TSE:FTS First Preference Shares, Series B are retractable at the holderGLYPH<213> option by depositing such shares with the CorporationGLYPH<213>s transfer agent on or before November 25, 2002 for redemption by the Corporation on December 2, 2002 at $25.00 per share together with all accrued and unpaid dividends thereon. The Corporation may redeem any or all of the outstanding First Preference Shares, Series B, at any time on or after December 2, 2002 for a redemption price of $25.00 together with all accrued and unpaid dividends thereon. The Senior Unsecured Debentures are redeemable at the option of the Corporation at a price calculated as the greater of the principal amount to be redeemed and the amount equal to the net present value of interest and principal based on the Canada Yield plus a premium ranging from 0.43% to 0.87% together with accrued and unpaid interest thereon. There are also stated limitations for additional borrowings, dividend payments, share distribution and redemption and the prepayment of subordinated debt. The Newfoundland Power and Maritime Electric first mortgage bonds are secured by a first fixed and specific charge on the respective utilityGLYPH<213>s capital assets owned or to be acquired and by a floating charge on all other assets. The Fortis Properties first mortgage bonds are secured by a fixed and floating charge on specific income producing properties. The senior secured notes are collateralized by a first fixed and specific mortgage and a charge on a specific income producing property. The first mortgages and term loan are secured by specific income producing properties. The Canadian Niagara Power term loan is secured by a general security agreement covering all its assets and a collateral mortgage on real property. Canadian Niagara Power is party to an interest rate swap contract maturing April 30, 2005 to hedge against interest exposures on $10.0 million of indebtedness. The contract has the effect of fixing the rate of interest at 6.2725% on $10.0 million of the $14.0 million term loan. The remaining $4.0 million of the term loan bears interest at a floating rate of BankersGLYPH<213> Acceptance plus 0.85%. The interest rate swap contract is accounted for as a hedge against the long-term debt. At December 31, 2001, there was an unrecognized loss of $0.7 million (2000 - $0.3 million loss) on the interest rate swap contract. The change in the market value of the interest rate swap contract, which will fluctuate over time, is not recognized until future interest payments are made. Therefore, the change in market value of this contract at year end has not been recognized in these consolidated financial statements. The BECOL term loan is secured by security agreements covering all its property assets and undertakings.  BECOL is party to an interest rate swap contract maturing on September 30, 2011 to hedge against interest exposures on the term loan. The contract has the effect of fixing the rate of interest at 9.45% on the indebtedness.  The interest rate swap is accounted for as a hedge against the long-term debt. At December 31, 2001, there was an unrecognized loss of $0.9 million on the interest rate swap contract. The change in the market value of the interest rate swap contract, which will fluctuate over time, is not recognized until future interest payments are made. Therefore, the change in market value of this contract at year end has not been recognized in these consolidated financial statements. The 12% fixed rate debentures can be called by Belize Electricity at any time after June 30, 2003 until maturity by giving the holders not more than 60 days nor less than 30 days written notice, and are repayable at the option of the holders at any time on or after June 30, 2002 by giving 12 months written notice to Belize Electricity Redemption by agreement between Belize Electricity and the debenture holders at any time is also allowed. The 9.5% fixed rate debentures can be called by Belize Electricity at any time after April 30, 2008 until maturity by giving holders not more than 60 days or not less than 30 days written notice, and are repayable at the option of the holders at any time on or after April 30, 2008 by giving 12 months written notice to Belize Electricity Redemption by agreement between Belize Electricity and the debenture holders at any time is also allowed. The IBRD loans bear interest at 0.5% per annum above the BankGLYPH<213> GLYPH<210>Cost of Qualified BorrowingsGLYPH<211> as defined in the loan agreement and mature in 2003 and 2011. The CDB loans bear interest at rates ranging from 2.0% to 8.5% and mature from 2004 to 2014. The EIB loan bears interest at 5.0% and matures in 2014. The AFB loan bears interest at three months LIBOR plus 0.085% and matures in 2006. The other loans bear interest at 8.0%, mature in 2003 and are unsecured. The loans contain various negative and positive covenants by Belize Electricity or the Government of Belize regarding future action by Belize Electricity or the Government of Belize. They also contain various events of default, in the event of which the loan becomes due and payable. FORTIS Inc. 2OO1 Annual Report 49 Belize Electricity BECOL Canadian Niagara Power Fortis Properties Newfoundland Power and Maritime Electric Fortis Inc.