|
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 B Enhanced
Junior Debentures due 2066 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
$37,450 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 $402,906 remaining available for future
registration
fees, being the sum of (a) $48,146 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.
|
PROSPECTUS
SUPPLEMENT
(To
prospectus dated September 5, 2006)
$350,000,000
Series
B Enhanced Junior Subordinated Debentures due 2066
The
Series B Enhanced Junior Subordinated Debentures
will
be Fully and Unconditionally Guaranteed by
FPL
GROUP, INC.
________________
The
Series B Enhanced Junior Subordinated Debentures will bear interest at 6.35%
per
year until October 1, 2016. During this period, FPL Group Capital will pay
interest on the securities on April 1 and October 1 of each year, beginning
April 1, 2007. Beginning October 1, 2016, the securities will bear interest
at
the Three-Month LIBOR Rate plus 206.75 basis points (2.0675%), reset quarterly,
payable on January 1, April 1, July 1 and October 1 of each year, beginning
January 1, 2017. The securities will be issued in registered form and in
denominations of $1,000 and integral multiples thereof. The securities will
mature on October 1, 2066.
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 then applicable to the securities, to the extent permitted
by
law.
FPL
Group
Capital may redeem the securities at its option at the times and the prices
described in this prospectus supplement.
See
“Risk Factors” beginning on page S-8 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)
|
99.872%
|
$349,552,000
|
|
|
Underwriting
Discount
|
1.25%
|
$
4,375,000
|
|
|
Proceeds
to FPL Group Capital (before expenses)
|
98.622%
|
$345,177,000
|
(1)
Plus
accrued interest, if any, from the date the securities are originally issued,
if
settlement occurs after that date.
The
securities are expected to be delivered in book-entry only form through The
Depository Trust Company, on or about September 19, 2006.
________________
Merrill
Lynch & Co. acted as structuring advisor for this transaction.
Joint
Book-Running Managers
Banc
of America Securities LLC Credit
Suisse JPMorgan
Lehman
Brothers Merrill
Lynch & Co.
Co-Managers
ABN
AMRO
Incorporated
Barclays
Capital Calyon
Securities (USA)
KeyBanc
Capital
Markets
Lazard Capital Markets
RBS
Greenwich
Capital Scotia
Capital
________________
The
date
of this prospectus supplement is September 13, 2006.
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-8 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.
RECENT
DEVELOPMENTS
On
December 18, 2005, FPL Group entered into an Agreement and Plan of Merger
with
Constellation Energy Group, Inc. and its wholly-owned subsidiary. Under the
terms of the merger agreement, a wholly-owned subsidiary of Constellation
Energy
formed for the purpose of the merger will merge with and into FPL Group.
As a
result, FPL Group will survive the merger and will become a wholly-owned
subsidiary of Constellation Energy upon completion of the merger. Following
the
merger, FPL Group Capital would be an indirect subsidiary of Constellation
Energy. Consummation of the merger is subject to customary closing conditions,
including FPL Group and Constellation Energy shareholder approvals, approvals
by
public service or utility commissions of specified states and approval from
the
Federal Energy Regulatory Commission. On December 19, 2005, FPL Group and
Florida Power & Light Company filed with the Securities and Exchange
Commission a Current Report on Form 8-K that provides additional
information on the Agreement and Plan of Merger, as well as other matters,
and
included a copy of that agreement as an exhibit.
CONCURRENT
OFFERING
In
addition to the securities offered by this prospectus supplement, FPL Group
Capital is concurrently offering $350,000,000 principal amount of its Series
A
Enhanced Junior Subordinated Debentures due 2066 by a separate prospectus
supplement. The offerings are not contingent upon each other.
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
B
Enhanced Junior Subordinated Debentures due 2066, 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 $1,000 and integral multiples thereof.
What
interest will
be paid by FPL Group Capital?
Fixed
Rate Period. The
Junior Subordinated Debentures will bear interest at 6.35% per year from
the
date they are issued up to, but not including, October 1, 2016 or earlier
redemption date (the “Fixed Rate Period”). Subject to FPL Group Capital’s right
to defer interest payments described below, during the Fixed Rate Period
interest is payable semi-annually in arrears on April 1 and October 1
of each
year, beginning April 1, 2007.
Floating
Rate Period.
The
Junior Subordinated Debentures will bear interest from October 1, 2016
up to,
but not including, the maturity date or earlier redemption date (the
“Floating
Rate Period”) at the Three-Month LIBOR Rate plus 206.75 basis points (2.0675%),
reset quarterly. Subject to FPL Group Capital’s right to defer interest payments
described below, during the Floating Rate Period interest is payable
quarterly
in arrears on January 1, April 1, July 1 and October 1 of each year,
beginning
January 1, 2017.
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 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 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 October
1, 2066).
Any deferred interest on the Junior Subordinated Debentures will accrue
additional interest at a rate equal to the interest rate then applicable
to 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.
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 may
(with
limited exceptions):
|
·
|
declare
or pay any dividend or distribution on its capital
stock;
|
|
·
|
redeem,
purchase, acquire or make a liquidation payment with respect
to any of its
capital stock;
|
|
·
|
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 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 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).
|
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 (i) in whole or in part on one or more occasions any time
before
October 1, 2016 at 100% of their principal amount plus accrued
and unpaid
interest plus any applicable “make-whole premium,” (ii) in whole or in part on
one or more occasions on or after October 1, 2016 at 100% of their
principal
amount plus accrued and unpaid interest, or (iii) in whole, but
not in part,
before October 1, 2016 at 100% of their principal amount plus accrued
and unpaid
interest plus any applicable “make-whole premium,” if certain changes in tax
laws, regulations or interpretations occur. 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” and “Specific Terms of the Junior
Subordinated Debentures—Right to Redeem Upon a Tax 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 long-term indebtedness, other than
the Junior Subordinated Debentures, or in certain limited cases
a designated
series of long-term indebtedness of FPL Group, that
|
·
|
FPL
Group Capital will not redeem or repurchase the Junior
Subordinated
Debentures and
|
|
·
|
FPL
Group will not purchase the Junior Subordinated
Debentures
|
on
or
before October 1, 2036, except, subject to certain limitations,
to the extent
that the applicable redemption or repurchase price does not exceed
a specified
amount of proceeds from the sale, during the 180 days prior to
the
date
of
that
redemption or repurchase, 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
or repurchase by FPL Group Capital or purchase by FPL Group.
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. 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, 2006, FPL Group Capital’s Senior Indebtedness, on an unconsolidated basis,
totaled approximately $4.5 billion.
FPL
Group
is a holding company that derives substantially all of its income
from its
operating subsidiaries. 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, 2006, FPL Group’s Senior Indebtedness, on
an unconsolidated basis, totaled approximately $4.5 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 does not plan to list the Junior Subordinated Debentures
on any national
securities exchange.
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. 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. See
“Specific
Terms
of
the Junior Subordinated Debentures—Book-Entry Only Issuance—The Depository Trust
Company” 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”
(Negative Outlook), “BBB+” (CreditWatch with Negative Implications) 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
& Priest 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.
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.
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 then applicable to 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 will not be
due and payable and, therefore, FPL Group will 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” in this prospectus supplement.
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. 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 or repurchase the Junior Subordinated
Debentures, and FPL Group’s right 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 or
repurchase the Junior Subordinated Debentures and (2) FPL
Group’s ability 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 indebtedness that ranks senior to the Junior Subordinated
Debentures,
or in certain limited cases holders of a designated series
of long-term
indebtedness of FPL Group, that (a) FPL Group Capital will
not redeem or
repurchase the Junior Subordinated Debentures and (b) FPL
Group will not
purchase the Junior Subordinated Debentures, in each case
on or before October
1, 2036, except, subject to certain limitations, to the extent
that the
applicable redemption or repurchase price does not exceed
a specified amount of
proceeds from the sale, during the 180 days prior to the
date of that redemption
or repurchase, 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
or repurchase by
FPL Group Capital or purchase by FPL Group.
The
ability to raise proceeds from qualifying securities during
the 180 days prior
to a proposed redemption or repurchase by FPL Group Capital
or purchase by FPL
Group 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 or repurchase some or all of the Junior
Subordinated
Debentures, or FPL Group would wish to purchase some or all
of the Junior
Subordinated Debentures, including as a result of a tax event,
and sufficient
cash is available for that purpose, but FPL Group and 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. 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, 2006, FPL Group Capital’s Senior
Indebtedness, on an unconsolidated basis, totaled approximately
$4.5
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.
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. 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, 2006, FPL
Group’s Senior
Indebtedness, on an unconsolidated basis, totaled approximately
$4.5 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. However, FPL Group
Capital has no
current intention of deferring interest payments on the
Junior Subordinated
Debentures.
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.
A
classification of the Junior Subordinated Debentures as
common equity by the
National Association of Insurance Commissioners may impact
U.S. insurance
company investors and the value of the Junior Subordinated
Debentures.
The
Securities Valuation Office (the “SVO”) of the National Association of Insurance
Commissioners (“NAIC”) may from time to time classify securities in
U.S. insurers’ portfolios as debt, preferred equity or common equity
instruments. Under the written guidelines outlined by the
SVO, it is not always
clear which securities classify as debt, preferred equity
or common equity or
which features are specifically relevant in making this
determination. FPL Group
Capital is aware that the SVO has classified several fixed
income securities,
either definitively or preliminarily, as common equity.
FPL Group Capital cannot
assure you that the Junior Subordinated Debentures would
not be classified as
common equity, if reviewed and classified by the SVO. If
the NAIC were to
classify the Junior Subordinated Debentures as common equity,
the willingness of
U.S. insurance investors to hold the Junior Subordinated Debentures
could
be reduced, which in turn could reduce the price of the
Junior Subordinated
Debentures in any available after-market. On September
12, 2006, the NAIC
Financial Condition E Committee adopted a proposal under
which securities such
as the Junior Subordinated Debentures would be reported
as preferred stock for
the 2006 reporting year. This proposal remains subject
to final review by the
NAIC, and there can be no assurance that the NAIC will
approve the proposal. As
of the date hereof, the SVO has not assigned a classification
to the Junior
Subordinated Debentures and there can be no assurance of
the classification that
may be assigned to the Junior Subordinated Debentures in
the
future.
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, 2006 and 2005 have been made. The income
statement data for the
six months ended June 30, 2006 and June 30, 2005, respectively,
generally will
not give a true indication of the results that may
be expected for an entire
year.
|
|
Six
Months Ended
June
30,
|
Twelve
Months Ended December 31,
|
||||||||||||||
|
|
2006
|
2005
|
2005
|
2004
|
2003
|
|||||||||||
|
|
(In
Millions, Except Earnings Per Share and Ratios)
|
|||||||||||||||
|
|
(Unaudited)
|
|||||||||||||||
|
Operating
revenues
|
$
|
7,393
|
$
|
5,178
|
$
|
11,846
|
$
|
10,522
|
$
|
9,630
|
||||||
|
Net
income
|
$
|
486
|
$
|
340
|
$
|
885
|
$
|
887
|
$
|
890
|
(a)
|
|||||
|
Weighted-average
common shares
outstanding (assuming dilution)
|
394.9
|
381.5
|
385.7
|
361.7
|
356.3
|
|||||||||||
|
Earnings
per share of common
stock (assuming dilution)
|
$
|
1.23
|
$
|
0.89
|
$
|
2.29
|
$
|
2.45
|
$
|
2.50
|
(a)
|
|||||
|
Ratio
of earnings to fixed charges
|
2.76
|
2.23
|
2.76
|
2.96
|
3.28
|
|||||||||||
(a)
Includes a $3 million loss, or $(0.01) per share, for
the cumulative effect of
adopting Financial Accounting Standards Board Interpretation
No. 46,
“Consolidation of Variable Interest Entities.”
The
following table shows FPL Group’s consolidated capitalization as of June 30,
2006, and as adjusted to reflect the issuance of the
Junior Subordinated
Debentures and the other transactions described below.
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, 2006
|
Amount
|
Percent
|
||||||||
|
(Unaudited)
(In
Millions)
|
||||||||||
|
Common
shareholders’ equity
|
$
|
9,075
|
$
|
9,075
|
48.4
|
%
|
||||
|
Long-term
debt (excluding current maturities)
|
8,360
|
9,660
|
51.6
|
%
|
||||||
|
Total capitalization
|
$
|
17,435
|
$
|
18,735
|
100.0
|
%
|
||||
(a)
To give effect to (i) the issuance of the Junior
Subordinated Debentures offered
by this prospectus supplement, (ii) the anticipated
issuance of $350,000,000
principal amount of FPL Group Capital’s Series A Enhanced Junior Subordinated
Debentures due 2066 in a separate September 2006
offering and (iii) the issuance
of $600 million of FPL Group Capital’s 5 5/8% Debentures, Series due
September 1, 2011 on August 18, 2006. Adjusted amounts
do not reflect the
deduction of any underwriting discounts in connection
with the issuance of
either series of junior subordinated debentures or
the $600 million of FPL
Group Capital’s 5 5/8% Debentures.
The
information in this section adds to the information
in the “Use of Proceeds”
section on page 8 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 and
to repay outstanding long-term
debt obligations. As of August 31, 2006, FPL Group
Capital had $212.2 million of
commercial paper outstanding, which had maturities
of up to 30 days and which
had annual interest rates ranging from 5.27% to
5.34%. 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 35 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 October 1,
2066.
Fixed
Rate Period.
The
Junior Subordinated Debentures will bear interest
at 6.35% per year during the
Fixed Rate Period. Subject to FPL Group Capital’s right to defer interest
payments as described below, during the Fixed Rate
Period interest is payable
semi-annually in arrears on April 1 and October
1 of each year, beginning April
1, 2007 and ending October 1, 2016. If interest
payments are deferred or
otherwise not paid during the Fixed Rate Period,
they will accrue and compound
until paid at the annual rate of 6.35% to the extent
permitted by law. The
amount of interest payable for any semi-annual
interest accrual period during
the Fixed Rate 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 semi-annual 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.
Floating
Rate Period.
The
Junior Subordinated Debentures will bear interest
during the Floating Rate
Period at the Three-Month LIBOR Rate plus 206.75
basis points (2.0675%), reset
quarterly. Subject to FPL Group Capital’s right to defer interest payments as
described below, during the Floating Rate Period
interest is payable quarterly
in arrears on January 1, April 1, July 1 and October
1 of each year (each, also
a “LIBOR Rate Reset Date”), beginning January 1, 2017. The first LIBOR Rate
Reset Date will be October 1, 2016. During the
Floating Rate Period, the
interest rate in effect on any LIBOR Rate Reset
Date will be the applicable rate
as reset on that date and the interest rate applicable
to any other day will be
the interest rate as reset on the immediately preceding
LIBOR Rate Reset Date.
If interest payments are deferred or otherwise
not paid during the Floating Rate
Period, they will accrue and compound until paid
at the prevailing floating rate
to the extent permitted by law. The amount of interest
payable for any quarterly
interest period during the Floating Rate Period
will be computed by multiplying
the floating rate for that quarterly interest period
by a fraction, the
numerator of which will be the actual number of
days elapsed during that
quarterly interest period (determined by including
the first day of the interest
period and excluding the last day), and the denominator
of which will be 360,
and by multiplying the result by the aggregate
principal amount of the Junior
Subordinated Debentures.
General.
In this
prospectus supplement the term “interest” includes semi-annual interest payments
during the Fixed Rate Period, quarterly interest
payments during the Floating
Rate Period, 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.
During
the Fixed Rate Period 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.
During
the Floating Rate Period, if any interest
payment date, other than a redemption
date or the maturity date of the Junior Subordinated
Debentures, falls on a day
that is not a business day, the interest
payment date will be postponed to the
next day that is a business day, except that
if that business day is in the next
succeeding calendar month, the interest payment
date will be the immediately
preceding business day. Also, if 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 redemption date or the maturity date,
if applicable.
During
the Floating Rate Period, if any LIBOR Rate
Reset Date falls on a day that is
not a business day, the LIBOR Rate Reset
Date will be postponed to the next day
that is a business day, except that if that
business day is in the next
succeeding calendar month, the LIBOR Rate
Reset Date will be the immediately
preceding business day.
So
long
as 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 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.
Determining
the Floating Rate.
The
“Three-Month LIBOR Rate” for each LIBOR Rate Reset Date means the
rate
determined in accordance with the following
provisions:
|
·
|
On
the related LIBOR Interest Determination
Date (as defined below), the
Calculation Agent or its affiliate
will determine the Three-Month
LIBOR
Rate which will be the rate for
deposits in U.S. Dollars having
a
Three-Month maturity which appears
on the Telerate Page 3750 (as defined
below) as of 11:00 a.m., London
time, on the LIBOR Interest Determination
Date.
|
|
·
|
If
no rate appears on Telerate Page
3750 on the LIBOR Interest Determination
Date, the Calculation Agent or
its affiliate will request the
principal
London offices of four major reference
banks in the London Inter-Bank
Market to provide it with their
offered quotations for deposits
in U.S.
Dollars for the period of three
months, commencing on the applicable
LIBOR
Rate Reset Date, to prime banks
in the London Inter-Bank Market
at
approximately 11:00 a.m., London
time, on that LIBOR Interest
Determination Date and in a principal
amount that is representative for
a
single transaction in U.S. Dollars
in that market at that time. If
at
least two quotations are provided,
then the Three-Month LIBOR Rate
will be
the average (rounded, if necessary,
to the nearest one hundredth (0.01)
of
a percent) of those quotations.
If fewer than two quotations are
provided,
then the Three-Month LIBOR Rate
will be the average (rounded, if
necessary, to the nearest one hundredth
(0.01) of a percent) of the rates
quoted at approximately 11:00 a.m.,
New York City time, on the LIBOR
Interest Determination Date by
three major banks in New York City
selected
by the Calculation Agent or its
affiliate for loans in U.S. Dollars
to
leading European banks, having
a Three-Month maturity and in a
principal
amount that is representative for
a single transaction in U.S. Dollars
in
that market at that time. If the
banks selected by the Calculation
Agent
or its affiliate are not providing
quotations in the manner described
by
this paragraph, the rate for the
quarterly interest period following
the
LIBOR Interest Determination Date
will be the rate in effect on that
LIBOR
Interest Determination Date.
|
“Telerate
Page 3750” means the display designated as “Telerate page 3750” on Moneyline
Telerate, Inc. (or such other page as may
replace “Telerate page 3750” on such
service) or such other service displaying
the London Inter-Bank offered rates of
major banks, as may replace Moneyline Telerate,
Inc.
“LIBOR
Interest Determination Date” means the second LIBOR Business Day preceding
each
LIBOR Rate Reset Date.
“LIBOR
Business Day” means any business day on which dealings
in deposits in U.S.
Dollars are transacted in the London Inter-Bank
Market.
“Calculation
Agent” means a banking institution or trust company
appointed by FPL Group
Capital to act as calculation agent.
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:
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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
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guarantees
of indebtedness or other
securities described in
the preceding bullet
point.
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“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.
FPL
Group
Capital is a holding company that
derives substantially all of its
income from
its operating subsidiaries. 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, 2006, FPL Group Capital’s Senior Indebtedness, on an unconsolidated
basis, totaled approximately $4.5
billion.
FPL
Group
is a holding company that derives
substantially all of its income from
its
operating subsidiaries. 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, 2006, FPL Group’s Senior
Indebtedness, on an unconsolidated
basis, totaled approximately $4.5
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 October
1, 2016. 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
October 1, 2016, 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 October 1,
2016 (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 25 basis
points.
FPL
Group
Capital will appoint an independent
investment banking institution
of national
standing to calculate the make-whole
premium; provided
that Banc of America Securities
LLC, Credit Suisse Securities (USA)
LLC, J.P.
Morgan Securities Inc., Lehman
Brothers Inc. or Merrill Lynch,
Pierce, Fenner
& Smith Incorporated 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 Banc of America
Securities LLC, Credit Suisse Securities
(USA)
LLC, J.P. Morgan Securities Inc.,
Lehman Brothers Inc. or Merrill
Lynch, Pierce,
Fenner & Smith Incorporated 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 October 1, 2016 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—The
Depository Trust Company.”
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
October 1, 2016 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
(“Tax 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 Redemption
Date plus (3) any
applicable “tax event make-whole premium.” The Tax 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 date fixed for
redemption (“Tax Event Redemption Date”).
The
amount of the tax 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 Tax Event 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 Tax Event
Redemption Date
to
October 1, 2016
(excluding any
accrued interest
for the period
prior to
the Tax 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 Tax 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 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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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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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.
Option
to Defer Interest Payments.
So long
as there is no event of
default under the Subordinated
Indenture, FPL Group
Capital may defer semi-annual
or quarterly 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
semi-annually or quarterly,
as the case may be, and
deferred interest payments
will accrue additional
interest at a rate equal
to the interest rate then
applicable to 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.
Book-Entry
Only Issuance—The Depository Trust
Company.
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.
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 the
Junior
Subordinated Debentures.
In that event,
certificates for
the Junior Subordinated
Debentures will
be printed and
delivered.
The
information in
this section concerning
DTC and DTC’s book-entry 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.
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 long-term
indebtedness that
ranks senior to
the Junior Subordinated
Debentures, or
in
certain limited
cases holders of
a designated series
of long-term indebtedness
of FPL Group, that
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FPL
Group
Capital
will
not redeem
or repurchase
the Junior
Subordinated
Debentures
and
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FPL
Group
will
not purchase
the Junior
Subordinated
Debentures
|
on
or
before October
1, 2036, except,
subject to certain
limitations, to
the extent
that the applicable
redemption or repurchase
price does not
exceed a specified
amount of proceeds
from the sale,
during the 180
days prior to the
date of that
redemption or repurchase,
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
or repurchase by
FPL Group Capital
or purchase by
FPL Group.
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 long-term indebtedness
or the 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 proceeds
from qualifying
securities
during the
180 days
prior
to a proposed
redemption
or repurchase
by FPL Group
Capital or
purchase
by FPL
Group 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.
The
Replacement
Capital Covenant
may be terminated
if the holders
of a majority
of
the aggregate
principal
amount of
the then
existing
covered debt
agree to
terminate
the Replacement
Capital Covenant,
or if FPL
Group Capital
and FPL
Group no
longer have
outstanding
any indebtedness
that qualifies
as covered
debt, and
will be terminated
on October
1, 2036,
if not so
terminated
earlier.
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:
|
·
|
an
individual
citizen
or
resident
of
the
United
States;
|
|
·
|
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;
|
|
·
|
an
estate
the
income
of
which
is
subject
to
U.S.
federal
income
taxation
regardless
of
its
source;
or
|
|
·
|
a
trust
if
(i)
a
court
within
the
United
States
is
able
to
exercise
primary
supervision
over
its
administration
and
one
or
more
United
States
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.
|
As
used
in this summary,
the term
“non-U.S.
holder” means a beneficial
owner of
a Junior
Subordinated
Debenture
that is not
a U.S. person
(as such
term is defined
in the
Code).
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 & Priest
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,
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.
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
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
Tax 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 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.
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
might 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 the
Optional
Deferral
Period
or 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 likely
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
to
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.
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
United
States
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:
|
·
|
the
interest
is
not
effectively
connected
with
the
non-U.S.
holder’s
conduct
of
a
trade
or
business
in
the
United
States;
|
|
·
|
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;
|
|
·
|
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
|
|
·
|
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).
|
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
should
be
subject
to
a
30%
United
States
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
United
States
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
United
States
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
United
States
income
tax
treaty
applies,
attributable
to
that
permanent
establishment),
that
non-U.S.
holder
will
be
subject
to
United
States
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
United
States
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
United
States
federal
income
tax
unless:
|
·
|
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
United
States
income
tax
treaty
applies,
is
attributable
to
a
permanent
establishment
maintained
by
the
non-U.S.
holder
within
the
United
States);
or
|
|
·
|
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.
|
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
United
States
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 51
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
Banc
of
America
Securities
LLC,
Credit
Suisse
Securities
(USA)
LLC,
J.P.
Morgan
Securities
Inc.,
Lehman
Brothers
Inc.
and
Merrill
Lynch,
Pierce,
Fenner
&
Smith
Incorporated
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
|
|||
|
Banc
of
America
Securities
LLC
|
$
|
56,000,000
|
||
|
Credit
Suisse
Securities
(USA)
LLC
|
56,000,000
|
|||
|
J.P.
Morgan
Securities
Inc.
|
56,000,000
|
|||
|
Lehman
Brothers
Inc.
|
56,000,000
|
|||
|
Merrill
Lynch,
Pierce,
Fenner
&
Smith
Incorporated
|
56,000,000
|
|||
|
ABN
AMRO
Incorporated
|
10,500,000
|
|||
|
Barclays
Capital
Inc.
|
10,500,000
|
|||
|
Calyon
Securities
(USA)
Inc.
|
10,500,000
|
|||
|
KeyBanc
Capital
Markets,
a
Division
of
McDonald
Investments
Inc.
|
7,000,000
|
|||
|
Lazard
Capital
Markets
LLC
|
10,500,000
|
|||
|
Greenwich
Capital
Markets,
Inc.
|
10,500,000
|
|||
|
Scotia
Capital
(USA)
Inc.
|
10,500,000
|
|||
|
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
offer
the
Junior
Subordinated
Debentures
to
the
public
if
the
underwriters
buy
the
Junior
Subordinated
Debentures
from
FPL
Group
Capital.
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
0.750%
of
the
principal
amount
of
the
Junior
Subordinated
Debentures
under
the
price
to
the
public.
Any
underwriter
may
allow,
and
the
dealers
may
reallow,
a
concession
not
in
excess
of
0.525%
of
the
principal
amount
of
the
Junior
Subordinated
Debentures
to
other
underwriters
or
to
other
dealers.
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.
There
is
currently
no
established
trading
market
for
the
Junior
Subordinated
Debentures.
The
underwriters
have
advised
FPL
Group
Capital
that
they
intend
to
make
a
market
in
the
Junior
Subordinated
Debentures
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.
In
connection
with
the
offering,
Banc
of
America
Securities
LLC,
Credit
Suisse
Securities
(USA)
LLC,
J.P. Morgan
Securities
Inc.,
Lehman
Brothers
Inc.
and
Merrill
Lynch,
Pierce,
Fenner
&
Smith
Incorporated
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
Banc
of
America
Securities
LLC,
Credit
Suisse
Securities
(USA)
LLC,
J.P.
Morgan
Securities
Inc.,
Lehman
Brothers
Inc.
or
Merrill
Lynch,
Pierce,
Fenner
&
Smith
Incorporated,
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.
Certain
of
the
underwriters
may
make
the
Junior
Subordinated
Debentures
available
for
distribution
on
the
Internet
through
a
proprietary
Web
site
and/or
a
third-party
system
operated
by
MarketAxess
Corporation,
an
Internet-based
communications
technology
provider.
MarketAxess
Corporation
is
providing
the
system
as
a
conduit
for
communications
between
those
underwriters
and
their
customers
and
is
not
a
party
to
any
transactions.
MarketAxess
Corporation,
a
registered
broker-dealer,
will
receive
compensation
from
those
underwriters
based
on
transactions
those
underwriters
conduct
through
the
system.
Those
underwriters
will
make
the
Junior
Subordinated
Debentures
available
to
their
customers
through
Internet
distributions,
whether
made
through
a
proprietary
or
third-party
system,
on
the
same
terms
as
distributions
made
through
other
channels.
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.
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.
Lazard
Capital
Markets
LLC
(“Lazard
Capital
Markets”)
has
entered
into
an
agreement
with
Mitsubishi
UFJ
Securities
(USA),
Inc.
(“MUS
(USA)”)
pursuant
to
which
MUS
(USA)
provides
certain
advisory
and/or
other
services
to
Lazard
Capital
Markets,
including
in
respect
of
this
offering.
In
return
for
this
provision
of
such
services
by
MUS
(USA)
to
Lazard
Capital
Markets,
Lazard
Capital
Markets
will
pay
to
MUS
(USA)
a
mutually
agreed
upon
fee.
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
engage,
in
commercial
banking
and
investment
banking
transactions
with
FPL
Group,
its
subsidiaries
and
its
affiliates.
PROSPECTUS
FPL
GROUP,
INC.
Senior
Debt
Securities
and
Junior
Subordinated
Debentures
__________________________
FPL
GROUP
CAPITAL
INC
Senior
Debt
Securities
and
Junior
Subordinated
Debentures
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
51
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.
September
5,
2006
This
prospectus
is
part
of
a
registration
statement
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
$1,400,000,000,
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
$1,400,000,000.
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:
senior
debt
securities,
subordinated
debt
securities,
guarantees
related
to
the
preferred
trust
securities
which
the
Trust
may
offer
and
guarantees
related
to
the
senior
debt
securities
and
subordinated
debt
securities
FPL
Group
Capital
may
offer.
FPL
Group
Capital
may
offer
any
of
the
following
securities:
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.
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,
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
of
power
generation
facilities,
including
nuclear
facilities,
involves
significant
risks
that
could
adversely
affect
the
results
of
operations
and
financial
condition
of
FPL
Group
and
FPL
Group
Capital.
The
operation
of
power
generation
facilities
involves
many
risks,
including
start
up
risks,
breakdown
or
failure
of
equipment,
transmission
lines
or
pipelines,
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
the
requirement
to
purchase
power
in
the
market
at
potentially
higher
prices
to
meet
their
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
the
ability
to
store
and/or
dispose
of
spent
nuclear
fuel,
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,
and
to
a
lesser
extent,
engage
in
limited
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
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,
including
the
proposed
merger
with
Constellation
Energy
Group,
Inc.,
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.
FPL
Group’s
ability
to
successfully
complete
and
integrate
the
proposed
merger
between
FPL
Group
and
Constellation
Energy
Group,
Inc.
(“Constellation
Energy”)
is
subject
to
certain
risks
and
uncertainties
including
the
ability
to
obtain
governmental
approvals
of
the
transaction
on
the
proposed
terms,
conditions
and
schedule;
the
failure
of
FPL
Group
or
Constellation
Energy’s
shareholders
to
approve
the
transaction;
the
risk
that
anticipated
synergies
will
not
be
achieved
or
will
take
longer
to
achieve
than
expected;
disruption
from
the
transaction
making
it
more
difficult
to
maintain
relationships
with
customers,
employees,
suppliers
or
governmental
entities;
unexpected
transaction
costs
or
liabilities;
economic
conditions;
and
other
specific
factors
discussed
in
documents
filed
with
the
SEC
by
both
FPL
Group
and
Constellation
Energy.
FPL
Group’s
proposed
merger
with
Constellation
Energy
is
subject
to
receipt
of
consents
or
approvals
from
governmental
entities
that
could
delay
or
prevent
the
completion
of
the
merger
or
impose
conditions
that
could
have
a
material
adverse
effect
on
the
combined
company
or
that
could
cause
abandonment
of
the
merger.
Completion
of
the
proposed
merger
is
conditioned
upon
the
receipt
of
consents,
orders,
approvals
or
clearances,
as
required,
from
the
Federal
Energy
Regulatory
Commission
and
the
public
service
commissions
or
similar
entities
in
several
of
the
states
in
which
Constellation
Energy
and/or
FPL
Group
operate
electric
and/or
gas
businesses,
including
the
state
of
Maryland.
Among
other
things,
governmental
entities
could
condition
their
approval
of
the
merger
upon
Constellation
Energy
and/or
FPL
Group
entering
into
agreements
to
restrict
the
operations
of
the
combined
businesses
in
accordance
with
specified
business
conduct
rules,
to
divest
generation
facilities
or
to
take
other
actions
which
governmental
entities
deem
necessary
or
desirable
in
the
public
interest.
The
terms
of
any
such
conditions
that
may
be
imposed,
if
any,
are
not
known
by
FPL
Group
as
of
the
date
hereof.
If
those
approvals
are
not
received,
or
they
are
not
received
on
terms
that
satisfy
the
conditions
set
forth
in
the
merger
agreement,
then
neither
Constellation
Energy
nor
FPL
Group
will
be
required
to
complete
the
merger.
Recently
adopted
energy
legislation
in
Maryland
requires
the
appointment
of
a
new
group
of
commissioners
at
the
Maryland
Public
Service
Commission
(“MPSC”)
and
directs
the
MPSC
to
complete
a
prompt
and
comprehensive
review
of
the
merger
pursuant
to
new
standards.
These
changes
have
created
additional
uncertainty
about
the
MPSC
approval
process
and
may
result
in
substantial
delay
in
the
timing
of
required
MPSC
approval
of
the
merger
or
the
imposition
of
terms
and
conditions
that
are
unfavorable
to
the
combined
company,
such
as
a
requirement
to
share
expected
merger
savings
with
utility
customers.
In
addition,
one
lawsuit
has
been
filed
challenging
the
constitutionality
of
certain
provisions
of
the
new
legislation,
and
additional
lawsuits
may
be
filed
in
the
future.
The
outcome
of
such
litigation
and
the
additional
uncertainty
that
could
result
cannot
be
predicted.
A
substantial
delay
in
obtaining
required
approvals
or
the
imposition
of
unfavorable
terms
or
conditions
in
connection
with
such
approvals
could
have
a
material
adverse
effect
on
the
business,
financial
condition
or
results
of
operations
of
FPL
Group,
FPL
Group
Capital
or
the
combined
company.
In
addition,
delays
or
unfavorable
terms
could
lead
Constellation
Energy
or
FPL
Group
to
become
involved
in
litigation
with
one
or
more
governmental
entities
or
may
cause
the
abandonment
of
the
merger.
The
anticipated
benefits
of
combining
FPL
Group
and
Constellation
Energy
may
not
be
realized.
FPL
Group
entered
into
the
merger
agreement
with
the
expectation
that
the
merger
would
result
in
various
benefits,
including,
among
other
things,
synergies,
cost
savings
and
operating
efficiencies.
Although
FPL
Group
expects
to
achieve
the
anticipated
benefits
of
the
merger,
including
the
synergies,
achieving
them
is
subject
to
a
number
of
uncertainties,
including:
| · |
the
ability
of
the
two
companies
to
combine
certain
of
their
operations
or
take
advantage
of
expected
growth
opportunities;
|
| · |
whether
the
governmental
entities
whose
approval
is
required
to
complete
the
merger
impose
conditions
on
the
merger
or
require
the
combined
company
to
share
a
portion
of
such
merger
benefits,
from
both
the
utility
and
the
competitive
energy
businesses,
with
utility
customers,
any
of
which
may
have
an
adverse
effect
on
the
combined
company;
and
|
| · |
general
competitive
factors
in
the
marketplace.
|
No
assurance
can
be
given
that
these
benefits
will
be
achieved,
or
if
achieved,
the
timing
of
their
achievement.
Failure
to
achieve
these
anticipated
benefits
could
result
in
increased
costs
and
decreases
in
the
amount
of
expected
revenues
of
the
combined
company.
In
addition,
Constellation
Energy’s
business
involves
certain
risks
which
are
different
from
the
risks
of
FPL
Group’s
current
business,
and
as
a
result
the
combined
company
may
be
exposed
to
competitive,
regulatory,
operational
and
other
challenges
that
do
not
affect
FPL
Group’s
businesses
to
a
similar
extent.
FPL
Group
and
its
subsidiaries,
including
FPL
Group
Capital,
will
be
subject
to
business
uncertainties
and
contractual
restrictions
while
the
merger
is
pending
that
could
adversely
affect
their
businesses.
Uncertainty
about
the
effect
of
the
merger
on
employees
and
customers
may
have
an
adverse
effect
on
FPL
Group
and
its
subsidiaries,
including
FPL
Group
Capital,
regardless
of
whether
the
merger
is
eventually
completed.
Although
FPL
Group
and
FPL
Group
Capital
have
taken
steps
designed
to
reduce
any
adverse
effects,
these
uncertainties
may
impair
FPL
Group’s
and
FPL
Group
Capital’s
ability
to
attract,
retain
and
motivate
key
personnel
until
the
merger
is
completed,
or
the
merger
agreement
is
terminated,
and
for
a
period
of
time
thereafter.
These
uncertainties
also
could
cause
customers,
suppliers
and
others
that
deal
with
FPL
Group
and
FPL
Group
Capital
to
seek
to
change
existing
business
relationships
with
FPL
Group
and
FPL
Group
Capital.
Employee
retention
and
recruitment
may
be
particularly
challenging
during
the
pendency
of
the
merger,
as
employees
and
prospective
employees
may
be
uncertain
about
their
future
roles
with
the
combined
company.
If,
despite
FPL
Group’s
and
FPL
Group
Capital’s
retention
and
recruiting
efforts,
key
employees
depart
or
fail
to
accept
employment
with
either
of
the
companies
because
of
issues
relating
to
the
uncertainty
and
difficulty
of
integration
or
a
desire
not
to
remain
with
the
combined
company,
FPL
Group’s,
FPL
Group
Capital’s
or
the
combined
company’s
business
could
be
seriously
harmed.
The
pursuit
of
the
merger
and
the
preparation
for
the
integration
of
Constellation
Energy
and
FPL
Group
place
a
significant
burden
on
management
and
internal
resources.
The
diversion
of
management
attention
away
from
day-to-day
business
concerns
and
any
difficulties
encountered
in
the
transition
and
integration
process
could
harm
FPL
Group’s
and
FPL
Group
Capital’s
businesses,
financial
condition
and
operating
results,
regardless
of
whether
the
merger
is
eventually
completed.
In
addition,
the
merger
agreement
restricts
FPL
Group
and
its
subsidiaries,
including
FPL
Group
Capital,
without
Constellation
Energy’s
consent,
from
making
certain
acquisitions
and
taking
other
specified
actions
until
the
merger
occurs
or
the
merger
agreement
terminates.
These
restrictions
may
prevent
FPL
Group
and
FPL
Group
Capital
from
pursuing
otherwise
attractive
business
opportunities
and
making
other
changes
to
their
businesses
prior
to
completion
of
the
merger
or
termination
of
the
merger
agreement.
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
PLUS
PREFERRED
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,
|
|||||||||||||||||||
|
2005
|
2004
|
2003
|
2002
|
2001
|
|||||||||||||||
|
2.76
|
2.96
|
3.28
|
2.95
|
3.60
|
|||||||||||||||
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
six
months
ended
June
30,
2006
was
2.76.
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,
2005,
as
amended
by
a
Form
10-K/A
filed
with
the
SEC
on
April 28,
2006;
|
|
(2)
|
FPL
Group’s
Quarterly
Report
on
Form
10-Q
for
the
quarters
ended
March
31,
2006
and
June
30,
2006;
and
|
|
(3)
|
FPL
Group’s
Current
Reports
on
Form
8-K
filed
with
the
SEC
on
January
5,
2006,
January
27,
2006,
as
amended
by
a
Form
8-K/A
filed
with
the
SEC
on
January
30,
2006
(excluding
information
furnished
and
not
filed),
April
24,
2006,
May
19,
2006,
May
26,
2006,
June
1,
2006,
June
9,
2006,
June
28,
2006,
July
5,
2006
and
August
18,
2006.
|
You
may
request
a
copy
of
these
documents,
at
no
cost
to
you,
by
writing
or
calling
Robert J.
Reger,
Jr.,
Esq.,
Thelen
Reid
&
Priest
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,
|
| (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
|
| (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,
|
| (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:
|
(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,
|
|
(2)
|
deferred
liabilities,
and
|
|
(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:
|
(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
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:
|
(1)
|
failure
to
pay
interest
on
the
Senior
Debt
Securities
of
that
series
within
30
days
after
it
is
due,
|
|
(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
serve
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:
|
(1)
|
direct
the
time,
method
and
place
of
conducting
any
proceeding
for
any
remedy
available
to
the
Guarantee
Trustee
under
the
Guarantee
Agreement,
or
|
|
(2)
|
direct
the
exercise
of
any
trust
or
power
conferred
upon
the
Guarantee
Trustee
under
the
Guarantee
Agreement.
(Guarantee
Agreement,
Section 3.01).
|
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
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:
|
(1)
|
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”);
|
|
(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;
|
|
(3)
|
the
rights
of
holders
of
Preferred
Trust
Securities
to
enforce
those
obligations
in
(1)
and
(2)
above,
as
applicable;
|
|
(4)
|
FPL
Group’s
agreement
to
pay
the
expenses
of
the
Trust;
and
|
|
(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:
|
(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
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
(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.
|
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:
|
(1)
|
the
expiration
of
the
term
of
the
Trust;
|
|
(2)
|
the
bankruptcy,
dissolution
or
liquidation
of
FPL
Group;
|
|
(3)
|
the
redemption
of
all
of
the
Preferred
Trust
Securities
of
the
Trust;
|
|
(4)
|
the
entry
of
an
order
for
dissolution
of
the
Trust
by
a
court
of
competent
jurisdiction;
or
|
|
(5)
|
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:
|
(1)
|
the
occurrence
of
an
event
of
default
as
described
in
the
related
Subordinated
Indenture;
|
|
(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;
|
|
(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;
|
|
(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
|
|
(5)
|
the
occurrence
of
certain
events
of
bankruptcy
or
insolvency
with
respect
to
the
Trust.
(Trust
Agreement,
Section
1.01).
|
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:
|
(1)
|
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;
|
|
(2)
|
waive
any
past
default
under
the
related
Subordinated
Indenture;
|
|
(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
|
|
(4)
|
consent
to
any
amendment,
modification
or
termination
of
the
related
Subordinated
Indenture
or
the
Junior
Subordinated
Debentures,
where
that
consent
will
be
required,
|
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:
|
(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;
|
|
(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:
|
(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
|
|
(2)
|
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)).
|
Each
affected
holder
of
Preferred
Trust
Securities
must
consent
to
any
amendment
to
the
Trust
Agreement
that:
|
(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;
|
|
(2)
|
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
|
|
(3)
|
modify
the
provisions
described
in
clauses
(1)
and
(2)
above.
(Trust
Agreement,
Section
10.03(c)).
|
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:
|
(1)
|
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
|
|
(2)
|
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).
|
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
|
(1)
|
the
Trust
will
not
be
deemed
to
be
an
“investment
company”
required
to
be
registered
under
the
Investment
Company
Act
of
1940,
|
|
(2)
|
the
Trust
will
not
be
taxed
as
a
corporation,
and
|
|
(3)
|
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.
|
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).
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):
|
(1)
|
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;
|
|
(2)
|
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
|
|
(3)
|
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
Preferred
Trust
Securities
upon
maturity
or
redemption
of
the
Junior
Subordinated
Debentures
as
provided
in
the
Trust
Agreement),
the
lesser
of:
|
|
(a)
|
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
|
|
(b)
|
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.
|
(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:
|
(1)
|
with
respect
to
the
Preferred
Trust
Securities
issued
by
FPL
Group
Capital
Trust
only,
the
Subordinated
Guarantee;
|
|
(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;
|
|
(3)
|
the
rights
of
holders
of
Preferred
Trust
Securities
to
enforce
those
obligations
in
(1)
and
(2)
above,
as
applicable;
|
|
(4)
|
FPL
Group’s
agreement
to
pay
the
expenses
of
the
Trust;
and
|
|
(5)
|
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.
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:
|
(1)
|
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);
|
|
(2)
|
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
|
|
(3)
|
senior
to
FPL
Group
common
stock.
(Preferred
Trust
Securities
Guarantee
Agreement,
Section 6.01).
|
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:
|
(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
|
|
(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).
|
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:
|
(1)
|
full
payment
of
the
redemption
price,
plus
accrued
and
unpaid
distributions
to
the
redemption
date,
for
all
the
Preferred
Trust
Securities;
|
|
(2)
|
the
distribution
of
Junior
Subordinated
Debentures
to
holders
of
the
Preferred
Trust
Securities
in
exchange
for
all
of
the
Preferred
Trust
Securities;
or
|
|
(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,
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:
|
(1)
|
the
title
of
those
Junior
Subordinated
Debentures,
|
|
(2)
|
any
limit
upon
the
aggregate
principal
amount
of
those
Junior
Subordinated
Debentures,
|
|
(3)
|
the
date(s)
on
which
the
principal
will
be
paid,
|
|
(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,
|
|
(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,
|
|
(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,
|
|
(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,
|
|
(25)
|
the
terms
relating
to
any
additional
interest
that
may
be
payable
as
a
result
of
any
tax,
assessment
or
governmental
charges,
and
|
|
(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
|
|
(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:
|
(1)
|
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
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,
|
|
(2)
|
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
|
|
(3)
|
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).
|
The
Subordinated
Indenture
does
not
prevent
or
restrict:
|
(1)
|
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;
|
|
(2)
|
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;
|
|
(3)
|
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
|
|
(4)
|
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).
|
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:
|
(1)
|
failure
to
pay
interest
on
the
Subordinated
Indenture
Securities
of
that
series
within
30
days
after
it
is
due
(provided,
however,
that
a
valid
optional
deferral
period
will
not
constitute
an
event
of
default),
|
|
(2)
|
failure
to
pay
principal
or
premium,
if
any,
on
the
Subordinated
Indenture
Securities
of
that
series
when
it
is
due,
|
|
(3)
|
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
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,
|
|
(4)
|
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,
|
|
(5)
|
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
|
|
(6)
|
any
other
event
of
default
specified
with
respect
to
the
Subordinated
Indenture
Securities
of
that
series.
(Subordinated
Indenture,
Section
801).
|
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:
|
(1)
|
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:
|
|
(a)
|
all
overdue
interest
on
all
Subordinated
Indenture
Securities
of
that
series,
|
|
(b)
|
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,
|
|
(c)
|
interest
on
overdue
interest
for
that
series,
and
|
|
(d)
|
all
amounts
due
to
the
Subordinated
Indenture
Trustee
under
the
Subordinated
Indenture,
and
|
|
(2)
|
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).
|
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:
|
(1)
|
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,
|
|
(2)
|
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
|
|
(3)
|
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).
|
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:
|
(1)
|
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,
|
|
(2)
|
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,
|
|
(3)
|
to
add
any
additional
events
of
default,
|
|
(4)
|
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
|
|
(a)
|
when
the
required
consent
of
the
registered
owners
of
Subordinated
Indenture
Securities
of
that
series
or
tranche
has
been
obtained,
or
|
|
(b)
|
when
no
Subordinated
Indenture
Securities
of
that
series
or
tranche
remain
outstanding
under
the
Subordinated
Indenture,
|
|
(5)
|
to
provide
collateral
security
for
all
but
not
a
part
of
the
Subordinated
Indenture
Securities,
|
|
(6)
|
to
establish
the
form
or
terms
of
Subordinated
Indenture
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
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,
|
|
(9)
|
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,
|
|
(10)
|
to
change
any
place
where
|
|
(a)
|
the
principal
of
and
premium,
if
any,
and
interest
on
all
or
any
series
or
tranche
of
Subordinated
Indenture
Securities
are
payable,
|
|
(b)
|
all
or
any
series
or
tranche
of
Subordinated
Indenture
Securities
may
be
transferred
or
exchanged,
and
|
|
(c)
|
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
|
|
(11)
|
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).
|
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:
|
(1)
|
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,
|
|
(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,
|
|
(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,
|
|
(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,
|
|
(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,
|
|
(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,
|
|
(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,
|
|
(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
|
|
(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:
|
(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
|
|
(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).
|
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
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”):
|
(1)
|
through
underwriters
or
dealers,
|
|
(2)
|
through
agents,
or
|
|
(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,
2005,
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
&
Priest
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
&
Priest
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
&
Priest
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
B
Enhanced
Junior
Subordinated
Debentures
due
2066
The
Series
B
Enhanced
Junior
Subordinated
Debentures
will
be
Fully
and Unconditionally
Guaranteed
by
FPL
GROUP,
INC.
___________
PROSPECTUS
SUPPLEMENT
September
13,
2006
___________
Banc
of
America
Securities
LLC
Credit
Suisse
JPMorgan
Lehman
Brothers
Merrill
Lynch
&
Co.
___________
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AMRO
Incorporated
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Calyon
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(USA)
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