Exhibit 5.1
Skadden, Arps, Slate, Meagher & Flom LLP
One Newark Center
Newark, New Jersey 07102
(973) 639-6800
January 8, 2001
PSE&G Transition Funding LLC
80 Park Plaza
Newark, New Jersey 07102
Re: PSE&G Transition Funding LLC
Ladies and Gentlemen:
We have acted as special New Jersey counsel to PSE&G Transition Funding
LLC, a Delaware limited liability company (the "Company"), in connection with
the Registration Statement on Form S-3 (Registration No. 333-83635), as amended
(the "Registration State ment"), filed by the Company with the Securities and
Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Securities Act") relating to transition bonds (the "Transition
Bonds") of the Company to be offered from time to time as described in the form
of the prospectus (the "Prospectus") included as part of the Registration
Statement. Capitalized terms used in this letter and not defined herein have the
meanings given to such terms in the Prospectus.
We are familiar with the proceedings taken and proposed to be taken by the
Company in connection with the proposed authorization, issuance and sale of the
Transition Bonds. In this connection, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of such records of the
Company and such agreements, certificates of public officials, certificates of
officers or other representatives of the Company and others and such other docu
ments, certificates and records as we have deemed necessary or appropriate as a
basis for the opinion set forth herein.
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified, conformed or photostatic copies and the
authenticity of the originals of such latter documents. In making our
examination of documents, we have assumed that the parties thereto had or will
have the power, corporate or other, to enter into and perform all obligations
thereunder and have also assumed the due authorization by all requisite action,
corporate or other, and execution and delivery by such
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PSE&G Transition Funding LLC
January 8, 2001
Page 2
parties of such documents and the validity and binding effect thereof on such
parties. As to any facts material to the opinions expressed herein which we have
not independently established or verified, we have relied upon statements and
representations of officers and other representatives of the Company, Public
Service Electric and Gas Company and others.
The opinion expressed below is based on the following assumptions:
(a) the Registration Statement will become effective
(b) the proposed transactions are consummated as contemplated in the
Registration Statement;
(c) prior to the issuance of any Series or Class of Transition Bonds:
(i) all necessary orders, approvals and authorizations for the Company's
purchase from time to time of Bondable Transition Property from PSE&G, in
exchange for the net proceeds of Transition Bonds will have been obtained
by the Company;
(ii) the Amended and Restated Limited Liability Company Agreement of the
Company will have been executed and delivered by an authorized
representative of PSE&G as sole member of the Company;
(iii) the Indenture will have been executed and delivered by the Company's
authorized representative and by the trustee named therein;
(iv) the maturity dates, the bond rates, the redemption provisions and the
other terms of the Transition Bonds being offered will be fixed in
accordance with the terms of the Indenture;
(v) the Sale Agreement between the Company and PSE&G, as Seller, will have
been executed and delivered;
(vi) the Servicing Agreement between the Company and PSE&G, as Servicer,
will have been executed and delivered; and
(vii) the Underwriting Agreement between PSE&G and the underwriters of the
Transition Bonds (the "Underwriting Agreement") will have been executed
and delivered; and
(d) the Indenture will be qualified in accordance with the provisions of
the Trust Indenture Act of 1939, as amended.
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PSE&G Transition Funding LLC
January 8, 2001
Page 3
Members of our firm are admitted to practice in the State of New Jersey,
and we do not express any opinion as to the laws of any other jurisdiction other
than the federal laws of the United States.
In rendering the opinion set forth herein, we have assumed that the
execution and delivery by the Company of the Indenture and the Transition Bonds
and the performance by the Company of its obligations thereunder do not violate,
conflict with or constitute a default under (i) any agreement or instrument to
which the Company or its properties is subject, except that we do not make such
assumption with respect to those agreements and instruments which have been
identified to us by the Company as being material to it; (ii) any law, rule or
regulation to which the Issuer is subject, except that we do not make such
assumption with respect to those laws, rules and regulations of the State of New
Jersey and the United States of America which, in our experience, are normally
applicable to transactions of the type contemplated by the Indenture and the
Transition Bonds ("Applicable Laws"), but without our having made any special
investigation concerning any other laws, rules or regulations; and (iii) any
judicial or regulatory order or decree of any governmental authority, except
that we do not make such assumption with respect to those orders or decrees
which have been identified to us by the Company as being material to it of any
New Jersey or federal executive, legislative, judicial, administrative or
regulatory body estab lished under Applicable Laws.
Based on and subject to the foregoing, we are of the opinion that, when
properly executed and authenticated in accordance with the Indenture and
delivered against payment of the purchase price provided for in the Underwriting
Agreement, and upon satisfaction of all other conditions contained in the
Indenture and the Underwriting Agreement, the Transition Bonds will constitute
valid and binding obligations of the Company, will be fully paid and
non-assessable and will be enforceable against the Company in accordance with
their terms, except to the extent that enforcement thereof may be limited by (1)
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other similar laws now or hereafter in effect relating to creditor's rights
generally and (2) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity).
We consent to the filing of this opinion as an Exhibit to the Registration
Statement and to the references to this firm under the heading "Various Legal
Matters Relating to the Transition Bonds" in the Prospectus included in the
Registration Statement. In giving this consent, we do not thereby admit that we
are included in the category of persons whose consent is required under Section
7 of the Securities Act or the rules and regulations of the Commission.
Very truly yours,
/s/ Skadden, Arps, Slate, Meagher & Flom LLP
