By Paul A. Harris
St. Louis, May 1 - Edison Mission Energy priced $2.7 billion of senior notes (B1/BB-) in three tranches on Tuesday, according to market sources.
The company priced a $1.2 billion tranche of 10-year notes at par to yield 7%, on top of price talk.
In addition, Edison Mission Energy priced an $800 million tranche of 12-year notes at par to yield 7.2%, within price talk that had the 12-year notes talked an eighth of a point to a quarter of a point behind the 10-year notes.
Also the company priced a $700 million tranche of 20-year notes at par to yield 7 5/8%, on top of price talk.
Citigroup, Credit Suisse, Deutsche Bank Securities, Goldman Sachs & Co., JP Morgan, Lehman Brothers and Merrill Lynch & Co. were joint bookrunners for the notes, which were issued via Rule 144A with registration rights and via Regulation S. RBS Greenwich Capital and UBS Investment Bank were 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.
| Issuer: | Edison Mission Energy
|
| Amount: | $2.7 billion
|
| Security description: | Senior notes
|
| Bookrunners: | Citigroup, Credit Suisse, Deutsche Bank Securities, Goldman Sachs & Co., JP Morgan, Lehman Brothers, Merrill Lynch & Co.
|
| Co-managers: | RBS Greenwich Capital, UBS Investment Bank
|
| Call protection: | Non-callable
|
| Trade date: | May 1
|
| Settlement date: | May 7
|
| Ratings: | Moody's: B1
|
| Standard & Poor's: BB-
|
| Distribution: | Rule 144A with registration rights/Regulation S
|
|
|
| 10-year notes
|
| Amount: | $1.2 billion
|
| Maturity: | May 15, 2017
|
| Coupon: | 7%
|
| Price: | Par
|
| Yield: | 7%
|
| Spread: | 239 bps
|
| Price talk: | 7% area
|
|
|
| 12-year notes
|
| Amount: | $800 million
|
| Maturity: | May 15, 2019
|
| Coupon: | 7.2%
|
| Price: | Par
|
| Yield: | 7.2%
|
| Spread: | 259 bps
|
| Price talk: | 12.5 bps to 25 bps behind 10 year
|
|
|
| 20-year notes
|
| Amount: | $700 million
|
| Maturity: | May 15, 2027
|
| Coupon: | 7 5/8%
|
| Price: | Par
|
| Yield: | 7 5/8%
|
| Spread: | 283 bps
|
| Price talk: | 7 5/8% area
|
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