Southern California Edison’s $550 Million Offering

Cleary Gottlieb represented BofA Securities, J.P. Morgan, RBC Capital Markets, and Wells Fargo Securities, as representatives of the underwriters, in a registered offering of $550 million 7.5% trust preference securities (cumulative, liquidation amount $25 per trust preference security) issued by SCE Trust VII (the trust) and guaranteed by Southern California Edison Co. (SCE).

The transaction priced on November 16, 2023, and is expected to close on November 22, 2023.

The trust preference securities offering was substantially similar in structure to prior offerings of trust preference securities guaranteed by SCE, in which Cleary also represented the underwriters. These offerings were specifically designed to allow SCE to access the retail preferred stock market without becoming subject to certain New York Stock Exchange equity listing requirements.

As with the prior offerings, the trust preference securities offering employed a traditional trust preferred structure, but with the twist that the sole assets of the trust consisted of SCE’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 preference stock.

SCE is an investor-owned public utility primarily engaged in the business of supplying and delivering electricity to an approximately 50,000 square mile area of Southern California, excluding the City of Los Angeles and certain other cities. It owns and operates transmission, distribution, and generation facilities, and procures power from a variety of sources, including other utilities, merchant generators, and other nonutility generators.