Mission Energy Holding executes supplemental indentures for 9 7/8%, 10% notes, prices tender

By Jennifer Chiou

New York, May 19 - Mission Energy Holding Co. subsidiary Edison Mission Energy entered into supplemental indentures related to its tender offer and consent solicitation for its $600 million of 9 7/8% senior notes due April 15, 2011 and $400 million of 10% senior notes due Aug. 15, 2008, according to an 8-K filing with the Securities and Exchange Commission.

The company noted that the supplemental indentures will not become operative until the tendered notes are accepted for purchase.

As of the consent date, Edison Mission had received tenders and consents for $594.527 million or 99.09% of the 9 7/8% notes and $366.566 million or 91.64% of the 10% notes.

Edison Mission also announced pricing for the tender.

For the 9 7/8% notes, the payment will be $1,174.23 per $1,000 principal amount while for the 10% notes the payment is $1,086.75 per $1,000 principal amount. In both cases, the totals include a $30 consent payment that will only be received by those that tendered by the consent deadline.

The consent solicitation is to amend the note indenture to eliminate substantially all the restrictive covenants, eliminate or modify certain events of default and eliminate or modify related provisions.

The amendments include changes to allow Edison Mission Energy to increase the size of its secured corporate credit facility.

The tender ends at 5 p.m. ET on June 5.

Payment per $1,000 principal amount will be based on the remaining payments to maturity, discounted using the comparable Treasury yield plus 75 basis points, minus accrued interest to the payment date. The total includes a $30.00 per $1,000 consent payment that will only be paid to holders who tendered with consents by the consent deadline of 5 p.m. ET on May 17.

Edison Mission will also pay accrued interest up to but excluding the payment date.

Edison Mission Energy said it intends to replace its existing $98 million secured corporate credit facility with a new secured corporate credit facility providing for $500 million in revolving loan and letter of credit capacity to be used to repay existing debt and/or to provide liquidity and credit support for the hedging and trading activities of Edison Mission Energy and its subsidiaries.

The offer is subject to conditions, including the receipt of consents from the holders of at least a majority of each series of notes and completion of debt financings to raise at least $1 billion.

J.P. Morgan Securities Inc. (212 270-3994 or 800 245-8812) and Citigroup Corporate and Investment Banking (212 723-6106 or 800 558-3745) are dealer managers. D.F. King & Co., Inc. is information agent (212 269-5550 or 800-859 8511).

Edison Mission Group is an Irvine, Calif., independent power producer.

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