Edison Mission sets talk for $2.7 billion three-part note offering

By Paul A. Harris

St. Louis, April 30 - Edison Mission Energy set price talk for its $2.7 billion three-part offering of senior notes (expected rating B1/confirmed BB-) on Monday, according to an informed source.

The company is offering 10-year notes with price talk in the 7% area, 12-year notes with price talk 12.5 basis points to 25 bps behind the 10-year notes and 20-year notes with price talk in the 7 5/8% area.

Tranche sizes remain to be determined.

Pricing is expected on Tuesday.

Citigroup, Credit Suisse, Deutsche Bank Securities, Goldman Sachs & Co., JP Morgan, Lehman Brothers and Merrill Lynch & Co. are joint bookrunners for the notes, which are being marketed via Rule 144A with registration rights and via Regulation S. RBS Greenwich Capital and UBS Investment Bank are the co-managers.

Proceeds will be used to fund the tender for $600 million of the company's 7.73% senior notes due June 15, 2009 as well as to fund a dividend to its immediate parent, Mission Energy Holding Co. and fund the tender for Mission Energy Holding's $799.957 million 13½% senior secured notes due 2008.

In addition proceeds will be used to fund a capital contribution to subsidiary Midwest Generation, LLC (MWG) and help fund MWG's tender for $1 billion of its 8¾% second-priority senior secured notes due 2034 and repay MWG's secured term loan.

The Rosemead, Calif.-based electric power generator and distributor is a wholly owned subsidiary of Edison Mission Group.

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