Cleary Gottlieb represented Citigroup Global Markets Inc., Morgan Stanley & Co. LLC, RBC Capital Markets, LLC, UBS Securities LLC and Wells Fargo Securities, LLC as representatives of the underwriters in a registered offering of $400 million 5.10% Trust Preference Securities (Cumulative, Liquidation Amount $25 per Trust Preference Security) issued by SCE Trust II (the “Trust”) and guaranteed by Southern California Edison. The transaction closed on January 29, 2013.
This offering was substantially similar in structure to the May 2012 offering of trust preference securities issued by SCE Trust I and guaranteed by Southern California Edison, in which Cleary Gottlieb also represented the underwriters. That offering was a first-of-its-kind transaction specifically designed to allow Southern California Edison to access the retail preferred stock market without becoming subject to certain New York Stock Exchange equity listing requirements, including that preferred stockholders have a right to elect directors after six dividend period nonpayments. (As a wholly-owned subsidiary of Edison International, Southern California Edison is not subject to NYSE corporate governance or other listed company requirements.) As with the May 2012 offering, the January 2013 offering employed a traditional trust preferred structure, but with the twist that the sole assets of the Trust consisted of Southern California Edison’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 Southern California Edison’s preference stock. The Trust securities have been approved for listing on the NYSE under its listing standards for “Other Securities,” so the listing does not subject Southern California Edison to NYSE regulation.
Southern California Edison supplies electricity to a 50,000 square mile service area in coastal, central, and southern California.