Southern California Edison in $475 Million Trust Preference Securities Offering
May 17, 2012
Cleary Gottlieb represented Citigroup Global Markets, Morgan Stanley & Co., RBC Capital Markets and UBS Securities as representatives of the underwriters in a registered offering of $475 million 5.625% Trust Preference Securities (Cumulative, Liquidation Amount $25 per Trust Preference Security) issued by SCE Trust I (the “Trust”) and guaranteed by Southern California Edison (the “Company”). The transaction closed on May 17.
This offering was a first-of-its-kind transaction specifically designed to allow the Company to access the retail preferred stock market without becoming subject to certain New York Stock Exchange equity listing requirements. (As a wholly-owned subsidiary of Edison International, the Company is not subject to NYSE corporate governance or other listed company requirements.) The offering employed a traditional trust preferred structure, but with the twist that the sole assets of the Trust consisted of the Company’s cumulative, perpetual preference stock instead of the deeply subordinated debt typically held by trusts in such deals. The terms of and payments due on the Trust securities mirror the terms of and payments due on the Company’s preference stock. The Trust securities have been approved for listing on the NYSE under its listing standards for “Other Securities."
Southern California Edison supplies electricity to a 50,000 square mile service area in coastal, central, and southern California.