Advertisement

California | SOUTHLAND FOCUS

Edison Unit's Notes Paying Higher Yields

April 03, 2001|Bloomberg News

Edison Mission Energy, a unit of cash-strapped Edison International, sold $600 million worth of 10-year notes, paying yields about 2 percentage points higher than a rival based outside California with the same debt rating.

The notes were priced to yield 9.88%, about 4.9 percentage points above benchmark U.S. Treasuries. Although power plant developer Edison Mission was set up as a so-called bankruptcy-remote unit separate from the parent, the risk of getting caught in California's energy debacle deterred buyers.

Rosemead-based Edison International owns Southern California Edison, which, along with PG&E Corp.'s Pacific Gas & Electric, is on the verge of bankruptcy.

They've accumulated $13 billion in debt for power costs that can't be passed on to consumers under the state's 1996 deregulation law. Edison spokesman Kevin Kelley had no immediate comment.

Irvine-based Edison Mission has a Baa3 rating at Moody's Investors Service and BBB- at Standard & Poor's, the bottom rung of investment-grade ranks. Edison said in January that it is changing its corporate structure to protect Edison Mission from creditors.

Advertisement
Los Angeles Times Articles
|
|
|