Filed Pursuant to Rule 424(b)(5)
Registration File No. 333-150101

 

Subject to Completion, dated November 7, 2008

 

PROSPECTUS SUPPLEMENT
(To Prospectus dated April 4, 2008)

 

 

$100,000,000     % Senior Notes Due 2010

 

In October 2005, we issued $100,000,000 aggregate principal amount of 5.1% Senior Notes initially due August 16, 2010, which we refer to herein as the “notes”, in connection with the issuance of 4,000,000 6.625% Equity Units, which we refer to herein as the “Units”. This is a remarketing of $100,000,000 aggregate principal amount of the notes on behalf of the Unit holders or any holder of notes that are not components of Units who elects to participate in the remarketing.

 

From and after November 16, 2008, the notes will bear interest at the rate of     % per year. We will pay interest semi-annually in arrears on May 16 and November 16 of each year, commencing May 16, 2009. The notes will mature on November 16, 2010. We may not redeem the notes prior to their maturity on November 16, 2010. Upon the occurrence of a Change of Control, we will generally be required to make an offer to repurchase the notes at a price equal to 101% of their aggregate principal amount plus accrued and unpaid interest to, but not including, the date of repurchase.

 

We may purchase up to $90,000,000 principal amount of the notes in the remarketing. Because we will cancel all of the notes we purchase in the remarketing, our purchase may adversely affect the liquidity of the remaining outstanding notes. See “Risk Factors — An active trading market for the securities may not develop, especially if we purchase a substantial portion of the notes in the remarketing.”

 

The notes are and will be our senior unsecured obligations and rank and will rank equally with all of our existing and future senior unsecured debt and senior to any future subordinated unsecured debt that we may incur.

 

The notes are not and will not be listed on any securities exchange or quoted on any automated quotation system. Currently there is no public trading market for the notes.

 

Investing in the notes involves risks. “Risk Factors” begin on page S-8.

 

 

 

 

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus supplement or the accompanying prospectus is accurate or complete. Any representation to the contrary is a criminal offense.

 

The notes will be ready for delivery in book-entry form only through The Depository Trust Company on or about November 17, 2008.

 

 

 

 

Remarketing Agents

 

 

 

November   , 2008

 

TABLE OF CONTENTS

 

Prospectus Supplement

 

 

Prospectus

 

 

This document is in two parts. The first part is this prospectus supplement, which describes the specific terms of this remarketing. The second part, the accompanying prospectus, gives more general information, some of which may not apply to this offering. You should read this entire prospectus supplement as well as the accompanying prospectus and the documents incorporated by reference that are described under “Where You Can Find More Information” herein. In the event that the information in this prospectus supplement is different from or inconsistent with that contained in the accompanying prospectus, you should rely on the information contained in this prospectus supplement. The description of the notes and indenture in this prospectus supplement replaces the description of the general provisions of the debt securities and the indenture in the accompanying prospectus which describes debt securities issued under a different indenture.

 

You should rely only on the information contained or incorporated by reference in this prospectus supplement, the accompanying prospectus and any free writing prospectus prepared by or on behalf of us, or information to which we have referred you. We have not, and the remarketing agents have not, authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not, and the remarketing agents are not, making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus supplement, the accompanying prospectus and the documents incorporated by reference is accurate only as of the respective dates of those documents in which the information is contained. Our business, financial condition, results of operations and prospects may have changed since those dates.

 

Unless otherwise indicated or unless the context otherwise requires, all references in this prospectus supplement and the accompanying prospectus to “PNMR,” “PNM Resources,” “we,” “our” and “us” refer to PNM Resources, Inc. Unless otherwise indicated, financial information included or incorporated by reference herein is for PNM Resources, Inc. and its subsidiaries on a consolidated basis.

 

PROSPECTUS SUPPLEMENT SUMMARY

Issuer		PNM Resources, Inc.
Securities		$100,000,000 aggregate principal amount of     % Senior Notes Due 2010, which we refer to herein as the “notes.”
Issuer Participation		We may purchase up to $90,000,000 principal amount of notes in the remarketing.
Denominations		The notes being remarketed have been issued in denominations of $1,000 and integral multiples thereof.
Maturity Date		November 16, 2010
Interest Rate		From and after November 16, 2008, the notes will bear interest at the rate of     % per year.
Interest Payment Dates		We will pay interest semi-annually in arrears on May 16 and November 16 of each year, commencing May 16, 2009.
Mandatory Redemption		We are not and will not be required to make mandatory redemption or sinking fund payments on the notes.
Optional Redemption		We may not redeem the notes prior to their maturity on November 16, 2010.
Change of Control		Upon the occurrence of a change of control, each holder of notes will have the right to require us to repurchase all or any part of such holder’s notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest to the date of repurchase. See “Description of Notes — Repurchase at the Option of Holders — Change of Control.”
Ranking		The notes are and will be our general unsecured obligations. The notes rank and will rank equally in right of payment with all our existing and future senior debt. The notes are and will be senior in right of payment to any subordinated debt that we may incur. As of September 30, 2008, we had $751.9 million aggregate principal amount of short-term and long-term debt outstanding ($13.2 million of which is secured). This amount does not include borrowings of our subsidiaries PNM and TNMP, but does include borrowings of First Choice under the PNMR Revolving Facility (defined below), which PNMR guarantees. The notes are and will be effectively subordinated to the claims of all creditors, including trade creditors and tort claimants, of our subsidiaries. As of September 30, 2008, our subsidiaries PNM and TNMP had approximately $1,713.6 million aggregate principal amount of short-term and long-term debt outstanding ($65.0 million of which is secured), excluding intercompany loans. See “Description of the Notes — Ranking” below.
Certain Covenants		The indenture limits our ability, among other things:
		•    to create liens without equally and ratably securing the notes; and
		•    to engage in certain sale/leaseback transactions.

		It also limits our ability to engage in mergers, consolidations and certain sales of assets.
		These covenants are subject to important exceptions and qualifications, as described under “Description of Notes — Covenants” below.
The Remarketing		The notes being remarketed were issued originally by us in October 2005 in connection with our issuance and sale of the Units. Each Unit initially consisted of both a purchase contract and a note. In order to secure its obligation under the purchase contract, the holder of the Units pledged its notes to us through a collateral agent. Pursuant to the terms of the Units, the remarketing agents are remarketing the notes originally issued in October 2005 on behalf of the current holder of Units in accordance with the remarketing agreement, as supplemented by the supplemental remarketing agreement among us, the remarketing agents and U.S. Bank National Association, as purchase contract agent and as attorney-in-fact for the holder of the purchase contracts. See “Plan of Distribution” in this prospectus supplement.
		The terms of the Units and the notes require the remarketing agents to use their commercially reasonable efforts to remarket the notes of any holders participating in the remarketing at a price of 100% of the aggregate principal amount of such notes. In connection with the remarketing, Citigroup Global Markets Inc., Banc of America Securities LLC, Wedbush Morgan Securities Inc., RBC Capital Markets Corporation and UBS Securities LLC, as remarketing agents, have reset the interest rate on the notes to     % per year.
Use of Proceeds		The remarketing agents will remit to U.S. Bank National Association, as collateral agent, the proceeds from the remarketing of the notes currently held as components of the Units. The collateral agent will pay to us 100% of the aggregate principal amount of the remarketed notes currently held as components of the Units, to satisfy in full the obligation of the holder of those Units to purchase our common stock and/or preferred stock, which we will issue on November 17, 2008. Any remaining proceeds from the remarketing will be remitted to the holders of the Units whose notes were sold in the remarketing.
		We may purchase and cancel up to $90.0 million aggregate principal amount of the notes. If we purchase $90.0 million aggregate principal amount of the notes, we will have approximately $10.0 million in cash remaining after the purchase of such notes and the sale of our common stock and/or preferred stock, which we expect to use to pay down outstanding borrowings under our revolving credit facility (the “PNMR Revolving Facility”). See “Use of Proceeds” below.

Ratings		As of the date hereof, ratings on our senior unsecured notes were as follows:
		•    S&P: BB− (stable)
		•    Moody’s: Ba2 (negative)
		•    Fitch: BB (stable)
		Investors are cautioned that a security rating is not a recommendation to buy, sell or hold securities, that it is subject to revision or withdrawal at any time by the assigning rating organization, and that each rating should be evaluated independently of any other rating.

 

Before you invest in our notes, you should carefully consider the risks described below. In addition, you should carefully consider any risks set forth in Part II, Item 1A of our Quarterly Report on Form 10-Q for the quarter ended September 30, 2008, and Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2007, both of which are incorporated by reference in this prospectus supplement. See also “Where You Can Find More Information” about future filings which we will make with the SEC, some of which may contain additional risk factors, and are incorporated by reference into this prospectus supplement. If any of the risks actually occurs, our business, financial condition, results of operations and cash flows could be harmed.

 

Any failure to meet our debt obligations could harm our business, financial condition and results of operations.

 

As of October 30, 2008, we had consolidated short-term debt outstanding of $778.7 million. We also have $140.3 million of letters of credit outstanding. In addition, as of October 30, 2008, we have scheduled maturities of long-term debt aggregating $205.6 million due prior to October 30, 2009, including TNMP’s $167.7 million aggregate principal amount of 6.25% senior unsecured notes due January 15, 2009 and $36.0 million aggregate principal amount of PNM pollution control revenue bonds that will be remarketed in July 2009.

 

PNMR also has outstanding $350.0 million aggregate principal amount of 9.25% Senior Notes, Series A due May 15, 2015. Together with our subsidiaries, we may incur substantially more debt in the future. While the indenture governing the notes does restrict our ability to incur additional indebtedness under it, PNMR and its subsidiaries may issue more debt under other indentures.

 

As of October 30, 2008, PNMR had $209.0 million of availability under its $610.0 million of liquidity arrangements. The liquidity arrangements consist of $600.0 million from the PNMR Revolving Facility and $10.0 million from local lines of credit. As of October 30, 2008, First Choice had $61.5 million of availability under its $300.0 million sublimit under the PNMR Revolving Facility. Any borrowings made by First Choice under this sublimit are guaranteed by PNMR.

 

PNMR has established a commercial paper program under which it may issue up to $400.0 million in commercial paper for up to 270 days. The commercial paper is unsecured and the proceeds are used for short-term cash management needs. The PNMR Revolving Facility serves as support for the outstanding commercial paper. As a result, the aggregate borrowings under the commercial paper program and the PNMR Revolving Facility cannot exceed the $600.0 million limit under the PNMR Revolving Facility. This commercial paper program is currently suspended and no commercial paper has been issued since March 11, 2008.

 

As of October 30, 2008, PNM had $658.5 million of liquidity arrangements. The liquidity arrangements consist of $400.0 million from an unsecured revolving credit facility (the “PNM Revolving Facility”), $150.0 million from a delayed draw term loan facility which expires April 30, 2009 (the “PNM Delayed Draw Term Facility”), $100.0 million from a letter of credit facility which expires April 30, 2009 (the “PNM Letter of Credit Facility”) and $8.5 million in local lines of credit. As of October 30, 2008, PNM had borrowed $340.0 million and had $26.5 million in letters of credit outstanding under the PNM Revolving Facility, had no borrowings under the PNM Delayed Draw Term Facility, had no borrowings under the PNM Letter of Credit Facility and had no borrowings under the local lines of credit.

 

PNM has a commercial paper program under which PNM may issue up to $300.0 million in commercial paper for up to 365 days. The commercial paper is unsecured and the proceeds are used for short-term cash management needs. The PNM Revolving Facility serves as support for PNM’s outstanding commercial paper so that the aggregate borrowing under both programs cannot exceed the $400.0 million limit under the PNM Revolving Facility. This commercial paper program is currently suspended and no commercial paper has been issued since March 11, 2008.

As of October 30, 2008, TNMP had $200.0 million of liquidity arrangements consisting of a revolving credit facility which expires in May 2009 (the “TNMP Revolver”). In March 2008, TNMP executed a $150.0 million term loan credit agreement (the “TNMP Term Loan Agreement”) and in April 2008, TNMP drew down the full $150.0 million under the TNMP Term Loan Agreement for the purpose of redeeming certain TNMP senior unsecured notes. Consistent with the TNMP Term Loan Agreement and certain amendments thereto, the amount borrowed thereunder was repaid in October 2008 with funds borrowed under the TNMP Revolver. On October 31, 2008, TNMP entered into a $100.0 million term loan credit agreement with two lenders (the “TNMP Bridge Facility”) to provide an additional source of funds that would be available in order to repay TNMP’s $167.7 million of senior unsecured notes that mature January 15, 2009. The TNMP Bridge Facility allows for original lenders under the TNMP Bridge Facility or new lenders to increase the total commitment under the facility up to a maximum of $150.0 million. TNMP is in discussions with several other potential lenders to obtain commitments to fill out the facility. The TNMP Bridge Facility provides for a single draw of funds after January 1, 2009 and through January 15, 2009 solely for the purpose of paying the principal of TNMP’s senior unsecured notes upon their maturity on January 15, 2009. Any amount drawn prior to or on January 15, 2009 will be due March 30, 2009. The facility will expire on January 15, 2009 if funds are not drawn by January 15, 2009. In the event the total commitment under the facility has not been increased by existing or new lenders from $100.0 million to $150.0 million on or before January 15, 2009, there will be no obligation for the lenders to make loans to TNMP on or before such date unless PNMR agrees to provide funds to bring the total available to TNMP to $150.0 million. As of October 31, 2008, TNMP had borrowed $150.0 million under the TNMP Revolver and had no borrowings under the TNMP Bridge Facility.

 

We and our subsidiaries are exploring financial alternatives to meet our debt obligations, including TNMP’s obligation to repay its $167.7 million of senior unsecured notes due January 15, 2009 and any obligation to repay any related borrowings under the TNMP Bridge Facility on March 30, 2009, and we currently believe that our and our subsidiaries’ internal cash generation, credit arrangements, and access to capital markets will provide sufficient resources to meet capital requirements and retire or refinance the obligations described above at maturity. To cover the difference in the amounts and timing of cash generation and cash requirements, we intend to use short-term borrowings under current liquidity arrangements described above and future liquidity arrangements that we may enter into.

 

The credit ratings of PNMR’s debt were recently downgraded and are below investment grade and there has also been an overall deterioration of the credit markets in general. If our cash flow and capital resources are insufficient to fund our debt obligations, we may be forced to sell assets, seek additional equity or debt capital or restructure our debt. In addition, any failure to make scheduled payments of interest and principal on our outstanding indebtedness would likely result in a further reduction of our credit ratings, which could harm our ability to incur additional indebtedness on acceptable terms and would result in an increase in the interest rates applicable under our credit facilities. Our cash flow and capital resources may be insufficient to pay interest and principal on our debt in the future, including payments on the notes. If that should occur, our capital raising or debt restructuring measures may be unsuccessful or inadequate to meet our scheduled debt service obligations, which could cause us to default on our obligations and further impair our liquidity.

 

To the extent that we or our subsidiaries incur new debt either under applicable indentures or pursuant to the facilities described above, this new debt will be combined with our current debt levels and the risks described herein and incorporated by reference could substantially increase.

 

We are a holding company and must rely on cash from our subsidiaries and EnergyCo to make payments on the notes.

 

We are a holding company and thus our investments in our subsidiaries and EnergyCo are our primary assets. Substantially all of our operations are conducted by our subsidiaries and EnergyCo. Consequently, our operating cash flow and our ability to service our indebtedness depends upon the operating cash flow of our subsidiaries and EnergyCo and the payment of funds by them to us in the

form of dividends or other distributions. Our subsidiaries and EnergyCo are separate legal entities that have no obligation to pay any amounts due pursuant to our obligations or to make any funds available for that purpose, whether by dividends or otherwise. In addition, each entity’s ability to pay dividends to us depends on any statutory, regulatory and/or contractual restrictions that may be applicable to each one, which may include requirements to maintain minimum levels of equity ratios, working capital or other assets.

 

Our utility subsidiaries are regulated by various state utility commissions which generally possess broad powers to ensure that the needs of the utility customers are being met. Specifically, as part of the order approving our formation as a holding company, the NMPRC placed certain restrictions on the ability of one of our primary subsidiaries, PNM, to pay dividends to us. The order states that PNM shall not pay dividends that will cause its debt rating to go below investment grade. Furthermore, the order provides that PNM cannot pay dividends in any year, as determined on a rolling four-quarter basis, in excess of net earnings for that year, with certain rollovers for prior earnings not distributed, without prior NMPRC approval. In January 2003, the NMPRC modified this dividend restriction to allow PNM to dividend earnings as well as equity contributions made by us back to us. Additionally, PNM is subject to various financial covenants that limit the transfer of assets, through dividends or other means. As of September 30, 2008, the amount of retained earnings of our subsidiaries not subject to dividend restrictions, under the most restrictive of such tests, was approximately $211.6 million, assuming that there is no violation of the order providing that PNM shall not pay dividends that cause its credit rating to go below investment grade. In September 2008, PNM paid a dividend of $40.0 million to PNMR, which was used for the repayment of short term debt, but PNM has not paid any other dividends to PNMR since 2005. To the extent that the state commissions attempt to impose further restrictions on the ability of our utility subsidiaries to pay dividends to us, it could adversely affect our ability to make payments on the notes.

 

The notes will be effectively subordinated to the claims of all creditors, including trade creditors and tort claimants, of our subsidiaries. In the event of the bankruptcy, insolvency, liquidation or reorganization of the business of one of our subsidiaries, creditors and holders of preferred stock of that subsidiary would generally have the right to be paid in full before any distribution is made to us or the holders of the notes. As of September 30, 2008, our subsidiaries PNM and TNMP had approximately $1,713.6 million aggregate principal amount of short-term and long-term debt outstanding (excluding intercompany loans) and cumulative preferred stock with aggregate liquidation amount of $11.5 million outstanding.

 

PNMR and PNM cannot make any assurances that the proposed sale of PNM’s natural gas operations will be consummated, and failure to complete the transaction would result in the incurrence of costs, the amounts of which could adversely impact PNMR’s and PNM’s future business and financial results, and could affect our ability to make payments on our debt obligations.

 

Consummation of the PNM natural gas operations sale is subject to various conditions and there is no assurance that all of the various conditions will be satisfied. In addition, there is a provision that no terms can be imposed in connection with the final regulatory approvals that could reasonably be expected to have a material adverse effect or impose any material adverse requirements on the buyer or its affiliates, operations or assets. If the transaction contemplated by the Gas Assets Agreement is not consummated by January 12, 2009, such agreement will terminate pursuant to its terms, subject to a six-month extension under certain circumstances.

 

If the gas operations sale is not completed for any reason:

 

 

 

We may not have sufficient funds to repurchase the notes if we experience a change in control.

 

We are required, under the terms of the notes, to offer to purchase all of the outstanding notes if we experience a change of control. If a change of control were to occur, we cannot assure you that we would have sufficient funds to repay debt outstanding or to purchase the notes, or any other securities that we may issue in the future that have a similar provision. We expect that we would require additional financing from third parties to fund any such purchases but we cannot assure you that we would be able to obtain such financing. Our failure to repay holders tendering notes upon a change of control would result in an event of default under the notes. See “Description of Notes — Repurchase at the Option of Holders — Change of Control.”

 

An active trading market for the notes may not develop, especially if we purchase a substantial portion of the notes in the remarketing.

 

There is currently no public market for the notes. We do not plan to list the notes on any national securities exchange or automated dealer quotation system and, consequently, an active trading market for the notes may not develop.

 

In addition, because we may purchase up to $90.0 million aggregate principal amount of the notes, there may be only approximately $10.0 million aggregate principal amount of notes outstanding after the remarketing. The trading market for the remaining notes may not be liquid and market prices may fluctuate significantly depending on the volume of trading in the notes. The liquidity of any trading market in the notes, and the market price quoted for the notes, also may be adversely affected by changes in the overall market for these securities and by changes in our financial performance or prospects. Moreover, we may determine from time to time in the future to purchase additional notes through open market purchases, privately negotiated transactions, tender offers, exchange offers or otherwise, which would further create a limited market for the notes.

 

Statements made in this prospectus supplement, the accompanying prospectus and the documents incorporated by reference herein, and other documents that we file with the SEC that relate to future events or our expectations, projections, estimates, intentions, goals, targets and strategies, are made pursuant to the Private Securities Litigation Reform Act of 1995. Forward-looking statements often can be identified by the words “believe”, “expect”, “anticipate”, “estimate” or similar expressions. Readers are cautioned that all forward-looking statements are based upon current expectations and estimates and we assume no obligation or duty to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

 

Since actual results may differ materially from those expressed or implied by these forward-looking statements, we caution readers not to place undue reliance on these statements. Our business, financial condition, cash flow and operating results are influenced by many factors, which are often beyond our control, that can cause actual results to differ from those expressed or implied by the forward-looking statements. These factors include:

 

 

 

The remarketing agents will remit to U.S. Bank National Association, as collateral agent, the proceeds from the remarketing of the notes currently held as components of the Units. The collateral agent will pay to us 100% of the aggregate principal amount of the remarketed notes currently held as components of the Units, to satisfy in full the obligation of the holders of those Units to purchase our common stock and/or preferred stock which we must issue on November 17, 2008. Any remaining proceeds from the remarketing will be remitted to the holders of the Units whose notes were sold in the remarketing.

 

We may purchase and cancel up to $90.0 million aggregate principal amount of the notes. If we purchase $90.0 million aggregate principal amount of the notes, we will have approximately $10.0 million in cash remaining after the purchase of such notes and the sale of our common stock and/or preferred stock, which we expect to use to pay down outstanding borrowings under the PNMR Revolving Facility. Our borrowings under the PNMR Revolving Facility as of October 30, 2008, totaled $288.7 million at a weighted average interest rate of 5.33%. Amounts borrowed under the PNMR Revolving Facility were used for general corporate purposes.

 

The following table shows our capitalization at September 30, 2008, on an actual basis and as adjusted to reflect the remarketing of the notes (assuming that we purchase and cancel $90.0 million principal amount of the notes in the remarketing) and the settlement of the stock purchase contracts that are components of the Units (assuming that we issue preferred stock to the holder of the Units in settlement of all of the stock purchase contracts that are part of the Units), as well as the application of the estimated net proceeds therefrom, all as described in “Use of Proceeds.” On October 31, 2008, we received notice from the holder of the Units that it has elected to purchase preferred stock under the stock purchase contracts that are part of the Units. This election is revocable at any time prior to November 17, 2008. You should read this table together with our historical financial statements and the accompanying notes incorporated by reference into this prospectus supplement.

 

 

 

 

The following table shows our ratio of earnings to fixed charges for the periods indicated.

 

 

 

 

Our ratio of earnings to fixed charges is computed by dividing our earnings by our fixed charges. For the purposes of such computations:

 

 

The notes being remarketed were issued under an indenture dated as of October 7, 2005, between us and U.S. Bank National Association, as trustee, as supplemented by the first supplemental indenture dated as of October 7, 2005, as supplemented and amended by the second supplemental indenture dated as of August 4, 2008, and to be further supplemented and amended by the third supplemental indenture to be dated as of November 17, 2008 (collectively referred to herein as the “indenture”).

 

The notes were initially issued in aggregate principal amount of $100,000,000. As long as the notes of this series are outstanding, we may not issue any new series of notes under this indenture. We may, however, issue more debt under other indentures.

 

The notes are not subject to a sinking fund provision. The notes will mature and become due and payable on November 16, 2010. The notes were issued in certificated form but as part of the remarketing, will be made eligible for book-entry settlement through the facilities of The Depository Trust Company or its nominee, as described below under “Description of Notes — Book-Entry Issuance”.

 

The following description is a summary of the material provisions of the notes and the indenture. These descriptions do not restate the indenture in its entirety. We urge you to read the indenture because it, and not this description, defines your rights as a holder of the notes. We have filed a copy of the original indenture, the first supplemental indenture and the second supplemental indenture as exhibits to the registration statement of which this prospectus supplement and the accompanying prospectus are a part. We will file the third supplemental indenture as an exhibit to a current report on Form 8-K.

 

The description of the notes in this prospectus supplement replaces the description of the general provisions of the debt securities and the indenture in the accompanying prospectus which describes debt securities issued under a different indenture.

 

In this “Description of the Notes,” references to “we,” “our,” “us”, “PNM Resources,” “PNMR” or “the Company” mean PNM Resources, Inc., excluding its subsidiaries.

 

General

 

The notes:

 

 

Maturity, Interest and Principal Payments

 

The notes will mature on November 16, 2010. From and after November 16, 2008, the notes will bear interest at the rate of  % per year. Interest on the notes will be payable semi-annually in arrears on May 16 and November 16 of each year, commencing May 16, 2009. We will make interest payments to noteholders of record at the close of business (whether or not a business day) on the first day of the month in which the interest payment date falls. Interest payable at maturity, however, will be paid to the person to whom the principal is paid. Interest will be computed on the basis of a 360-day year of twelve 30-day months. In the event that any interest payment date would otherwise fall on a day that is not a business day, that interest payment date will be postponed to the next day that is a business day

and no interest or other payment will accrue as a result of that postponement. Principal of, premium, if any, and interest on the notes will be payable, and the notes will be transferable, at our office or agency in The City of New York maintained for those purposes, which initially will be the corporate trust agency of the trustee, maintained in New York, New York. We will not impose any service charge for any transfer, exchange or redemption of notes, but we or the trustee may require payment of any tax or other governmental charge that may be payable in connection with transfers, exchanges or redemptions.

 

If there has been a default in the payment of interest on any notes, the defaulted interest may be paid to the holder of the notes as of the close of business on a date to be fixed by the trustee, which will be between 10 and 15 days prior to the date we proposed for payment of the defaulted interest, and not less than 10 days after receipt by the trustee of the notice of the proposed payment.

 

Registration of Transfer and Exchange

 

Subject to any limitations on the transfer of global securities, the transfer of the notes may be registered, and the notes may be exchanged for other notes of the same series, of authorized denominations and with the same terms and principal amount, at the corporate trust office of the trustee. We may change the place for registration of transfer and exchange of the notes and may designate additional places for registration and exchange. No service charge will be made for any transfer or exchange of the notes. However, we may require payment to cover any tax or other governmental charge that may be imposed.

 

Repurchase at the Option of Holders

 

Change of Control

 

If a change of control (a “Change of Control”) occurs, we will be required to make an offer (a “Change of Control Offer”) to each holder of notes to repurchase all or any part (equal to $1,000 or an integral multiple thereof) of that holder’s notes on the terms set forth in the third supplemental indenture. In the Change of Control Offer, we will offer a payment (the “Change of Control Payment”) in cash equal to 101% of the aggregate principal amount of notes repurchased plus accrued and unpaid interest on the notes repurchased, to the date of purchase (the “Change of Control Payment Date”). Within ten days following any Change of Control, we will mail a notice to each holder of notes describing (1) the transaction or transactions that constitute the Change of Control and offering to repurchase notes on the Change of Control Payment Date specified in the notice, which date will be no earlier than 30 days and no later than 60 days from the date such notice is mailed and (2) the procedures determined by us, consistent with the indenture, that a holder must follow in order to have its notes repurchased pursuant to the Change of Control Offer.

 

On the Change of Control Payment Date, we will, to the extent lawful:

 

(1)  accept for payment all notes or portions of notes properly tendered pursuant to the Change of Control Offer;

 

(2)  deposit with the trustee an amount equal to the Change of Control Payment in respect of all notes or portions of notes properly tendered; and

 

(3)  deliver or cause to be delivered to the trustee the notes properly accepted together with an officer’s certificate stating the aggregate principal amount of notes or portions of notes being purchased by us.

 

The trustee will promptly mail to each holder of notes properly tendered the Change of Control Payment for such notes, and the trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each holder a new note equal in principal amount to any unpurchased portion of the notes surrendered, if any; provided that each new note will be in a principal amount of $1,000 or an integral multiple thereof.

If the Change of Control Payment Date is on or after an interest payment record date and on or before the related interest payment date, any accrued and unpaid interest will be paid to the holder in whose name a note is registered at the close of business on such record date, and no other interest will be payable to holders who tender pursuant to the Change of Control Offer.

 

We will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date.

 

We will comply with the requirements of Rule 14e-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the notes as a result of a Change of Control. To the extent that the provisions of any securities laws or regulations conflict with the Change of Control provisions of the indenture, we will comply with the applicable securities laws and regulations and will not be deemed to have breached our obligations under the Change of Control provisions of the indenture by virtue of such conflict.

 

The PNMR Revolving Facility does provide, and future agreements governing our indebtedness, including one or more credit facilities, may also provide, that a Change of Control would constitute a default or require repayment of the indebtedness under these agreements. In addition, future agreements governing our indebtedness may prohibit us from repurchasing any notes in the event of a Change of Control. In the event a Change of Control occurs at a time when we are prohibited from repurchasing notes, we must seek the consent of our lenders to the repurchase of notes or must attempt to refinance the borrowings that contain the prohibition. If we do not obtain such a consent or repay those borrowings, we will remain prohibited from repurchasing notes. In such case, our failure to comply with the foregoing provisions would constitute an event of default under the indenture which could, in turn, constitute a default under such credit facility or other agreements governing our indebtedness.

 

The provisions described above that require us to make a Change of Control Offer following a Change of Control will be applicable whether or not any other provisions of the indenture are applicable. Except as described above with respect to a Change of Control, the indenture does not contain provisions that permit the holders of the notes to require that we repurchase or redeem the notes in the event of a takeover, recapitalization or similar transaction.

 

We will not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in the indenture applicable to a Change of Control Offer made by us and purchases all notes properly tendered and not withdrawn under the Change of Control Offer.

 

If a Change of Control Offer is made, there can be no assurance that we will have available funds sufficient to pay the Change of Control Payment for all the notes that might be delivered by holders seeking to accept the Change of Control Offer. In the event that we are required to purchase outstanding notes pursuant to a Change of Control Offer, we expect we would seek third-party financing to the extent we do not have available funds to meet our purchase obligations. However, there can be no assurance that we would be able to obtain such financing or that the terms of the indenture would permit the incurrence of such financing.

 

The definition of Change of Control includes a phrase relating to the direct or indirect sale, lease, transfer, conveyance or other disposition of “all or substantially all” of our properties or assets and our subsidiaries taken as a whole. Although there is a limited body of case law interpreting the phrase “substantially all,” there is no precise established definition of the phrase under applicable law. Accordingly, in certain circumstances there may be a degree of uncertainty as to whether a particular transaction would involve a disposition of “all or substantially all” of our property or assets and our Subsidiaries taken as a whole. As a result, it may be unclear as to whether a Change of Control has occurred and whether a holder of notes may require us to make a Change of Control Offer.

Ranking

 

The notes are our senior unsecured obligations and will rank equally with all of our existing and future senior unsecured debt and senior to any future subordinated unsecured debt that we may incur. As of September 30, 2008, we had $751.9 million aggregate principal amount of short-term and long-term debt outstanding ($13.2 million of which is secured). This amount does not include borrowings of our subsidiaries PNM and TNMP, but does include borrowings of First Choice under the PNMR Revolving Facility, which PNMR guarantees.

 

We are a holding company and conduct substantially all of our operations through subsidiaries. However, the notes will be obligations exclusively of PNMR and will not be guaranteed by any of our subsidiaries, including PNM. As a result, the notes will be structurally subordinated to all debt and other liabilities of our subsidiaries, which means that creditors of our subsidiaries and preferred stockholders of our subsidiaries will be paid from their assets before holders of the notes would have any claims to those assets. As of September 30, 2008, our subsidiary PNM had $1,395.9 million aggregate principal amount of short-term and long-term debt outstanding ($65.0 million of which is secured) and cumulative preferred stock with aggregate stated value of $11.5 million outstanding. As of September 30, 2008, our subsidiary TNMP had $317.7 million aggregate principal amount of short-term and long-term debt outstanding (none of which is secured).

 

As a holding company, our cash flows and consequent ability to service our debt, including the notes, are dependent upon the earnings of our subsidiaries and distribution of those earnings to us and other payments or distributions of funds by our subsidiaries to us, including payments of principal and interest under intercompany indebtedness. Our operating subsidiaries are separate and distinct legal entities and will have no obligation, contingent or otherwise, to pay any dividends or make any other distributions (except for payments required pursuant to the terms of intercompany indebtedness) to us or to otherwise pay amounts due with respect to the notes or to make specific funds available for such payments. Various financing arrangements, charter provisions and regulatory requirements may impose certain restrictions on the ability of our subsidiaries to transfer funds to us in the form of cash dividends, loans or advances. Specifically, as part of the order approving our formation as a holding company, the NMPRC placed certain restrictions on the ability of one of our primary subsidiaries, PNM, to pay dividends to us. The order explicitly states that PNM shall not pay dividends that will cause its debt rating to go below investment grade. Furthermore, the order provides that PNM cannot pay dividends in any year, as determined on a rolling four-quarter basis, in excess of net earnings for that year, with certain rollovers for prior earnings not distributed, without prior NMPRC approval. In January 2003, the NMPRC modified this dividend restriction to allow PNM to dividend earnings as well as equity contributions made by us back to us. TNMP was subject to the same restrictions on dividends when it had jurisdictional operations in New Mexico prior to January 1, 2007. Additionally, PNM is subject to various financial covenants that limit the transfer of assets, through dividends or other means. As of September 30, 2008, the amount of retained earnings of our subsidiaries not subject to dividend restrictions, under the most restrictive of such tests, was approximately $211.6 million, assuming that there is no violation of the order providing that PNM shall not pay dividends that cause its credit rating to go below investment grade. In September 2008, PNM paid a dividend of $40.0 million to PNMR, which was used for the payment of short term debt, but PNM has not paid any other dividends to PNMR since 2005.

 

Except as described under “Covenants — Restrictions on Liens” the indenture does not limit our ability, or the ability of our subsidiaries or EnergyCo, to issue or incur other debt or liabilities (secured or unsecured) or issue preferred stock. In addition, the indenture does not contain provisions that afford holders of the notes protection in the event of a highly leveraged transaction or other similar transaction involving us that may adversely affect the holders.

Covenants

 

The following covenants are contained or will be contained in the indenture and will apply to the notes. You will find the definitions of capitalized terms used in this description under the heading “— Certain Definitions.” For purposes of this description, references to the “Company,” “PNMR,” “we,” “our” and “us” refer only to PNM Resources, Inc. and not to its subsidiaries. Certain defined terms used in this description but not defined herein have the meanings assigned to them in the indenture.

 

Restrictions on Mergers and Sale of Assets

 

Under the terms of the indenture, we may not consolidate with or merge into any other entity or convey, transfer or lease our properties and assets substantially as an entirety to any entity, unless:

 

 

Restrictions on Liens

 

The third supplemental indenture will provide that so long as any notes are outstanding, we will not issue, assume, or guarantee any Debt (as defined below) secured by any mortgage, security interest, pledge, lien, charge or similar encumbrance (collectively, “Liens”) of or upon any of our property or assets or upon any of the property or assets of our Subsidiaries (as defined below), owned as of the date of the third supplemental indenture or thereafter acquired, without also securing the outstanding notes (together with, if we so determine, any other Debt of or guaranteed by us ranking senior to, or equally with, the notes) equally and ratably with the Debt so long as the other Debt is so secured.

 

This limitation does not apply in the case of any Debt secured by:

 

•    Liens created, incurred, assumed or existing on our property in favor of the lenders, letter of credit issuers or hedge providers under the Credit Facility and related Hedging Obligations in an aggregate principal amount up to $600 million;

 

•    Liens on any property or shares of stock of a person existing at the time of a sale, lease or other disposition of all or substantially all of the properties or assets of a person or an operating business of a person to us; provided, however, that such Lien was not incurred in anticipation of the merger, consolidation, or sale, lease, other disposition or other such transaction;

 

•    Liens on any property to secure all or part of the cost of acquiring, constructing, developing, or repairing, altering or improving the property, or to secure Debt incurred to provide funds for any of these purposes or for the reimbursement of funds previously expended for any of these purposes; provided, however, that the principal amount of Debt secured by each such Lien was incurred concurrently with, or within 18 months of, the acquisition, construction, development, repair, alteration or improvement of such property and does not exceed the cost (as determined in accordance with generally accepted accounting principles) to us of the property subject to the Lien;

 

•    Liens in favor of the United States of America or any State thereof, or any department, agency, or instrumentality or political subdivision of the United States of America or any State thereof, or for the benefit of holders of securities issued by any such entity, to secure any Debt incurred for the

purpose of financing all or any part of the purchase price or the cost of constructing, developing or repairing, altering, or improving the property subject to such Liens; or

 

•    The extension, renewal or replacement of any Lien referred to above; provided, however, that such extension, renewal or replacement Lien will be limited to the same property that secured the Lien so extended, renewed or replaced; and the maximum principal amount of Debt so secured and not otherwise authorized by the previous clauses shall not exceed the maximum principal amount of Debt, plus any premium or fee payable in connection with any such extension, renewal or replacement, so secured at the time of such extension, renewal, or replacement.

 

Notwithstanding the foregoing, so long as any notes are outstanding, we may issue, assume, or guarantee Debt, or permit to exist Debt, secured by Liens which would not be permitted by the foregoing restrictions provided that, at the time of incurrence of such Debt, the sum, without duplication, of:

 

 

does not exceed at such time $100 million.

 

Restrictions on Sale and Lease-Back Transactions

 

The third supplemental indenture will provide that so long as any notes are outstanding, we will not enter into any Sale and Lease-Back Transaction with respect to any Operating Property if the commitment by the purchaser was obtained more than 18 months after the later of (1) the completion of the acquisition, construction, or development of the Operating Property or (2) the placing in operation of the Operating Property or of the Operating Property as constructed, developed, or substantially repaired, altered, or improved, unless:

 

 

 

 

provided, however, that the amount to be applied to the retirement of Debt will be reduced by an amount equal to the principal amount of any Debt voluntarily retired by us within such 180-day period (plus any premium or fee paid in connection with any redemption in accordance with the terms of such Debt), excluding retirement pursuant to mandatory sinking fund or prepayment provisions and payments at maturity.

Certain Definitions

 

Set forth below are certain defined terms used in the third supplemental indenture. Reference is made to the indenture for a full disclosure of all such terms, as well as any other capitalized terms used herein for which no definition is provided.

 

“Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular “person” (as that term is used in Section 13(d)(3) of the Exchange Act), such “person” will be deemed to have beneficial ownership of all securities that such “person” has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition. The terms “Beneficially Owns” and “Beneficially Owned” have a corresponding meaning.

 

“Capital Stock” means:

 

(1)  in the case of a corporation, corporate stock;

 

(2)  in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;

 

(3)  in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and

 

(4)  any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

 

“Change of Control” means the occurrence of any of the following:

 

(1)  the direct or indirect sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of ours and our Subsidiaries taken as a whole to any “person” (as that term is used in Section 13(d)(3) of the Exchange Act, including any “group” with the meaning of the Exchange Act);

 

(2)  the adoption of a plan relating to the liquidation or dissolution of the Company;

 

(3)  any “person” (as defined above) becomes the Beneficial Owner, directly or indirectly, of more than 50% of the Voting Stock of the Company, measured by voting power rather than number of shares;

 

(4)  the first day on which a majority of the members of the Board of Directors of the Company are not Continuing Directors;

 

(5)  the first day on which the Company ceases to be a Beneficial Owner of a majority of the Voting Stock of either PNM or TNMP;

 

(6)  we consolidate with, or merge with or into, any Person, or any Person consolidates with, or merges with or into, us, in any such event pursuant to a transaction in which any of the outstanding Voting Stock of ours or such other Person is converted into or exchanged for cash, securities or other property, other than any such transaction where our outstanding Voting Stock immediately prior to such transaction is converted into or exchanged for Voting Stock (other than Disqualified Stock) of the surviving or transferee Person constituting a majority of the outstanding shares of such Voting Stock of such surviving or transferee Person (immediately after giving effect to such issuance).

 

“Continuing Directors” means, as of any date of determination, any member of the Board of Directors of the Company who:

 

(1)  was a member of such Board of Directors on the date of the third supplemental indenture; or

(2)  was nominated for election or elected to such Board of Directors with the approval of a majority of the Continuing Directors who were members of such Board of Directors at the time of such nomination or election.

 

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a person, whether through the ability to exercise voting power, by contract or otherwise. A person shall be deemed to Control another person if such person directly or indirectly owns or controls more than 50% of the other person’s capital stock. The terms “Controlling” and “Controlled” have meanings correlative thereto.

 

“Credit Facility” means the Amended and Restated Credit Agreement dated August 15, 2005 among the Company and First Choice, as borrowers, the lenders named therein and Bank of America, N.A., as administrative agent.

 

“Debt” means (1) any outstanding debt for money borrowed and (2) any indebtedness evidenced by notes, debentures, bonds or other similar instruments.

 

“Disqualified Stock” means any Capital Stock that, by its terms (or by the terms of any security into which it is convertible, or for which it is exchangeable, in each case at the option of the holder of the Capital Stock), or upon the happening of any event (other than as a result of an optional redemption by the issuer thereof), matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder of the Capital Stock, in whole or in part, on or prior to the date that is 91 days after the date on which the notes mature.

 

“Hedging Obligations” means, with respect to any specified person, the obligations of such person under: (1) interest rate swap agreements (whether from fixed to floating or from floating to fixed), interest rate cap agreements and interest rate collar agreements; (2) other agreements or arrangements designed to manage interest rates or interest rate risk; and (3) other agreements or arrangements designed to protect such person against fluctuations in currency exchange rates or commodity prices.

 

“Operating Property” means (1) any interest in real property owned directly by us and (2) any asset owned directly by us that is depreciable in accordance with generally accepted accounting principles.

 

“Payment Default” means a default under any mortgage, indenture or instrument under which we may issue or by which there may be secured or evidenced any Debt of ours (or the payment of which is guaranteed by us), if that default is caused by a failure to pay principal of, or interest or premium, if any, on such Debt prior to the expiration of the grace period provided in such Debt.

 

“Public Utility Subsidiary” means, at any particular time, a direct or indirect Subsidiary of the Company that, as a substantial part of its business, distributes, sells or transmits electric energy to retail or wholesale customers at rates or tariffs that are regulated by either a state or Federal regulatory authority.

 

“Sale and Lease-Back Transaction” means any arrangement with any entity providing for the leasing to us of any Operating Property (except for temporary leases for a term, including any renewal thereof, of not more than forty-eight (48) months), which Operating Property has been or is to be sold or transferred by us to such entity; provided, however, Sale and Lease-Back Transaction shall not include any arrangement (i) first entered into prior to the date of the third supplemental indenture and (ii) involving the exchange of any Operating Property for any property subject to an arrangement specified in the preceding clause (i).

 

“Significant Subsidiary” means, at any particular time, any direct Subsidiary of the Company whose consolidated gross assets or consolidated gross revenues (having regard to the Company’s direct beneficial interest in the shares, or the like, of that subsidiary) represent at least 25% of the Company’s consolidated gross assets or consolidated gross revenues appearing in the most recent audited financial statements of the Company as of the date of determination.

“Subsidiary” means, with respect to any person (the “parent”) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with generally accepted accounting principles as of that date, as well as any other corporation, limited liability company, partnership, association or other entity (1) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of that date, owned, controlled or held or (2) that is, as of that date, otherwise Controlled (within the meaning of the first sentence of the definition of “Control”), by the parent or one or more subsidiaries of the parent.

 

“Value” means, with respect to a Sale and Lease-Back Transaction, as of any particular time, the amount equal to the greater of (1) the net proceeds to us from the sale or transfer of the property leased pursuant to such Sale and Lease-Back Transaction or (2) the net book value of such property, as determined in accordance with generally accepted accounting principles by us at the time of entering into such Sale and Lease-Back Transaction, in either case multiplied by a fraction, the numerator of which shall be equal to the number of full years of the term of the lease that is part of such Sale and Lease-Back Transaction remaining at the time of determination and the denominator of which shall be equal to the number of full years of such term, without regard, in any case, to any renewal or extension options contained in such lease.

 

‘‘Voting Stock” of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.

 

Modification of the Indenture

 

We and the trustee may enter into one or more supplemental indentures without the consent of any holder of the notes for certain specified purposes, including:

 

 

 

 

 

If the Trust Indenture Act of 1939 is amended after the date of the indenture to require changes to the indenture, the indenture will be deemed to be amended so as to conform to that amendment of the Trust Indenture Act of 1939. If the Trust Indenture Act of 1939 is amended after the date of the indenture to permit one or more changes to, or the elimination of, any provisions of the indenture which, at the date of the execution and delivery of the indenture or at any time thereafter, are required by the Trust Indenture Act of 1939 to be contained in the indenture, the indenture shall be deemed to have been amended to effect such changes or elimination. We and the trustee may, without the consent of any of the holders, enter into one or more supplemental indentures to evidence that amendment.

 

The consent of the holders of a majority in aggregate principal amount of the notes of all series then outstanding, considered as one class, is required for all other modifications to the indenture. However, if less than all of the series of notes outstanding are directly affected by a proposed supplemental indenture, then only the consent of the holders of a majority in aggregate principal amount of the outstanding notes of all series that are directly affected will be required. No amendment or modification may:

 

 

A supplemental indenture which changes the original indenture solely for the benefit of one or more particular series of notes, or modifies the rights of the holders of the notes of one or more series, will not affect the rights under the original indenture of the holders of the notes of any other series.

 

The original indenture provides that the notes owned by us or anyone else required to make payment on the notes will be disregarded and considered not to be outstanding in determining whether the required holders have given a request or consent.

 

We may fix in advance a record date to determine the required number of holders entitled to give any request, demand, authorization, direction, notice, consent, waiver or other such “act” or action of the holders, in certain situations. If the record date is fixed, the holders of the outstanding notes of the relevant series on that record date, and no other holders, will be entitled to take or revoke the relevant action, whether or not those holders remain holders after that record date. No action, however, will be effective unless taken on or prior to the applicable expiration date by holders of the requisite principal amount of the outstanding notes of that series on that record date. Any request, demand, authorization, direction, notice, consent, election, waiver or other act of a holder will bind every future holder of the same notes and the holder of every debt security issued upon the registration of transfer of or in exchange of those notes. A transferee will be bound by our acts or those of the Trustee taken in reliance thereon, whether or not notation of that action is made upon that debt security.

Events of Default

 

“Event of default” when used in the indenture with respect to the notes, means any of the following:

 

 

Book-Entry Issuance

 

The remarketed notes will be in the form of one or more fully registered global securities. The global securities will be deposited with the trustee under the indenture as custodian for the depositary, which will be The Depository Trust Company, and registered in the name of the depositary or its nominee.

 

Unless and until it is exchanged in whole or in part for the individual notes it represents, a global security may not be transferred except as a whole:

 

 

Investors may hold their beneficial interests in the global securities directly through the depositary if they have an account with the depositary or indirectly through organizations that have accounts with the depositary.

 

The following is based on information furnished to us by 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 (the “Exchange Act”). DTC holds securities that its participants (“Direct Participants”) deposit with DTC. DTC also facilitates the settlement among Direct Participants of sales and other securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in Direct 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. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC, in turn, is owned by a number of Direct Participants of DTC and Members of the National Securities Clearing Corporation, Fixed Income Clearing Corporation, and Emerging Markets Clearing Corporation, as well as by the New York Stock Exchange, Inc., the American Stock Exchange LLC, and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as securities brokers and dealers, banks, trust companies and clearing 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 Direct and Indirect Participants are on file with the SEC.

 

Purchases of securities under the DTC system must be made by or through Direct Participants, who will receive a credit for the securities on DTC’s records. The ownership interest of each actual purchaser of each security (“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 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 or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in securities, except in the event that use of the book-entry system for the securities is discontinued.

 

To facilitate subsequent transfers, all securities deposited by Direct Participants with the Trustee on behalf of DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of securities with DTC and their registration in the name of Cede & Co. or such other nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the securities; DTC’s records reflect only the identity of the Direct Participants to whose accounts such securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect 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.

 

Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the securities. Under its usual procedures, DTC mails 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 securities are credited on the record date (identified in a listing attached to the omnibus proxy).

 

Principal and interest payments on the securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts, upon DTC’s receipt of funds and corresponding detail information from the Company or its agent on the payable date in accordance with their respective holdings shown on DTC’s records. Payments by Direct and Indirect 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 such Direct or Indirect Participant and not of DTC, the Company or the Trustee, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Company or its agent, disbursement of such payments to Direct Participants

will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

 

DTC may discontinue providing its services as securities depository with respect to the notes at any time by giving reasonable notice to the Company or the Trustee. Under such circumstances, if a successor securities depository is not obtained, security certificates are required to be printed and delivered.

 

The Company may decide to discontinue use of the system of book-entry only transfers through DTC (or a successor securities depository). In that event, security certificates will be printed and delivered to DTC.

 

The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that we believe to be reliable, but we take no responsibility for the accuracy thereof.

 

We have no responsibility for the performance by DTC or its Participants of their respective obligations as described in this prospectus supplement or under the rules and procedures governing their respective operations.

 

The Trustee

 

The trustee under the indenture is U.S. Bank National Association. The indenture provides that, except during the continuance of an event of default, the trustee will perform only the duties that are specifically set forth in the indenture. If an event of default has occurred and is continuing, the trustee will exercise the rights and powers vested in it under the indenture and use the same degree of care and skill in its exercise as a prudent person would exercise under the circumstances in the conduct of such person’s own affairs.

 

The indenture and provisions of the Trust Indenture Act of 1939, as amended, contain limitations on the rights of the trustee, should it become our creditor, to obtain payment of claims in certain cases or to realize on certain property received by it on any such claims, as security or otherwise. The trustee is permitted to engage in other transactions, but if it acquires any conflicting interest and a default occurs it must eliminate that conflict within 90 days, apply to the SEC for permission to continue as trustee or resign.

 

We and our affiliates also maintain credit and liquidity facilities and conduct other banking transactions with affiliates of the trustee in the ordinary course of our businesses.

 

The following discussion summarizes certain material U.S. federal income tax considerations of purchasing, owning and disposing of the notes. This discussion applies only to the holders of the notes who acquire the notes pursuant to this prospectus supplement and who hold the notes as capital assets.

 

In this discussion, we do not purport to address all tax considerations that may be important to a particular holder in light of the holder’s circumstances, or to certain categories of investors that may be subject to special rules, such as:

 

 

 

This discussion is included for general information only and does not address all of the aspects of U.S. federal income taxation that may be relevant to you in light of your particular investment or other circumstances. In addition, this discussion does not address any state or local income, foreign income or other tax consequences. This discussion is based on U.S. federal income tax law, including the provisions of the Internal Revenue Code of 1986, as amended, Treasury regulations, administrative rulings and judicial authority, all as in effect as of the date of this prospectus supplement. Subsequent developments in U.S. federal income tax law, including changes in law or differing interpretations, which may be applied retroactively, could have a material effect on the U.S. federal income tax consequences of purchasing, owning and disposing of notes as described below. Before you purchase notes, you should consult your own tax advisor regarding the particular U.S. federal, state and local income, foreign income and other tax consequences of acquiring, owning and disposing of notes that may be applicable to you.

 

U.S. Holders

 

The following summary applies to you only if you are a U.S. holder (as defined below).

 

Definition of a U.S. Holder

 

A “U.S. holder” is a beneficial owner of a note or notes who or which is for U.S. federal income tax purposes:

 

 

Payments of Interest

 

The notes bear interest at a fixed rate. Interest on your notes will be taxed as ordinary interest income. In addition:

 

 

Sale or Other Disposition of Notes

 

When you sell or otherwise dispose of your notes in a taxable transaction, you generally will recognize taxable gain or loss equal to the difference, if any, between:

 

 

Your tax basis in your notes generally will equal the amount you paid for the notes. Your gain or loss generally will be capital gain or loss and will be long-term capital gain or loss if at the time of the sale or other taxable disposition you have held the notes for more than one year. Subject to limited exceptions, your capital losses cannot be used to offset your ordinary income. If you are a non-corporate U.S. holder, your long-term capital gain generally will be subject to a maximum tax rate of 15% for taxable years beginning on or before December 31, 2010. For taxable years beginning on or after January 1, 2011, the long-term capital gain rate is currently scheduled to increase to 20%.

 

Information Reporting and Backup Withholding

 

Information reporting requirements generally apply to interest and principal payments and to the proceeds of sales before maturity (unless you are an exempt recipient such as a corporation). These amounts generally must be reported to the Internal Revenue Service and to you. In general, “backup withholding” may apply:

 

 

if you are a non-corporate U.S. holder and fail to provide a correct taxpayer identification number, certified under penalties of perjury, or otherwise fail to comply with applicable requirements of the backup withholding rules.

 

The applicable backup withholding rate will be the fourth lowest income tax rate applicable to unmarried individuals for the relevant taxable year. Currently, the backup withholding rate is 28%. The backup withholding tax is not an additional tax and may be refunded or credited against your U.S. federal income tax liability if the required information is provided timely to the Internal Revenue Service.

 

Non-U.S. Holders

 

The following summary applies to you if you are not a U.S. holder (as defined above) or a partnership (including an entity treated as a partnership for U.S. federal income tax purposes). An individual may, subject to exceptions, be deemed to be a resident alien, as opposed to a non-resident alien, by, among other ways, being present in the U.S.:

 

 

Resident aliens are subject to U.S. federal income tax as if they were U.S. citizens.

 

U.S. Federal Withholding Tax

 

Under current U.S. federal income tax laws, and subject to the discussion below, U.S. federal withholding tax will not apply to payments by us or our paying agent (in its capacity as such) of

interest on your notes under the “portfolio interest” exception of the Internal Revenue Code, provided that interest on the notes is not effectively connected with your conduct of a trade or business in the United States and:

 

 

 

If you cannot satisfy the requirements described above, payments of interest made to you will be subject to the 30% U.S. federal withholding tax, unless you provide us with a properly executed IRS Form W-8BEN (or successor form) claiming an exemption from (or a reduction of) withholding under the benefit of a U.S. income tax treaty, or you provide us with a properly executed IRS Form W-8ECI claiming that the payments of interest are effectively connected with your conduct of a trade or business in the United States.

 

U.S. Federal Income Tax

 

Except for the possible application of U.S. federal withholding tax (as described immediately above) and backup withholding tax (see “Backup Withholding and Information Reporting” below), you generally will not have to pay U.S. federal income tax on payments of interest on your notes, or on any gain or income realized from the sale, redemption, retirement at maturity or other disposition of your notes (subject to, in the case of proceeds representing accrued interest, the conditions described in “U.S. Federal Withholding Tax” immediately above) unless:

 

 

If you are engaged in a trade or business in the United States and interest, gain or any other income attributable to your notes is effectively connected with the conduct of your trade or business, and, if a U.S. income tax treaty applies, you maintain a U.S. “permanent establishment” to which the interest, gain or other income is generally attributable, you generally will be subject to U.S. income tax on a net income basis on such interest, gain or income. In this instance, however, the interest on your notes will be exempt from the 30% U.S. withholding tax discussed immediately above under “U.S. Federal Withholding Tax” if you provide a properly executed IRS Form W-8ECI or appropriate substitute form to us or our paying agent on or before any payment date to claim the exemption.

 

In addition, if you are a foreign corporation, you may be subject to a U.S. branch profits tax equal to 30% of your effectively connected earnings and profits for the taxable year, as adjusted for certain items, unless a lower rate applies to you under a U.S. income tax treaty with your country of residence.

For this purpose, you must include interest and gain on your notes in the earnings and profits subject to the U.S. branch profits tax if these amounts are effectively connected with the conduct of your U.S. trade or business.

 

Backup Withholding and Information Reporting

 

Payments of interest on a note, and amounts withheld from such payments, if any, generally will be required to be reported to the U.S. Internal Revenue Service and to you. Backup withholding will not apply to payments made by us or our paying agent (in its capacity as such) to you if you have provided the required certification that you are a non-U.S. holder as described in “U.S. Federal Withholding Tax” above, and if neither we nor our paying agent has actual knowledge or reason to know that you are a U.S. holder (as described in ‘‘— U.S. Holders — Definition of a U.S. Holder” above).

 

The gross proceeds from the disposition of your notes may be subject to information reporting and backup withholding tax. If you sell your notes outside the United States through a non-U.S. office of a non-U.S. broker and the sales proceeds are paid to you outside the United States, then the U.S. backup withholding and information reporting requirements generally will not apply to that payment. However, U.S. information reporting, but not backup withholding, will apply to a payment of sales proceeds, even if that payment is made outside the United States, if you sell your notes though a non-U.S. office of a broker that:

 

 

unless the broker has documentary evidence in its files that you are not a United States person and certain other conditions are met or you otherwise establish an exemption. If you receive payments of the proceeds of a sale of your notes to or through a U.S. office of a broker, the payment is subject to both U.S. backup withholding and information reporting unless you provide an IRS Form W-8BEN or an appropriate substitute form certifying that you are not a United States person or you otherwise establish an exemption.

 

You should consult your own tax advisor regarding application of backup withholding in your particular circumstances and the availability of and procedure for obtaining an exemption from backup withholding under current Treasury regulations. Any amounts withheld under the backup withholding rules from a payment to you will be allowed as a refund or credit against your U.S. federal income tax liability, provided that the required information is furnished timely to the Internal Revenue Service.

 

Under the terms and conditions contained in a supplemental remarketing agreement dated November 7, 2008 (the “remarketing agreement”), between the Company, Citigroup Global Markets Inc., Banc of America Securities LLC, Wedbush Morgan Securities Inc., RBC Capital Markets Corporation and UBS Securities LLC (collectively, the “remarketing agents”), which we will file as an exhibit to a current report on Form 8-K, the remarketing agents have agreed to use commercially reasonable efforts to remarket $100,000,000 aggregate principal amount of the notes.

 

The remarketing agreement provides that the remarketing is subject to customary conditions precedent, including the performance by the Company of its obligations and agreements under the remarketing agreement.

 

Under the remarketing agreement, upon a successful remarketing, we will pay the remarketing agents a remarketing fee of 100 basis points (1.00%) of the principal amount of the remarketed notes for services in performing their duties under the remarketing agreement.

 

Commissions and Expenses

 

The representatives of the remarketing agents have advised us that the remarketing agents may offer the notes originally issued in October 2005, directly to the public at the public offering price on the cover of this prospectus supplement and to selected dealers at a price that represents a concession not in excess of     % of the principal amount of the notes. Such dealers may reallow a concession not in excess of     % of the principal amount of the notes to certain other dealers.

 

The expenses of the remarketing are estimated to be $325,000 (excluding the fees and expenses of the remarketing agents).

 

Indemnification

 

We have agreed to indemnify the remarketing agents against certain liabilities, including liabilities under the Securities Act of 1933, as amended, and to contribute to payments that the remarketing agents may be required to make for these liabilities.

 

Stabilization, Short Positions and Penalty Bids

 

The remarketing agents may engage in stabilizing transactions, short sales and purchases to cover positions created by short sales, and penalty bids or purchases for the purpose of pegging, fixing or maintaining the price of the notes, in accordance with Regulation M under the Exchange Act. Stabilizing transactions consist of certain bids or purchases for the purpose of preventing or retarding a decline in the market price of the notes and short positions created by the remarketing agents involve the sale of a greater aggregate principal amount of notes than the remarketing agents are required to remarket. The remarketing agents also may impose a penalty bid, whereby selling concessions allowed to broker-dealers for notes remarketed may be reclaimed by the representatives of the remarketing agents if such notes are repurchased by the remarketing agents in stabilizing or covering transactions. These activities may stabilize, maintain or otherwise affect the market price of the notes which may be higher than the price that might otherwise prevail in the open market, and these activities, if commenced, may be discontinued at anytime.

 

Trading Market

 

We do not intend to apply for listing of the notes on a securities exchange or for quotation among automated quotation systems, but have been advised by the remarketing agents that they intend to make a market in the notes, but they are not obligated to do so and may discontinue any market making at any time without notice. We cannot assure you as to the liquidity of the trading market for the notes.

Relationships and FINRA Conduct Rules

 

Certain of the remarketing agents and their related entities have engaged and may engage in commercial and investment banking transactions with us in the ordinary course of their business. They have received customary compensation and expenses for these commercial and investment banking transactions. UnionBanc Investment Services LLC, a Financial Industry Regulatory Authority member and subsidiary of Union Bank of California, N.A., is being paid a referral fee by Wedbush Morgan Securities Inc.

 

We expect that delivery of the notes will be made against payment therefor on or about November 17, 2008, which we expect to be the th business day following the date hereof (this settlement cycle being referred to as “T+  ”). Under Rule 15c6-1 of the SEC under the Exchange Act, trades in the secondary market generally are required to settle in three business days, unless the parties to that trade expressly agree otherwise. Accordingly, purchasers who wish to trade notes on any day prior to the third business day before the settlement date will be required, by virtue of the fact that we expect the notes initially to settle in T+  , to specify an alternate settlement cycle at the time of any such trade to prevent a failed settlement and should consult their own advisor.

 

Certain legal matters in connection with the remarketing and the offering of the notes will be passed upon for us by Charles L. Moore, Esq., Associate General Counsel, and Troutman Sanders LLP. As of October 31, 2008, Charles L. Moore, Esq. held options to acquire 20,000 shares of our common stock (8,662 of which were exercisable). Counsel for any underwriters will render an opinion as to certain legal matters relating to the notes for any underwriters, dealers, purchasers or agents. Certain matters will be passed upon for the remarketing agents by Simpson Thacher & Bartlett LLP.

 

PNMR files annual, quarterly and current reports and other information with the SEC. You may read and copy these documents at the SEC’s Public Reference Room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information about the Public Reference Room. The SEC also maintains an Internet website that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC. The address of the site is www.sec.gov.

 

PNMR’s Internet address is www.pnmresources.com. The contents of the website are not a part of the registration statement of which this prospectus supplement and the accompanying prospectus are a part. PNMR’s filings with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports, filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, are accessible free of charge at www.pnmresources.com as soon as reasonably practicable after PNMR electronically files such material with, or furnishes it to, the SEC. These reports are also available upon request in print from us free of charge.

 

PNMR is “incorporating by reference” in this prospectus supplement and the accompanying prospectus information PNMR files with the SEC, which means that PNMR is disclosing important information to you by referring you to those documents. Our combined filings with the SEC present separate filings by PNMR, PNM and TNMP. Information contained therein relating to an individual registrant is filed by that registrant on its own behalf and each registrant makes no representation as to information relating to other registrants. The information PNMR incorporates by reference is considered to be part of this prospectus supplement, unless PNMR updates or supersedes that information by the information contained in this prospectus supplement or the information PNMR files subsequently with the SEC that is incorporated by reference in this prospectus supplement. PNMR is incorporating by reference the following documents that it has filed with the SEC (except

those portions of filings that relate to PNM or TNMP as separate registrants), other than any information in these documents that is deemed not to be “filed” with the SEC:

 

 

PNMR also incorporates by reference into this prospectus supplement any filings PNMR makes with the SEC (excluding information furnished under Items 2.02 or 7.01 of Current Reports on Form 8-K) under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, after the initial filing of the registration statement that contains this prospectus.

 

You may obtain without charge a copy of any of the documents PNMR incorporates by reference, except for exhibits to such documents which are not specifically incorporated by reference into such documents, by contacting us at PNM Resources, Inc., Alvarado Square, Albuquerque, New Mexico, 87158, Attention: Investor Relations. You may also telephone your request at (505) 241-2868.

Prospectus

 

 

Debt Securities

 

 

We intend to offer from time to time, at prices and on terms to be determined at or prior to the time of sale, our debt securities. We will specify the principal amount of debt securities being offered and the underwriters for the offering, together with the terms and conditions for such offering, the public offering price, the underwriting discounts and commissions and our net proceeds from the sale thereof, in supplements to this prospectus. You should read both the prospectus and the applicable prospectus supplement carefully before you invest.

 

Our principal executive office is located at Alvarado Square, Albuquerque, New Mexico 87158, and our telephone number is (505) 241-2700.

 

 

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

 

 

 

The date of this prospectus is April 4, 2008.

TABLE OF CONTENTS

 

 

 

 

This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission, or SEC, utilizing a “shelf” registration process. This prospectus provides you with a general description of our debt securities. Each time we sell debt securities, we will describe in a supplement to this prospectus the specific terms of that offering. The applicable prospectus supplement may also add, update or change information in this prospectus. Please carefully read both this prospectus and the applicable prospectus supplement, together with additional information referred to in “Where You Can Find More Information” herein, before investing in the debt securities.

 

The registration statement that contains this prospectus (including the exhibits to the registration statement) contains additional information about our company and the securities offered under this prospectus. That registration statement can be read at the SEC website or at the SEC offices mentioned under the heading “Where You Can Find More Information” in the applicable prospectus supplement.

 

Unless otherwise indicated or unless the context otherwise requires, all references in this prospectus and any accompanying prospectus supplement to “PNMR”, “PNM Resources”, “we”, “our”, “us” and “the Company” refer to PNM Resources, Inc. Unless otherwise indicated, financial information included or incorporated by reference herein is for PNM Resources, Inc. and its subsidiaries on a consolidated basis.

 

We are not offering the debt securities in any jurisdiction where the offer is not permitted.

 

You should not assume that the information in this prospectus or any prospectus supplement is accurate as of any date other than the date on the front of each of those documents.

 

We are an investor-owned holding company of energy and energy-related businesses. Our primary subsidiaries are Public Service Company of New Mexico (“PNM”), Texas-New Mexico Power Company (“TNMP”) and First Choice Power, L.P. (“First Choice”). In addition, we have a 50 percent ownership interest in EnergyCo, LLC (“EnergyCo”), an unregulated energy company.

 

PNM is an integrated public utility with regulated operations primarily engaged in the generation, transmission and distribution of electricity, and the transmission and distribution and sale of natural gas, and unregulated operations primarily focused on the sale and marketing of electricity into the wholesale market in the western United States. TNMP is a regulated electric utility providing transmission and distribution services in Texas. First Choice is a competitive retail electric provider operating in Texas.

 

EnergyCo was created in January 2007 by ECJV Holdings, LLC (“ECJV”), a wholly-owned subsidiary of Cascade Investment, L.L.C., one of PNMR’s largest shareholders, and us to serve expanding U.S. markets throughout the Southwest, Texas and the West. PNMR and ECJV each have a 50 percent ownership interest in EnergyCo, which is a limited liability company.

 

Unless we indicate otherwise in the applicable prospectus supplement, the net proceeds from the sale of the offered securities will be used for general corporate purposes, which may include:

 

 

We will describe in the applicable prospectus supplement any specific allocation of the proceeds to a particular purpose that we have made at the date of such prospectus supplement. We will temporarily invest any net proceeds that we do not immediately use in short-term marketable securities.

 

The following table shows our ratio of earnings to fixed charges for the periods indicated.

 

 

Our ratio of earnings to fixed charges is computed by dividing our earnings by our fixed charges. For the purposes of such computations:

 

 

General

 

The following description sets forth certain general terms and provisions of our debt securities. When we offer our debt securities in the future, a prospectus supplement will explain the particular terms of those debt securities and the extent to which any of these general provisions will not apply. You should read this prospectus and any applicable prospectus supplement before you make any investment decision. We may issue one or more series of debt securities directly to the public or as part of a purchase unit from time to time. We may also sell hybrid or novel securities now existing or developed in the future that combine certain features of the debt securities described in this prospectus.

 

The debt securities will be our direct unsecured general obligations. We may issue the debt securities from time to time in one or more series under an indenture dated as of March 15, 2005 between us and The Bank of New York Trust Company, N.A. (as successor to JPMorgan Chase Bank, N.A.), as trustee (the “Trustee”). This indenture, as it may be amended and supplemented from time to time, is referred to in this prospectus as the “Indenture.”

 

We have summarized selected provisions of the Indenture below. You should read this summary together with the Indenture, any supplemental indentures or other documents establishing the debt securities for a complete understanding of the provisions that may be important to you. The following description of the debt securities and the Indenture is qualified by reference to the Indenture, which is incorporated by reference as an exhibit to the registration statement of which this prospectus is a part. References to certain sections in parentheses below are references to sections of the Indenture. Whenever particular provisions or defined terms in the Indenture are referred to under this “Description of Debt Securities,” such provisions or defined terms are incorporated by reference herein. The Indenture is qualified under the Trust Indenture Act of 1939. You should refer to the Trust Indenture Act of 1939 for provisions that apply to the debt securities.

 

There is no requirement under the Indenture that our future issuances of debt securities be issued exclusively under the Indenture and we will be free to employ other indentures or documentation, containing provisions different from those included in the Indenture or applicable to one or more issuances of debt securities in connection with future issuances of other debt securities. Nonetheless, the debt securities registered under the registration statement of which this prospectus is a part will only be issued pursuant to an indenture (or a form thereof) that is filed as an exhibit to the registration statement.

 

The Indenture provides that the applicable debt securities will be issued in one or more series, may be issued at various times, may have differing maturity dates and may bear interest at differing rates. We need not issue all debt securities of one series at the same time and, unless otherwise provided, we may reopen a series, without the consent of the holders of the debt securities of that series for issuances of additional debt securities of that series. Unless otherwise described in the applicable prospectus supplement, the Indenture does not limit the aggregate amount of debt, including secured debt, we or our subsidiaries may incur.

 

The Indenture does not currently contain any restriction on the payment of dividends or any financial covenants. However, the supplemental indenture for any series of debt securities may contain such restrictions. The prospectus supplement related to such debt securities will describe such restrictions and the protections, if any, that such restrictions provide the holders of the debt securities in the event of a highly leveraged transaction involving us that may adversely affect the holders of the debt securities.

 

Ranking

 

The debt securities will be our direct unsecured general obligations and will rank equally with all of our other unsubordinated debt. As of December 31, 2007, PNMR, exclusive of its subsidiaries, had $692.1 million of outstanding short-term and long-term debt that would have ranked equally with the debt securities, and an additional $13.2 million of outstanding long-term debt that is secured.

 

We are a holding company and derive substantially all of our income from our operating subsidiaries. As a result, our cash flows and consequent ability to service our debt, including the debt securities, are dependent

upon the earnings of our subsidiaries and distribution of those earnings to us and other payments or distributions of funds by our subsidiaries to us, including payments of principal and interest under intercompany indebtedness. Our operating subsidiaries are separate and distinct legal entities and will have no obligation, contingent or otherwise, to pay any dividends or make any other distributions (except for payments required pursuant to the terms of intercompany indebtedness) to us or to otherwise pay amounts due with respect to the debt securities or to make specific funds available for such payments. Various financing arrangements, charter provisions and regulatory requirements may impose certain restrictions on the ability of our subsidiaries to transfer funds to us in the form of cash dividends, loans or advances. The debt securities will be effectively subordinated to the claims of all creditors, including trade creditors and tort claimants, of our subsidiaries. In the event of the bankruptcy, insolvency, liquidation or reorganization of the business of one of our subsidiaries, creditors of that subsidiary would generally have the right to be paid in full before any distribution is made to us or the holders of the debt securities. As of December 31, 2007, our subsidiary PNM had $11.5 million aggregate stated value of cumulative preferred stock outstanding and $1,326.9 million aggregate principal amount of short-term and long-term debt outstanding, $65.0 million of which is secured. As of December 31, 2007, our subsidiary TNMP had $316.6 million aggregate principal amount of unsecured short-term and long-term debt outstanding, excluding $3.4 million of short-term debt payable to PNMR.

 

The Indenture provides that payment of principal, premium and interest on any debt security issued under the Indenture shall be made solely from the assets of PNMR and not from any assets of utility subsidiaries. (See Section 1.14)

 

Provisions of a Particular Series

 

The prospectus supplement relating to any series of debt securities being offered will include specific terms relating to that offering. These terms will include any of the following terms that apply to that series:

 

 

 

(See Section 3.01)

 

All debt securities of any one series will be substantially identical except as to denomination and except as may otherwise be determined in the manner provided for in the Indenture. (See Section 3.01)

 

Debt securities may be issued and sold at a substantial discount below their stated principal amount. If applicable, the prospectus supplement will describe any special United States federal income tax consequences and other considerations which apply to senior debt securities issued at a discount or to any securities denominated or payable in a foreign currency or currency unit.

 

Redemption

 

We will set forth any terms for the redemption of any debt securities in the applicable prospectus supplement. Unless we indicate differently in the applicable prospectus supplement, the debt securities will be redeemable upon notice by mail to the holders between 30 and 60 days prior to the redemption date. If less than all of the debt securities of any series are to be redeemed, the Trustee will select the debt securities to be redeemed. In the absence of any provision for selection, the Trustee will choose a method of random selection as it deems fair and appropriate. (See Sections 11.03 and 11.04)

 

The debt securities will cease to bear interest on the redemption date assuming we redeem them. We will pay the redemption price and any accrued interest once the debt securities are surrendered for redemption. (See Section 11.06) If only part of a debt security is redeemed, the Trustee will deliver to you a new debt security of the same series for the remaining portion without charge. (See Section 11.07)

 

We may make any redemption, at our option, conditional upon the receipt by the paying agent or agents, on or prior to the date fixed for redemption, of money sufficient to pay the redemption price. If the paying agent or agents have not received the money by the date fixed for redemption, we will not be required to redeem the debt securities. (See Section 11.04)

 

Payment

 

Except as may be provided in the applicable prospectus supplement, interest, if any, on each debt security payable on each interest payment date will be paid to the person in whose name the debt security is registered as of the close of business on the regular record date for the interest payment date. If there has been a default in the payment of interest on any debt security, the defaulted interest may be paid to the holder of that debt security as of the close of business on a date to be fixed by the Trustee, which will be between 10 and 15 days prior to the date we proposed for payment of the defaulted interest, and not less than 10 days after receipt by the Trustee of the notice of the proposed payment. The defaulted interest may also be paid in any

other manner permitted by any securities exchange on which that debt security may be listed, if the Trustee finds it practicable. (See Section 3.07)

 

Registration of Transfer and Exchange

 

Unless otherwise specified in the prospectus supplement applicable to any series of debt securities, subject to any limitations on the transfer of global securities, the transfer of the debt securities may be registered, and the debt securities may be exchanged for other debt securities of the same series, of authorized denominations and with the same terms and principal amount, at the corporate trust office of the Trustee. We may change the place for registration of transfer and exchange of the debt securities and may designate additional places for registration and exchange. Unless otherwise provided in the prospectus supplement applicable to any series of debt securities, no service charge will be made for any transfer or exchange of the debt securities. However, we may require payment to cover any tax or other governmental charge that may be imposed. We will not be required to execute or to provide for the registration of transfer of, or the exchange of:

 

 

(See Section 3.05)

 

Restrictions on Mergers and Sale of Assets

 

Under the terms of the Indenture, we may not consolidate with or merge into any other entity or convey, transfer or lease our properties and assets substantially as an entirety to any entity, unless:

 

 

(See Section 8.01)

 

Discharge, Defeasance and Covenant Defeasance

 

The Indenture provides that we may be:

 

 

(See Sections 13.02 and 13.03)

 

We must satisfy certain conditions to effect a defeasance or covenant defeasance. Those conditions include the irrevocable deposit with the Trustee, in trust, of money or government obligations which through their scheduled payments of principal and interest would provide sufficient money to pay the principal and any premium and interest on those debt securities on the maturity dates of those payments or upon redemption. In addition, we will be required to deliver to the Trustee an opinion of counsel to the effect that the deposit and

related defeasance or covenant defeasance will not cause the holders of the applicable series of debt securities to recognize gain or loss for federal income tax purposes, and that such holders will be subject to federal income tax on the same amount, in the same manner and at the same times as would be the case if such deposit and related defeasance or covenant defeasance were not to occur. In the case of a defeasance, that opinion of counsel must be based upon a ruling from the Internal Revenue Service or a change in federal income tax law. (See Section 13.04)

 

Modification of the Indenture

 

We and the Trustee may enter into one or more supplemental indentures without the consent of any holder of the debt securities for certain specified purposes, including:

 

 

 

 

(See Section 9.01)

 

If the Trust Indenture Act of 1939 is amended after the date of the Indenture to require changes to the Indenture, the Indenture will be deemed to be amended so as to conform to that amendment of the Trust Indenture Act of 1939. We and the Trustee may, without the consent of any of the holders, enter into one or more supplemental indentures to evidence that amendment. (See Section 9.01)

 

The consent of the holders of a majority in aggregate principal amount of the debt securities of all series then outstanding, considered as one class, is required for all other modifications to the Indenture. However, if less than all of the series of debt securities outstanding are directly affected by a proposed supplemental indenture, then only the consent of the holders of a majority in aggregate principal amount of the outstanding debt securities of all series that are directly affected will be required. No amendment or modification may:

 

 

 

(See Section 9.02)

 

A supplemental indenture which changes the Indenture solely for the benefit of one or more particular series of debt securities, or modifies the rights of the holders of the debt securities of one or more series, will not affect the rights under the Indenture of the holders of the debt securities of any other series. (See Section 9.02)

 

The Indenture provides that the debt securities owned by us or anyone else required to make payment on the debt securities will be disregarded and considered not to be outstanding in determining whether the required holders have given a request or consent. (See Section 1.01)

 

We may fix in advance a record date to determine the required number of holders entitled to give any request, demand, authorization, direction, notice, consent, waiver or other such “act” or action of the holders, in certain situations. If the record date is fixed, the holders of the outstanding debt securities of the relevant series on that record date, and no other holders, will be entitled to take or revoke the relevant action, whether or not those holders remain holders after that record date. No action, however, will be effective unless taken on or prior to the applicable expiration date by holders of the requisite principal amount of the outstanding debt securities of that series on that record date. Any request, demand, authorization, direction, notice, consent, election, waiver or other act of a holder will bind every future holder of the same debt securities and the holder of every debt security issued upon the registration of transfer of or in exchange of those debt securities. A transferee will be bound by our acts or those of the Trustee taken in reliance thereon, whether or not notation of that action is made upon that debt security. (See Section 1.04)

 

Events of Default

 

“Event of default” when used in the Indenture with respect to any particular series of debt securities, means any of the following:

 

 

(See Section 5.01)

 

Remedies

 

Acceleration of Maturity

 

If an event of default with respect to any one series of debt securities occurs and continues, either the Trustee or the holders of a majority in principal amount of the outstanding debt securities of that series may declare the principal amount of all the debt securities of that series to be due and payable immediately. However, if the event of default is applicable to more than one series of debt securities, the Trustee or the holders of a majority in principal amount of all the outstanding debt securities of all series, considered as one class, and not the holders of any one series, may make a declaration of acceleration. (See Section 5.02)

 

At any time after a declaration of acceleration has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee, the event of default giving rise to the declaration of acceleration will be considered waived, and the declaration and its consequences will be automatically rescinded and annulled if:

 

 

 

 

(See Section 5.02)

 

The holders of a majority in principal amount of the outstanding debt securities of any particular series may on behalf of the holders of all the debt securities of that series waive any past default under the Indenture with respect to that series and its consequences, except a default:

 

 

However, if a default occurs and continues with respect to more than one series of debt securities, the holders of a majority in aggregate principal amount of the outstanding debt securities of all such series, considered as one class, has the right to waive the default, and not the holders of the debt securities of any one such series. Upon any waiver, the default ceases to exist, and any and all events of default arising therefrom is deemed to have been cured, for every purpose of the Indenture; but no waiver will extend to any subsequent or other default or impair any right consequent thereon. (See Section 5.13)

 

Right to Direct Proceedings

 

If an event of default with respect to any particular series of debt securities occurs and continues, the holders of a majority in principal amount of the outstanding debt securities of that series have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with respect to the debt securities of that series. However, if an event of default occurs and continues with respect to more than one series of debt securities, the holders of a majority in aggregate principal amount of the outstanding debt securities of all such series, considered as one class, have the right to make the direction, and not the holders of the debt securities of any one of such series. In either case, the Indenture further provides that:

 

 

 

(See Section 5.12)

 

Limitation on Right to Institute Proceedings

 

No holder of debt securities of any particular series will have any right to institute any proceeding, judicial or otherwise, with respect to the Indenture, or for the appointment of a receiver or Trustee, or for any other remedy under the Indenture, unless:

 

 

(See Section 5.07)

 

No Impairment of Right to Receive Payment

 

The limitations on the right to institute proceedings, however, do not apply to a suit by a holder of a debt security for payment of the principal of or premium, if any, or interest if any, on that debt security on or after the applicable due date. (See Section 5.08)

 

Annual Notice to Trustee

 

We will provide to the Trustee an annual statement by an appropriate officer as to whether we are in default in the performance and observance of any of the terms, provisions and conditions of the Indenture. (See Section 10.04)

 

Notices

 

Notices to holders of the debt securities will be given by mail to the holders at the addresses that appear in the security register. (See Section 1.06)

 

Title

 

We, the Trustee, and any of our agents or the agents of the Trustee, may treat the person in whose name the debt securities are registered as the absolute owner thereof, whether or not such debt securities may be overdue, for the purpose of making payments and for all other purposes irrespective of notice to the contrary. (See Section 3.08)

 

Governing Law

 

The Indenture and the debt securities will be governed by, and construed in accordance with, the laws of the State of New York. (See Section 1.12)

 

Regarding the Trustee

 

The Trustee is The Bank of New York Trust Company, N.A. (as successor to JPMorgan Chase Bank, N.A.). In addition to acting as Trustee, The Bank of New York Trust Company, N.A. and its affiliates act, and may act, as Trustee under our and our affiliates’ other various indentures and trusts. We and our affiliates also maintain credit and liquidity facilities and conduct other banking transactions with affiliates of the Trustee in the ordinary course of our businesses. In addition, an affiliate of the Trustee is the owner participant with respect to portions of Palo Verde Nuclear Generating Station which are subject to sale and leaseback financing agreements.

The Trustee may resign at any time by giving us written notice or be removed at any time by an act of the holders of a majority in principal amount of any particular series of debt securities then outstanding delivered to the Trustee and us. In addition, provided that no event of default has occurred or is continuing, we may appoint a new trustee upon delivering to the Trustee a resolution of our board of directors appointing a successor trustee and the successor’s acceptance of our appointment. In this case, the Trustee will be deemed to have resigned and the successor will be deemed to have been appointed as trustee in accordance with the Indenture. In any event, the resignation or removal of the Trustee, and no appointment of a successor trustee, will be effective until the acceptance of appointment by a successor trustee. (See Section 6.10)

 

The Trustee will perform only those duties that are specifically set forth in the Indenture unless an event of default under the Indenture occurs and continues. In case an event of default occurs and continues, the Trustee will exercise the same degree of care and skill as a prudent individual would exercise in the conduct of his or her own affairs. (See Section 6.01)

 

Book-Entry Issuance

 

Unless otherwise provided in a prospectus supplement, we will issue debt securities of each series in the form of one or more fully registered global securities. The global securities will be deposited with the Trustee under the Indenture as custodian for the depositary, which will be The Depository Trust Company or another depositary identified in a prospectus supplement, and registered in the name of the depositary or its nominee.

 

Unless and until it is exchanged in whole or in part for the individual debt securities it represents, a global security may not be transferred except as a whole:

 

 

Investors may hold their beneficial interests in the global securities directly through the depositary if they have an account with the depositary or indirectly through organizations that have accounts with the depositary.

 

The following is based on information furnished to us by 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 (the “Exchange Act”). DTC holds securities that its participants (“Direct Participants”) deposit with DTC. DTC also facilitates the settlement among Direct Participants of sales and other securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in Direct 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. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC, in turn, is owned by a number of Direct Participants of DTC and Members of the National Securities Clearing Corporation, Fixed Income Clearing Corporation, and Emerging Markets Clearing Corporation, as well as by the New York Stock Exchange, Inc., the American Stock Exchange LLC, and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as securities brokers and dealers, banks, trust companies and clearing 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 Direct and Indirect Participants are on file with the SEC.

 

Purchases of securities under the DTC system must be made by or through Direct Participants, who will receive a credit for the securities on DTC’s records. The ownership interest of each actual purchaser of each security (“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 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 or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in securities, except in the event that use of the book-entry system for the securities is discontinued.

 

To facilitate subsequent transfers, all securities deposited by Direct Participants with the Trustee on behalf of DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of securities with DTC and their registration in the name of Cede & Co. or such other nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the securities; DTC’s records reflect only the identity of the Direct Participants to whose accounts such securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect 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.

 

Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the securities. Under its usual procedures, DTC mails 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 securities are credited on the record date (identified in a listing attached to the omnibus proxy).

 

Principal and interest payments on the securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts, upon DTC’s receipt of funds and corresponding detail information from the Company or its agent on the payable date in accordance with their respective holdings shown on DTC’s records. Payments by Direct and Indirect 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 such Direct or Indirect Participant and not of DTC, the Company or the Trustee, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Company or its agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

 

DTC may discontinue providing its services as securities depository with respect to the notes at any time by giving reasonable notice to the Company or the Trustee. Under such circumstances, if a successor securities depository is not obtained, security certificates are required to be printed and delivered.

 

The Company may decide to discontinue use of the system of book-entry only transfers through DTC (or a successor securities depository). In that event, security certificates will be printed and delivered to DTC.

 

The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that we believe to be reliable, but we take no responsibility for the accuracy thereof.

 

We have no responsibility for the performance by DTC or its Participants of their respective obligations as described in this prospectus or under the rules and procedures governing their respective operations.

 

We may sell debt securities, in or outside of the United States, to underwriters or dealers, through agents, directly to purchasers or through a combination of these methods. The applicable prospectus supplement will contain specific information relating to the terms of the offering, including, to the extent not otherwise included in the prospectus:

 

 

By Underwriters

 

If underwriters are used in the sale, the debt securities will be acquired by the underwriters for their own account. Underwriters may offer the debt securities directly or through underwriting syndicates represented by one or more managing underwriters. The underwriters may resell the debt securities in one or more transactions, including negotiated transactions, at a fixed public offering price, which may be changed, or at varying prices determined at the time of sale. The obligations of the underwriters to purchase the debt securities will be subject to certain conditions. The initial public offering price and any discounts or concessions allowed or re-allowed or paid to dealers may be changed from time to time.

 

By Dealers

 

If dealers are used in the sale, unless otherwise specified in the applicable prospectus supplement, we will sell the debt securities to the dealers as principals. The dealers may then resell the debt securities to the public at varying prices to be determined by the dealers at the time of resale. The applicable prospectus supplement will contain more information about the dealers, including the names of the dealers and the terms of our agreement with them.

 

By Agents and Direct Sales

 

We may sell the debt securities directly to the public, without the use of underwriters, dealers or agents. We may also sell the debt securities through agents we designate from time to time, including in connection with remarketings of any of our outstanding debt securities. The applicable prospectus supplement will contain more information about the agents, including the names of the agents and any commission we agree to pay the agents.

 

We also may engage a broker-dealer from time to time to act as agent or principal for the offer of our debt securities in one or more placements pursuant to a distribution agreement. If we and the broker-dealer agree, we will sell to the broker-dealer as agent or as principal, and the broker-dealer will seek to solicit offers to purchase on an agency basis and/or will purchase on a principal basis, our debt securities. The number and purchase price (less an underwriting discount) of the debt securities we sell to the broker-dealer will be mutually agreed on the relevant trading day. The debt securities sold under the distribution agreement will be sold at prices related to the prevailing market price for such securities, and therefore exact figures regarding the price, proceeds that will be raised or commissions to be paid will be described in a prospectus supplement to this prospectus or in other filings made in accordance with and as permitted by the Securities Act of 1933, as amended (the “Securities Act”) and the Exchange Act. The broker-dealer may make sales of our debt securities pursuant to the distribution agreement in privately negotiated transactions and/or any other method permitted by law deemed to be an “at-the-market” offering as defined in Rule 415 promulgated under the

Securities Act including sales made on the New York Stock Exchange, the current trading market for certain of our debt securities.

 

General Information

 

Underwriters, dealers and agents that participate in the distribution of the debt securities may be deemed underwriters as defined in the Securities Act, and any discounts or commissions we pay to them and any profit made by them on the resale of the debt securities may be treated as underwriting discounts and commissions under the Securities Act. Any underwriters or agents will be identified and their compensation from us will be described in the applicable prospectus supplement.

 

We may agree with the underwriters, dealers and agents to indemnify them against certain civil liabilities, including liabilities under the Securities Act, or to contribute with respect to payments which the underwriters, dealers or agents may be required to make.

 

Underwriters, dealers and agents may be customers of, engage in transactions with or perform services for, us in the ordinary course of their businesses.

 

The legality of the debt securities in respect of which this prospectus is being delivered will be passed upon for us by Charles L. Moore, Esq., Associate General Counsel, and Troutman Sanders LLP, who will also pass on certain other legal matters. As of February 29, 2008, Charles L. Moore, Esq. held options to acquire 13,000 shares of our common stock (7,326 of which were exercisable). Counsel for any underwriters will render an opinion as to certain legal matters relating to the debt securities for any underwriters, dealers, purchasers or agents.

 

The financial statements and the related financial statement schedules, incorporated in this prospectus by reference from the Company’s Annual Report on Form 10-K for the year ended December 31, 2007, and the effectiveness of PNM Resources, Inc.’s internal control over financial reporting have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their reports, which are incorporated herein by reference (which reports (1) express an unqualified opinion and include explanatory paragraphs regarding the adoption of Financial Accounting Standards Board Financial Interpretation No. 47, Accounting for Conditional Asset Retirement Obligations in 2005, Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment and Statement of Financial Accounting Standards No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans — an amendment of FASB Statements No. 87, 88, 106, and 132R in 2006, and the adoption of Financial Accounting Standards Board Financial Interpretation No. 48, Accounting for Uncertainty in Income Taxes in 2007 and (2) express an unqualified opinion on the effectiveness of internal control over financial reporting). Such financial statements and financial statement schedules have been so incorporated in reliance upon the reports of such firm given upon their authority as experts in accounting and auditing.

 

PNMR files annual, quarterly and special reports and other information with the SEC. You may read and copy these documents at the SEC’s Public Reference Room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information about the Public Reference Room. The SEC also maintains an Internet website that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC. The address of the site is www.sec.gov.

 

PNMR’s Internet address is www.pnmresources.com. The contents of the website are not a part of the registration statement of which this prospectus is a part. PNMR’s filings with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports, filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, are accessible free of charge at http://www.pnmresources.com as soon as reasonably practicable after PNMR electronically files such material with, or furnishes it to, the SEC. These reports are also available upon request in print from us free of charge.

 

PNMR is “incorporating by reference” in this prospectus information PNMR files with the SEC, which means that PNMR is disclosing important information to you by referring you to those documents. Our combined filings with the SEC present separate filings by PNMR, PNM and TNMP. Information contained therein relating to an individual registrant is filed by that registrant on its own behalf and each registrant makes no representation as to information relating to other registrants. The information PNMR incorporates by reference is considered to be part of this prospectus, unless PNMR updates or supersedes that information by the information contained in this prospectus or the information PNMR files subsequently with the SEC that is incorporated by reference in this prospectus or a prospectus supplement. PNMR is incorporating by reference the following documents that it has filed with the SEC (except those portions of filings that relate to PNM or TNMP as separate registrants), other than any information in these documents that is deemed not to be “filed” with the SEC:

 

 

PNMR also incorporates by reference into this prospectus any filings PNMR makes with the SEC (excluding information furnished under Items 2.02 or 7.01 of Current Reports on Form 8-K) under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, after the initial filing of the registration statement that contains this prospectus and before termination of this offering.

 

You may obtain without charge a copy of any of the documents PNMR incorporates by reference, except for exhibits to such documents which are not specifically incorporated by reference into such documents, by contacting us at PNM Resources, Inc., Alvarado Square, Albuquerque, New Mexico, 87158, Attention: Investor Relations. You may also telephone your request at (505) 241-2211.