DESCRIPTION OF THE NOTES

GENERAL

We will issue the notes as a series of debt securities under an indenture, dated as of October 1, 1988, between us (as successor to Cleco Utility Group Inc.) and Bankers Trust Company, as supplemented and amended. The Bank of New York is the current trustee under the indenture. Copies of the indenture and the Agreement of Resignation, Appointment and Acceptance under which The Bank of New York succeeded Bankers Trust Company as trustee under the indenture are included among the exhibits to the registration statement of which this prospectus supplement and the accompanying prospectus are a part. The indenture is governed by the Trust Indenture Act of 1939, as amended. The term "debt securities," as used in this prospectus supplement, refers to all securities issued and issuable from time to time under the indenture and includes the notes. The debt securities and the indenture are more fully described in the accompanying prospectus. The following summary of the material provisions of the notes and of the indenture is not complete and is qualified in its entirety by reference to the indenture.

The following description of the notes will apply unless otherwise specified in an applicable pricing supplement.

All of our debt securities, including the notes, issued and to be issued under the indenture will be our unsecured general obligations and will rank equally with all of our other unsecured and unsubordinated indebtedness outstanding from time to time. The indenture does not limit the aggregate principal amount of debt securities that we may issue. We may issue our debt securities from time to time in one or more series up to the aggregate principal amount authorized by us for a particular series. We may, from time to time, without the consent of the holders of the notes, issue notes or other debt securities under our indenture in addition to the notes offered by this prospectus supplement. We may also, from time to time, without the consent of the holders of the notes, issue additional notes or other debt securities having the same terms as previously issued notes, other than the date of issuance, interest commencement date and offering price, which may vary, that will form a single issue with the previously issued notes. At September 30, 2000, we had approximately $240 million principal amount of debt securities issued and outstanding under the indenture, all of which are medium-term notes.

The notes will be offered on a continuing basis and will mature on a date one year or more from their date of issue. We call the date on which the notes mature the "Stated Maturity Date," as specified in the applicable pricing supplement, unless the principal amount of the notes, or any installment of the principal amount, becomes due and payable prior to the Stated Maturity Date by the declaration of acceleration of maturity, notice of redemption at our option, notice of the holder's option to elect repayment or otherwise. The Stated Maturity Date or any date prior to the Stated Maturity Date on which a particular note becomes due and payable, as the case may be, is referred to in this prospectus supplement as the "Maturity Date" with respect to the principal of the particular note repayable on that date. Interest-bearing notes will bear interest at either fixed or floating rates as specified in the applicable pricing supplement. We may also issue notes that do not bear interest, or we may issue notes at significant discounts from their principal amount payable at maturity.

The notes will be denominated in United States dollars, and we will make payments of principal, premium, if any, and/or interest, if any, on the notes in United States dollars. Unless otherwise specified in the applicable pricing supplement, you will be required to pay the purchase price of your notes in immediately available funds in United States dollars in The City of New York on the date of settlement. The notes are currently limited to up to $100 million aggregate initial offering price, but we may from time to time provide for the issuance of additional notes without the consent of the holders of outstanding notes.

Interest rates that we offer on the notes may differ depending upon, among other factors, the aggregate principal amount of notes purchased in any single transaction. Notes with different variable terms, in addition to interest rates, may also be offered concurrently to different investors. We may change interest rates or formulas and other variable terms of the notes from time to time, but no change will affect any note already issued or for which we have accepted an offer to purchase.

Each note will be issued in fully registered book-entry form or certificated form, in denominations of $1,000 or any larger amount that is an integral multiple of $1,000, unless otherwise specified in the applicable pricing supplement. Interests in notes in book-entry form may be transferred or exchanged only through a participating member of The Depository Trust Company, also known as DTC, or any other depository that is identified in an applicable pricing supplement. For more information on notes in book-entry form and on the depository, see "-- Book-Entry Notes" in this prospectus supplement and "Description of the Debt Securities--Form, Denomination and Registration; Book- Entry System" in the accompanying prospectus. Registration of any transfer of notes in certificated form will be made at the corporate trust office of the trustee in the Borough of Manhattan, The City of New York. You will not have to pay a service charge to transfer or exchange notes, but we may require you to pay taxes or other governmental charges for exchanges involving transfers under the terms of the indenture.

We will make payments of principal, premium, if any, and/or interest, if any, on notes in book-entry form through the trustee to the depository or its nominee. In the case of notes in certificated form, we will make payment of principal, premium, if any, and/or interest, if any, due on the Maturity Date through the trustee in immediately available funds upon presentation and surrender of the certificated note and, in the case of any repayment on an optional repayment date, upon submission of a duly completed election form if and as required by the provisions described below, at the corporate trust office of the trustee or at any other place as we may designate. Payment of interest due on the Maturity Date of notes in certificated form will be made to the person to whom payment of the principal under the note will be made. Payment of interest due on notes in certificated form other than on the Maturity Date will be made at the corporate trust office of the trustee or, at our option, may be made by check mailed to the address of the person entitled to receive payment as the address appears in the security register. However, a holder of $10 million or more in aggregate principal amount of notes in certificated form, whether having identical or different terms and provisions, will be entitled to receive interest payments, other than on the Maturity Date, by wire transfer of immediately available funds if appropriate wire transfer instructions have been received in writing by the trustee not less than 15 days prior to the applicable interest payment date. Any wire instructions received by the trustee will remain in effect until revoked by the applicable holder.

REDEMPTION AT THE OPTION OF THE COMPANY

The notes will not be subject to any sinking fund. We may redeem the notes at our option before their Stated Maturity Date only if an initial redemption date is specified in the applicable notes and in the applicable pricing supplement. If an initial redemption date is specified in the applicable notes and pricing supplement, we may redeem the related notes at any time on or after the initial redemption date by providing notice to the holders of the related notes not more than 60 days nor less than 30 days prior to the date of redemption. We may make this type of redemption all at once or in parts over time.

When we redeem any notes at our option as provided above, we will pay the redemption price plus the interest that is payable to (but not including) the date of redemption on the applicable note. Unless otherwise specified in the applicable pricing supplement, the redemption price with respect to a note will initially mean a percentage, the initial redemption percentage, multiplied by the unpaid principal amount of the note to be redeemed. The initial redemption percentage, if any, will be specified in the applicable pricing supplement and will decline at each anniversary of the initial redemption date by a percentage specified in the applicable pricing supplement until the redemption price is 100% of the unpaid principal amount of the note to be redeemed. If an initial redemption

percentage is specified in the applicable pricing supplement but no percentage for the annual reduction of the initial redemption percentage is specified, the redemption price will be based upon the initial redemption percentage of the unpaid principal amount of the note to be redeemed. We will redeem the notes at our option in increments of $1,000 or any other integral multiple of an authorized denomination specified in the applicable pricing supplement, provided that any remaining principal amount will be at least $1,000 or other authorized denomination of the applicable note.

REPAYMENT AT THE OPTION OF THE HOLDER

We will repay the notes in whole or in part at the option of the holders of the notes on any optional repayment date specified in an applicable pricing supplement. However, a note will not be repayable at the option of a holder before its Stated Maturity Date if the applicable pricing supplement does not specify an optional repayment date. Any repayment in part will be in increments of $1,000 or any other integral multiple of an authorized denomination specified in the applicable pricing supplement, provided that any remaining principal amount will be at least $1,000 or other authorized denomination of the applicable note. The repayment price for any note to be repaid will be 100% of the unpaid principal amount to be repaid, together with interest on the principal of the applicable note payable to the date of repayment.

For any note to be repaid, the trustee must receive, at its corporate trust office, not more than 60 nor less than 30 days before the optional repayment date, the particular note being repaid and:

. in the case of a note in certificated form, the form entitled "Option to elect Repayment" duly completed, or

. in the case of a note in book-entry form, repayment instructions from the applicable beneficial owner of the note to the depository and forwarded by the depository.

Notices of elections from a holder to exercise the repayment option must be received by the trustee by 5:00 p.m., New York City time, on the last day for giving notice. Exercise of the repayment option by the holder of a note will be irrevocable.

Only the depository may exercise the repayment option in respect of global securities representing notes in book-entry form. Accordingly, beneficial owners of global securities that desire to have all or any portion of the notes in book-entry form represented by global securities repaid must instruct the "participant" through which they own their interests to direct the depository to exercise the repayment option on their behalf by forwarding repayment instructions to the trustee as discussed above. In order to ensure that the instructions are received by the trustee on a particular day, the applicable beneficial owner must provide the necessary instructions to the participant through which it owns its interest before that participant's deadline for accepting instructions for that day. Beneficial owners of notes in book-entry form should consult the participants through which they own their interests for the applicable deadlines, as different participants may have different deadlines for accepting instructions from their customers. All instructions given to participants from beneficial owners of notes in book-entry form relating to the option to elect repayment will be irrevocable. In addition, at the time instructions are given, each beneficial owner must cause the participant through which the beneficial owner owns its interest to transfer to the trustee, on the depository's records, its interest in the global security or securities representing the related notes in book-entry form. For more information on global securities and procedures relating to the depository, see "--Book-Entry Notes" in this prospectus supplement and "Description of the Debt Securities-- Form, Denomination and Registration; Book-Entry System" in the accompanying prospectus.

We may at any time purchase notes at any price in the open market or otherwise. We may hold notes that we purchase in this manner or surrender them to the trustee for cancellation at our discretion.

INTEREST

Each interest-bearing note will bear interest at a fixed or floating rate as provided in the applicable pricing supplement from its original issue date until the principal of the note is paid or made available for payment. Fixed

rate notes will bear interest at a rate per annum, and floating rate notes will bear interest pursuant to an interest rate formula. Interest payments on the notes will equal the amount of interest accrued from and including

. the immediately preceding interest payment date on which interest was paid, or

. the date of issue, if no interest has been paid with respect to the notes.

Interest on the notes will accrue to, but exclude, the applicable interest payment date or the Maturity Date, as the case may be.

Interest will be payable in arrears on each interest payment date specified in the applicable pricing supplement and on the Maturity Date. Unless otherwise specified in an applicable pricing supplement, interest will be payable to the persons who are registered holders of the notes as of the close of business on the regular record date, which will be the fifteenth calendar day immediately preceding the related interest payment date, whether or not that day is a "Business Day," as defined below. The first payment of interest on any note originally issued between a regular record date and the related interest payment date will be made on the interest payment date immediately following the next succeeding regular record date to the persons who are the registered holders on the next succeeding regular record date.

"Business Day" means any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which commercial banks are authorized or required by law, regulation or executive order to close in The City of New York. Additionally, with respect to notes as to which the London Interbank Offered Rate, or "LIBOR," is an applicable "Interest Rate Basis," the day must also be a "London Banking Day," which means a day on which commercial banks are open for business, including dealings in the "LIBOR Currency," in London. The terms "LIBOR," "LIBOR Currency" and "Interest Rate Basis" are discussed in "--Floating Rate Notes" below.

FIXED RATE NOTES

Each fixed rate note will bear interest from and including the date of issue, at the rate per annum specified in the applicable pricing supplement, until the principal amount of the note is paid. The interest rate on any fixed- rate note may not exceed 9% per year unless we apply for and receive an order of the Louisiana Public Service Commission allowing a higher rate to be paid. Interest on fixed rate notes will be computed on the basis of a 360-day year of twelve 30-day months.

Unless otherwise specified in an applicable pricing supplement, interest on fixed rate notes will be payable semiannually on March 15 and September 15 of each year and on the Maturity Date. If any interest payment date or the Maturity Date of a fixed rate note falls on a day that is not a Business Day, the related payment of principal, premium, if any, and/or interest will be made on the next succeeding Business Day as if made on the date the applicable payment was due, and no additional interest will accrue in respect of the payment made on that next succeeding Business Day.

FLOATING RATE NOTES

We use various capitalized terms in this section in describing the floating rate notes. If not already defined, these terms are defined and discussed below.

Interest on floating rate notes will be determined by reference to the applicable "Interest Rate Basis" or "Interest Rate Bases," which may be one or more of:

. the "Commercial Paper Rate,"

. LIBOR,

. the "Treasury Rate," or

. any other Interest Rate Basis or interest rate formula that is specified in the applicable pricing supplement.

A floating rate note may bear interest with respect to two or more Interest Rate Bases.

Each applicable pricing supplement will specify certain terms of the floating rate note being offered, including:

. whether the floating rate note is:

. a "Regular Floating Rate Note,"

. a "Floating Rate/Fixed Rate Note" or

. an "Inverse Floating Rate Note,"

. the "Fixed Interest Rate," if applicable,

. the Interest Rate Basis or Bases,

. the "Initial Interest Rate," if any,

. the "Interest Reset Dates,"

. the interest payment dates,

. the period to maturity of the instrument or obligation with respect to which the Interest Rate Basis or Bases will be calculated, which we call the "Index Maturity,"

. the "Maximum Interest Rate" and "Minimum Interest Rate," if any,

. the number of basis points to be added to or subtracted from the related Interest Rate Basis or Bases, which we call the "Spread,"

. the percentage of the related Interest Rate Basis or Bases by which the Interest Rate Basis or Bases will be multiplied to determine the applicable interest rate, which we call the "Spread Multiplier," and

. if one or more of the specified Interest Rate Bases is LIBOR, the LIBOR Currency, the Index Maturity and the "Designated LIBOR Page."

Regular Floating Rate Notes

A floating rate note will be a "Regular Floating Rate Note" unless:

. it is designated as a Floating Rate/Fixed Rate Note or an Inverse Floating Rate Note or

. a different interest rate formula applies to the note as a result of an "Addendum" to or "Other Provision" of the note, as described below in "-- Other Provisions; Addenda."

A Regular Floating Rate Note will bear interest at the rate determined by reference to the applicable Interest Rate Basis or Bases:

. plus or minus the applicable Spread, if any, and/or

. multiplied by the applicable Spread Multiplier, if any.

Beginning on the first Interest Reset Date, the rate at which interest on the Regular Floating Rate Note will be payable will be reset as of each Interest Reset Date, except that the interest rate in effect for the period from the date of issue to the first Interest Reset Date will be the "Initial Interest Rate."

Floating Rate/Fixed Rate Notes

If a floating rate note is designated as a "Floating Rate/Fixed Rate Note," it will bear interest at the rate determined by reference to the applicable Interest Rate Basis or Bases:

. plus or minus the applicable Spread, if any, and/or

. multiplied by the applicable Spread Multiplier, if any.

Beginning on the first Interest Reset Date, the rate at which interest on the Floating Rate/Fixed Rate Note will be payable will be reset as of each Interest Reset Date, except that:

. the interest rate in effect for the period from the date of issue to the first Interest Reset Date will be the Initial Interest Rate, and

. the interest rate in effect commencing on, and including, the date on which interest begins to accrue on a fixed rate basis to maturity will be the "Fixed Interest Rate," if the rate is specified in the applicable pricing supplement, or if no Fixed Interest Rate is specified, the interest rate in effect on the Floating Rate/Fixed Rate Note on the day immediately preceding the date on which interest begins to accrue on a fixed rate basis.

Inverse Floating Rate Notes

If a floating rate note is designated as an "Inverse Floating Rate Note," it will bear interest equal to the Fixed Interest Rate specified in the related pricing supplement minus the rate determined by reference to the applicable Interest Rate Basis or Bases:

. plus or minus the applicable Spread, if any, and/or

. multiplied by the applicable Spread Multiplier, if any.

However, the interest rate on the applicable Inverse Floating Rate Note will not be less than 0%. Beginning on the first Interest Reset Date, the rate at which interest on the Inverse Floating Rate Note is payable will be reset as of each Interest Reset Date, except that the interest rate in effect for the period from the date of issue to the first Interest Reset Date will be the Initial Interest Rate.

Interest Rate Determination

The interest rate derived from an Interest Rate Basis will be determined in accordance with the applicable provisions below. The interest rate in effect on each day will be based on:

. if the day is an Interest Reset Date, the rate determined as of the "Interest Determination Date" immediately preceding the applicable Interest Reset Date, or

. if the day is not an Interest Reset Date, the rate determined as of the Interest Determination Date immediately preceding the most recent Interest Reset Date, except that the interest rate in effect for the period from the date of issue to the first Interest Reset Date will be the Initial Interest Rate.

Interest Reset Dates. The applicable pricing supplement will specify the "Interest Reset Dates," which are the dates on which the interest rate on the related floating rate note will be reset. The period between Interest Reset Dates is the "Interest Reset Period." The Interest Reset Date will be, in the case of floating rate notes that reset:

. daily -- each Business Day;

. weekly -- the Wednesday of each week, except for weekly reset floating rate notes as to which the Treasury Rate is an applicable Interest Rate Basis. These notes will reset the Tuesday of each week, except as described below under "--Interest Determination Dates;"

. monthly -- the third Wednesday of each month;

. quarterly -- the third Wednesday of March, June, September and December of each year;

. semiannually -- the third Wednesday of the two months specified in the applicable pricing supplement; and

. annually -- the third Wednesday of the month specified in the applicable pricing supplement.

However, the rate of interest will not reset after the applicable date on which interest on a fixed rate basis begins to accrue with respect to Floating Rate/Fixed Rate Notes.

If any Interest Reset Date for any floating rate note would otherwise be a day that is not a Business Day, the particular Interest Reset Date will be postponed to the next succeeding Business Day. However, in the case of a floating rate note as to which LIBOR is an applicable Interest Rate Basis, if the Business Day falls in the next succeeding calendar month, the particular Interest Reset Date will be the immediately preceding Business Day. In addition, in the case of a floating rate note as to which the Treasury Rate is an applicable Interest Rate Basis, if the Interest Determination Date would otherwise fall on an Interest Reset Date, the particular Interest Reset Date will be postponed to the next succeeding Business Day.

Interest Determination Dates. The interest rate applicable to an Interest Reset Period commencing on the related Interest Reset Date will be determined by reference to the applicable Interest Rate Basis as of the particular "Interest Determination Date."

. The Interest Determination Date with respect to the Commercial Paper Rate will be the second Business Day preceding the related Interest Reset Date.

. The Interest Determination Date with respect to LIBOR will be the second London Banking Day preceding the related Interest Reset Date.

. The Interest Determination Date with respect to the Treasury Rate will be the day in the week in which the related Interest Reset Date falls on which day "Treasury Bills" are normally auctioned. Treasury Bills are normally sold at auction on Monday of each week, unless that day is a legal holiday, in which case the auction is normally held on the following Tuesday, except that the auction may be held on the preceding Friday. However, if an auction is held on the Friday of the week preceding the related Interest Reset Date, the Interest Determination Date will be the preceding Friday.

. The Interest Determination Date pertaining to a floating rate note the interest rate of which is based on two or more Interest Rate Bases will be the latest Business Day that is at least two Business Days before the related Interest Reset Date for the applicable floating rate note on which each Interest Rate Basis is determinable.

Calculation Date. The Bank of New York will be the calculation agent. The interest rate applicable to each Interest Reset Period will be determined by the calculation agent on or prior to the calculation date, except with respect to LIBOR, which will be determined on the particular Interest Determination Date. Upon the request of the

holder of any floating rate note, the calculation agent will provide the interest rate then in effect and, if determined, the interest rate that will become effective as a result of a determination made for the next Interest Reset Date with respect to that floating rate note. Unless otherwise specified in the applicable pricing supplement, the calculation date, if applicable, pertaining to any Interest Determination Date will be the earlier of:

. the tenth calendar day after the applicable Interest Determination Date, or, if the tenth calendar day is not a Business Day, the next succeeding Business Day, or

. the Business Day immediately preceding the applicable interest payment date or the Maturity Date, as the case may be.

Maximum and Minimum Interest Rates. A floating rate note also may have either or both of the following:

. a maximum numerical limitation, or ceiling, on the rate at which interest may accrue during any Interest Reset Period, which we call a "Maximum Interest Rate," and

. a minimum numerical limitation, or floor, on the rate at which interest may accrue during any Interest Reset Period, which we call a "Minimum Interest Rate."

The indenture is, and any notes issued under the indenture will be, governed by and construed in accordance with the laws of the State of New York. In addition to any Maximum Interest Rate that may apply to a floating rate note, the interest on floating rate notes will in no event be higher than the maximum rate permitted by New York law, as it may be modified by federal law.

Interest Payments and Calculations. Each applicable pricing supplement will specify the dates on which interest will be payable. The interest payment dates with respect to floating rate notes that reset will be:

. in the case of floating rate notes that reset daily, weekly or monthly -- the third Wednesday of each month or the third Wednesday of March, June, September and December of each year, as specified in the applicable pricing supplement;

. in the case of floating rate notes that reset quarterly -- the third Wednesday of March, June, September and December of each year;

. in the case of floating rate notes that reset semiannually -- the third Wednesday of the two months of each year specified in the applicable pricing supplement; and

. in the case of floating rate notes that reset annually -- the third Wednesday of the month of each year specified in the applicable pricing supplement.

In addition, the Maturity Date will also be an interest payment date.

If any interest payment date, other than the Maturity Date, for any floating rate note would otherwise be a day that is not a Business Day, the interest payment date will be postponed to the next succeeding Business Day. However, in the case of a floating rate note as to which LIBOR is an applicable Interest Rate Basis, if the Business Day falls in the next succeeding calendar month, the applicable interest payment date will be the immediately preceding Business Day. If the Maturity Date of a floating rate note falls on a day that is not a Business Day, the payment of principal, premium, if any, and/or interest will be made on the next succeeding Business Day as if made on the Maturity Date, and no additional interest will accrue in respect of the payment made on that next succeeding Business Day.

All percentages resulting from any calculation on floating rate notes will be rounded to the nearest one hundred-thousandth of a percentage point, with five one-millionths of a percentage point rounded upwards. For example, 9.876545%, or .09876545, would be rounded to 9.87655%, or .0987655. All monetary amounts used in or

resulting from any calculation on floating rate notes will be rounded to the nearest cent or other comparable unit, with one-half cent or unit being rounded upward.

With respect to each floating rate note, accrued interest is calculated by multiplying its principal amount by an accrued interest factor. The accrued interest factor is computed by adding the interest factor calculated for each day in the period for which accrued interest is being calculated.

. In the case of notes for which the Interest Rate Basis is the Commercial Paper Rate or LIBOR, the interest factor for each day will be computed by dividing the interest rate applicable to each day in the period by 360.

. In the case of notes for which the Interest Rate Basis is the Treasury Rate, the interest factor for each day will be computed by dividing the interest rate applicable to each day in the period by the actual number of days in the year.

. The interest factor for notes for which the interest rate is calculated with reference to two or more Interest Rate Bases will be calculated in each period in the same manner as if only one of the applicable Interest Rate Bases applied.

Interest Rate Bases

The calculation agent will determine the rate derived from each Interest Rate Basis in accordance with the following provisions:

Commercial Paper Rate. "Commercial Paper Rate" means:

(1) the "Money Market Yield," as defined below, on the applicable Interest Determination Date of the rate for commercial paper having the Index Maturity specified in the applicable pricing supplement published in H.15(519), as defined below, under the caption "Commercial Paper-Nonfinancial," or

(2) if the rate referred to in clause (1) is not so published by 3:00 p.m., New York City time, on the related calculation date, the Money Market Yield on the applicable Interest Determination Date of the rate for commercial paper having the applicable Index Maturity as published in H.15 Daily Update, as defined below, or other recognized electronic source used for the purpose of displaying the applicable rate, under the caption "Commercial Paper-Nonfinancial," or

(3) if the rate referred to in clause (2) is not so published by 3:00 p.m., New York City time, on the related calculation date, the rate on the applicable Interest Determination Date calculated by the calculation agent as the Money Market Yield of the arithmetic mean of the offered rates at approximately 11:00 a.m., New York City time, on that Interest Determination Date of three leading dealers of United States dollar commercial paper in The City of New York, which may include an agent or its affiliates, selected by the calculation agent for commercial paper having the applicable Index Maturity placed for industrial issuers whose bond rating is "Aa," or the equivalent, from a nationally recognized statistical rating organization, or

(4) if the dealers selected by the calculation agent are not quoting as mentioned in clause (3), the Commercial Paper Rate in effect on the applicable Interest Determination Date.

"Money Market Yield" means a yield calculated in accordance with the following formula and expressed as a percentage:

                               D x 360
Money Market Yield =  ---------------------  x 100
                            360 - (D x M)

where "D" refers to the applicable per annum rate for commercial paper quoted on a bank discount basis and expressed as a decimal, and "M" refers to the actual number of days in the interest period for which interest is being calculated.

"H.15 (519)" means the weekly statistical release designated as H.15(519), or any successor publication, published by the Board of Governors of the Federal Reserve System.

"H.15 Daily Update" means the daily update of H.15(519), available through the world wide web site of the Board of Governors of the Federal Reserve System at http://www.bog.frb.fed.us/releases/h15/update, or any successor site or publication (the referenced web site and its successor sites or publications are not incorporated by reference into this prospectus supplement).

LIBOR. "LIBOR" means:

(1) if "LIBOR Telerate" is specified in the applicable pricing supplement or if neither "LIBOR Reuters" nor "LIBOR Telerate" is specified in the applicable pricing supplement as the method for calculating LIBOR, LIBOR will be the rate for deposits in the LIBOR Currency, as defined below, having the Index Maturity specified in the applicable pricing supplement, commencing on the related Interest Reset Date, that appears on the Designated LIBOR Page, as defined below, as of 11:00 a.m., London time, on the applicable Interest Determination Date, or

(2) if "LIBOR Reuters" is specified in the applicable pricing supplement, LIBOR will be the arithmetic mean of the offered rates, calculated by the calculation agent, for deposits in the LIBOR Currency having the applicable Index Maturity, commencing on the related Interest Reset Date, that appear on the Designated LIBOR Page as of 11:00 a.m., London time, on the applicable Interest Determination Date. If the Designated LIBOR Page by its terms provides only for a single rate, then the single rate will be used, or

(3) with respect to an Interest Determination Date on which fewer than two offered rates appear, or no rate appears, as the case may be, on the Designated LIBOR Page as specified in clauses (1) and (2), respectively, the rate calculated by the calculation agent as the arithmetic mean of at least two offered quotations obtained by the calculation agent after requesting the principal London offices of each of four major reference banks, which may include affiliates of an agent, in the London interbank market to provide the calculation agent with its offered quotation for deposits in the LIBOR Currency for the period of the applicable Index Maturity, commencing on the related Interest Reset Date, to prime banks in the London interbank market at approximately 11:00 a.m., London time, on the applicable Interest Determination Date and in a principal amount that is representative for a single transaction in the applicable LIBOR Currency in that market at that time, or

(4) if fewer than two quotations referred to in clause (3) are so provided, the rate calculated by the calculation agent as the arithmetic mean of the rates quoted at approximately 11:00 a.m., in the applicable Principal Financial Center, as defined below, on the applicable Interest Determination Date by three major banks, which may include affiliates of an agent, in the applicable Principal Financial Center selected by the calculation agent for loans in the LIBOR Currency to leading European banks, having the applicable Index Maturity and in a principal amount that is representative for a single transaction in the applicable LIBOR Currency in that market at that time, or

(5) if the banks so selected by the calculation agent are not quoting as mentioned in clause (4), LIBOR in effect on the applicable Interest Determination Date.

"LIBOR Currency" means the currency specified in the applicable pricing supplement as to which LIBOR will be calculated or, if no currency is specified in the applicable pricing supplement, United States dollars.

"Designated LIBOR Page" means either:

. if "LIBOR Telerate" is designated in the applicable pricing supplement or neither "LIBOR Reuters" nor "LIBOR Telerate" is specified in the applicable pricing supplement as the method for calculating LIBOR, the display on Bridge Telerate, Inc., or any successor service on the page specified in the pricing supplement, or any page as may replace the specified page on that service, for the purpose of displaying the London interbank rates of major banks for the applicable LIBOR Currency, or

. if "LIBOR Reuters" is specified in the applicable pricing supplement, the display on the Reuters Monitor Money Rates Service or any successor service on the page specified in the applicable pricing supplement, or any other page as may replace the specified page on that service, for the purpose of displaying the London interbank rates of major banks for the applicable LIBOR Currency.

"Principal Financial Center" means the capital city of the country to which the LIBOR Currency relates, except that with respect to United States dollars, Australian dollars, Canadian dollars, Deutsche marks, Dutch guilders, Italian lire, Portuguese escudos, South African rand and Swiss francs, the "Principal Financial Center" will be The City of New York, Sydney, Toronto, Frankfurt, Amsterdam, Milan, London, Johannesburg and Zurich, respectively.

Treasury Rate. The "Treasury Rate" means:

(1) the rate from the auction held on the applicable Interest Determination Date, which we refer to as the "Auction," of direct obligations of the United States, which we refer to as "Treasury Bills," having the Index Maturity specified in the applicable pricing supplement under the caption "INVESTMENT RATE" on the display on Bridge Telerate, Inc., or any successor service on page 56 or 57 or any other pages as may replace page 56 or 57 on that service, which we refer to as "Telerate Page 56" and "Telerate Page 57," respectively, or

(2) if the rate referred to in clause (1) is not so published by 3:00 p.m., New York City time, on the related calculation date, the "Bond Equivalent Yield," as defined below, of the rate for the applicable Treasury Bills as published in H.15 Daily Update, or other recognized electronic source used for the purpose of displaying the applicable rate, under the caption "U.S. Government Securities/Treasury Bills/Auction High," or

(3) if the rate referred to in clause (2) is not so published by 3:00 p.m., New York City time, on the related calculation date, the Bond Equivalent Yield of the auction rate of the applicable Treasury Bills announced by the United States Department of the Treasury, or

(4) if the rate referred to in clause (3) is not announced by the United States Department of the Treasury, or if the Auction is not held, the Bond Equivalent Yield of the rate on the applicable Interest Determination Date of the applicable Treasury Bills published in H.15(519) under the caption "U.S. Government Securities/Treasury Bills/Secondary Market," or

(5) if the rate referred to in clause (4) is not so published by 3:00 p.m., New York City time, on the related calculation date, the rate on the applicable Interest Determination Date of the applicable Treasury Bills published in H.15 Daily Update, or other recognized electronic source used for the purpose of displaying the applicable rate, under the caption "U.S. Government Securities/Treasury Bills/Secondary Market," or

(6) if the rate referred to in clause (5) is not so published by 3:00 p.m., New York City time, on the related calculation date, the rate on the applicable Interest Determination Date calculated by the calculation agent as the Bond Equivalent Yield of the arithmetic mean of the secondary market bid rates, as of approximately 3:30 p.m., New York City time, on the applicable Interest Determination Date, of three primary United States government securities dealers, which may include an agent or its affiliates, selected by the calculation agent, for the issue of Treasury Bills with a remaining maturity closest to the Index Maturity specified in the applicable pricing supplement, or

(7) if the dealers selected by the calculation agent are not quoting as mentioned in clause (6), the Treasury Rate in effect on the applicable Interest Determination Date.

"Bond Equivalent Yield" means a yield calculated in accordance with the following formula and expressed as a percentage:

                                   D x N
Bond Equivalent Yield =  ---------------------  x 100
                               360 - (D x M)

where "D" refers to the applicable per annum rate for Treasury Bills quoted on a bank discount basis and expressed as a decimal, "N" refers to 365 or 366, as the case may be, and "M" refers to the actual number of days in the interest period for which interest is being calculated.

OTHER PROVISIONS; ADDENDA

Any provisions with respect to a series of notes, including the specification and determination of one or more Interest Rate Bases, the calculation of the interest rate applicable to a floating rate note, the applicable interest payment dates, the Stated Maturity Date, any redemption or repayment provisions or any other matter relating to the applicable notes may be modified by terms specified under "Other Provisions" on the face of the applicable notes. Any of these provisions may also be modified in an Addendum relating to the applicable notes, if specified on the face of the applicable notes and in the applicable pricing supplement.

DEFEASANCE AND COVENANT DEFEASANCE

We will be discharged from all of our obligations with respect to the notes, except for certain obligations to exchange or register the transfer of notes, to replace stolen, lost or mutilated notes, to maintain paying agencies and to hold moneys for payment in trust, upon the deposit in trust for the benefit of the holders of the notes of money or U.S. government obligations, or both. A deposit by us in this manner will provide money in an amount sufficient to pay the principal, premium, if any, and/or interest, if any, on the notes on the respective stated maturities in accordance with the terms of the indenture and the notes through the payment of principal and interest in respect of the deposited money or government obligations in accordance with their terms. This defeasance or discharge may occur only if, among other things, we have delivered to the trustee an opinion of counsel to the effect that we have received from, or there has been published by, the United States Internal Revenue Service a ruling, or there has been a change in tax law, in either case to the effect that holders of the notes will not recognize gain or loss for federal income tax purposes as a result of the deposit, defeasance and discharge and will be subject to federal income tax on the same amount, in the same manner and at the same times as would have been the case if the deposit, defeasance and discharge were not to occur.

In certain circumstances, we may omit to comply with specified restrictive covenants applicable to the notes. In those circumstances, the occurrence of certain events of default, which are described in the accompanying prospectus under "-- Events of Default," will be deemed not to be or result in an event of default with respect to the notes. In order to exercise this option, we will be required to deposit, in trust for the benefit of the holders of the notes, money or U.S. government obligations, or both. A deposit by us in this manner will provide money in an amount sufficient to pay the principal, premium, if any, and/or interest, if any, on the notes on the respective stated maturities in accordance with the terms of the indenture and the notes through the payment of principal and interest in respect of the money or government obligations in accordance with their terms. We will also be required, among

other things, to deliver to the trustee an opinion of counsel to the effect that holders of the notes will not recognize gain or loss for federal income tax purposes as a result of the deposit and defeasance of certain obligations and will be subject to federal income tax on the same amount, in the same manner and at the same times as would have been the case if the deposit and defeasance were not to occur. In the event we exercise this option with respect to any notes and the notes were declared due and payable because of the occurrence of any event of default, the amount of money and U.S. government obligations deposited in trust would be sufficient to pay amounts due on the notes at the time of their respective stated maturities, but might not be sufficient to pay amounts due on the notes upon any acceleration resulting from the event of default. In this case, we would remain liable for those payments.

DISCOUNT NOTES

We may from time to time offer notes at a price less than their redemption price at maturity, resulting in the applicable notes being treated as if they were issued with original issue discount for federal income tax purposes. These notes are called "Discount Notes." Discount Notes may pay no current interest or interest at a rate that at the time of issuance is below market rates. Additional considerations relating to any Discount Notes will be described in the applicable pricing supplement.

AMORTIZING NOTES

We may from time to time offer notes, which we call "Amortizing Notes," with amounts of principal and interest payable in installments over the term of the notes. Unless otherwise specified in an applicable pricing supplement, interest on each Amortizing Note will be computed on the basis of a 360-day year of twelve 30-day months. Payments with respect to Amortizing Notes will be applied first to interest due and payable on the Amortizing Notes and then to the reduction of the unpaid principal amount of the Amortizing Notes. Further information concerning additional terms and conditions of any issue of Amortizing Notes will be specified in the applicable pricing supplement. A table setting forth repayment information in respect of each Amortizing Note will be specified in the applicable pricing supplement.

BOOK-ENTRY NOTES

DESCRIPTION OF THE GLOBAL SECURITIES

Upon issuance, all notes in book-entry form having the same date of issue, maturity and otherwise having identical terms and provisions will be represented by one or more fully registered global securities, which we call the "Global Notes." Each Global Note will be deposited with, or on behalf of, The Depository Trust Company, as depository, and registered in the name of the depository or a nominee of the depository. Unless and until it is exchanged in whole or in part for notes in certificated form, no Global Note may be transferred except as a whole by the depository or by a nominee of the depository.

DEPOSITORY PROCEDURES

For information about the depository and its procedures, see "Description of the Debt Securities -- Form, Denomination and Registration; Book-Entry System" in the accompanying prospectus.

DESCRIPTION OF THE DEBT SECURITIES

We may from time to time offer debt securities consisting of our unsecured debentures, notes (including notes commonly known as medium-term notes) or other evidences of indebtedness in one or more series at an aggregate initial offering price not to exceed $200 million pursuant to this prospectus. We refer to these debentures, notes or other evidences of indebtedness as the "debt securities." The following description highlights the general terms and provisions of the debt securities. When we offer debt securities in the future, the prospectus supplement will explain the particular terms of those securities and the extent to which these general provisions may apply.

The debt securities will be issued under an indenture, dated as of October 1, 1988, between us (as successor to Cleco Utility Group Inc.) and Bankers Trust Company, as supplemented and amended. The Bank of New York is the current trustee under the indenture. Copies of the indenture and the Agreement of Resignation, Appointment and Acceptance under which The Bank of New York succeeded Bankers Trust Company as trustee under the indenture are included among the exhibits to the registration statement of which this prospectus is a part.

We have summarized selected provisions of the indenture below. The summary is not complete. You should read the indenture filed as an exhibit to the registration statement of which this prospectus is a part for any provisions that may be important to you. In the summary below, we have included references to section numbers of the indenture so that you can easily locate these provisions. In describing the provisions of the indenture, we use the term "corporation" as it is defined in the indenture. The indenture defines "corporation" to include corporations, associations, companies, including limited liability companies, and business trusts.

Unless otherwise indicated in a prospectus supplement, the covenants contained in the indenture and the debt securities would not necessarily afford holders of the debt securities protection in the event of a disposition of one or more of our generating facilities or a highly leveraged or other transaction involving us, including a decline in our credit quality, that may adversely affect holders.

GENERAL

The indenture does not limit the principal amount of unsecured debentures, notes or other obligations that we may issue under it from time to time in one or more series. The term "indenture securities," as used in this prospectus, refers to all of these obligations issued and issuable under the indenture from time to time and includes the debt securities. We may issue additional indenture securities, in addition to the debt securities, in the future under the indenture. At September 30, 2000, we had approximately $240 million principal amount of indenture securities issued and outstanding under the indenture.

A prospectus supplement relating to any series of debt securities being offered will include specific terms relating to the offering. These terms will include some or all of the following:

. the title and series of the debt securities;

. the total principal amount of the debt securities;

. any limit on the aggregate principal amount of a series of debt securities;

. the date on which the principal of the debt securities is payable;

. the interest rate that the debt securities will bear, if any, including any method or formula to determine such rate, and the interest payment dates for the debt securities;

. the place where the principal, premium, if any, and/or interest, if any, on the debt securities will be payable;

. any optional redemption periods and the terms of that option;

. any sinking fund or other provisions that would obligate us to repurchase or otherwise redeem the debt securities;

. the manner in which payments of principal, premium, if any, and/or interest, if any, on the debt securities will be determined, if these amounts will be based on an index, formula or other method;

. the currency in which payment of principal, premium, if any, and interest, if any, on the debt securities will be payable, if other than U.S. currency; and

. any other terms of the debt securities. (Section 301)

RANKING; LIMITATIONS ON MORTGAGES AND LIENS

The debt securities will rank equally with all of our other unsecured and unsubordinated indebtedness. As of September 30, 2000, we had outstanding $60 million aggregate principal amount of first mortgage bonds issued under and secured by an Indenture of Mortgage, dated as of July 1, 1950, between us and Bank One, Louisiana, N.A., formerly The National Bank of Commerce in New Orleans, as trustee. In this prospectus, we sometimes refer to this Indenture of Mortgage as the "mortgage indenture." Holders of the first mortgage bonds issued under the mortgage indenture would have a prior claim on certain of our material assets upon dissolution, winding up, liquidation or reorganization by us. We may issue mortgage bonds under the mortgage indenture in addition to the first mortgage bonds currently issued and outstanding.

So long as any indenture securities remain outstanding, the indenture prohibits us from creating or permitting any mortgage, lien or similar encumbrance, which we call a "mortgage," on any of our properties, unless we secure the indenture securities equally and ratably with the mortgage being created or permitted. This prohibition does not apply to:

. mortgages to secure first mortgage bonds issued under the mortgage indenture;

. "permitted liens" as defined in the Twenty-Fifth Supplemental Indenture to the mortgage indenture;

. the following mortgages, provided that the mortgages do not apply to property owned by us or one of our subsidiaries, other than unimproved real property on which the construction or improvement is located:

. mortgages to secure or provide for the payment of the purchase price or cost of property acquired, constructed or improved after the date of the indenture that are created or assumed

- within 120 days after the acquisition or completion of construction or improvement or

- within six months of the 120-day period, if pursuant to a firm commitment for financing arrangements, or

. mortgages on any property existing at the time the property is acquired;

. existing mortgages of a corporation merged with or into us or one of our subsidiaries;

. mortgages of any corporation existing at the time it becomes one of our subsidiaries;

. mortgages securing debt owed by one of our subsidiaries to us or to another one of our subsidiaries;

. mortgages in favor of governmental bodies to secure advances or other payments under any contract or statute or to secure indebtedness incurred to finance the purchase price or cost of constructing or improving the property subject to these mortgages, including mortgages to secure pollution control or industrial revenue bonds;

. mortgages to secure loans to us or one of our subsidiaries maturing within 12 months and made in the ordinary course of business;

. mortgages on any property, including any natural gas, oil or other mineral property, to secure all or part of the cost of exploration, drilling or development of the property or to secure debt incurred to provide funds for any of these costs;

. mortgages existing on the date of the indenture;

. certain mortgages typically incurred in the ordinary course of business, including mortgages resulting from legal proceedings contested in good faith;

. mortgages for extending, renewing or replacing indebtedness secured by any of the mortgages described in the bullet point items above, so long as

. the principal amount of the indebtedness secured by these mortgages is not more than the principal amount of indebtedness secured at the time of the extension, renewal or replacement plus any premiums incurred in retiring the indebtedness and

. the mortgage for the extension, renewal or replacement is limited to the original property or indebtedness;

. mortgages on any property of one of our subsidiaries, except that the prohibition does apply if the property of the subsidiary is being used to secure any of our indebtedness; or

. the issuance, assumption or guarantee by us or one of our subsidiaries of indebtedness secured by a mortgage up to an amount that, together with all other secured indebtedness of ours that does not fall

under one of the above exceptions, is less than 5% of our "consolidated net tangible assets," which consists of:

. the total amount of assets appearing on our balance sheet or consolidated balance sheet, minus certain amounts for depreciation, intangible assets and other items. (Section 1009)

MODIFICATION OF THE INDENTURE

We and the trustee may modify the indenture without the consent of holders of indenture securities to do certain things, such as to establish the form and terms of a series of indenture securities or to add to our covenants under the indenture for the benefit of holders. (Section 901) Additionally, with certain exceptions, we and the trustee may modify the indenture or the rights of the holders of indenture securities if we obtain the consent of the holders of at least 50% in principal amount of all outstanding indenture securities affected by the modification. However, modifications of provisions of the indenture involving the following items will not be effective against any holder without the holder's consent:

. the principal, premium or interest payment terms of any indenture security;

. waivers of past defaults or certain requirements for quorum and voting; and

. with certain exceptions, percentage requirements for modification or waiver of provisions of the indenture. (Section 902)

EVENTS OF DEFAULT

With respect to indenture securities of a particular series, the following are events of default under the indenture:

. failure for three "business days" (as defined in the indenture) after payment is due to pay principal and/or premium, if any, on any indenture security of the particular series;

. failure for 30 days after payment is due to pay interest on any indenture security of the particular series;

. failure for three business days after payment is due to make any sinking fund installment required by the terms of the particular series;

. with certain exceptions, violation of any covenant or warranty made by us in the indenture that persists for at least 60 days after we have been notified of the violation in the manner provided in the indenture by the trustee or by the holders of 10% of the particular series;

. default under other mortgages or instruments or under other series of indenture securities resulting in acceleration of indebtedness of over $5 million, unless the default is rescinded or discharged within 90 days after we are given notice in the manner provided in the indenture regarding the default from the trustee or from the holders of 25% of the particular series;

. certain events of bankruptcy, insolvency or reorganization; and

. any other event of default provided with respect to the particular series.
(Section 501)

An event of default for a particular series of indenture securities does not necessarily constitute an event of default for any other series of indenture securities issued under the indenture.

If an event of default occurs and continues, either the trustee or the holders of at least 25% of the series may declare those indenture securities due and payable. Holders of a majority of a series of indenture securities may waive past defaults for that series under certain circumstances. (Section 502) We must furnish annually to the trustee a statement regarding performance by us of certain of our obligations under the indenture and any related defaults.
(Section 1005)

SATISFACTION AND DISCHARGE OF INDENTURE

With certain exceptions, we will be discharged from our obligations under the indenture with respect to any series of indenture securities by

. delivering all outstanding indenture securities (other than indenture securities to which specified conditions apply) to the trustee for cancellation and paying all other amounts payable by us under the indenture, or

. paying the principal, premium, if any, interest, if any, and any other amounts payable by us under the indenture when

. all outstanding indenture securities (other than indenture securities to which specified conditions apply) have become due and payable or will become due and payable within one year, or

. for indenture securities redeemable at our option, such indenture securities are to be called for redemption within one year under arrangements satisfactory to the trustee.

In addition to the requirements described above, we must also deliver a specified certificate and opinion of counsel to the trustee relating to the satisfaction and discharge of the indenture in order to be discharged from our obligations under the indenture. (Section 401)

CONSOLIDATION, MERGER, SALE OR CONVEYANCE

The indenture allows us to consolidate or merge with another corporation or sell, lease or convey all or substantially all of our assets to another corporation only if

. we will be the surviving corporation, or the successor corporation is incorporated in the United States and assumes all of our obligations under the indenture securities and the indenture in a manner satisfactory to the trustee and

. no default exists immediately after the transaction. (Section 801)

FORM, DENOMINATION AND REGISTRATION; BOOK-ENTRY SYSTEM

Unless otherwise indicated in a prospectus supplement, the debt securities will be issued only in fully registered form, without coupons, in denominations of $1,000 or integral multiples of $1,000. (Section 302) You will not have to pay a service charge to transfer or exchange debt securities, but we may require you to pay taxes or other governmental charges for exchanges involving transfers under the terms of the indenture. (Section 305)

Unless otherwise indicated in a prospectus supplement, each series of debt securities will be represented by one or more fully registered global notes, which we call the "Global Notes." Each Global Note will be deposited with, or on behalf of, The Depository Trust Company, as depository, and registered in the name of the depository or a nominee of the depository. Unless and until it is exchanged in whole or in part for debt securities in certificated form, no Global Note may be transferred except as a whole by the depository or by a nominee of the depository.

So long as the depository or its nominee is the registered owner of a Global Note, the depository or its nominee, as the case may be, will be considered the sole owner or holder of the debt securities represented by the

Global Note for all purposes under the indenture. Except as provided below, beneficial owners of a Global Note representing debt securities will not be entitled to have the debt securities registered in their names, will not receive or be entitled to receive physical delivery of the debt securities in definitive form and will not be considered the registered holders of the debt securities under the indenture. Furthermore, no Global Note representing debt securities will be exchangeable or transferable. Accordingly, each beneficial owner must rely on the procedures of the depository and, if that beneficial owner is not a "participant," as described below, on the procedures of the participant through which the beneficial owner owns its interest, to exercise any rights of a holder under the indenture. We understand that under existing industry practices, if we were to request any action of holders or if an owner of a beneficial interest in a Global Note representing debt securities were to desire to take any action that a holder is entitled to take under the indenture,

. the depository would authorize the participants holding the relevant beneficial interests to give or take the desired action, and

. the participants would authorize beneficial owners owning through the participants to give or take the desired action or would otherwise act upon the instructions of beneficial owners.

Each Global Note will be exchangeable for debt securities in certificated form only if:

. the depository is at any time unwilling or unable to continue as depository and a successor depository is not appointed by us within 60 days, or

. we, in our sole discretion, determine that the Global Notes will be exchangeable for certificated notes.

If one of the above events occurs, the Global Note or Global Notes will be exchangeable for debt securities in certificated form of like tenor and of an equal aggregate principal amount. The certificated debt securities will be registered in the name or names of the beneficial owners of the Global Note or Notes as the depository instructs the trustee. It is expected that instructions may be based upon directions received by the depository from participants with respect to ownership of beneficial interests in Global Notes.

The laws of some states may require that certain purchasers of securities take physical delivery of securities in definitive form. These laws may impair your ability to own, transfer or pledge beneficial interests in Global Notes.

The following is based on information furnished by the depository:

The depository will act as securities depository for the debt securities. The debt securities will be issued as fully registered securities registered in the name of Cede & Co., the depository's partnership nominee. One fully registered Global Note in an amount up to $200 million will be issued for each issue of debt securities, each in the aggregate principal amount of the issue, and will be deposited with the depository.

The depository 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. The depository holds securities that its "participants" deposit with the depository. The depository 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 of the depository include securities brokers and dealers, including the agents, banks, trust companies, clearing corporations and certain other organizations.

The depository is owned by a number of its direct participants and by the New York Stock Exchange, Inc., the American Stock Exchange LLC and the National Association of Securities Dealers, Inc. Access to the depository's 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. The rules applicable to the depository and its participants are on file with the SEC.

Purchases of debt securities under the depository's system must be made by or through direct participants, which will receive a credit for those debt securities on the depository's records. The ownership interest of each beneficial owner of each debt security represented by a Global Note is, in turn, to be recorded on the records of direct participants and indirect participants. Beneficial owners of debt securities will not receive written confirmation from the depository of their purchase, but beneficial owners are expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the direct participants or indirect participants through which the beneficial owners entered into the transaction. Transfers of ownership interests in a Global Note representing debt securities are to be accomplished by entries made on the books of participants acting on behalf of beneficial owners. Beneficial owners of a Global Note representing debt securities will not receive debt securities in certificated form representing their ownership interests in the debt securities, except in the event that use of the book-entry system for those debt securities is discontinued.

To facilitate subsequent transfers, all Global Notes representing debt securities that are deposited with, or on behalf of, the depository are registered in the name of the depository's nominee, Cede & Co. The deposit of Global Notes with or on behalf of the depository and their registration in the name of Cede & Co. effect no change in beneficial ownership. The depository has no knowledge of the actual beneficial owners of the Global Notes representing the debt securities. Instead, the depository's records reflect only the identity of the direct participants to whose accounts the debt securities 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 the depository 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.

Neither the depository nor Cede & Co. will consent or vote with respect to the Global Notes representing the debt securities. Under its usual procedures, the depository mails an omnibus proxy to us as soon as possible after the applicable record date. The omnibus proxy assigns Cede & Co.'s consenting or voting rights to those direct participants, identified in a listing attached to the omnibus proxy, to whose accounts the debt securities are credited on the applicable record date.

We will make principal, premium, if any, and/or interest, if any, payments on the Global Notes representing the debt securities in immediately available funds to the depository. The depository's practice is to credit direct participants' accounts on the applicable payment date in accordance with their respective holdings shown on the depository's records unless the depository has reason to believe that it will not receive payment on the applicable 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 accounts of customers in bearer form or registered in "street name," and will be the responsibility of the applicable participant and not of the depository, the trustee, any agent or us, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal, premium, if any, and/or interest, if any, to the depository will be our responsibility and that of the trustee. Disbursement of payments to direct participants will be the responsibility of the depository, and disbursement of payments to the beneficial owners will be the responsibility of direct participants and indirect participants.

If applicable, redemption notices must be sent to Cede & Co. If less than all of the debt securities of like tenor and terms are being redeemed, the depository's practice is to determine by lot the amount of the interest of each direct participant in the issue to be redeemed.

A beneficial owner must give notice of any option to elect to have its debt securities repaid by us, through its participant, to the trustee, and will effect delivery of the applicable debt securities by causing the direct participant to transfer the participant's interest in the Global Note representing the debt securities, on the depository's records, to the trustee. The requirement for physical delivery of debt securities in connection with a demand for repayment will be deemed satisfied when the ownership rights in the Global Note or Notes representing the debt securities are transferred by direct participants on the depository's records.

The depository may discontinue providing its services as securities depository with respect to the debt securities at any time by giving reasonable notice to the trustee or us. Neither we, the trustee nor any underwriter or agent will have any responsibility for the performance by the depository or its participants or indirect participants of their obligations. In the event that a successor securities depository is not obtained, debt securities in certificated form are required to be printed and delivered. Similarly, we may decide to discontinue use of the system of book-entry transfers through the depository or a successor securities depository. In that event, debt securities in certificated form will be printed and delivered.

The information in this section concerning the depository and the depository's system has been obtained from sources that we believe to be reliable, but we take no responsibility for the accuracy of the information.

CONCERNING THE TRUSTEE

The Bank of New York is the trustee under the indenture. The trustee also may act as a depository of funds for, make loans to and perform other services for us in the normal course of business, including acting as trustee under other indentures of ours. The corporate trust office of the trustee is located at 101 Barclay Street, New York, New York 10286.

The trustee generally will be under no obligation to exercise any of its rights or powers under the indenture at the request or direction of any of the holders, unless the holders offer a reasonable indemnity to the trustee. (Section 603) The holders of a majority of a series of indenture securities generally may direct the time, method and place of conducting any proceedings for any remedy available to the trustee, or exercising any trust or power conferred on the trustee with respect to the indenture securities. (Section 512) The right of a holder to institute a proceeding under the indenture is subject to certain conditions, but each holder has an absolute right to receive payment of principal, premium, if any, and interest, if any, when due and to institute suit for the enforcement of payment of these amounts. This right is subject to certain limited exceptions in the case of interest. (Section 508) Within 90 days after a default with respect to any series of indenture securities, the trustee is required to give the holders notice of the default, unless the default has been cured or waived. The trustee may withhold this notice if it determines that it is in the best interest of the holders to do so, but the trustee may not withhold notice in this manner with respect to a default in the payment of principal, premium, if any, and/or interest, if any, on any indenture security. (Section 602)

The trustee may resign from its duties with respect to the indenture at any time. We may remove the trustee in certain circumstances, and the holders of a majority of a series of indenture securities may remove the trustee with respect to that series. If the trustee resigns, is removed or becomes incapable of acting as trustee or a vacancy occurs in the office of the trustee for any reason, a successor trustee will be appointed in accordance with the provisions of the indenture. (Article Six)

The indenture contains the provisions required by the Trust Indenture Act of 1939 with reference to the disqualification of the trustee if the trustee has or acquires any "conflicting interest," as that term is defined in the indenture. (Section 608) In the event the trustee becomes a creditor of ours, the indenture also contains certain limitations on the right of the trustee to obtain payment of claims in certain cases, or to realize on certain property received by it in respect of any claims as security or otherwise. (Section 613)

PLAN OF DISTRIBUTION

We may sell debt securities in and outside the United States:

. through an underwriter or underwriters,

. through dealers,

. through agents,

. directly to purchasers, including our affiliates, or

. through a combination of any of these methods.

We may authorize underwriters, dealers and agents to solicit offers by institutions to purchase debt securities from us pursuant to delayed delivery contracts providing for payment and delivery on a specified date. If we elect to use delayed delivery contracts, we will describe the date of delivery, the conditions of the sale and the commissions payable for solicitation of such contracts in the prospectus supplement.

We will describe the terms of any offering of debt securities in the prospectus supplement, including:

. the method of distribution,

. the name or names of any underwriters, dealers, purchasers or agents, and any managing underwriter or underwriters,

. the purchase price of the debt securities and the proceeds we receive from the sale,

. any underwriting discounts, agency fees or other form of underwriters' compensation,

. any discounts and concessions allowed, reallowed or paid to dealers or agents, and

. the expected time of delivery of the offered debt securities.

We may change the initial public offering price and any discount or concessions allowed or reallowed to dealers from time to time.

If we use underwriters to sell our debt securities, the underwriting agreement will provide that the obligations of the underwriters are subject to certain conditions precedent and that the underwriters will be obligated to purchase all of the offered debt securities if any are purchased. In connection with the sale of debt securities, underwriters may receive compensation from us or from purchasers of debt securities for whom they may act as agents in the form of discounts, concessions or commissions. Underwriters may sell debt securities to or through dealers, and dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters and/or commissions from the purchasers for whom they may act as agents.

If we use a dealer to sell debt securities, we will sell the debt securities to the dealer as principal. The dealer may then resell the debt securities to the public at varying prices to be determined by the dealer at the time of resale. These dealers may be deemed underwriters, as such term is defined in the Securities Act of 1933, of the debt securities they offer and sell. If we elect to use a dealer to sell debt securities, we will provide the name of the dealer and the terms of the transaction in the prospectus supplement.

We may sell the debt securities directly. In this case, no underwriters or agents would be involved. We may also sell the debt securities through agents designated from time to time. In the prospectus supplement, we will name any agent involved in the offer or sale of the debt securities, and we will describe any commissions payable to the agent. Unless we inform you otherwise in the prospectus supplement, any agent will agree to use its reasonable best efforts to solicit purchases for the period of its appointment.

Debt securities may also be offered and sold in connection with a remarketing upon their purchase, in accordance with a redemption or repayment by their terms or otherwise by one or more remarketing firms acting as principals for their own accounts or as our agents. We will identify any remarketing firm, the terms of any remarketing agreement and the compensation to be paid to a remarketing firm in the prospectus supplement. Remarketing firms may be deemed underwriters under the Securities Act of 1933.

Underwriters, agents, dealers and some purchasers participating in the distribution of debt securities may be deemed to be underwriters, and any discounts and commissions received by them and any profit realized by them on resale of debt securities may be deemed to be underwriting discounts and commissions under the Securities Act of 1933.

Unless we inform you otherwise in the prospectus supplement, none of our managers, officers or employees will solicit or receive a commission in connection with direct sales of debt securities, although these persons may respond to inquiries by potential purchasers and perform ministerial and clerical work in connection with any such direct sales.

We may enter into agreements with the underwriters, agents, purchasers, dealers or remarketing firms who participate in the distribution of our debt securities that will require us to indemnify them against specified liabilities, including liabilities under the Securities Act of 1933, or to contribute to payments that they or any person controlling them may be required to make for those liabilities. Underwriters, agents or dealers may be our customers. They may also engage in transactions with us or perform services for us or for our affiliates in the ordinary course of business.

Each series of debt securities will be a new issue with no established trading market. We may elect to list any series of debt securities on an exchange. However, we are not obligated to do so. It is possible that one or more underwriters may make a market in a series of debt securities. However, they will not be obligated to do so and may discontinue market making at any time without notice. We cannot assure you that a liquid trading market for the debt securities will develop.

In connection with an offering, the underwriters or agents may purchase and sell debt securities in the open market. These transactions may include over- allotment and stabilizing transactions and purchases to cover syndicate short positions created in connection with the offering. Stabilizing transactions consist of bids or purchases for the purpose of preventing or retarding a decline in the market price of the debt securities. Syndicate short positions involve the sale by the underwriters or agents of a greater number of debt securities than they are required to purchase from us in the offering. The underwriters also may impose a penalty bid, in which selling concessions allowed to syndicate members or other broker dealers in respect of the debt securities sold in the offering for their account may be reclaimed by the syndicate if the debt securities are repurchased by the syndicate in stabilizing or covering transactions. These activities may stabilize, maintain or otherwise affect the market price of the debt securities, which may be higher than the price that might otherwise prevail in the open market, and these activities, if commenced, may be discontinued at any time. These transactions may be effected on the NYSE, in the over-the-counter market or otherwise.