THE BANK OF NEW YORK, AS TRUSTEE

EXHIBIT 4(b)

SOUTHWESTERN ELECTRIC POWER COMPANY

and

THE BANK OF NEW YORK,

AS TRUSTEE

___________________

SIXTH SUPPLEMENTAL INDENTURE

Dated as of December 4, 2007

Supplemental to the Indenture

dated as of February 25, 2000

5.875% Senior Notes, Series F, due 2018

 

 

SIXTH SUPPLEMENTAL INDENTURE, dated as of December 4, 2007, between SOUTHWESTERN ELECTRIC POWER COMPANY, a corporation duly organized and existing under the laws of the State of Delaware (the "Company"), and THE BANK OF NEW YORK, a New York banking corporation organized and existing under the laws of the State of New York, as Trustee under the Original Indenture referred to below (the "Trustee").

RECITALS OF THE COMPANY

The Company has heretofore executed and delivered to the Trustee an indenture dated as of February 25, 2000 (the "Original Indenture"), to provide for the issuance from time to time of its debentures, notes or other evidences of indebtedness (the "Senior Notes"), the form and terms of which are to be established as set forth in Section 201 and 301 of the Original Indenture.

Section 901 of the Original Indenture provides, among other things, that the Company and the Trustee may enter into indentures supplemental to the Original Indenture for, among other things, the purpose of establishing the form and terms of the Senior Notes of any series as permitted in Sections 201 and 301 of the Original Indenture.

The Company desires to create a series of the Senior Notes in an aggregate principal amount of $300,000,000 to be designated the "5.875% Senior Notes, Series F, due 2018" (the "Series F Notes"), and all action on the part of the Company necessary to authorize the issuance of the Series F Notes under the Original Indenture and this Sixth Supplemental Indenture has been duly taken.

All acts and things necessary to make the Series F Notes, when executed by the Company and completed, authenticated and delivered by the Trustee as provided in the Original Indenture and this Sixth Supplemental Indenture, the valid and binding obligations of the Company and to constitute these presents a valid and binding supplemental indenture and agreement according to its terms, have been done and performed.

NOW, THEREFORE, THIS SIXTH SUPPLEMENTAL INDENTURE WITNESSETH:

That in consideration of the premises and of the acceptance and purchase of the Series F Notes by the Holders thereof and of the acceptance of this trust by the Trustee, the Company covenants and agrees with the Trustee, for the equal benefit of the Holders of the Series F Notes, as follows:

 

 

ARTICLE ONE

Definitions

SECTION 101.                                Definitions.

The use of the terms and expressions herein is in accordance with the definitions, uses and constructions contained in the Original Indenture and the form of the Series F Note attached hereto as Exhibit A .

ARTICLE TWO

Terms and Issuance of the Series F Notes

SECTION 201.                                 Issue of Series F Notes .

A series of Senior Notes which shall be designated the "5.875%  Senior Notes, Series F, due 2018" shall be executed, authenticated and delivered from time to time in accordance with the provisions of, and shall in all respects be subject to, the terms, conditions and covenants of, the Original Indenture and this Sixth Supplemental Indenture (including the form of Series F Note set forth in Exhibit A hereto).  The aggregate principal amount of the Series F Notes which may be authenticated and delivered under this Sixth Supplemental Indenture shall initially be $300,000,000, and such principal amount of the Series F Notes may be increased from time to time.  All Series F Notes need not be issued at the same time and such series may be reopened at any time, without the consent of any Holder, for the issuance of additional Series F Notes.  Any such additional Series F Notes will have the same interest rate, maturity and other terms as those initially issued.

SECTION 202.                                 Form of Series F Notes; Incorporation of Terms .

The Series F Notes shall be issued initially in the form of one Global Security.  The form of the Series F Notes shall be substantially in the form of the Global Security attached hereto as Exhibit A .  The terms of such Series F Notes are herein incorporated by reference and are part of this Sixth Supplemental Indenture.

SECTION 203.                                 Depositary for Global Securities .

The Depositary for any Global Securities of the series of which this Series F Note is a part shall be The Depository Trust Company in The City of New York.

SECTION 204.                                 Restrictions on Liens .

The covenant contained in Section 1007 of the Original Indenture shall not be applicable to the Series F Notes.

So long as any of the Series F Notes are outstanding, the Company will not create or suffer to be created or to exist any additional mortgage, pledge, security interest, or other lien (collectively "Liens") on any of its utility properties or tangible assets now owned or hereafter acquired to secure any indebtedness for borrowed money ("Secured Debt"), without providing that the Series F Notes will be similarly secured.  This restriction does not apply to the Company's subsidiaries, nor will it prevent any of them from creating or permitting to exist Liens on their property or assets to secure any Secured Debt.  In addition, this restriction does not prevent the creation or existence of:

In addition to the permitted issuances above, Secured Debt not otherwise so permitted may be issued in an amount that does not exceed 15% of Net Tangible Assets as defined below.

“Net Tangible Assets” means the total of all assets (including revaluations thereof as a result of commercial appraisals, price level restatement or otherwise) appearing on the Company’s balance sheet, net of applicable reserves and deductions, but excluding goodwill, trade names, trademarks, patents, unamortized debt discount and all other like intangible assets (which term shall not be construed to include such revaluations), less the aggregate of the Company’s current liabilities appearing on such balance sheet.  For purposes of this definition, the Company’s balance sheet does not include assets and liabilities of its subsidiaries.

This restriction also does not apply to or prevent the creation or existence of leases made, or existing on property acquired, in the ordinary course of business.

SECTION 205.                                 Place of Payment .

The Place of Payment in respect of the Series F Notes will be at the principal office or place of business of the Trustee or its successor in trust under the Indenture, which, at the date hereof, is located at 101 Barclay Street, New York, NY 10286, Attention: Corporate Trust Administration.

 

SECTION 206.          Optional Redemption .

The Series F Notes may be redeemed at the Company’s option at any time upon no more than 60 and not less than 30 days’ notice by mail.  The Series F Notes may be redeemed either as a whole or in part at a redemption price equal to the greater of (1) 100% of the principal amount of the Series F Notes being redeemed and (2) the sum of the present values of the remaining scheduled payments of principal and interest on the Series F Notes being redeemed (excluding the portion of any such interest accrued to the date of redemption) discounted (for purposes of determining present value) to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined below) plus 30 basis points; plus, in each case, accrued interest thereon to the date of redemption.

"Business Day" means any day that is not a day on which banking institutions in New York City are authorized or required by law or regulation to close.

“Comparable Treasury Issue” means the United States Treasury security selected by an Independent Investment Banker as having a maturity comparable to the remaining term (“remaining life”) of the Series F Notes that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining life of the Series F Notes.

“Comparable Treasury Price” means, with respect to any redemption date, (1) the average of the Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (2) if the Company obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations.

“Independent Investment Banker” means one of the Reference Treasury Dealers appointed by the Company and reasonably acceptable to the Trustee.

“Reference Treasury Dealer” means Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. Incorporated, UBS Securities LLC and Wachovia Capital Markets, LLC and their respective successors; provided, however, that if any of the foregoing shall cease to be a Reference Treasury Dealer the Company will substitute therefor a primary U.S. government securities dealer reasonably acceptable to the Trustee.

“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee by such Reference Treasury Dealer at or before 3:30 p.m., New York City time, on the third Business Day preceding such redemption date.

“Treasury Rate” means, with respect to any redemption date: (i) the yield, under the heading which represents the average for the week immediately preceding the date on which the notice of redemption is mailed to the registered Holders of the Securities (the “calculation date”), appearing in the most recently published statistical release designated “H.15(519)” or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded U.S. Treasury securities adjusted to constant maturity under the caption “Treasury Constant Maturities,” for the maturity corresponding to the Comparable Treasury Issue (if no maturity is within three months before or after the remaining life (as defined above), yields for the two published maturities most closely corresponding to the Comparable Treasury Issue will be determined by the Independent Investment Banker and the Treasury Rate will be interpolated or extrapolated from such yields by the Independent Investment Banker on a straight line basis, rounding to the nearest month); or (ii) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, calculated by the Independent Investment Banker using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date.

SECTION 207.           Sinking Funds .

Article Twelve of the Indenture shall not apply to the Series F Notes.

SECTION 208.           Regular Record Date .

The "Regular Record Date" will be the February 15 or August 15, as the case may be, next preceding an interest payment date (whether or not a business day).

ARTICLE THREE

Miscellaneous

SECTION 301.                                 Execution as Supplemental Indenture .

This Sixth Supplemental Indenture is executed and shall be construed as an indenture supplemental to the Original Indenture and, as provided in the Original Indenture, this Sixth Supplemental Indenture forms a part thereof.

SECTION 302.                                 Conflict with Trust Indenture Act .

If any provision hereof limits, qualifies or conflicts with another provision hereof which is required to be included in this Sixth Supplemental Indenture by any of the provisions of the Trust Indenture Act, such required provision shall control.

SECTION 303.                                 Effect of Headings .

The Article and Section headings herein are for convenience only and shall not affect the construction hereof.

SECTION 304.                                 Successors and Assigns .

All covenants and agreements by the Company in this Sixth Supplemental Indenture shall bind its successors and assigns, whether so expressed or not.

SECTION 305.                                 Separability Clause .

In case any provision in this Sixth Supplemental Indenture or in the Series F Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

SECTION 306.                                 Benefits of Sixth Supplemental Indenture .

Nothing in this Sixth Supplemental Indenture or in the Series F Notes, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder and the Holders, any benefit or any legal or equitable right, remedy or claim under this Sixth Supplemental Indenture.

SECTION 307.                                 Execution and Counterparts .

This Sixth Supplemental Indenture may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Sixth Supplemental Indenture to be duly executed and attested, all as of the day and year first above written.

SOUTHWESTERN ELECTRIC POWER COMPANY

By:                       /s/  Stephan T. Haynes

Title:                   Assistant Treasurer

Attest:

By:            /s/ Thomas G. Berkemeyer

Title:        Assistant Secretary

THE BANK OF NEW YORK, as Trustee

By:            /s/ Mary LaGum