIP), AmerenEnergy Resources Generating Co. and Ameren Energy Resources Co., LLC in a two-step corporate reorganization of Ameren.

The first step of the reorganization merged AmerenCILCO and Illinois Power with and into Central Illinois Public Service, which was renamed Ameren Illinois.

The second step of the reorganization involves the distribution of AmerenEnergy Resources stock from Ameren Illinois to Ameren and the subsequent contribution by Ameren of the AmerenEnergy Resources stock to Ameren Energy Resources.

On March 15, AmerenCIPS said that it did not expect to redeem any of their outstanding long-term debt or preferred stock and that of their subsidiaries, with the exception the Central Illinois Light preferreds and $40 million of AmerenCIPS' 7.61% series 97-2 first-mortgage bonds.

The newly created series of Ameren Illinois preferred stock will have the same payment and redemption terms as the existing Illinois Power preferred stock, except to the extent that the holders exercise their dissenters' rights. The exchange involves that:

• Each outstanding share of 4.08% serial preferred stock of Illinois Power will be converted into one-half of a share of 4.08% cumulative preferred stock of Ameren Illinois;

• Each outstanding share of 4.2% serial preferred stock of Illinois Power will be converted into one-half of a share of 4.2% cumulative preferred stock of Ameren Illinois;

• Each outstanding share of 4.26% serial preferred stock of Illinois Power will be converted into one-half of a share of 4.26% cumulative preferred stock of Ameren Illinois;

• Each outstanding share of 4.42% serial preferred stock of Illinois Power will be converted into one-half of a share of 4.42% cumulative preferred stock of Ameren Illinois;

• Each outstanding share of 4.7% serial preferred stock of Illinois Power will be converted into one-half of a share of 4.70% cumulative preferred stock of Ameren Illinois; and

• Each outstanding share of 7.75% serial preferred stock of Illinois Power will be converted into one-half of a share of 7.75% cumulative preferred stock of Ameren Illinois.

According to the filing, shares of CIPS common and preferred stock that are currently outstanding will remain outstanding following the merger, except to the extent that CIPS preferred shareholders exercise their dissenters' rights.

Under Illinois law, in lieu of a shareholder meeting, the merger agreement may be approved by the written consent of holders of at least two-thirds of the preferred and common shares. Because holders of more than this amount of preferreds will redeem their securities, no vote is required, the S-4 said.

Ameren, a St. Louis utility company, previously noted hat following the redemption of the 7.61% mortgage bonds, AmerenCIPS intends to cause a release date to occur for its senior secured notes, causing these notes to become unsecured and AmerenCIPS' mortgage indenture to be discharged.

Meanwhile, the senior secured notes of Illinois Power and AmerenCILCO will still be secured by the mortgage bonds held by their respective senior note trustee.

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