Filed Pursuant to Rule 424(b)(5)
Registration Nos. 333-67453
333-67453-01
333-67453-02
333-67453-03
PROSPECTUS SUPPLEMENT
(To Prospectus dated December 4, 1998)
$442,000,000
(ALABAMA POWER LOGO)
$275,000,000 SERIES N 4.875% SENIOR NOTES
DUE SEPTEMBER 1, 2004
$167,000,000 SERIES O FLOATING RATE SENIOR NOTES
DUE MARCH 3, 2003
---------------------------
This is a public offering by Alabama Power Company of $275,000,000 of
Series N 4.875% Senior Notes due September 1, 2004 and $167,000,000 of Series O
Floating Rate Senior Notes due March 3, 2003. The Series N Senior Notes and the
Series O Senior Notes are collectively referred to as the Senior Notes.
Interest on the Series N Senior Notes is payable September 1 and March 1 of
each year, beginning March 1, 2002.
Interest on the Series O Senior Notes is payable quarterly, beginning
December 3, 2001. The per annum interest rate on the Series O Senior Notes will
be reset quarterly based on three-month LIBOR plus 0.10%; however, under certain
limited circumstances described in this Prospectus Supplement, the interest rate
on the Series O Senior Notes will be determined without reference to LIBOR.
The Senior Notes are not redeemable prior to maturity.
The Senior Notes should be delivered on or about August 29, 2001 through
the book-entry facilities of The Depository Trust Company.
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Per Series N Per Series O
Senior Note Total Senior Note Total
--------------------------------------------------------------------------------------------------------------------
Public Offering Price........... 99.826% $274,521,500 100.000% $167,000,000
Underwriting Discount........... 0.350% $ 962,500 0.150% $ 250,500
Proceeds to Alabama Power
Company....................... 99.476% $273,559,000 99.850% $166,749,500
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Neither the Securities and Exchange Commission nor any other regulatory
body has approved or disapproved of these securities or passed upon the accuracy
or adequacy of this Prospectus Supplement or the accompanying Prospectus. Any
representation to the contrary is a criminal offense.
---------------------------
LEHMAN BROTHERS
BNY CAPITAL MARKETS, INC.
JACKSON SECURITIES INC.
SCOTIA CAPITAL
August 22, 2001
In making your investment decision, you should rely only on the information
contained or incorporated by reference in this Prospectus Supplement and the
attached Prospectus. We have not authorized anyone to provide you with any other
information. If you receive any unauthorized information, you must not rely on
it.
We are offering to sell the Senior Notes only in places where sales are
permitted.
You should not assume that the information contained or incorporated by
reference in this Prospectus Supplement or the attached Prospectus, including
information incorporated by reference, is accurate as of any date other than its
respective date.
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TABLE OF CONTENTS
PAGE
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PROSPECTUS SUPPLEMENT
The Company S-3
Capitalization S-3
Recent Results of Operations; Recent
Developments S-3
Use of Proceeds S-3
Description of the Senior Notes S-4
Experts S-8
Underwriting S-9
PAGE
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PROSPECTUS
About this Prospectus 2
Available Information 2
Incorporation of Certain Documents by
Reference 2
Selected Information 4
Alabama Power Company 4
The Trusts 5
Accounting Treatment of Trusts 5
Certain Ratios 6
Use of Proceeds 6
Description of the New Bonds 6
Description of the New Stock 9
Description of the Senior Notes 11
Description of the Junior Subordinated
Notes 15
Description of the Preferred
Securities 20
Description of the Guarantees 21
Relationship Among the Preferred
Securities, the Junior Subordinated
Notes and the Guarantees 23
Plan of Distribution 24
Legal Matters 25
Experts 25
S-2
THE COMPANY
Alabama Power Company (the "Company") is a corporation organized under the
laws of the State of Alabama on November 10, 1927, by the consolidation of a
predecessor Alabama Power Company, Gulf Electric Company and Houston Power
Company. The Company has its principal office at 600 North 18th Street,
Birmingham, Alabama 35291, telephone (205) 257-1000. The Company is a wholly
owned subsidiary of The Southern Company.
The Company is a regulated public utility engaged in the generation,
transmission, distribution and sale of electric energy within an approximately
44,500 square mile service area comprising most of the State of Alabama.
CAPITALIZATION
The following table sets forth the capitalization of the Company as of June
30, 2001, and as adjusted to reflect the transaction described in note (1)
below. The following data is qualified in its entirety by reference to and,
therefore, should be read together with the detailed information and financial
statements appearing in the documents incorporated herein by reference. See also
"Selected Information" in the accompanying Prospectus.
AS OF JUNE 30, 2001
-----------------------------------
ACTUAL AS ADJUSTED(1)
---------- --------------
(THOUSANDS, EXCEPT PERCENTAGES)
Common Stock Equity........................................ $3,242,629 $3,242,629 42.4%
Cumulative Preferred Stock................................. 317,512 317,512 4.2
Company Obligated Mandatorily Redeemable Preferred
Securities of Subsidiary Trusts Holding Company Junior
Subordinated Notes....................................... 347,000 347,000 4.5
Senior Notes............................................... 2,441,974 2,883,974 37.7
Other Long-Term Debt....................................... 853,770 853,770 11.2
---------- ---------- -----
Total, excluding amounts due within one year............... $7,202,885 $7,644,885 100.0%
========== ========== =====
---------------
(1) Reflects the issuance of the Senior Notes.
RECENT RESULTS OF OPERATIONS; RECENT DEVELOPMENTS
For the twelve months ended June 30, 2001, "Operating Revenues," "Earnings
Before Interest and Income Taxes" and "Net Income After Dividends on Preferred
Stock" were $3,774,695,000, $938,209,000 and $394,609,000, respectively. In the
opinion of the management of the Company, the above amounts for the twelve
months ended June 30, 2001 reflect all adjustments necessary to present fairly
the results of operations for such period. The "Ratio of Earnings to Fixed
Charges" for the twelve months ended June 30, 2001 was 3.23. The "Ratio of
Earnings to Fixed Charges" for the year ended December 31, 2000 was 3.33.
On August 15, 2001, the collective bargaining agreement between the Company
and more than 3,000 employees represented by the International Brotherhood of
Electrical Workers (the "IBEW") expired. The Company and the IBEW are currently
negotiating the terms of a possible new contract. The members of the IBEW are
continuing to work without a contract, and the expiration of the contract has
not caused any operational problems at the Company's plants. If a new contract
is not approved by the IBEW, a work stoppage could occur. In the event of such a
work stoppage, it is expected that normal operations of the Company will
continue through the use of the Company's non-union employees.
USE OF PROCEEDS
The proceeds from the sale of the Senior Notes will be applied by the
Company to redeem on August 31, 2001 $131.5 million aggregate principal amount
of its First Mortgage Bonds, 9% Series due February 1, 2024 and will be used for
other general corporate purposes which includes the repayment of a portion of
the Company's outstanding short-term indebtedness, which aggregated
approximately $337,000,000 as of August 22, 2001.
S-3
DESCRIPTION OF THE SENIOR NOTES
Set forth below is a description of the specific terms of the Series N
4.875% Senior Notes due September 1, 2004 (the "Series N Senior Notes")and the
Series O Floating Rate Senior Notes due March 3, 2003 (the "Series O Senior
Notes" and, together with the Series N Senior Notes, the "Senior Notes"). This
description supplements, and should be read together with, the description of
the general terms and provisions of the Senior Notes set forth in the
accompanying Prospectus under the caption "Description of the Senior Notes." The
following description does not purport to be complete and is subject to, and is
qualified in its entirety by reference to, the description in the accompanying
Prospectus and the Senior Note Indenture (the "Senior Note Indenture") dated as
of December 1, 1997, as supplemented, between the Company and The Chase
Manhattan Bank, as trustee (the "Senior Note Indenture Trustee").
GENERAL
Series N Senior Notes
The Series N Senior Notes will be issued as a series of senior notes under
the Senior Note Indenture. The Series N Senior Notes will be initially issued in
the aggregate principal amount of $275,000,000. The Company may, without the
consent of the holders of the Series N Senior Notes, issue additional notes
having the same ranking and interest rate, maturity and other terms (except for
the issue price and issue date) as the Series N Senior Notes. Any additional
notes having such similar terms, together with the Series N Senior Notes, will
constitute a single series of senior notes under the Senior Note Indenture.
The entire principal amount of the Series N Senior Notes will mature and
become due and payable, together with any accrued and unpaid interest thereon,
on September 1, 2004. The Series N Senior Notes are not subject to any sinking
fund provision. The Series N Senior Notes are available for purchase in
denominations of $1,000 and any integral multiple thereof.
Series O Senior Notes
The Series O Senior Notes will be issued as a series of senior notes under
the Senior Note Indenture. The Series O Senior Notes will be initially issued in
the aggregate principal amount of $167,000,000. The Company may, without the
consent of the holders of the Series O Senior Notes, issue additional notes
having the same ranking and interest rate, maturity and other terms (except for
the issue price and issue date) as the Series O Senior Notes. Any additional
notes having such similar terms, together with the Series O Senior Notes, will
constitute a single series of senior notes under the Senior Note Indenture.
The entire principal amount of the Series O Senior Notes will mature and
become due and payable, together with any accrued and unpaid interest thereon,
on March 3, 2003. The Series O Senior Notes are not subject to any sinking fund
provision. The Series O Senior Notes are available for purchase in denominations
of $1,000 and any integral multiple thereof.
INTEREST
Series N Senior Notes
Each Series N Senior Note shall bear interest at the rate of 4.875% per
annum from the date of original issuance, payable semiannually in arrears on
September 1 and March 1 of each year to the person in whose name such Series N
Senior Note is registered at the close of business on the fifteenth calendar day
prior to such payment date. The initial interest payment date is March 1, 2002.
The amount of interest payable will be computed on the basis of a 360-day year
of twelve 30-day months. In the event that any date on which interest is payable
on the Series N Senior Notes is not a Business Day (as defined below), then
payment of the interest payable on such date will be made on the next succeeding
day which is a Business Day (and without any interest or other payment in
respect of any such delay), with the same force and effect as if made on such
date.
S-4
Series O Senior Notes
Each Series O Senior Note shall bear interest from the date of original
issuance, payable quarterly in arrears on March 3, June 3, September 3 and
December 3, as applicable, to the person in whose name such Series O Senior Note
is registered at the close of business on the fifteenth calendar day prior to
such payment date. The initial interest payment date for the Series O Senior
Notes is December 3, 2001. The amount of interest payable will be computed on
the basis of the actual number of days elapsed over a 360-day year. If any
interest payment date for the Series O Senior Notes would otherwise be a day
that is not a Business Day, the interest payment date will be the next
succeeding Business Day.
The Series O Senior Notes will bear interest for each quarterly Interest
Period at a per annum rate determined by the Calculation Agent, subject to the
maximum interest rate permitted by New York or other applicable state law, as
such law may be modified by United States law of general application. The
interest rate applicable during each quarterly Interest Period will be equal to
LIBOR on the Interest Determination Date for such Interest Period plus 0.10%;
provided, however, that in certain circumstances described below, the interest
rate will be determined without reference to LIBOR. Promptly upon such
determination, the Calculation Agent will notify the Company and the Senior Note
Indenture Trustee, if the Senior Note Indenture Trustee is not then serving as
the Calculation Agent, of the interest rate for the new Interest Period. The
interest rate determined by the Calculation Agent, absent manifest error, shall
be binding and conclusive upon the beneficial owners and holders of the Series O
Senior Notes, the Company and the Senior Note Indenture Trustee.
If the following circumstances exist on any Interest Determination Date,
the Calculation Agent shall determine the interest rate for the Series O Senior
Notes as follows:
(1) In the event no Reported Rate appears on Telerate Page 3750 as of
approximately 11:00 a.m., London time, on an Interest Determination Date,
the Calculation Agent shall request the principal London offices of each of
four major banks in the London interbank market selected by the Calculation
Agent (after consultation with the Company) to provide a quotation of the
rate (the "Rate Quotation") at which three-month deposits in amounts of not
less than $1,000,000 are offered by it to prime banks in the London
interbank market, as of approximately 11:00 a.m., London time, on such
Interest Determination Date, that is representative of single transactions
at such time (the "Representative Amounts"). If at least two Rate
Quotations are provided, the interest rate will be the arithmetic mean of
the Rate Quotations obtained by the Calculation Agent, plus 0.10%.
(2) In the event no Reported Rate appears on Telerate Page 3750 as of
approximately 11:00 a.m., London time, on an Interest Determination Date
and there are fewer than two Rate Quotations, the interest rate will be the
arithmetic mean of the rates quoted at approximately 11:00 a.m., New York
City time, on such Interest Determination Date, by three major banks in New
York City selected by the Calculation Agent (after consultation with the
Company), for loans in Representative Amounts in U.S. dollars to leading
European banks, having an index maturity of three months for a period
commencing on the second London Business Day immediately following such
Interest Determination Date, plus 0.10%; provided, however, that if fewer
than three banks selected by the Calculation Agent are quoting such rates,
the interest rate for the applicable Interest Period will be the same as
the interest rate in effect for the immediately preceding Interest Period.
Upon the request of a holder of the Series O Senior Notes, the Calculation
Agent will provide to such holder the interest rate in effect on the date of
such request and, if determined, the interest rate for the next Interest Period.
The following definitions apply to the Series O Senior Notes:
"Business Day" means a day other than (i) a Saturday or Sunday, (ii) a day
on which banks in New York, New York are authorized or obligated by law or
executive order to remain closed, or (iii) a day on which the Senior Note
Indenture Trustee's corporate trust office is closed for business.
S-5
"Calculation Agent" means The Chase Manhattan Bank, or its successor
appointed by the Company, acting as calculation agent.
"Interest Determination Date" means the second London Business Day
immediately preceding the first day of the relevant Interest Period.
"Interest Period" means the period commencing on an interest payment date
for the Series O Senior Notes (or, with respect to the initial Interest Period
only, commencing on the issue date for the Series O Senior Notes) and ending on
the day before the next succeeding interest payment date for the Series O Senior
Notes.
"LIBOR" for any Interest Determination Date will be the offered rate for
deposits in U.S. dollars having an index maturity of three months for a period
commencing on the second London Business Day immediately following the Interest
Determination Date in amounts of not less than $1,000,000, as such rate appears
on Telerate Page 3750 or a successor reporter of such rates selected by the
Calculation Agent and acceptable to the Company, at approximately 11:00 a.m.,
London time, on the Interest Determination Date (the "Reported Rate").
"London Business Day" means a day that is a Business Day and a day on which
dealings in deposits in U.S. dollars are transacted, or with respect to any
future date are expected to be transacted, in the London interbank market.
"Telerate Page 3750" means the display designated on page 3750 on Bridge
Telerate, Inc. (or such other page as may replace the 3750 page on that service
or such other service as may be nominated by the British Bankers' Association
for the purpose of displaying London interbank offered rates for U.S. dollar
deposits).
RANKING
The Senior Notes will be direct, unsecured and unsubordinated obligations
of the Company and will rank equally with all other unsecured and unsubordinated
obligations of the Company. The Senior Notes will be effectively subordinated to
all secured debt of the Company, including its first mortgage bonds, aggregating
approximately $808,000,000 outstanding at June 30, 2001. The Senior Note
Indenture contains no restrictions on the amount of additional indebtedness that
may be incurred by the Company.
REDEMPTION
The Senior Notes will not be redeemable by the Company prior to their
respective maturities.
BOOK-ENTRY ONLY ISSUANCE -- THE DEPOSITORY TRUST COMPANY
The Depository Trust Company ("DTC") will act as the initial securities
depositary for the Senior Notes. Each series of the Senior Notes will be issued
only as fully registered securities registered in the name of Cede & Co., DTC's
nominee. One or more fully registered global certificates for each series of the
Senior Notes will be issued, representing in the aggregate the total principal
amount of the respective series of the Senior Notes, and will be deposited with
DTC.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934, as amended. DTC holds securities that its participants
("Participants") deposit with DTC. DTC also facilitates the settlement among
Participants of securities transactions, such as transfers and pledges, in
deposited securities through electronic computerized book-entry changes in
Participants' accounts, thereby eliminating the need for physical movement of
securities certificates. Direct Participants include securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations ("Direct Participants"). DTC is owned by a number of its Direct
Participants and by the New York Stock Exchange, Inc., the American Stock
Exchange, Inc., and the National Association of Securities Dealers, Inc. Access
to the DTC
S-6
system is also available to others such as securities brokers and dealers, banks
and trust companies that clear through or maintain a custodial relationship with
a Direct Participant, either directly or indirectly ("Indirect Participants").
The rules applicable to DTC and its Participants are on file with the Securities
and Exchange Commission.
Purchases of Senior Notes within the DTC system must be made by or through
Direct Participants, which will receive a credit for the Senior Notes on DTC's
records. The ownership interest of each actual purchaser of Senior Notes
("Beneficial Owner") is in turn to be recorded on the Direct and Indirect
Participants' records. Beneficial Owners will not receive written confirmation
from DTC of their purchases, but Beneficial Owners are expected to receive
written confirmations providing details of the transactions, as well as periodic
statements of their holdings, from the Direct or Indirect Participants through
which the Beneficial Owners purchased Senior Notes. Transfers of ownership
interests in the Senior Notes are to be accomplished by entries made on the
books of Participants acting on behalf of Beneficial Owners. Beneficial Owners
will not receive certificates representing their ownership interests in Senior
Notes, except in the event that use of the book-entry system for the Senior
Notes is discontinued.
DTC has no knowledge of the actual Beneficial Owners of the Senior Notes.
DTC's records reflect only the identity of the Direct Participants to whose
accounts such Senior Notes are credited, which may or may not be the Beneficial
Owners. The Participants will remain responsible for keeping account of their
holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect 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.
Although voting with respect to the Senior Notes is limited, in those cases
where a vote is required, neither DTC nor Cede & Co. will itself consent or vote
with respect to Senior Notes. Under its usual procedures, DTC would mail an
Omnibus Proxy to the Company as soon as possible after the record date. The
Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct
Participants to whose accounts the Senior Notes are credited on the record date
(identified in a listing attached to the Omnibus Proxy).
Payments on the Senior Notes will be made to DTC. DTC's practice is to
credit Direct Participants' accounts on the relevant payment date in accordance
with their respective holdings shown on DTC's records unless DTC has reason to
believe that it will not receive payments on such payment date. Payments by
Participants to Beneficial Owners will be governed by standing instructions and
customary practices, as is the case with securities held for the account of
customers registered in "street name," and will be the responsibility of such
Participant and not of DTC or the Company, subject to any statutory or
regulatory requirements as may be in effect from time to time. Payment to DTC is
the responsibility of the Company, disbursement of such payments to Direct
Participants is the responsibility of DTC, and disbursement of such payments to
the Beneficial Owners is the responsibility of Direct and Indirect Participants.
Except as provided herein, a Beneficial Owner of a global Senior Note will
not be entitled to receive physical delivery of Senior Notes. Accordingly, each
Beneficial Owner must rely on the procedures of DTC to exercise any rights under
the Senior Notes. The laws of some jurisdictions require that certain purchasers
of securities take physical delivery of securities in definitive form. Such laws
may impair the ability to transfer beneficial interests in a global Senior Note.
DTC may discontinue providing its services as securities depositary with
respect to the Senior Notes at any time by giving reasonable notice to the
Company. Under such circumstances, in the event that a successor securities
depositary is not obtained, Senior Notes certificates will be printed and
delivered to the holders of record. Additionally, the Company may decide to
discontinue use of the system of book-entry transfers through DTC (or a
successor depositary) with respect to the Senior Notes. In that event,
certificates for the Senior Notes will be printed and delivered to the holders
of record.
S-7
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Company believes to be reliable, but the
Company takes no responsibility for the accuracy thereof. The Company has no
responsibility for the performance by DTC or its Participants of their
respective obligations as described herein or under the rules and procedures
governing their respective operations.
EXPERTS
The financial statements and schedules of the Company included in the
Company's Annual Report on Form 10-K for the year ended December 31, 2000,
incorporated by reference herein, have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their reports with respect
thereto, and are incorporated herein in reliance upon the authority of said firm
as experts in accounting and auditing in giving said reports.
S-8
UNDERWRITING
Subject to the terms and conditions of an underwriting agreement (the
"Underwriting Agreement"), the Company has agreed to sell to the underwriters
named below (the "Underwriters") and each of the Underwriters has severally
agreed to purchase from the Company the respective principal amount of Senior
Notes set forth opposite its name below:
PRINCIPAL AMOUNT OF PRINCIPAL AMOUNT OF
NAME SERIES N SENIOR NOTES SERIES O SENIOR NOTES
---- --------------------- ---------------------
Lehman Brothers Inc. .................................... $165,000,000 $116,900,000
BNY Capital Markets, Inc................................. 36,685,000 16,700,000
Jackson Securities Inc. ................................. 36,657,500 16,700,000
Scotia Capital (USA) Inc. ............................... 36,657,500 16,700,000
------------ ------------
Total.......................................... $275,000,000 $167,000,000
============ ============
In the Underwriting Agreement, the Underwriters have agreed, subject to the
terms and conditions set forth therein, to purchase all of the Senior Notes
offered hereby if any of the Senior Notes are purchased.
The Underwriters propose to offer the Senior Notes in part directly to the
public at the initial public offering prices set forth on the cover page of this
Prospectus Supplement, and in part to certain securities dealers at such price
less a concession not in excess of 0.200% and 0.090% of the principal amount per
Series N Senior Note and Series O Senior Note, respectively. The Underwriters
may allow, and such dealers may reallow, a concession not in excess of 0.150%
and 0.050% of the principal amount per Series N Senior Note and Series O Senior
Note, respectively, to certain brokers and dealers. After the Senior Notes are
released for sale to the public, the offering price and other selling terms may
from time to time be varied by the Underwriters.
Prior to this offering, there has been no public market for the Senior
Notes. The Underwriters have advised the Company that they intend to make a
market in the Senior Notes. The Underwriters will have no obligation to make a
market in the Senior Notes, however, and may cease market making activities, if
commenced, at any time.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as amended.
The Company's expenses associated with the offer and sale of the Senior
Notes are estimated to be $430,000.
In order to facilitate the offering of the Senior Notes, the Underwriters
may engage in transactions that stabilize, maintain or otherwise affect the
price of the Senior Notes. Specifically, the Underwriters may over-allot in
connection with the offering, creating short positions in the Senior Notes for
their own accounts. In addition, to cover over-allotments or to stabilize the
price of the Senior Notes, the Underwriters may bid for, and purchase, Senior
Notes in the open market. The Underwriters may reclaim selling concessions
allowed to an underwriter or dealer for distributing Senior Notes in the
offering, if the Underwriters repurchase previously distributed Senior Notes in
transactions to cover short positions, in stabilization transactions or
otherwise. Any of these activities may stabilize or maintain the market price of
the Senior Notes above independent market levels. The Underwriters are not
required to engage in these activities, and may end any of these activities at
any time.
In general, purchases of a security for the purpose of stabilization or to
reduce a short position could cause the price of the security to be higher than
it might be in the absence of such purchases. The imposition of a penalty bid
might also have an effect on the price of a security to the extent that it were
to discourage resales of the security.
Neither the Company nor the Underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the Senior Notes. In
S-9
addition, neither the Company nor the Underwriters makes any representation that
the Underwriters will engage in such transactions or that such transactions once
commenced will not be discontinued without notice.
The Underwriters engage in transactions with, and, from time to time, have
performed investment banking and/or commercial banking services for, the Company
and its affiliates in the ordinary course of business.
Lehman Brothers Inc. will make Senior Notes available for distribution on
the Internet through a proprietary web site and/or a third-party system operated
by Market Axess Inc., an Internet-based communications technology provider.
Market Axess Inc. is providing the system as a conduit for communications
between Lehman Brothers Inc. and its customers and is not a party to any
transactions. Market Axess Inc., a registered broker-dealer, will receive
compensation from Lehman Brothers Inc. based on transactions the underwriter
conducts through the system. Lehman Brothers Inc. will make Senior Notes
available to its customers through the Internet distributions, whether made
through a proprietary or third party system, on the same terms as distributions
made through other channels.
S-10
$442,000,000
(ALABAMA POWER LOGO)
$275,000,000 SERIES N 4.875% SENIOR NOTES
DUE SEPTEMBER 1, 2004
$167,000,000 SERIES O FLOATING RATE SENIOR NOTES
DUE MARCH 3, 2003
---------------------------
PROSPECTUS SUPPLEMENT
August 22, 2001
---------------------------
LEHMAN BROTHERS
BNY CAPITAL MARKETS, INC.
JACKSON SECURITIES INC.
SCOTIA CAPITAL