Fitch to rate Edison Mission note BB-

Fitch Ratings said it expects to assign a BB- rating to Edison Mission Energy's planned $2.7 billion senior unsecured note issuance and a BBB- rating to Midwest Generation LLC's $500 million amended secured credit facility.

Meanwhile, the agency affirmed Edison Mission's BB- issuer default and senior unsecured debt ratings and Midwest Generation's BB issuer default rating.

The outlook is stable.

The proposed new issuances by Edison Mission and Midwest Generation are conditional upon the successful conclusion of tender and consent solicitations for debt of Edison Mission, Midwest Generation, and Mission Energy Holdings Co. announced by their ultimate parent, Edison International on April 17. Upon successful completion of these transactions, Mission Energy Holdings will no longer have any outstanding debt and will cease to exist as a separate corporate entity.

In the planned transactions, Edison Mission will raise $2.7 billion to be used along with cash on hand to retire and pay tender considerations for Midwest Generation's $1 billion 8¾% second-lien notes, Mission Energy Holdings' $800 million 13½% notes and Edison Mission's $600 million 7.73% notes.

The agency said that as a consequence of the transactions, Edison Mission will modestly reduce cash on hand but will have lower interest expenses and materially lower debt maturities through 2016. Thus, Midwest Generation and Edison Mission will have improved liquidity and flexibility to fund capital expenditures.

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