Edison settles early tenders for 7.73% notes, 8¾% notes, 13½% notes

By Jennifer Chiou

New York, May 7 - Edison International announced that in the tender offers for three subsidiaries of its Edison Mission Group, Edison Mission Energy accepted $587 million of its $600 million of 7.73% senior notes due June 15, 2009, Midwest Generation, LLC accepted $999.8 million of its $1 billion of 8¾% second-priority senior secured notes due 2034 and Mission Energy Holding Co. accepted $795.7 million of its $799.957 million of 13½% senior secured notes due 2008 at the early deadline.

The consent solicitations expired at 5 p.m. ET on April 30.

The offers end at 9 a.m. ET on May 15. They began on April 17.

The Rosemead, Calif. energy company said that the subsidiaries solicited consents to eliminate substantially all the restrictive covenants, eliminate or modify certain events of default and eliminate or modify related provisions contained in each indenture.

Edison International said that the amendments are now operative.

For each $1,000 principal amount, the company said it paid $1,051.98 for the 7.73% notes, $1,106.88 for the 8¾% notes and $1,092.08 for the 13½% notes.

For each $1,000 principal amount of 7.73% notes and 13½% notes, the payout was calculated using the sum of $1,000 - the amount payable at maturity - and the interest that would accrue from the last interest payment through the maturity, determined on the basis of a yield equal to the sum of the bid-side yield on the reference Treasury note plus 50 basis points. The reference note is the 4% Treasury due June 15, 2009 for the 7.73% notes and the 5.125% Treasury due June 30, 2008 for the 13½% notes.

For each $1,000 principal amount of 8¾% notes, the payout was calculated using the present value of $1,043.75, the optional redemption price on the earliest redemption date, and the interest that would accrue from the last interest payment through that date, discounted using the bid-side yield on the 3.125% Treasury due April 15, 2009 and 50 bps.

Those who tendered by the consent deadline received the $30.00 payment that is included in the payout.

The offers are conditioned upon tenders from holders of a majority of notes, particularly at least 66 2/3% of the 8¾% notes, as well as one or more new planned debt financings.

Edison Mission Energy also closed its previously announced private offering of $2.7 billion of senior notes, the proceeds of which went towards the tenders along with cash on hand.

The company also repaid $327.8 million outstanding under Midwest Generation's senior secured term loan facility.

The information agent is D.F. King & Co., Inc. (call collect 212 269-5550 or 800 859-8511). The dealer manager and solicitation agent is Citigroup Global Markets Inc. (call collect 212 723-6106 or 800 558-3745).

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