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Registration No. 33-61343
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________
Amendment No. 1
to
Form S-3
Registration Statement
Under
The Securities Act of 1933
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COMMONWEALTH EDISON COMPANY ILLINOIS 36-0938600
ComEd FINANCING I DELAWARE Applied For
(Exact name of registrant (State or other jurisdiction of (I.R.S. Employer
as specified in its charter) incorporation or organization) Identification No.)
John C. Bukovski, Vice President
37th Floor, 10 South Dearborn Street 37th Floor, 10 South Dearborn Street
Post Office Box 767 Post Office Box 767
Chicago, Illinois 60690-0767 Chicago, Illinois 60690-0767
312/394-4321 312/394-3117
(Address, including zip code, and telephone number, (Name, address, including zip code, and telephone
including area code, of each registrant's principal number, including area code, of agent for service for
executive offices) each registrant)
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Approximate date of commencement of proposed sale to the public: As soon
as practicable after the Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier registration statement for the same
offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [X]
CALCULATION OF REGISTRATION FEE
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Proposed maximum Proposed maximum Amount of
Title of each class of Amount to be offering price per aggregate offering registration
securities to be registered registered unit (2)(3) price (2)(3) fee
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Preferred Securities of ComEd
Financing I and Subordinated
Deferrable Interest Notes of
Commonwealth Edison Company (1) 8,000,000 $25.00 $200,000,000 $68,965.52
Guarantees of Preferred Securities
of ComEd Financing I by Common- Preferred
wealth Edison Company (4)....... Securities
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Total $200,000,000 $68,965.52
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(1) The Subordinated Deferrable Interest Notes will be purchased by, and
constitute assets of, ComEd Financing I. No separate consideration
therefor will be received.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(i) and Rule 457(n).
(3) Exclusive of accrued interest and distributions, if any.
(4) Includes the rights of holders of the Preferred Securities under the
Guarantee Agreement and certain back-up undertakings as described in the
Registration Statement. No separate consideration will be received for
such Guarantees.
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* *
* INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A *
* REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE *
* SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR *
* MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT *
* BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR *
* THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE *
* SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE *
* UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS *
* OF ANY SUCH STATE. *
* *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
Preliminary Prospectus dated September 8, 1995
Subject to completion
PROSPECTUS
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8,000,000 Preferred Securities
ComEd Financing I
___% Trust Originated Preferred Securities(SM) ("TOPrS(SM)")
(Liquidation Amount $25 per Preferred Security)
guaranteed to the extent set forth herein by
Commonwealth Edison Company
___________________
The ___% Trust Originated Preferred Securities (the "Preferred Securities")
offered hereby evidence preferred undivided beneficial interests in the assets
of ComEd Financing I, a statutory business trust formed under the laws of the
State of Delaware (the "Trust"). Commonwealth Edison Company, an Illinois
corporation ("ComEd" or the "Company"), will own all the common securities (the
"Common Securities" and, together with the Preferred Securities, the "Trust
Securities") representing common undivided beneficial interests in the assets of
the Trust. The Trust exists for the sole purpose of issuing the Trust Securities
and investing the proceeds thereof in an equivalent principal amount of ___%
Subordinated Deferrable Interest Notes due September 30, 2035 (the "Subordinated
Notes") of ComEd. The Subordinated Notes will be unsecured obligations of ComEd
and will
(continued on next page)
__________________
SEE "RISK FACTORS" COMMENCING ON PAGE 5 OF THIS PROSPECTUS FOR CERTAIN
INFORMATION RELEVANT TO AN INVESTMENT IN THE PREFERRED SECURITIES, INCLUDING THE
PERIOD AND CIRCUMSTANCES DURING AND UNDER WHICH PAYMENTS OF DISTRIBUTIONS ON THE
PREFERRED SECURITIES MAY BE DEFERRED AND THE RELATED UNITED STATES FEDERAL
INCOME TAX CONSEQUENCES OF SUCH DEFERRAL.
An application will be filed to list the Preferred Securities on the New
York Stock Exchange, Inc. (the "New York Stock Exchange"). If such application
is approved, trading of the Preferred Securities on the New York Stock Exchange
is expected to commence within a 30-day period after the initial delivery of the
Preferred Securities. See "Underwriting."
____________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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Initial Public Underwriting Proceeds to
Offering Price (1) Commission (2) Trust (3)(4)
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Per Preferred
Security............. $ 25.00 (3) $25.00
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Total................. $200,000,000 (3) $200,000,000
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(1) Plus accrued distributions, if any, from September __, 1995.
(2) ComEd and the Trust have agreed to indemnify the several Underwriters
against certain liabilities, including liabilities under the Securities Act
of 1933, as amended. See "Underwriting."
(3) In view of the fact that the proceeds of the sale of the Preferred
Securities will be invested in Subordinated Notes, ComEd has agreed to pay
to the Underwriters as compensation for their arranging the investment
therein of such proceeds, $________ per Preferred Security (or $________ in
the aggregate); provided, that such compensation for sales of 10,000 or
more Preferred Securities to a single purchaser will be ________ per
Preferred Security. Therefore, to the extent of such sales, the actual
amount of Underwriters' compensation will be less than the aggregate amount
specified in the preceding sentence. See "Underwriting."
(4) Expenses of the offering which are payable by ComEd are estimated to be
$500,000.
The Preferred Securities offered hereby are offered severally by the
Underwriters, as specified herein, subject to receipt and acceptance by them and
subject to their right to reject any order in whole or in part. It is expected
that delivery of the Preferred Securities will be made only in book-entry form
through the facilities of The Depository Trust Company on or about September
__, 1995.
____________________
Merrill Lynch & Co.
Dean Witter Reynolds Inc.
A.G. Edwards & Sons, Inc.
Furman Selz Incorporated
PaineWebber Incorporated
Salomon Brothers Inc
Smith Barney Inc.
____________________
The date of this Prospectus is September __, 1995.
(SM)"Trust Originated Preferred Securities" and "TOPrS" are service marks of
Merrill Lynch & Co., Inc.
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[Inside cover page]
(continued from previous page.)
be subordinate and junior in right of payment to certain other indebtedness of
ComEd, as described herein. Upon an event of default under the Declaration (as
defined herein), the holders of the Preferred Securities will have a preference
over the holder of the Common Securities with respect to payments in respect of
distributions and payments upon liquidation, redemption and otherwise.
Holders of the Preferred Securities are entitled to receive cumulative
cash distributions at an annual rate of __ % of the liquidation amount of $25
per Preferred Security, accruing from the date of original issuance and payable
quarterly in arrears on March 31, June 30, September 30 and December 31 of each
year commencing September 30, 1995 ("distributions"). The payment of
distributions out of moneys held by the Trust, and payments on liquidation of
the Trust or the redemption of Preferred Securities, as set forth below, are
guaranteed by ComEd (the "Preferred Securities Guarantee") to the extent the
Trust has funds available therefor as described under "Description of the
Preferred Securities Guarantee." The obligations of ComEd under the Preferred
Securities Guarantee are subordinate and junior in right of payment to all other
liabilities of ComEd and will rank pari passu with the most senior preferred
stock issued by ComEd. The obligations of ComEd under the Subordinated Notes
are subordinate and junior in right of payment to all present and future Senior
Indebtedness (as defined herein) of ComEd. The Senior Indebtedness of ComEd
aggregated approximately $8,234 million at July 31, 1995.
The distribution rate and the distribution and other payment dates for
the Preferred Securities will correspond to the interest rate and interest and
other payment dates on the Subordinated Notes, which will be the sole assets of
the Trust. As a result, if principal or interest is not paid on the Subordinated
Notes, no amounts will be paid on the Preferred Securities. If ComEd does not
make principal or interest payments on the Subordinated Notes, the Trust will
not have sufficient funds to make distributions on the Preferred Securities, in
which event the Preferred Securities Guarantee will not apply to such
distributions until the Trust has sufficient funds available therefor.
ComEd has the right to defer payments of interest on the Subordinated
Notes by extending the interest payment period on the Subordinated Notes, at any
time, for up to 20 consecutive quarters (each, an "Extension Period"). If
interest payments are so deferred, distributions will also be deferred. Despite
such deferral, distributions will continue to accrue with interest thereon (to
the extent permitted by applicable law) at an annual rate of __% per annum,
compounded quarterly, and during any Extension Period, holders of Preferred
Securities will be required to include deferred interest income in their gross
income for United States federal income tax purposes in advance of receipt of
the cash interest payments attributable to such deferred income. There could be
multiple Extension Periods of varying lengths throughout the term of the
Subordinated Notes. See "Description of the Subordinated Notes -- Option to
Extend Interest Payment Period," "Risk Factors -- Option to Extend Interest
Payment Period" and "Certain Federal Income Tax Consequences -- Original Issue
Discount, Premium and Market Discount." In the event of any such deferral, the
holders of the Preferred Securities do not have the right to appoint a special
representative or trustee or otherwise act to protect their interests.
The Subordinated Notes are redeemable by ComEd (in whole or in part)
from time to time, on or after September 30, 2000 or at any time in certain
circumstances upon the occurrence of a Tax Event (as defined herein). If ComEd
redeems Subordinated Notes, the Trust must redeem Trust Securities having an
aggregate liquidation amount equal to the aggregate principal amount of the
Subordinated Notes so redeemed at $25 per Trust Security plus accrued and unpaid
distributions thereon (the "Redemption Price") to the date fixed for redemption.
See "Description of the Preferred Securities -- Mandatory Redemption." The
Preferred Securities will be redeemed upon maturity of the Subordinated Notes.
The Subordinated Notes mature on September 30, 2035. In addition, upon the
occurrence of a Special Event (as defined herein) arising from a change in law
or a change in legal interpretation, unless the Subordinated Notes are redeemed
in the limited circumstances described below, the Trust shall be dissolved with
the result that the Subordinated Notes will be distributed to the holders of the
Preferred Securities, on a pro rata basis, in lieu of any cash distribution. In
the case of the occurrence of a Special Event that is a Tax Event, ComEd will
have the right in certain circumstances to redeem the Subordinated Notes, which
would result in the redemption by the Trust of the Trust Securities in the same
amount on a pro rata basis. If the Subordinated Notes are distributed to the
holders of the Preferred Securities, ComEd will use its best efforts to have the
Subordinated Notes listed on the New York Stock Exchange or on such other
exchange as the Preferred Securities are then listed. See "Description of the
Preferred Securities -- Special Event Redemption or Distribution" and
"Description of the Subordinated Notes."
In the event of the voluntary or involuntary dissolution, winding up
or termination of the Trust, the holders of the Preferred Securities will be
entitled to receive, for each Preferred Security, a liquidation amount of $25
plus accrued and unpaid distributions thereon (including interest thereon) to
the date of payment, unless in connection with such dissolution, the
Subordinated Notes are distributed to the holders of the Preferred Securities.
See "Description of the Preferred Securities --Liquidation Distribution Upon
Dissolution."
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE
SECURITIES OFFERED HEREBY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN
THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK
EXCHANGE, IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF
COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
IT IS EXPECTED THAT DELIVERY OF THE PREFERRED SECURITIES WILL BE MADE
AGAINST PAYMENT THEREFOR ON OR ABOUT THE DATE SPECIFIED IN THE LAST PARAGRAPH OF
THE COVER PAGE, WHICH IS THE FIFTH BUSINESS DAY FOLLOWING THE DATE HEREOF (SUCH
SETTLEMENT CYCLE BEING HEREIN REFERRED TO AS "T+5"). PURCHASERS OF THE
PREFERRED SECURITIES SHOULD NOTE THAT THE ABILITY TO SETTLE SECONDARY MARKET
TRADES OF THE PREFERRED SECURITIES ON THE DATE HEREOF AND THE NEXT SUCCEEDING
DAY MAY BE EFFECTED BY THE T+5 SETTLEMENT. SEE "UNDERWRITING."
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AVAILABLE INFORMATION
ComEd and the Trust have filed with the Securities and Exchange
Commission (the "Commission") a combined registration statement on Form S-3
(herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the Subordinated Notes, the Preferred
Securities and the Preferred Securities Guarantee offered hereby. This
Prospectus does not contain all of the information set forth in the Registration
Statement, certain parts of which are omitted in accordance with the rules and
regulations of the Commission. For further information, reference is hereby
made to the Registration Statement. Statements or extracts presented in this
Prospectus from financial statements, contracts, agreements or other documents
included as exhibits to the Registration Statement are not necessarily complete.
With respect to each such financial statement, contract, agreement or other
document filed as an exhibit to the Registration Statement, reference is hereby
made to the exhibit for a more complete description of the matter involved.
ComEd is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, information statements and other information with the
Commission. Such reports, information statements and other information can be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at
the Commission's Regional Offices at Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661, and Seven World Trade Center, 13th Floor,
New York, New York 10048. Copies of such material can also be obtained from the
Public Reference Section of the Commission at 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549, at prescribed rates. Such reports, information
statements and other information concerning ComEd may also be inspected at the
offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New
York 10005, the Chicago Stock Exchange, 440 South LaSalle Street, Chicago,
Illinois 60604 and the Pacific Stock Exchange, 301 Pine Street, San Francisco,
California 94104, the securities exchanges on which certain of ComEd's
securities are listed.
No separate financial statements of the Trust are included herein.
ComEd does not believe that such statements would be material to holders of the
Preferred Securities. The Trust is not currently subject to the informational
reporting requirements of the Exchange Act. The Trust will become subject to
such requirements upon the effectiveness of the Registration Statement of which
this Prospectus forms a part, although it intends to seek and expects to receive
an exemption therefrom.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by ComEd with the Commission (File No.
1-1839) are incorporated in this Prospectus by reference and made a part hereof:
(i) ComEd's Annual Report on Form 10-K for the year ended December
31, 1994 (the "1994 Form 10-K Report");
(ii) ComEd's Quarterly Reports on Form 10-Q for the quarterly periods
ended March 31, 1995 (the "March 31, 1995 Form 10-Q Report") and June 30,
1995 (the "June 30, 1995 Form 10-Q Report"); and
(iii) ComEd's Current Report on Form 8-K/A-1 dated January 27, 1995
(the "January 27, 1995 Form 8-K Report").
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All documents subsequently filed by ComEd pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act, after the date of this Prospectus and
prior to the termination of the offering made by this Prospectus, shall be
deemed to be incorporated into this Prospectus by reference and to be a part
hereof from the respective dates of filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated by reference
in this Prospectus shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained in this Prospectus or
in any other subsequently filed document which also is or is deemed to be
incorporated by reference in this Prospectus modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
ComEd will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon written or oral
request of such person, a copy of any or all of the documents that have been or
may be incorporated in this Prospectus by reference, other than certain exhibits
to such documents. Such requests should be directed to David A. Scholz,
Secretary, Commonwealth Edison Company, 37th Floor, 10 South Dearborn Street,
P.O. Box 767, Chicago, Illinois 60690-0767 (telephone number 312/394-3126).
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by reference to the
detailed information appearing elsewhere in this Prospectus. Reference is made
to "Definitions" herein for the location herein of the definitions of certain
capitalized terms used herein.
Preferred Securities Offered. 8,000,000 ___% Trust Originated
Preferred Securities evidencing preferred undivided beneficial interests in the
assets of the Trust are offered hereby. Holders of the Preferred Securities are
entitled to receive cumulative cash distributions at an annual rate of ___% of
the liquidation amount of $25 per Preferred Security, accruing from the date of
original issuance and payable quarterly in arrears on March 31, June 30,
September 30 and December 31 of each year commencing on September 30, 1995. The
distribution rate and the distribution and other payment dates for the Preferred
Securities will correspond to the interest rate and interest and other payment
dates on the Subordinated Notes, which will be the sole assets of the Trust. As
a result, if principal or interest is not paid on the Subordinated Notes, no
amounts will be paid on the Preferred Securities. See "Description of the
Preferred Securities."
Subordinated Notes. The Trust will invest the proceeds from the
issuance of the Preferred Securities and Common Securities in an equivalent
amount of ___% Subordinated Deferrable Interest Notes due September 30, 2035 of
ComEd. The Subordinated Notes will be subordinate and junior in right of payment
to all Senior Indebtedness of ComEd. See "Description of Subordinated Notes--
Subordination."
Preferred Securities Guarantee. Payment of distributions out of
moneys held by the Trust, and payments on liquidation of the Trust or the
redemption of Preferred Securities are guaranteed by ComEd to the extent the
Trust has funds available therefor. If ComEd does not make principal or
interest payments on the Subordinated Notes, the Trust will not have sufficient
funds to make distributions on the Preferred Securities, in which event the
Preferred Securities Guarantee will not apply to such distributions until the
Trust has sufficient funds available therefor. See "Description of Preferred
Securities Guarantee" and "Effect of Obligations under the Subordinated Notes
and the Preferred Securities Guarantee" herein. The obligations of ComEd under
the Preferred Securities Guarantee are subordinate and junior in right of
payment to all other liabilities of ComEd and will rank pari passu with the most
senior preferred stock issued by ComEd. See "Risk Factors--Ranking of
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Preferred Securities Guarantee and Subordinated Notes" and "Description of the
Preferred Securities Guarantee."
Interest Deferral. ComEd has the right to defer payments of interest
on the Subordinated Notes by extending the interest payment period on the
Subordinated Notes, at any time, for up to 20 consecutive quarters. If interest
payments on the Subordinated Notes are so deferred, distributions on the
Preferred Securities will also be deferred. During any deferral, distributions
will continue to accrue with interest thereon (to the extent permitted by law)
as described herein. There could be multiple Extension Periods of varying
lengths throughout the term of the Subordinated Notes. During an Extension
Period, holders of Preferred Securities will be required to include deferred
interest income in their gross income in advance of receipt of the cash interest
payments attributable thereto. See "Description of the Preferred Securities--
Voting Rights," "Description of the Subordinated Notes--Option to Extend
Interest Payment Period" and "Certain Federal Income Tax Consequences--Original
Issue Discount, Premium and Market Discount."
Redemption. The Subordinated Notes are redeemable by ComEd (in whole
or in part) from time to time, on or after September 30, 2000, or at any time in
certain circumstances upon the occurrence of a Tax Event. If the Subordinated
Notes are redeemed, the Trust must redeem Trust Securities having an aggregate
liquidation amount equal to the aggregate principal amount of Subordinated Notes
so redeemed. The Preferred Securities will be redeemed upon maturity of the
Subordinated Notes. See "Description of the Preferred Securities--Mandatory
Redemption."
RISK FACTORS
Prospective purchasers of Preferred Securities should carefully review
the information contained or incorporated by reference elsewhere in this
Prospectus and should particularly consider the following matters:
RANKING OF PREFERRED SECURITIES GUARANTEE AND SUBORDINATED NOTES
ComEd's obligations under the Preferred Securities Guarantee are
subordinate and junior in right of payment to all liabilities of ComEd and pari
passu with the most senior preferred stock now or hereafter issued by ComEd and
with any guarantee now or hereafter entered into by ComEd in respect of any
preferred stock of any affiliate of ComEd. The obligations of ComEd under the
Subordinated Notes are subordinate and junior in right of payment to all present
and future Senior Indebtedness (as defined herein) of ComEd. No payment of
principal of (including redemption payments, if any), premium, if any, or
interest on, the Subordinated Notes may be made if (a) any Senior Indebtedness
of ComEd is not paid when due and any applicable grace period with respect to
such default has ended with such default not being cured or waived or ceasing to
exist, or (b) the maturity of any Senior Indebtedness has been accelerated
because of a default. At July 31, 1995, Senior Indebtedness of ComEd aggregated
approximately $8,234 million. There are no terms in the Preferred Securities,
the Subordinated Notes or the Preferred Securities Guarantee that limit ComEd's
ability to incur additional indebtedness, including indebtedness that ranks
senior to the Subordinated Notes or the Preferred Securities Guarantee. See
"Description of the Preferred Securities Guarantee" and "Description of the
Subordinated Notes--Subordination."
RIGHTS UNDER THE PREFERRED SECURITIES GUARANTEE
The Preferred Securities Guarantee guarantees to the holders of the
Preferred Securities the payment of (i) any accrued and unpaid distributions
which are required to be paid on the Preferred Securities, to the extent the
Trust shall have funds available therefor, (ii) the Redemption Price, including
all accrued and unpaid distributions, to the date of the redemption, to the
extent the Trust has funds available therefor, with respect to any Preferred
Securities called for redemption by the Trust and (iii) upon a voluntary or
involuntary dissolution, winding-up or termination of the Trust (other than in
connection with the distribution of Subordinated Notes to the holders of
Preferred Securities) the lesser of (a) the aggregate of the liquidation amount
and all accrued and unpaid distributions on the Preferred Securities to the date
of payment therefor and (b) the amount of assets of the Trust
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remaining available for distribution to holders of Preferred Securities in
liquidation of the Trust. The holders of a majority in liquidation amount of
the Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Preferred Guarantee
Trustee (as defined herein) or to direct the exercise of any trust or power
conferred upon the Preferred Guarantee Trustee under the Preferred Securities
Guarantee. If the Preferred Guarantee Trustee fails to enforce the Preferred
Securities Guarantee, any holder of Preferred Securities may institute a legal
proceeding directly against ComEd to enforce the Preferred Guarantee Trustee's
rights under the Preferred Securities Guarantee, without first instituting a
legal proceeding against the Trust, the Preferred Guarantee Trustee or any other
person or entity. If ComEd were to default in its obligation to pay amounts
payable on the Subordinated Notes, the Trust would lack available funds for the
payment of distributions or amounts payable on redemption of the Preferred
Securities or otherwise, and in such event holders of the Preferred Securities
would not be able to rely upon the Preferred Securities Guarantee for payment of
such amounts. Instead, holders of the Preferred Securities would rely on the
enforcement by the Property Trustee (as defined herein) of its rights as
registered holder of the Subordinated Notes against ComEd, pursuant to the terms
of the Subordinated Notes. See "Description of the Preferred Securities
Guarantee -- Status of the Preferred Securities Guarantee" and "Description of
the Subordinated Notes -- Subordination." The Declaration (as defined herein)
provides that each holder of Preferred Securities by acceptance thereof agrees
to the provisions of the Preferred Securities Guarantee and the Indenture (as
defined herein).
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF PREFERRED SECURITIES
If a Declaration Event of Default (as defined herein) occurs and is
continuing, then the holders of Preferred Securities would rely on the
enforcement by the Property Trustee of its rights as a holder of the
Subordinated Notes against ComEd. In addition, the holders of a majority in
aggregate liquidation amount of the Preferred Securities will have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Property Trustee or to direct the exercise of any trust or
power conferred upon the Property Trustee under the Declaration, including the
right to direct the Property Trustee to exercise the remedies available to it as
a holder of the Subordinated Notes. If the Property Trustee fails to enforce
its rights under the Subordinated Notes, a holder of Preferred Securities may
institute a legal proceeding directly against ComEd to enforce the Property
Trustee's rights under the Subordinated Notes without first instituting any
legal proceeding against the Property Trustee or any other person or entity,
including the Trust.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
ComEd has the right under the Indenture to defer payments of interest
on the Subordinated Notes by extending the interest payment period at any time,
and from time to time, on the Subordinated Notes. As a consequence of such an
extension, quarterly distributions on the Preferred Securities would be deferred
(but despite such deferral would continue to accrue with interest thereon
compounded quarterly) by the Trust during any such extended interest payment
period. Such right to extend the interest payment period for the Subordinated
Notes is limited to a period not exceeding 20 consecutive quarters for any such
extension. In the event that ComEd exercises this right to defer payments of
interest, then (a) ComEd shall not declare or pay any dividend on, make any
distributions with respect to, or redeem, purchase or make a liquidation payment
with respect to, any of its capital stock, (b) ComEd shall not make any payment
of interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities (including guarantees) issued by ComEd which rank pari passu
with or junior to the Subordinated Notes and (c) ComEd shall not make any
guarantee payments with respect to the foregoing (other than pursuant to the
Preferred Securities Guarantee). Prior to the termination of any such Extension
Period, ComEd may further defer payments of interest by further extending the
interest payment period, provided that such Extension Period, together with all
such previous and further extensions thereof, may not exceed 20 consecutive
quarters or extend
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<PAGE>
beyond the maturity of the Subordinated Notes. Upon the termination of any
Extension Period and the payment of all amounts then due, ComEd may select a new
Extension Period, as if no Extension Period had previously been declared,
subject to the above requirements. See "Description of the Preferred Securities
-- Distributions" and "-- Voting Rights" and "Description of the Subordinated
Notes -- Option to Extend Interest Payment Period."
Should ComEd exercise its rights to defer payments of interest by
extending the interest payment period, each holder of Preferred Securities will
continue to accrue income (as original issue discount) for United States federal
income tax purposes in respect of the deferred interest allocable to its
Preferred Securities. As a result, holders of Preferred Securities will
recognize income for United States federal income tax purposes in advance of the
receipt of cash and will not receive cash from the Trust related to such income
if such holder disposes of its Preferred Securities prior to the record date for
the date on which distributions of such amounts are made. ComEd has no current
intention of exercising its right to defer payments of interest by extending the
interest payment period on the Subordinated Notes. However, should ComEd
determine to exercise such right in the future, the market price of the
Preferred Securities is likely to be affected. A holder that disposes of its
Preferred Securities during an Extension Period, therefore, might not receive
the same return on its investment as a holder that continues to hold its
Preferred Securities. In addition, as a result of the existence of ComEd's
right to defer interest payments, the market price of the Preferred Securities
(which represent an undivided beneficial interest in the Subordinated Notes) may
be more volatile than other securities on which original issue discount accrues
that do not have such rights. See "Certain Federal Income Tax Consequences --
Original Issue Discount, Premium and Market Discount."
SPECIAL EVENT DISTRIBUTION
Upon the occurrence of a Special Event, the Trust will be dissolved,
except in the limited circumstances described below, with the result that the
Subordinated Notes would be distributed to the holders of the Trust Securities
in connection with the liquidation of the Trust. In the case of a Special Event
that is a Tax Event, in certain circumstances ComEd shall have the right to
redeem the Subordinated Notes, in whole or in part, in which event the Trust
will redeem the Trust Securities on a pro rata basis to the same extent as the
Subordinated Notes are redeemed. See "Description of the Preferred Securities -
- Special Event Redemption or Distribution" and "Certain Federal Income Tax
Consequences."
There can be no assurance as to the market prices for the Preferred
Securities or the Subordinated Notes that may be distributed in exchange for
Preferred Securities if a dissolution or liquidation of the Trust were to occur.
Accordingly, the Preferred Securities that an investor may purchase, or the
Subordinated Notes that the investor may receive on dissolution and liquidation
of the Trust, may trade at a discount to the price that the investor paid to
purchase the Preferred Securities offered hereby. Because holders of Preferred
Securities may receive Subordinated Notes upon the occurrence of a Special
Event, prospective purchasers of Preferred Securities are also making an
investment decision with regard to the Subordinated Notes and should carefully
review all the information regarding the Subordinated Notes and ComEd contained
herein. See "Description of the Preferred Securities -- Special Event
Redemption or Distribution" and "Description of the Subordinated Notes."
LIMITED VOTING RIGHTS
Holders of Preferred Securities will have limited voting rights and
will not be entitled to vote to appoint, remove or replace, or to increase or
decrease the number of, ComEd Trustees (as defined herein), which voting rights
are vested exclusively in ComEd as the holder of the Common Securities. See
"Description of the Preferred Securities -- Voting Rights."
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<PAGE>
TRADING PRICE OF PREFERRED SECURITIES
The Preferred Securities may trade at a price that does not fully
reflect the value of accrued but unpaid interest with respect to the underlying
Subordinated Notes. A holder who disposes of his Preferred Securities between
record dates for payments of distributions thereon will be required to include
accrued but unpaid interest on the Subordinated Notes through the date of
disposition in income as ordinary income (i.e., OID (as defined herein)), and to
add such amount to his adjusted tax basis in his pro rata share of the
underlying Subordinated Notes deemed disposed of. To the extent the selling
price is less than the holder's adjusted tax basis (which will include, in the
form of OID, all accrued but unpaid interest), a holder will recognize a capital
loss. Subject to certain limited exceptions, capital losses cannot be applied
to offset ordinary income for United States federal income tax purposes. See
"Certain Federal Income Tax Consequences -- Original Issue Discount, Premium and
Market Discount" and "-- Sale of Preferred Securities."
COMMONWEALTH EDISON COMPANY
ComEd is engaged principally in the production, purchase,
transmission, distribution and sale of electricity to a diverse base of
residential, commercial and industrial customers. ComEd's electric service
territory has an area of approximately 11,540 square miles and an estimated
population of approximately 8.2 million as of December 31, 1994 and
approximately 8.1 million as of December 31, 1993. It includes the city of
Chicago, an area of about 225 square miles with an estimated population of three
million from which ComEd derived approximately one-third of its ultimate
consumer revenues in the twelve months ended June 30, 1995. ComEd had
approximately 3.4 million electric customers as of June 30, 1995. ComEd's
principal executive offices are located at 37th Floor, 10 South Dearborn Street,
Post Office Box 767, Chicago, Illinois 60690-0767, and its telephone number is
312/394-4321.
COMED FINANCING I
The Trust is a statutory business trust formed under Delaware law
pursuant to the filing of a certificate of trust with the Delaware Secretary of
State on July 21, 1995. The Trust's business is defined in a Declaration of
Trust, executed by ComEd, as sponsor (the "Sponsor"), and the ComEd Trustees (as
defined herein). The Declaration of Trust will be amended and restated in its
entirety (as so amended and restated, the "Declaration") substantially in the
form filed as an exhibit to the Registration Statement of which this Prospectus
forms a part. The Declaration will be qualified as an indenture under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"). Upon issuance of
the Preferred Securities, the purchasers thereof will own all of the Preferred
Securities. ComEd will acquire all of the Common Securities in an aggregate
liquidation amount equal to 3% of the total capital of the Trust. The Trust
exists for the exclusive purposes of (i) issuing the Trust Securities
representing undivided beneficial interests in the assets of the Trust, (ii)
investing the gross proceeds of the Trust Securities in the Subordinated Notes
and (iii) engaging in only those other activities necessary or incidental
thereto. The Trust has a term of approximately 45 years, but may terminate
earlier as provided in the Declaration.
The Trust's business and affairs will be conducted by the trustees
(the "ComEd Trustees") appointed by ComEd, as holder of the Common Securities.
The duties and obligations of the ComEd Trustees shall be governed by the
Declaration. Pursuant to the Declaration, the number of ComEd Trustees will
initially be three. Two of the ComEd Trustees (the "Regular Trustees") will be
persons who are employees or officers of, or affiliated with, ComEd. The third
trustee will be a financial institution unaffiliated with ComEd which maintains
a principal place of business in the State of Delaware that will serve as
property trustee under the Declaration and as indenture trustee for purposes of
the Trust Indenture Act (the "Property Trustee"). Wilmington Trust Company will
act as
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<PAGE>
the Property Trustee until removed or replaced by the holder of the Common
Securities. Wilmington Trust Company will also act as indenture trustee under
the Preferred Securities Guarantee (the "Preferred Guarantee Trustee"). See
"Description of the Preferred Securities Guarantee."
The Property Trustee will hold title to the Subordinated Notes for the
benefit of the holders of the Trust Securities and will have the power to
exercise all rights, powers and privileges under the Indenture (as defined
herein) as the holder of the Subordinated Notes. In addition, the Property
Trustee will maintain exclusive control of a segregated non-interest bearing
bank account (the "Property Account") to hold all payments made in respect of
the Subordinated Notes for the benefit of the holders of the Trust Securities.
The Property Trustee will make payments of distributions and payments on
liquidation, redemption and otherwise to the holders of the Trust Securities out
of funds from the Property Account. The Preferred Guarantee Trustee will hold
the Preferred Securities Guarantee for the benefit of the holders of the
Preferred Securities. ComEd, as the holder of all the Common Securities, will
have the right to appoint, remove or replace any ComEd Trustee and to increase
the number of ComEd Trustees, provided that the number of ComEd Trustees shall
be at least three, a majority of which shall be Regular Trustees. ComEd will
pay all fees and expenses related to the Trust, the offering of the Trust
Securities and the issuance of the Subordinated Notes. See "Description of the
Subordinated Notes -- Miscellaneous."
The rights of the holders of the Preferred Securities, including
economic rights, rights to information and voting rights, are as set forth in
the Declaration, the Delaware Business Trust Act, as amended (the "Trust Act"),
and the Trust Indenture Act. See "Description of the Preferred Securities."
The trustee in the State of Delaware is Wilmington Trust Company,
Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890. The
principal place of business of the Trust shall be c/o Commonwealth Edison
Company, 37th Floor, 10 South Dearborn Street, Chicago, Illinois 60690-0767
(telephone number 312/394-4321).
SELECTED FINANCIAL INFORMATION
The following information is qualified in its entirety by the
information appearing elsewhere in this Prospectus and by the information and
financial statements incorporated in this Prospectus by reference.
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<PAGE>
COMMONWEALTH EDISON COMPANY
<TABLE>
<S> <C>
Estimated Population of Service Area....................................... 8,200,000
Customers (as of June 30, 1995)............................................ 3,368,000
Sales (thousands of kilowatthours--12 months ended June 30, 1995).......... 89,134,000
Net Electric Generating Capability, net of summer limitations (kilowatts).. 21,965,000
Fuel Sources of Kilowatthour Generation (12 months ended June 30, 1995):
Nuclear............................................................... 74%
Coal.................................................................. 23
Oil................................................................... 1
Natural gas........................................................... 2
---
100%
---
</TABLE>
FINANCIAL INFORMATION
<TABLE>
<CAPTION>
TWELVE
YEAR ENDED DECEMBER 31 MONTHS
----------------------------------------------------------------------- ENDED
JUNE 30,
1990(B) 1991(B) 1992(B) 1993(A)(B) 1994(A)(B) 1995(C)
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Electric Operating $5,310,819 $6,275,533 $6,026,321 $5,260,440 $6,277,521 $6,458,276
Revenues (thousands (1) (1) (1) (2) (2)
of dollars)
Net Income (thousands $ 128,291 $ 94,887 $ 513,981 $ 112,440 $ 423,946 $ 614,661
of dollars) (3)
Net Income on Common $ 45,796 $ 16,599 $ 443,442 $ 46,388 $ 359,019 $ 546,988
Stock (thousands (3)
of dollars)
Earnings per Common $ 0.22 $ 0.08 $ 2.08 $ 0.22 $ 1.68 $ 2.55
Share (3)
Ratios of Earnings to-
Fixed Charges (D) 1.42 1.59 2.06 1.19 1.99 2.47
Fixed Charges and 1.21 1.36 1.78 1.03 1.73 2.13
Preferred and
Preference Stock
Dividend Require-
ments (D)
--------------------------
</TABLE>
See Notes (A) through (D) on pages 11 through 13.
(1) Reflects provisions for revenue refunds of $536.4 million, $0.9 million and
$18.4 million for the years ended December 31, 1990, 1991 and 1992,
respectively, relating to the Illinois Supreme Court's ("Supreme Court")
reversal of the Illinois Commerce Commission's ("ICC") 1988 rate order and
the Supreme Court's decision regarding Byron Unit 1.
(2) Reflects provisions for revenue refunds of $1,281 million and $16 million
for the years ended December 31, 1993 and 1994, respectively, recording the
effects of two settlements related to various proceedings and matters
concerning ComEd's rates and its fuel adjustment clause. See Note A for
additional information.
(3) In January 1993, ComEd adopted an accounting standard which requires an
asset and liability approach for financial accounting and reporting for
income taxes as opposed to the deferred method that ComEd had previously
used. ComEd adopted the standard as a cumulative effect
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<PAGE>
of a change in an accounting principle, which increased net income and net
income on common stock for the year ended December 31, 1993 by $9.7 million
or $0.05 per common share.
NOTES TO FINANCIAL INFORMATION:
(A) In November 1993, two settlements related to various proceedings and
matters concerning ComEd's rates and its fuel adjustment clause became
final. One settlement (the "Rate Matters Settlement") concerned the
proceedings relating to ComEd's 1985 and 1991 ICC rate orders (which orders
related to, among other things, the recovery of costs associated with
ComEd's four most recently completed nuclear generating units, Byron Units
1 and 2 and Braidwood Units 1 and 2), the proceedings concerning the
reduction in the difference between ComEd's summer and non-summer
residential rates that was effected in the summer of 1988, outstanding
issues related to the appropriate interest rate and rate design to be
applied to a refund made by ComEd during 1990 related to a 1988 ICC rate
order, and matters related to a rider to ComEd's rates that it was required
to file as a result of the change in the federal corporate income tax rate
made by the Tax Reform Act of 1986. The other settlement (the "Fuel
Matters Settlement") related to the ICC fuel reconciliation proceedings
involving ComEd for the period from 1985 through 1988 and to future
challenges by the settling parties to the prudence of ComEd's western coal
costs for the period from 1989 through 1992.
Under the Rate Matters Settlement, effective as of November 4, 1993, ComEd
reduced its rates by approximately $339 million annually and commenced
refunding approximately $1.26 billion (including revenue taxes), plus
interest at five percent on the unpaid balance, through temporarily reduced
rates over an initial refund period which ended in November 1994 (followed
by a reconciliation period of five months). ComEd had previously deferred
the recognition of revenues during 1993 as a result of developments in the
proceedings related to the 1991 ICC rate order, which resulted in a
reduction to 1993 net income of approximately $160 million or $0.75 per
common share. The recording of the effects of the Rate Matters Settlement
in October 1993 reduced 1993 net income by approximately $292 million or
$1.37 per common share, in addition to the approximately $160 million
effect of the deferred recognition of revenues and after the partially
offsetting effect of recording approximately $269 million or $1.26 per
common share in deferred carrying charges, net of income taxes, authorized
in the ICC rate order issued on January 6, 1993 (as subsequently modified,
the "Remand Order"). The deferred recognition of revenues was eliminated
in October 1993 at the time the provisions for revenue refunds related to
the Rate Matters Settlement, which reflected those deferred revenues, were
recorded.
Under the Fuel Matters Settlement, effective as of December 2, 1993, ComEd
commenced paying approximately $108 million (including revenue taxes) to
its customers through temporarily reduced collections under its fuel
adjustment clause over a twelve-month period which ended in November 1994.
The recording of the effects of the Fuel Matters Settlement in October 1993
reduced 1993 net income by approximately $62 million or $0.29 per common
share.
(B) During the periods presented under the subcaption "Financial Information"
in "Selected Financial Information," ComEd's revenues, net income, cash
flows, plant carrying costs, ratios of earnings to fixed charges and ratios
of earnings to fixed charges and preferred and preference stock dividend
requirements were affected directly by the proceedings that are the subject
of the Rate Matters Settlement and the Fuel Matters Settlement. The
uncertainties associated with such proceedings and related issues, among
other things, led to the Rate Matters Settlement and the Fuel Matters
Settlement. See Note A for additional information.
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<PAGE>
The Illinois Public Utilities Act requires the ICC to hold annual public
hearings to determine whether each utility's fuel adjustment clause
reflects actual costs of fuel and power prudently purchased and to
reconcile amounts collected with actual costs. Through its fuel adjustment
clause, ComEd recovers from its customers the cost of the fuel used to
generate electricity and of purchased power as compared to fuel costs
included in base rates.
ComEd is currently involved in proceedings relating to the amounts
collected under its fuel adjustment clause with respect to 1993. ICC
orders have been issued in fuel reconciliation proceedings for years prior
to 1993; however, certain intervenors have appealed the ICC order in the
1989 fuel reconciliation proceedings on issues relating to nuclear station
performance. Under the Fuel Matters Settlement, parties to the settlement
agreed not to challenge the prudence of ComEd's western coal costs for the
period from 1989 through 1992. ComEd's western coal contracts and its rail
contracts for delivery of the western coal were renegotiated during 1992
effective as of January 1, 1993, to provide, among other things, for
significant reductions in the delivered price of the coal over the duration
of the contracts. However, the renegotiated contracts provide for the
purchase of certain coal at prices substantially above currently prevailing
market prices and ComEd has substantial purchase commitments under its
contracts. For additional information relating to ComEd's commitments for
the purchase of coal, see "Management's Discussion and Analysis of
Financial Condition and Results of Operations," subcaption "Liquidity and
Capital Resources," and Notes 1 and 19 of Notes to Financial Statements in
the June 30, 1995 Form 10-Q Report.
(C) On January 9, 1995, the ICC issued its rate order (the "Rate Order") in the
proceedings relating to ComEd's February 10, 1994 rate increase request.
The Rate Order provides, among other things, for (i) an increase in ComEd's
total revenues of approximately $301.8 million (excluding add-on revenue
taxes) or 5.2%, on an annual basis, including a $303.2 million increase in
base rates, (ii) the collection of municipal franchise costs as an adder to
base rates until May 1, 1995, when ComEd began collecting such costs
prospectively on an individual municipality basis through a rider, and
(iii) the use of a rider, with annual review proceedings, to pass on to
ratepayers increases or decreases in estimated costs associated with the
decommissioning of ComEd's nuclear generating units. The rates provided in
the Rate Order became effective on January 14, 1995; however, they are
being collected subject to refund as a result of subsequent judicial
action. Intervenors and ComEd have filed appeals of the Rate Order with
the Illinois Appellate Court. Electric operating revenues of approximately
$139 million (excluding revenue taxes) are subject to refund.
In the Rate Order, the ICC also determined that Byron Unit 2 and Braidwood
Units 1 and 2 were 100% "used and useful" and that the previously
determined reasonable costs of such Units, as depreciated, should be
included in full in ComEd's rate base. The ICC also determined, however,
that ComEd's annual nuclear plant decommissioning cost collections from its
ratepayers should be reduced from the $127 million previously authorized in
the 1991 ICC rate order to $112.7 million. The $112.7 million annual
collection amount primarily resulted from the ICC's decision to exclude
from ComEd's costs subject to collection a contingency allowance. As noted
above, the Rate Order established a rider which allows annual adjustments
to decommissioning cost collections outside of the context of a traditional
rate proceeding. Such rider is intended to allow adjustments in
decommissioning cost recoveries from ratepayers as changes in cost
estimates become identifiable. On April 19, 1995, the ICC approved ComEd's
initial rider filing, which increased its annual collections to $113.5
million. Under Illinois law, decommissioning cost collections are required
to be deposited in external trust funds; and, consequently, such
collections do not add to the cash flows available for general corporate
purposes.
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<PAGE>
(D) For purposes of computing the ratios of earnings to fixed charges and the
ratios of earnings to fixed charges and preferred and preference stock
dividend requirements: (i) earnings consist of net income before deducting
net provisions for income taxes (including deferred taxes and current
income taxes applicable to nonoperating activities), investment tax credits
deferred and fixed charges; (ii) fixed charges consist of interest on debt,
amortization of debt discount, premium and expense, and the estimated
interest component of nuclear fuel and other lease payments and rentals;
and (iii) preferred and preference stock dividend requirements represent an
amount equal to income, before income taxes, which would be required to
meet the dividends on preferred and preference stocks.
CAPITALIZATION OF COMED
The following table sets forth the unaudited consolidated
capitalization including short-term borrowings and current maturities of ComEd
at June 30, 1995, and as adjusted to reflect the sale of the Preferred
Securities offered hereby and the application of the estimated net proceeds from
such sale. See "Use of Proceeds." The table should be read in conjunction with
ComEd's consolidated financial statements and notes thereto included in the
documents incorporated by reference herein. See "Incorporation of Certain
Documents by Reference."
<TABLE>
<CAPTION>
At June 30, 1995
-----------------
(Unaudited)
Actual As Adjusted
------- -----------
(Dollars in Millions)
<S> <C> <C>
Short-term borrowings.............................. $ 47 $ 7
Long-term borrowings including current maturities.. 7,559 7,399
Company-obligated mandatorily redeemable preferred
securities of ComEd Financing I (1)............... -- 200
Preferred and preference stocks without mandatory
redemption requirements........................... 508 508
Preference stock subject to mandatory redemption
requirements including current maturities......... 307 307
Common stock equity................................ 5,431 5,431
------- -------
Total capitalization including
short-term borrowings and current maturities...... $13,852 $13,852
======= =======
</TABLE>
________________________
(1) As described in this Prospectus, the sole asset of the Trust will be the
____% Subordinated Deferrable Interest Notes due September 30, 2035 of
ComEd with a principal amount of $ ________ and upon redemption of such
debt, the Preferred Securities will be mandatorily redeemable.
ACCOUNTING TREATMENT
The financial statements of the Trust will be consolidated with
ComEd's financial statements, with the Preferred Securities shown on ComEd's
consolidated financial statements as Company-obligated mandatorily redeemable
preferred securities of ComEd Financing I.
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<PAGE>
USE OF PROCEEDS
The proceeds of the sale of the Preferred Securities will be invested
by the Trust in the Subordinated Notes of ComEd. ComEd will use the net
proceeds from the sale of such Subordinated Notes to pay approximately $140
million of short-term commercial paper notes issued to discharge previously
outstanding long-term debt and to pay approximately $60 million on an
outstanding bank loan. The commercial paper bears interest at rates ranging
from 5.89% to 6.13% and the bank loan bears interest at a variable rate of
interest (currently approximately 6 1/2%). See "Capitalization of ComEd." For
additional information concerning ComEd's outstanding long-term debt, see the
Statements of Consolidated Capitalization in the June 30, 1995 Form 10-Q
Report.
DESCRIPTION OF THE PREFERRED SECURITIES
The Preferred Securities will be issued pursuant to the terms of the
Declaration. The Declaration will be qualified as an indenture under the Trust
Indenture Act. The Property Trustee will act as the indenture trustee for
purposes of compliance with the provisions of the Trust Indenture Act. The
terms of the Preferred Securities will include those stated in the Declaration
and those made part of the Declaration by the Trust Indenture Act. The
following summary of the principal terms and provisions of the Preferred
Securities does not purport to be complete and is subject to, and qualified in
its entirety by reference to, the Declaration, a copy of which is filed as an
exhibit to the Registration Statement, of which this Prospectus is a part, the
Trust Act and the Trust Indenture Act.
GENERAL
The Declaration authorizes the Regular Trustees, on behalf of the
Trust, to issue the Preferred Securities, which represent preferred undivided
beneficial interests in the assets of the Trust, and the Common Securities,
which represent common undivided beneficial interests in the assets of the
Trust. All of the Common Securities will be owned by ComEd. The Common
Securities rank pari passu, and payments will be made thereon on a pro rata
basis, with the Preferred Securities, except that upon the occurrence and during
the continuation of a Declaration Event of Default, the rights of the holders of
the Common Securities to receive payment of periodic distributions and payments
upon liquidation, redemption and otherwise will be subordinated to the rights to
payment of the holders of the Preferred Securities. The Declaration does not
permit the issuance by the Trust of any securities other than the Trust
Securities or the incurrence of any indebtedness by the Trust. Pursuant to the
Declaration, the Property Trustee will own and hold the Subordinated Notes for
the benefit of the holders of the Trust Securities. The payment of
distributions out of money held by the Trust, and payments upon redemption of
the Preferred Securities or liquidation of the Trust, are guaranteed by ComEd to
the extent described under "Description of the Preferred Securities Guarantee."
The Preferred Guarantee Trustee will hold the Preferred Securities Guarantee for
the benefit of the holders of the Preferred Securities. The Preferred
Securities Guarantee does not cover payment of distributions on the Preferred
Securities when the Trust does not have sufficient available funds in the
Property Account to make such distributions.
DISTRIBUTIONS
Distributions on the Preferred Securities will be fixed at a rate per
annum of __% of the stated liquidation amount of $25 per Preferred Security.
Distributions in arrears will bear interest at the rate of __% per annum (to the
extent permitted by applicable law). The term "distributions" as used herein
includes any such interest payable unless otherwise stated.
Distributions on the Preferred Securities will be cumulative, will
accrue from September __, 1995 and will be payable quarterly in arrears on
March 31, June 30, September 30 and December 31 of each year to the holders of
record on the applicable record date, commencing
-14-
<PAGE>
September 30, 1995 when, as and if available for payment by the Property
Trustee, except as otherwise described below. The amount of distributions
payable for any full quarterly period will be computed on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than a full quarter, on
the basis of the actual number of days elapsed in such a 90-day quarter.
ComEd has the right under the Indenture to defer payments of interest
on the Subordinated Notes by extending the interest payment period from time to
time on the Subordinated Notes which, if exercised, would defer quarterly
distributions on the Preferred Securities (though such distributions would
continue to accrue interest since interest would continue to accrue on the
Subordinated Notes) during any such extended interest payment period. In the
event that ComEd exercises this right, then (a) ComEd shall not declare or pay
any dividend on, make any distributions with respect to, or redeem, purchase or
make a liquidation payment with respect to, any of its capital stock, (b) ComEd
shall not make any payment of interest, principal or premium, if any, on or
repay, repurchase or redeem any debt securities (including guarantees) issued by
ComEd which rank pari passu with or junior to the Subordinated Notes, and (c)
ComEd shall not make any guarantee payments with respect to the foregoing (other
than pursuant to the Preferred Securities Guarantee). Prior to the termination
of any such Extension Period, ComEd may further extend the interest payment
period, provided that such Extension Period, together with all such previous and
further extensions thereof, may not exceed 20 consecutive quarters or extend
beyond the maturity of the Subordinated Notes. Upon the termination of any
Extension Period and the payment of all amounts then due, ComEd may select a new
Extension Period as if no Extension Period had previously been declared, subject
to the above requirements. See "-- Voting Rights" and "Description of the
Subordinated Notes --Interest" and "-- Option to Extend Interest Payment
Period." If distributions are deferred, the deferred distributions and accrued
interest thereon shall be paid to holders of record of the Preferred Securities,
if funds are available therefor, as they appear on the books and records of the
Trust on the record date next following the termination of such Extension
Period.
Distributions on the Preferred Securities must be paid on the dates
payable to the extent that the Trust has funds available for the payment of such
distributions in the Property Account. The Trust's funds available for
distribution to the holders of the Preferred Securities will be limited to
payments received under the Subordinated Notes. See "Description of the
Subordinated Notes." The payment of distributions out of moneys held by the
Trust is guaranteed by ComEd to the extent set forth under "Description of the
Preferred Securities Guarantee."
Distributions on the Preferred Securities will be payable to the
holders thereof as they appear on the books and records of the Trust on the
relevant record dates, which, as long as the Preferred Securities remain in
book-entry only form, will be one Business Day (as defined herein) prior to the
relevant payment dates, which payment dates correspond to the interest payment
dates on the Subordinated Notes. Such distributions will be paid through the
Property Trustee, who will hold amounts received in respect of the Subordinated
Notes in the Property Account for the benefit of the holders of the Trust
Securities. Subject to any applicable laws and regulations and the provisions
of the Declaration, each such payment will be made as described under "-- Book-
Entry Only Issuance --The Depository Trust Company" below. In the event the
Preferred Securities shall not continue to remain in book-entry only form, the
Regular Trustees shall have the right to select relevant record dates which
shall be at least one Business Day, but less than 60 Business Days, prior to the
relevant payment dates. In the event that any date on which distributions are
to be made on the Preferred Securities is not a Business Day, then payment of
the distributions payable on such date will be made on the next succeeding day
which is a Business Day (and without any interest or other payment in respect of
any such delay) except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such date. A
"Business Day" shall mean any day other than a day on which banking institutions
in Wilmington, Delaware or New York, New York are authorized or required by law
to close.
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<PAGE>
MANDATORY REDEMPTION
The Subordinated Notes will mature on September 30, 2035 and may be
redeemed, in whole or in part, at any time on or after September 30, 1995, or at
any time in certain circumstances upon the occurrence of a Tax Event. Upon the
repayment of the Subordinated Notes, whether at maturity or upon acceleration,
redemption or otherwise, the proceeds from such repayment or payment shall
simultaneously be applied to redeem Trust Securities having an aggregate
liquidation amount equal to the aggregate principal amount of the Subordinated
Notes so repaid or redeemed at the Redemption Price; provided that, except in
the case of payments upon maturity, holders of Trust Securities shall be given
not less than 30 nor more than 60 days notice of such redemption. See
"Description of the Subordinated Notes." In the event that fewer than all of
the outstanding Preferred Securities are to be redeemed, the Preferred
Securities will be redeemed pro rata as described under "-- Book-Entry Only
Issuance -- The Depository Trust Company" below.
SPECIAL EVENT REDEMPTION OR DISTRIBUTION
"Tax Event" means that the Regular Trustees shall have received an
opinion from independent tax counsel experienced in such matters (a "Dissolution
Tax Opinion") to the effect that, on or after the date of this Prospectus, as a
result of (a) any amendment to, or change (including any announced prospective
change) in, the laws (or any regulations thereunder) of the United States or any
political subdivision or taxing authority thereof or therein or (b) any
amendment to, or change in, an interpretation or application of such laws or
regulations by any legislative body, court, governmental agency or regulatory
authority, which amendment or change is enacted, promulgated, issued or
announced or which interpretation or pronouncement is issued or announced or
which action is taken, in each case on or after the date of this Prospectus,
there is more than an insubstantial risk that (i) the Trust would be subject to
United States federal income tax with respect to interest accrued or received on
the Subordinated Notes, (ii) interest payable to the Trust on the Subordinated
Notes would not be deductible in whole or in part by ComEd for United States
federal income tax purposes or (iii) the Trust would be subject to more than a
de minimis amount of other taxes, duties or other governmental charges, which
change or amendment becomes effective on or after the date of this Prospectus.
"Investment Company Event" means that the Regular Trustees shall have
received an opinion from independent counsel experienced in practice under the
1940 Act (as hereinafter defined) to the effect that, as a result of the
occurrence of a change in law or regulation or a written change in
interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority (a "Change in 1940 Act Law"),
there is more than an insubstantial risk that the Trust is or will be considered
an "investment company" which is required to be registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), which Change in 1940 Act Law
becomes effective on or after the date of this Prospectus.
If, at any time, a Tax Event or an Investment Company Event (each, as
defined above, a "Special Event") shall occur and be continuing, the Trust
shall, except in the circumstances described below, be dissolved with the result
that Subordinated Notes with an aggregate principal amount equal to the
aggregate stated liquidation amount of, with an interest rate identical to the
distribution rate of, and accrued and unpaid interest equal to accrued and
unpaid distributions on, the Trust Securities would be distributed to the
holders of the Trust Securities, in liquidation of such holders' interests in
the Trust on a pro rata basis, within 90 days following the occurrence of such
Special Event; provided, however, that in the case of the occurrence of a Tax
Event, as a condition of such dissolution and distribution, the Regular Trustees
shall have received an opinion from independent tax counsel experienced in such
matters (a "No Recognition Opinion"), which opinion may rely on published
revenue rulings of the Internal Revenue Service, to the effect that the holders
of the Trust Securities will not recognize any gain or loss for United States
federal income tax purposes as a result of such dissolution of the Trust and the
distribution of the Subordinated Notes; and, provided, further, that,
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if at the time there is available to the Trust the opportunity to eliminate,
within such 90-day period, the Special Event by taking some ministerial action,
such as filing a form or making an election, or pursuing some other similar
reasonable measure, which has no adverse effect on the Trust, ComEd or the
holders of the Trust Securities, the Trust will pursue such measure in lieu of
dissolution. Furthermore, if in the case of the occurrence of a Tax Event, (i)
ComEd has received an opinion (a "Redemption Tax Opinion") from independent tax
counsel experienced in such matters that, as a result of a Tax Event, there is
more than an insubstantial risk that ComEd would be precluded from deducting the
interest on the Subordinated Notes for United States federal income tax purposes
even after the Subordinated Notes were distributed to the holders of Trust
Securities in liquidation of such holders' interests in the Trust as described
above or (ii) the Regular Trustees shall have been informed by such tax counsel
that a No Recognition Opinion cannot be delivered, ComEd shall have the right,
upon not less than 30 nor more than 60 days notice, to redeem the Subordinated
Notes in whole or in part for cash within 90 days following the occurrence of
such Tax Event, and, following such redemption, Trust Securities with an
aggregate liquidation amount equal to the aggregate principal amount of the
Subordinated Notes so redeemed shall be redeemed by the Trust at the Redemption
Price on a pro rata basis; provided, however, that, if at the time there is
available to ComEd or the Trust the opportunity to eliminate, within such 90-day
period, the Tax Event by taking some ministerial action, such as filing a form
or making an election, or pursuing some other similar reasonable measure which
has no adverse effect on the Trust, ComEd or the holders of the Trust
Securities, ComEd or the Trust will pursue such measure in lieu of redemption.
If Subordinated Notes are distributed to the holders of the Preferred
Securities, ComEd will use its best efforts to have the Subordinated Notes
listed on the New York Stock Exchange or on such other exchange as the Preferred
Securities are then listed.
After the date for any distribution of Subordinated Notes upon
dissolution of the Trust, (i) the Preferred Securities and Preferred Securities
Guarantee will no longer be deemed to be outstanding, (ii) the depositary or its
nominee, as the record holder of the Preferred Securities, will receive a
registered global certificate or certificates representing the Subordinated
Notes to be delivered upon such distribution and (iii) any certificates
representing Preferred Securities and Preferred Securities Guarantee not held by
the depositary or its nominee will be deemed to represent Subordinated Notes
having an aggregate principal amount equal to the aggregate stated liquidation
amount of, with an interest rate identical to the distribution rate of, and
accrued and unpaid interest equal to accrued and unpaid distributions on, such
Preferred Securities, until such certificates are presented to ComEd or its
agent for transfer or reissuance.
There can be no assurance as to the market prices for the Preferred
Securities or the Subordinated Notes that may be distributed in exchange for the
Preferred Securities if a dissolution and liquidation of the Trust were to
occur. Accordingly, the Preferred Securities that an investor may purchase, or
the Subordinated Notes that the investor may receive on dissolution and
liquidation of the Trust, may trade at a discount to the price that the investor
paid to purchase the Preferred Securities offered hereby.
REDEMPTION PROCEDURES
The Trust may not redeem fewer than all of the outstanding Preferred
Securities unless all accrued and unpaid distributions have been paid on all
Trust Securities for all quarterly distribution periods terminating on or prior
to the date of redemption.
If the Trust gives a notice of redemption in respect of Preferred
Securities (which notice will be irrevocable), then, by 12:00 noon, New York
City time, on the redemption date, provided that ComEd has paid to the Property
Trustee a sufficient amount of cash in connection with the related redemption or
maturity of the Subordinated Notes, the Trust will irrevocably deposit with the
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depositary funds sufficient to pay the applicable Redemption Price and will give
the depositary irrevocable instructions and authority to pay the Redemption
Price to the holders of the Preferred Securities. See "-- Book-Entry Only
Issuance -- The Depository Trust Company." If notice of redemption shall have
been given and funds deposited as required, then immediately prior to the close
of business on the date of such deposit, distributions will cease to accrue and
all rights of holders of such Preferred Securities so called for redemption will
cease, except the right of the holders of such Preferred Securities to receive
the Redemption Price, but without interest on such Redemption Price. In the
event that any date fixed for redemption of Preferred Securities is not a
Business Day, then payment of the Redemption Price payable on such date will be
made on the next succeeding day which is a Business Day (and without any
interest or other payment in respect of any such delay), except that, if such
Business Day falls in the next calendar year, such payment will be made on the
immediately preceding Business Day. In the event that payment of the Redemption
Price in respect of Preferred Securities is improperly withheld or refused and
not paid either by the Trust or by ComEd pursuant to the Preferred Securities
Guarantee, distributions on such Preferred Securities will continue to accrue,
from the original redemption date to the actual date of payment, in which case
the actual payment date will be considered the date fixed for redemption for
purposes of calculating the Redemption Price.
In the event that fewer than all of the outstanding Preferred
Securities are to be redeemed, the Preferred Securities will be redeemed pro
rata as described under "-- Book-Entry Only Issuance -- The Depository Trust
Company" below.
Subject to the foregoing and to applicable law (including, without
limitation, United States federal securities laws), ComEd or its affiliates may,
at any time and from time to time, purchase outstanding Preferred Securities by
tender, in the open market or by private agreement.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
In the event of any voluntary or involuntary dissolution, winding-up
or termination of the Trust, the holders of the Preferred Securities at that
time will be entitled to receive out of the assets of the Trust, after
satisfaction of liabilities to creditors, distributions in an amount equal to
the aggregate of the stated liquidation amount of $25 per Preferred Security
plus accrued and unpaid distributions thereon to the date of payment (the
"Liquidation Distribution"), unless, in connection with such dissolution,
winding-up or termination, Subordinated Notes in an aggregate principal amount
equal to the aggregate stated liquidation amount of, with an interest rate
identical to the distribution rate of, and accrued and unpaid interest equal to
accrued and unpaid distributions on, the Preferred Securities have been
distributed on a pro rata basis to the holders of Preferred Securities in
exchange for such Preferred Securities.
If, upon any such dissolution, the Liquidation Distribution can be
paid only in part because the Trust has insufficient assets available to pay in
full the aggregate Liquidation Distribution, then the amounts payable directly
by the Trust on the Preferred Securities shall be paid on a pro rata basis. The
holders of the Common Securities will be entitled to receive distributions upon
any such dissolution pro rata with the holders of the Preferred Securities,
except that if a Declaration Event of Default has occurred and is continuing,
the Preferred Securities shall have a preference over the Common Securities.
Pursuant to the Declaration, the Trust shall terminate (i) on
September __, 2040, the expiration of the term of the Trust, (ii) upon the
bankruptcy of ComEd, (iii) upon the filing of a certificate of dissolution or
its equivalent with respect to ComEd, the filing of a certificate of
cancellation with respect to the Trust, or the revocation of the charter of
ComEd and the expiration of 90 days after the date of revocation without a
reinstatement thereof, (iv) upon the distribution of the Subordinated Notes
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following the occurrence of a Special Event, (v) upon the entry of a decree of a
judicial dissolution of ComEd or the Trust or (vi) upon the redemption of all of
the Trust Securities.
DECLARATION EVENTS OF DEFAULT
An event of default under the Indenture (an "Indenture Event of
Default") (see "Description of the Subordinated Notes -- Indenture Events of
Default") constitutes an event of default under the Declaration with respect to
the Trust Securities (a "Declaration Event of Default"), provided that pursuant
to the Declaration, the holder of the Common Securities will be deemed to have
waived any Declaration Event of Default with respect to the Common Securities or
its consequences until all Declaration Events of Default with respect to the
Preferred Securities have been cured, waived or otherwise eliminated. Until
such Declaration Events of Default with respect to the Preferred Securities have
been so cured, waived or otherwise eliminated, the Property Trustee will be
deemed to be acting solely on behalf of the holders of the Preferred Securities
and only the holders of the Preferred Securities will have the right to direct
the Property Trustee with respect to certain matters under the Declaration, and
therefore the Indenture.
Upon the occurrence of a Declaration Event of Default, the Property
Trustee, as the sole holder of the Subordinated Notes, will have the right under
the Indenture to declare the principal of, and interest on, the Subordinated
Notes to be immediately due and payable.
VOTING RIGHTS
Except as provided below, under the Trust Act, the Trust Indenture Act
and under "Description of the Preferred Securities Guarantee -- Amendments and
Assignment" and as otherwise required by law and the Declaration, the holders of
the Preferred Securities will have no voting rights. In the event that ComEd
elects to defer payments of interest on the Subordinated Notes as described
above under "-- Distributions," the holders of the Preferred Securities do not
have the right to appoint a special representative or trustee or otherwise act
to protect their interests.
The holders of a majority in aggregate liquidation amount of the
Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Property Trustee, or
to direct the exercise of any trust or power conferred upon the Property Trustee
under the Declaration, including the right to direct the Property Trustee, as
the holder of the Subordinated Notes, to (i) direct the time, method and place
of conducting any proceeding for any remedy available to the Debt Trustee (as
hereinafter defined) under the Indenture with respect to the Subordinated Notes,
(ii) waive any past Indenture Event of Default which is waivable under the Base
Indenture (as defined herein), (iii) exercise any right to rescind or annul a
declaration that the principal of all the Subordinated Notes shall be due and
payable, or (iv) consent to any amendment, modification or termination of the
Indenture or the Subordinated Notes, where such consent shall be required,
provided that where a consent under the Indenture would require the consent of
more than a majority of the holders in principal amount of Subordinated Notes
affected thereby (a "Super-Majority"), only the holders of at least the
proportion in liquidation amount of the Preferred Securities which the relevant
Super-Majority represents of the aggregate principal amount of the Subordinated
Notes, may direct the Property Trustee to give such consent. If the Property
Trustee fails to enforce its rights under the Declaration, a holder of Preferred
Securities may institute a legal proceeding directly against any person to
enforce the Property Trustee's rights under the Declaration without first
instituting any legal proceeding against the Property Trustee or any other
person or entity. The Property Trustee shall notify all holders of the Preferred
Securities of any notice of default received from the Debt Trustee with respect
to the Subordinated Notes. Such notice shall state that such Indenture Event of
Default also constitutes a Declaration Event of Default. The Property Trustee
shall not take any action described in clauses (i), (ii), (iii) or (iv) above
unless the Property Trustee has obtained an opinion of independent tax counsel
to the effect that, as a result of such action, the Trust will not be classified
as other than a grantor trust for United States federal
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income tax purposes and each holder of Trust Securities will be treated as
owning an undivided beneficial interest in the Subordinated Notes.
In the event the consent of the Property Trustee, as the holder of the
Subordinated Notes, is required under the Indenture with respect to any
amendment, modification or termination of the Indenture, the Property Trustee
shall request the direction of the holders of the Trust Securities with respect
to such amendment, modification or termination. The Property Trustee shall vote
with respect to such amendment, modification or termination as directed by a
majority in liquidation amount of the Preferred Securities and, if no
Declaration Event of Default has occurred and is continuing, a majority in
liquidation amount of the Common Securities, voting together as separate
classes, provided that where a consent under the Indenture would require the
consent of a Super-Majority, the Property Trustee may only give such consent at
the direction of the holders of at least the proportion in liquidation amount of
the Preferred Securities and Common Securities, respectively, which the relevant
Super-Majority represents of the aggregate principal amount of the Subordinated
Notes outstanding. The Property Trustee shall not take any such action in
accordance with the directions of the holders of the Trust Securities unless the
Property Trustee has obtained an opinion of independent tax counsel to the
effect that, as a result of such action, the Trust will not be classified as
other than a grantor trust for United States federal income tax purposes.
A waiver of an Indenture Event of Default will constitute a waiver of
the corresponding Declaration Event of Default.
Any required approval or direction of holders of Preferred Securities
may be given at a separate meeting of holders of Preferred Securities convened
for such purpose, at a meeting of all of the holders of Trust Securities or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which holders of Preferred Securities are entitled to vote, or of any
matter upon which action by written consent of such holders is to be taken, to
be mailed to each holder of record of Preferred Securities. Each such notice
will include a statement setting forth (i) the date of such meeting or the date
by which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such holders are entitled to vote
or of such matter upon which written consent is sought and (iii) instructions
for the delivery of proxies or consents. No vote or consent of the holders of
Preferred Securities will be required for the Trust to redeem and cancel
Preferred Securities or distribute Subordinated Notes in accordance with the
Declaration.
Notwithstanding that holders of Preferred Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Preferred Securities at such time that are owned by ComEd or any entity directly
or indirectly controlling or controlled by, or under direct or indirect common
control with, ComEd shall not be entitled to vote or consent and shall, for
purposes of such vote or consent, be treated as if they were not outstanding.
The procedures by which holders of Preferred Securities may exercise
their voting rights are described below. See "-- Book-Entry Only Issuance --
The Depository Trust Company."
Holders of the Preferred Securities will have no rights to appoint or
remove the ComEd Trustees, who may be appointed, removed or replaced solely by
ComEd, as the direct or indirect holder of all the Common Securities.
MODIFICATION OF THE DECLARATION
The Declaration may be amended or modified if approved and executed by
a majority of the Regular Trustees, provided that if any proposed amendment
provides for, or the Regular Trustees otherwise propose to effect, (i) any
action that would adversely affect the powers, preferences or special rights of
the Trust Securities, whether by way of amendment to the Declaration or
otherwise
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or (ii) the dissolution, winding-up or termination of the Trust other than
pursuant to the terms of the Declaration, then the holders of the Trust
Securities as a single class will be entitled to vote on such amendment or
proposal and such amendment or proposal shall not be effective except with the
approval of at least 66-2/3 in liquidation amount of the Trust Securities
affected thereby, provided that a reduction of the principal amount or the
distribution rate, or a change in the payment dates or maturity of the Preferred
Securities, shall not be permitted without the consent of each holder of
Preferred Securities. In the event any amendment or proposal referred to in
clause (i) above would adversely affect only the Preferred Securities or the
Common Securities, then only the affected class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of 66-2/3 in liquidation amount of such class of Trust
Securities.
Notwithstanding the foregoing, no amendment or modification may be
made to the Declaration if such amendment or modification would (i) cause the
Trust to be classified for purposes of United States federal income taxation as
other than a grantor trust, (ii) reduce or otherwise adversely affect the powers
of the Property Trustee or (iii) cause the Trust to be deemed to be an
"investment company" which is required to be registered under the 1940 Act.
MERGERS, CONSOLIDATIONS OR AMALGAMATIONS
The Trust may not consolidate, amalgamate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described below. The Trust may, with the consent of a majority of the Regular
Trustees and without the consent of the holders of the Trust Securities,
consolidate, amalgamate, merge with or into, or be replaced by a trust organized
as such under the laws of any State; provided, that (i) such successor entity
either (x) expressly assumes all of the obligations of the Trust with respect to
the Trust Securities or (y) substitutes for the Trust Securities other
securities having substantially the same terms as the Trust Securities (the
"Successor Securities") so long as the Successor Securities rank the same as the
Trust Securities rank in priority with respect to distributions and payments
upon liquidation, redemption, maturity and otherwise, (ii) ComEd expressly
acknowledges a trustee of such successor entity which possesses the same powers
and duties as the Property Trustee as the holder of the Subordinated Notes,
(iii) the Preferred Securities or any Successor Securities are listed, or any
Successor Securities will be listed upon notification of issuance, on any
national securities exchange or other organization on which the Preferred
Securities are then listed, (iv) such merger, consolidation, amalgamation or
replacement does not cause the Preferred Securities (including any Successor
Securities) to be downgraded by any nationally recognized statistical rating
organization, (v) such merger, consolidation, amalgamation or replacement does
not adversely affect the rights, preferences and privileges of the holders of
the Trust Securities (including any Successor Securities) in any material
respect (other than with respect to any dilution of the holders' interest in the
new entity), (vi) such successor entity has a purpose identical to that of the
Trust, (vii) prior to such merger, consolidation, amalgamation or replacement,
ComEd has received an opinion from independent counsel to the Trust experienced
in such matters to the effect that (A) such merger, consolidation, amalgamation
or replacement does not adversely affect the rights, preferences and privileges
of the holders of the Trust Securities (including any Successor Securities) in
any material respect (other than with respect to any dilution of the holders'
interest in the new entity), and (B) following such merger, consolidation,
amalgamation or replacement, neither the Trust nor such successor entity will be
required to register as an investment company under the 1940 Act and (viii)
ComEd guarantees the obligations of such successor entity under the Successor
Securities at least to the extent provided by the Preferred Securities
Guarantee. Notwithstanding the foregoing, the Trust shall not, except with the
consent of holders of 100% in liquidation amount of the Trust Securities,
consolidate, amalgamate, merge with or into, or be replaced by any other entity
or permit any other entity to consolidate, amalgamate, merge with or into, or
replace it if such consolidation, amalgamation, merger or replacement would
cause the Trust or the successor entity to be classified
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for United States federal income tax purposes as other than a grantor trust and
each holder of Trust Securities not to be treated as owning an undivided
beneficial interest in the Subordinated Notes.
BOOK-ENTRY ONLY ISSUANCE - THE DEPOSITORY TRUST COMPANY
The Depository Trust Company ("DTC") will act as securities depositary
for the Preferred Securities. The Preferred Securities will be issued only as
fully registered securities registered in the name of Cede & Co. (DTC's
nominee). One or more fully registered global Preferred Securities certificates
will be issued, representing in the aggregate the total number of Preferred
Securities, and will be deposited with DTC.
The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of securities in definitive form. Such laws
may impair the ability to transfer beneficial interests in a global Preferred
Security.
DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking
Law, a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "Clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its participants ("Participants") deposit with DTC. DTC
also facilitates the settlement among Participants of securities transactions,
such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Direct Participants
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations ("Direct Participants"). DTC is
owned by a number of its Direct Participants and by the New York Stock Exchange,
the American Stock Exchange, Inc., and the National Association of Securities
Dealers, Inc. Access to the DTC system is also available to others such as
securities brokers and dealers, banks and trust companies that clear through or
maintain a custodial relationship with a Direct Participant, either directly or
indirectly ("Indirect Participants"). The rules applicable to DTC and its
Participants are on file with the Commission.
Purchases of Preferred Securities within the DTC system must be made
by or through Direct Participants, which will receive a credit for the Preferred
Securities on DTC's records. The ownership interest of each actual purchaser of
Preferred Securities ("Beneficial Owner") is in turn to be recorded on the
Direct and Indirect Participants' records. Beneficial Owners will not receive
written confirmation from DTC of their purchases, but Beneficial Owners are
expected to receive written confirmations providing details of the transactions,
as well as periodic statements of their holdings, from the Direct or Indirect
Participants through which the Beneficial Owners purchased Preferred Securities.
Transfers of ownership interests in the Preferred Securities are to be
accomplished by entries made on the books of Participants acting on behalf of
Beneficial Owners. Beneficial Owners will not receive certificates representing
their ownership interests in Preferred Securities, except in the event that use
of the book-entry system for the Preferred Securities is discontinued.
To facilitate subsequent transfers, all the Preferred Securities
deposited by Participants with DTC are registered in the name of DTC's nominee,
Cede & Co. The deposit of Preferred Securities with DTC and their registration
in the name of Cede & Co. effect no change in beneficial ownership. DTC has no
knowledge of the actual Beneficial Owners of the Preferred Securities. DTC's
records reflect only the identity of the Direct Participants to whose accounts
such Preferred Securities are credited, which may or may not be the Beneficial
Owners. The Participants will remain responsible for keeping account of their
holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to
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Beneficial Owners will be governed by arrangements among them, subject to any
statutory or regulatory requirements as may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. If less than all of the
Preferred Securities are being redeemed, DTC will reduce pro rata the amount of
the interest of each Direct Participant in the Preferred Securities to be
redeemed; provided that if, as a result of such pro rata redemption, Direct
Participants would hold fractional interests in the Preferred Securities, DTC
will adjust the amount of the interest of each Direct Participant to be redeemed
to avoid such fractional interests.
Although voting with respect to the Preferred Securities is limited,
in those cases where a vote is required neither DTC nor Cede & Co. will itself
consent or vote with respect to Preferred Securities. Under its usual
procedures, DTC would mail an Omnibus Proxy to the Trust as soon as possible
after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or
voting rights to those Direct Participants to whose accounts the Preferred
Securities are credited on the record date (identified in a listing attached to
the Omnibus Proxy).
Distribution payments on the Preferred Securities will be made to DTC.
DTC's practice is to credit Direct Participants' accounts on the relevant
payment date in accordance with their respective holdings shown on DTC's records
unless DTC has reason to believe that it will not receive payments on such
payment date. Payments by participants to Beneficial Owners will be governed by
standing instructions and customary practices, as in the case with securities
held for the account of customers in bearer form or registered in "street name,"
and will be the responsibility of such Participant and not of DTC, the Trust,
any trustee or ComEd, subject to any statutory or regulatory requirements as may
be in effect from time to time. Payment of distributions to DTC is the
responsibility of the Trust, disbursement of such payments to Direct
Participants is the responsibility of DTC, and disbursement of such payments to
the Beneficial Owners is the responsibility of Direct and Indirect Participants.
Except as provided herein, a Beneficial Owner in a global Preferred
Security will not be entitled to receive physical delivery of Preferred
Securities. Accordingly, each Beneficial Owner must rely on the procedures of
DTC to exercise any rights under the Preferred Securities.
DTC may discontinue providing its services as securities depositary
with respect to the Preferred Securities at any time by giving reasonable notice
to the Trust. Under such circumstances, in the event that a successor
securities depositary is not obtained, Preferred Securities certificates are
required to be printed and delivered. Additionally, the Regular Trustees (with
the consent of ComEd) may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor depositary) with respect to the Preferred
Securities. In that event, certificates for the Preferred Securities will be
printed and delivered.
The information in this section concerning DTC and DTC's book-entry
system has been obtained from sources that ComEd and the Trust believe to be
reliable, but ComEd and the Trust take no responsibility for the accuracy
thereof.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, prior to the occurrence of a default with
respect to the Trust Securities and after the curing of all such defaults that
may have occurred, undertakes to perform only such duties as are specifically
set forth in the Declaration and, after default, shall exercise the same degree
of care as a prudent individual would exercise in the conduct of his or her own
affairs. Subject to such provisions, the Property Trustee is under no
obligation to exercise any of the powers vested in it by the Declaration at the
request of any holder of Preferred Securities, unless offered reasonable
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indemnity by such holder against the costs, expenses and liabilities which might
be incurred thereby; but the foregoing shall not relieve the Property Trustee,
upon the occurrence of a Declaration Event of Default, from exercising the
rights and powers vested in it by the Declaration. The Property Trustee also
serves as trustee under the Preferred Securities Guarantee.
REGISTRAR AND TRANSFER AGENT
In the event that the Preferred Securities do not remain in book-entry
only form, the Property Trustee will act as paying agent and may designate an
additional or substitute paying agent at any time. Registration of transfers of
Preferred Securities will be effected without charge by or on behalf of the
Trust, but upon payment (with the giving of such indemnity as the Regular
Trustees may require) in respect of any tax or other government charges which
may be imposed in relation to it. The Trust will not be required to register or
cause to be registered the transfer of Preferred Securities after such Preferred
Securities have been called for redemption.
GOVERNING LAW
The Declaration and the Preferred Securities will be governed by, and
construed in accordance with, the internal laws of the State of Delaware.
MISCELLANEOUS
The Regular Trustees are authorized and directed to operate the Trust
in such a way so that the Trust will not be deemed to be an "investment company"
required to be registered under the 1940 Act or characterized for United States
federal income tax purposes as other than a grantor Trust. ComEd is authorized
and directed to conduct its affairs so that the Subordinated Notes will be
treated as indebtedness of ComEd for United States federal income tax purposes.
In this connection, the Regular Trustees and ComEd are authorized to take any
action, not inconsistent with applicable law, the restated articles of
incorporation of ComEd, that each of the Regular Trustees and ComEd determines
in their discretion to be necessary or desirable for such purposes, as long as
such action does not materially and adversely affect the interests of the
holders of the Preferred Securities.
DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEE
Set forth below is a summary of information concerning the Preferred
Securities Guarantee that will be executed and delivered by ComEd for the
benefit of the holders from time to time of the Preferred Securities. The
Preferred Securities Guarantee will be qualified as an indenture under the Trust
Indenture Act. Wilmington Trust Company will act as the Preferred Guarantee
Trustee. The terms of the Preferred Securities Guarantee will be those set
forth therein and those made part thereof by the Trust Indenture Act. The
following summary does not purport to be complete and is subject in all respects
to the provisions of, and is qualified in its entirety by reference to, the
Preferred Securities Guarantee, which is filed as an exhibit to the Registration
Statement of which this Prospectus forms a part and the Trust Indenture Act.
The Preferred Securities will be held by the Preferred Guarantee Trustee for the
benefit of the holders of the Preferred Securities.
GENERAL
Pursuant to the Preferred Securities Guarantee, ComEd will irrevocably
and unconditionally agree, to the extent set forth therein, to pay in full to
the holders of the Preferred Securities the Guarantee Payments (as defined
herein) (without duplication of amounts theretofore paid by the Trust), to the
extent not paid by the Trust, regardless of any defense, right of set-off or
counterclaim that the Trust may have or assert. The following payments or
distributions with respect
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to the Preferred Securities to the extent not paid or made by the Trust (the
"Guarantee Payments") will be subject to the Preferred Securities Guarantee
(without duplication): (i) any accrued and unpaid distributions that are
required to be paid on the Preferred Securities, to the extent the Trust has
funds available therefor, (ii) the Redemption Price, including all accrued and
unpaid distributions to the date of the redemption, to the extent the Trust has
funds available therefor, with respect to any Preferred Securities called for
redemption by the Trust and (iii) upon a voluntary or involuntary dissolution,
winding-up or termination of the Trust (other than in connection with the
distribution of Subordinated Notes to the holders of Preferred Securities in
exchange for Preferred Securities), the lesser of (a) the aggregate of the
liquidation amount and all accrued and unpaid distributions on the Preferred
Securities to the date of payment and (b) the amount of assets of the Trust
remaining available for distribution to holders of Preferred Securities in
liquidation of the Trust. ComEd's obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by ComEd to the holders of
Preferred Securities or by causing the Trust to pay such amounts to such
holders.
The Preferred Securities Guarantee will be a full and unconditional
guarantee of the Guarantee Payments with respect to the Preferred Securities
from the time of issuance of the Preferred Securities, but will not apply to the
payment of distributions and other payments on the Preferred Securities when the
Property Trustee does not have sufficient funds in the Property Account to make
such distributions or other payments. If ComEd does not make interest payments
on the Subordinated Notes held by the Property Trustee, the Trust will not make
distributions on the Preferred Securities issued by the Trust and will not have
funds available therefor. See "Description of the Subordinated Notes -- Certain
Covenants."
ComEd has also agreed separately to irrevocably and unconditionally
guarantee the obligations of the Trust with respect to the Common Securities
(the "Common Securities Guarantee") to the same extent as the Preferred
Securities Guarantee, except that upon the occurrence and during the
continuation of an Indenture Event of Default, holders of Preferred Securities
shall have priority over holders of Common Securities with respect to
distributions and payments on liquidation, redemption or otherwise.
CERTAIN COVENANTS OF COMED
In the Preferred Securities Guarantee, ComEd will covenant that, so
long as the Preferred Securities remain outstanding, if there shall have
occurred and is continuing any event that would constitute an event of default
under the Preferred Securities Guarantee or the Declaration, then (a) ComEd
shall not declare or pay any dividend on, or make any distribution with respect
to, or redeem, purchase, acquire or make a liquidation payment with respect to,
any of its capital stock, and (b) ComEd shall not make any payment of interest,
principal or premium, if any, on or repay, repurchase or redeem any debt
securities (including guarantees) issued by ComEd which rank pari passu with or
junior to the Subordinated Notes.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes which do not materially adversely
affect the rights of holders of Preferred Securities (in which case no vote will
be required), the Preferred Securities Guarantee may be amended only with the
prior approval of the holders of not less than 66-2/3% in liquidation amount of
the outstanding Preferred Securities. The manner of obtaining any such approval
of holders of the Preferred Securities is set forth under "Description of the
Preferred Securities -- Voting Rights." All guarantees and agreements contained
in the Preferred Securities Guarantee shall bind the successors, assigns,
receivers, trustees and representatives of ComEd and shall inure to the benefit
of the Preferred Guarantee Trustee and the holders of the Preferred Securities
then outstanding.
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TERMINATION OF THE PREFERRED SECURITIES GUARANTEE
The Preferred Securities Guarantee will terminate and be of no further
force and effect as to the Preferred Securities upon full payment of the
Redemption Price of all Preferred Securities, or upon distribution of the
Subordinated Notes to the holders of the Preferred Securities, and will
terminate completely upon full payment of the amounts payable upon liquidation
of the Trust. See "Description of the Subordinated Notes -- Events of Default"
for a description of the events of default and enforcement rights of the holders
of Subordinated Notes. The Preferred Securities Guarantee will continue to be
effective or will be reinstated, as the case may be, if at any time any holder
of Preferred Securities must repay to the Trust or ComEd, or their successors,
any sums paid to them under such Preferred Securities or the Preferred
Securities Guarantee.
EVENTS OF DEFAULT
An event of default under the Preferred Securities Guarantee will
occur upon the failure of ComEd to perform any of its payment or other
obligations thereunder.
The holders of a majority in liquidation amount of the Preferred
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Preferred Guarantee Trustee in
respect of the Preferred Securities Guarantee or to direct the exercise of any
trust or power conferred upon the Preferred Guarantee Trustee under the
Preferred Securities Guarantee. If the Preferred Guarantee Trustee fails to
enforce the Preferred Securities Guarantee, any holder of Preferred Securities
may institute a legal proceeding directly against ComEd to enforce the Preferred
Guarantee Trustee's rights under the Preferred Securities Guarantee, without
first instituting a legal proceeding against the Trust, the Preferred Guarantee
Trustee or any other person or entity.
STATUS OF THE PREFERRED SECURITIES GUARANTEE
ComEd's obligations under the Preferred Securities Guarantee to make
the Guarantee Payments will constitute an unsecured obligation of ComEd and will
rank (i) subordinate and junior in right of payment to all other liabilities of
ComEd, including the Subordinated Notes, except those liabilities of ComEd made
pari passu or subordinate by their terms, (ii) pari passu with the most senior
preferred stock now or hereafter issued by ComEd and with any guarantee now or
hereafter entered into by ComEd in respect of any preferred stock of any
affiliate of ComEd, and (iii) senior to ComEd's common stock. The terms of the
Preferred Securities provide that each holder of Preferred Securities by
acceptance thereof agrees to the subordination provisions and other terms of the
Preferred Securities Guarantee.
The Preferred Securities Guarantee will constitute a guarantee of
payment and not of collection (that is, the guaranteed party may institute a
legal proceeding directly against the guarantor to enforce its rights under the
guarantee without instituting a legal proceeding against any other person or
entity). The Preferred Securities Guarantee will be deposited with the
Preferred Guarantee Trustee to be held for the benefit of the holders of the
Preferred Securities. Except as otherwise noted herein, the Preferred Guarantee
Trustee has the right to enforce the Preferred Securities Guarantee on behalf of
the holders of the Preferred Securities. The Preferred Securities Guarantee
will not be discharged except by payment of the Guarantee Payments in full
(without duplication of amounts theretofore paid by the Trust).
INFORMATION CONCERNING THE PREFERRED GUARANTEE TRUSTEE
The Preferred Guarantee Trustee, prior to the occurrence of a default
with respect to the Preferred Securities Guarantee and after the curing of all
such defaults that may have occurred, undertakes to perform only such duties as
are specifically set forth in the Preferred Securities
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Guarantee and, after default, shall exercise the same degree of care as a
prudent individual would exercise in the conduct of his or her own affairs.
Subject to such provisions, the Preferred Guarantee Trustee is under no
obligation to exercise any of the powers vested in it by the Preferred
Securities Guarantee at the request of any holder of Preferred Securities,
unless offered reasonable indemnity against the costs, expenses and liabilities
which might be incurred thereby; but the foregoing shall not relieve the
Preferred Guarantee Trustee, upon the occurrence of an event of default under
the Preferred Securities Guarantee, from exercising the rights and powers vested
in it by the Preferred Securities Guarantee. The Preferred Guarantee Trustee
also serves as Property Trustee.
GOVERNING LAW
The Preferred Securities Guarantee will be governed by, and construed
in accordance with, the internal laws of the State of New York.
DESCRIPTION OF THE SUBORDINATED NOTES
Set forth below is a description of the terms of the Subordinated
Notes. The following description does not purport to be complete and is subject
to, and is qualified in its entirety by reference to, the Indenture (the "Base
Indenture"), dated as of September 1, 1995, between ComEd and Wilmington Trust
Company, as Trustee (the "Debt Trustee"), as supplemented by a First
Supplemental Indenture, dated as of September __, 1995 (the Base Indenture, as
so supplemented, is hereinafter referred to as the "Indenture"), the forms of
which are filed as an exhibit to the Registration Statement of which this
Prospectus forms a part. The terms of the Subordinated Notes will include those
stated in the Indenture and those made a part of the Indenture by reference to
the Trust Indenture Act. Certain capitalized terms used herein are defined in
the Indenture.
Under certain circumstances involving the dissolution of the Trust
following the occurrence of a Special Event, Subordinated Notes may be
distributed to the holders of Trust Securities in liquidation of the Trust. See
"Description of the Preferred Securities -- Special Event Redemption or
Distribution."
If the Subordinated Notes are distributed to the holders of the Trust
Securities, ComEd will use its best efforts to have the Subordinated Notes
listed on the New York Stock Exchange or on such other exchange as the Preferred
Securities are then listed.
GENERAL
The Subordinated Notes will be issued as unsecured subordinated debt
securities under the Indenture. The Subordinated Notes will be limited in
aggregate principal amount to approximately $206.2 million, such amount being
the sum of the aggregate stated liquidation amount of the Preferred Securities
and the capital contributed by ComEd in exchange for the Common Securities (the
"Payment").
The Subordinated Notes are not subject to a sinking fund provision.
The entire principal amount of the Subordinated Notes will mature and become due
and payable, together with any accrued and unpaid interest thereon, including
Additional Interest (as defined herein), if any, on September 30, 2035.
If Subordinated Notes are distributed to holders of the Preferred
Securities in liquidation of such holders' interests in the Trust, such
Subordinated Notes will initially be issued as a Global Security (as defined
below). As described herein, under certain limited circumstances, Subordinated
Notes may be issued in certificated form in exchange for a Global Security. See
"--Book Entry and Settlement." In the event Subordinated Notes are issued in
certificated form, such Subordinated Notes
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will be in denominations of $25 and integral multiples thereof and may be
transferred or exchanged at the offices described below. Payments on
Subordinated Notes issued as a Global Security will be made to the depositary
for the Subordinated Notes. In the event Subordinated Notes are issued in
certificated form, principal and interest will be payable, the transfer of the
Subordinated Notes will be registrable and Subordinated Notes will be
exchangeable for Subordinated Notes of other denominations of a like aggregate
principal amount at the corporate trust office of the Debt Trustee in
Wilmington, Delaware; provided, that payment of interest may be made at the
option of ComEd by check mailed to the address of the persons entitled
thereto.
The Indenture does not contain provisions that afford holders of the
Subordinated Notes protection in the event of a highly leveraged transaction
involving ComEd.
SUBORDINATION
The Indenture provides that the Subordinated Notes are subordinated
and junior in right of payment to all Senior Indebtedness of ComEd, whether now
existing or hereafter incurred. No payment of principal of (including
redemption payments, if any), premium, if any, or interest on, the Subordinated
Notes may be made if (a) any Senior Indebtedness of ComEd is not paid when due
and any applicable grace period with respect to such default has ended with such
default not being cured or waived or ceasing to exist, or (b) the maturity of
any Senior Indebtedness has been accelerated because of a default. Upon any
distribution of assets of ComEd to creditors upon any dissolution, winding-up,
liquidation or reorganization, whether voluntary or involuntary, or in
bankruptcy, insolvency, receivership or other proceedings, all principal of,
premium, if any, and interest due or to become due on, all Senior Indebtedness
must be paid in full before the holders of the Subordinated Notes are entitled
to receive or retain any payment. The rights of the holders of the Subordinated
Notes will be subrogated to the rights of the holders of Senior Indebtedness to
receive payments or distributions applicable to such Senior Indebtedness until
all amounts owing on the Subordinated Notes are paid in full.
The term "Senior Indebtedness" means (i) any payment in respect of (a)
indebtedness of ComEd for money borrowed and (b) indebtedness evidenced by
securities, debentures, bonds, notes or other similar instruments issued by
ComEd including, without limitation, indebtedness evidenced by securities issued
pursuant to its Mortgage dated July 1, 1923, as supplemented, and indentures
with various trustees (other than the Indenture); (ii) all capital lease
obligations of ComEd; (iii) all obligations of ComEd issued or assumed as the
deferred purchase price of property, all conditional sale obligations of ComEd
and all obligations of ComEd under any title retention agreement (but excluding
trade accounts payable arising in the ordinary course of business); (iv) all
obligations of ComEd for the reimbursement on any letter of credit, banker's
acceptance, security purchase facility or similar credit transaction; (v) all
obligations of the type referred to in clauses (i) through (iv) above of other
persons for the payment of which ComEd is responsible or liable as obligor,
guarantor or otherwise; and (vi) all obligations of the type referred to in
clauses (i) through (v) above of other persons secured by any lien on any
property or asset of ComEd (whether or not such obligation is assumed by ComEd),
except for (1) any such indebtedness that is by its terms subordinated to or
pari passu with the Subordinated Notes, as the case may be, including all other
debt securities and guarantees in respect of those debt securities, issued to
any other trusts, partnerships or other entities affiliated with ComEd which act
as a financing vehicle of ComEd in connection with the issuance of preferred
securities by such entity or other securities which rank pari passu with, or
junior to, the Preferred Securities, and (2) any indebtedness between or among
ComEd and its affiliates. Such Senior Indebtedness shall continue to be Senior
Indebtedness and be entitled to the benefits of the subordination provisions
irrespective of any amendment, modification or waiver of any term of such Senior
Indebtedness.
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The Indenture does not limit the aggregate amount of Senior
Indebtedness which may be issued by ComEd. As of July 31, 1995, Senior
Indebtedness of ComEd aggregated approximately $8,234 million.
CERTAIN COVENANTS
If (i) there shall have occurred any event that would constitute an
Indenture Event of Default or (ii) ComEd shall be in default with respect to its
payment of any obligations under the Preferred Securities Guarantee or the
Common Securities Guarantee, then (a) ComEd shall not declare or pay any
dividend on, make any distributions with respect to, or redeem, purchase or make
a liquidation payment with respect to, any of its capital stock, (b) ComEd shall
not make any payment of interest, principal or premium, if any, on or repay,
repurchase or redeem any debt securities issued by ComEd which rank pari passu
with or junior to the Subordinated Notes and (c) ComEd shall not make any
guarantee payments with respect to the foregoing (other than pursuant to the
Preferred Securities Guarantee).
If ComEd shall have given notice of its election of an Extension
Period as provided in the Indenture and such period, or any extension thereof,
shall be continuing, then (a) ComEd shall not declare or pay any dividend on,
make any distributions with respect to, or redeem, purchase or make a
liquidation payment with respect to, any of its capital stock, (b) ComEd shall
not make any payment of interest, principal or premium, if any, on or repay,
repurchase or redeem any debt securities (including guarantees) issued by ComEd
which rank pari passu with or junior to the Subordinated Notes and (c) ComEd
shall not make any guarantee payments with respect to the foregoing (other than
pursuant to the Preferred Securities Guarantee).
For so long as the Trust Securities remain outstanding, ComEd will
covenant (i) to directly or indirectly maintain 100% direct or indirect
ownership of the Common Securities of the Trust; provided, however, that any
permitted successor of ComEd under the Indenture may succeed to ComEd's
ownership of such Common Securities, (ii) not to cause, as sponsor of the Trust,
or to permit, as holder of the Common Securities, the dissolution, winding-up or
termination of the Trust, except in connection with a distribution of the
Subordinated Notes as provided in the Declaration and in connection with certain
mergers, consolidations or amalgamations and (iii) to use its reasonable efforts
to cause the Trust (a) to remain a statutory business trust, except in
connection with the distribution of Subordinated Notes to the holders of Trust
Securities in liquidation of the Trust, the redemption of all of the Trust
Securities of the Trust, or certain mergers, consolidations or amalgamations,
each as permitted by the Declaration, and (b) to otherwise continue to be
classified as a grantor trust for United States federal income purposes.
OPTIONAL REDEMPTION
ComEd shall have the right to redeem the Subordinated Notes, in whole
or in part, from time to time, on or after September 30, 2000, or at any time in
certain circumstances upon the occurrence of a Tax Event as described under
"Description of the Preferred Securities -- Special Event Redemption or
Distribution," upon not less than 30 nor more than 60 days' notice, at a
Redemption Price equal to 100% of the principal amount to be redeemed plus any
accrued and unpaid interest, including Additional Interest, if any, to the
redemption date. If a partial redemption of the Preferred Securities resulting
from a partial redemption of the Subordinated Notes would result in the
delisting of the Preferred Securities, ComEd may only redeem the Subordinated
Notes in whole.
INTEREST
Each Subordinated Note shall bear interest at the rate of ____% per
annum from the original date of issuance, payable quarterly in arrears on March
31, June 30, September 30 and
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December 31 of each year (each, an "Interest Payment Date"), commencing
September 30, 1995, to the person in whose name such Subordinated Note is
registered, subject to certain exceptions, at the close of business on the
Business Day next preceding such Interest Payment Date. In the event the
Subordinated Notes shall not continue to remain in book-entry only form, ComEd
shall have the right to select record dates which shall be not less than fifteen
days prior to each Interest Payment Date.
The amount of interest payable for any period will be computed on the
basis of a 360-day year of twelve 30-day months. The amount of interest payable
for any period shorter than a full quarterly period will be computed on the
basis of the actual number of days elapsed in such 90-day quarter. In the event
that any date on which interest is payable on the Subordinated Notes is not a
Business Day, then payment of the interest payable on such date will be made on
the next succeeding day which is a Business Day (and without any interest or
other payment in respect of any such delay), except that, if such Business Day
is in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
ComEd shall have the right at any time, and from time to time, during
the term of the Subordinated Notes to defer payments of interest by extending
the interest payment period for a period not exceeding 20 consecutive quarters,
at the end of which Extension Period, ComEd shall pay all interest then accrued
and unpaid (including any Additional Interest, together with interest thereon at
the rate specified for the Subordinated Notes to the extent permitted by
applicable law); provided, that, during any such Extension Period, (a) ComEd
shall not declare or pay any dividend on, make any distributions with respect
to, or redeem, purchase or make a liquidation payment with respect to, any of
its capital stock, (b) ComEd shall not make any payment of interest, principal
or premium, if any, on or repay, repurchase or redeem any debt securities
(including guarantees) issued by ComEd which rank pari passu with or junior to
the Subordinated Notes and (c) ComEd shall not make any guarantee payments with
respect to the foregoing (other than pursuant to the Preferred Securities
Guarantee). Prior to the termination of any such Extension Period, ComEd may
further defer payments of interest by extending the interest payment period,
provided that such Extension Period together with all such previous and further
extensions thereof may not exceed 20 consecutive quarters or extend beyond the
maturity of the Subordinated Notes. Upon the termination of any Extension
Period and the payment of all amounts then due, ComEd may select a new Extension
Period, as if no Extension Period had previously been declared, subject to the
above requirements. No interest during an Extension Period, except at the end
thereof, shall be due and payable. ComEd has no present intention of exercising
its rights to defer payments of interest by extending the interest payment
period on the Subordinated Notes. If the Property Trustee shall be the sole
holder of the Subordinated Notes, ComEd shall give the Regular Trustees and the
Property Trustee notice of its selection of such Extension Period one Business
Day prior to the earlier of (i) the next succeeding date on which distributions
on the Preferred Securities are payable or (ii) the date the Trust is required
to give notice to the New York Stock Exchange or other applicable self-
regulatory organization or to holders of the Preferred Securities of the record
date or the date such distribution is payable, but in any event not less than
one Business Day prior to such record date. The Regular Trustees shall give
notice of ComEd's selection of such Extension Period to the holders of the
Preferred Securities. If the Property Trustee shall not be the sole holder of
the Subordinated Notes, ComEd shall give the holders of the Subordinated Notes
notice of its selection of such Extension Period ten Business Days prior to the
earlier of (i) the Interest Payment Date or (ii) the date ComEd is required to
give notice to the New York Stock Exchange or other applicable self-regulatory
organization or to holders of the Subordinated Notes of the record or payment
date of such related interest payment, but in any event at least two Business
Days before such record date.
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ADDITIONAL INTEREST
If at any time the Trust shall be required to pay any taxes, duties,
assessments or governmental charges of whatever nature (other than withholding
taxes) imposed by the United States, or any other taxing authority, then, in any
such case, ComEd will pay as additional interest ("Additional Interest") such
additional amounts as shall be required so that the net amounts received and
retained by the Trust after paying any such taxes, duties, assessments or other
governmental charges will be equal to the amounts the Trust would have received
had no such taxes, duties, assessments or other governmental charges been
imposed.
INDENTURE EVENTS OF DEFAULT
In case any Indenture Event of Default shall occur and be continuing,
the Property Trustee, as the holder of the Subordinated Notes, will have the
right to declare the principal of and the interest on the Subordinated Notes
(including any Additional Interest, if any) and any other amounts payable under
the Indenture to be forthwith due and payable and to enforce its other rights as
a creditor with respect to the Subordinated Notes.
The Indenture provides that any one or more of the following described
events, which has occurred and is continuing, constitutes an "Event of Default"
with respect to the Subordinated Notes:
(a) failure for 30 days to pay interest on the Subordinated Notes,
including any Additional Interest in respect thereof, when due; provided,
however, that a valid extension of the interest payment period by ComEd
shall not constitute a default in the payment of interest for this purpose;
or
(b) failure to pay principal or premium, if any, on the Subordinated
Notes when due whether at maturity, upon earlier redemption or otherwise;
or
(c) failure to observe or perform any other covenant (other than those
specifically relating to another series of subordinated debt securities)
contained in the Indenture for 90 days after written notice to ComEd from
the Debt Trustee or the holders of at least 25% in principal amount of the
outstanding Subordinated Notes; or
(d) certain events of bankruptcy, insolvency or reorganization of
ComEd; or
(e) the voluntary or involuntary dissolution, winding-up or
termination of the Trust, except in connection with the distribution of
Subordinated Notes to the holders of Preferred Securities in liquidation of
the Trust, the redemption of all outstanding Trust Securities of the Trust
and certain mergers, consolidations or amalgamations permitted by the
Declaration.
The holders of a majority in aggregate outstanding principal amount of
the Subordinated Notes have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Debt Trustee. The
Debt Trustee or the holders of not less than 25% in aggregate outstanding
principal amount of the Subordinated Notes may declare the principal due and
payable immediately on default, but the holders of a majority in aggregate
outstanding principal amount may annul such declaration and waive the default if
the default has been cured and a sum sufficient to pay all matured installments
of interest and principal due otherwise than by acceleration and any applicable
premium has been deposited with the Debt Trustee.
The holders of a majority in aggregate outstanding principal amount of
the Subordinated Notes affected thereby may, on behalf of the holders of all the
Subordinated Notes, waive any past
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default, except (i) a default in the payment of principal, premium, if any, or
interest (unless such default has been cured and a sum sufficient to pay all
matured installments of interest and principal due otherwise than by
acceleration and any applicable premium has been deposited with the Debt
Trustee) or (ii) a default in the covenant of ComEd not to declare or pay
dividends on, or make distributions with respect to, or redeem, purchase or
acquire any of its capital stock during an Extension Period. An Indenture Event
of Default also constitutes a Declaration Event of Default. The holders of
Preferred Securities in certain circumstances have the right to direct the
Property Trustee to exercise its rights as the holder of the Subordinated Notes.
See "Description of the Preferred Securities -- Declaration Events of Default"
and "-- Voting Rights."
BOOK-ENTRY AND SETTLEMENT
If distributed to holders of Preferred Securities in connection with
the voluntary or involuntary dissolution, winding-up or liquidation of the Trust
as a result of the occurrence of a Special Event, the Subordinated Notes will be
issued in the form of one or more global certificates (each, a "Global
Security") registered in the name of the depositary or its nominee. Except
under the limited circumstances described below, Subordinated Notes represented
by the Global Security will not be exchangeable for, and will not otherwise be
issuable as, Subordinated Notes in definitive form. The Global Securities
described above may not be transferred except by the depositary to a nominee of
the depositary or by a nominee of the depositary to the depositary or another
nominee of the depositary or to a successor depositary or its nominee.
The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
laws may impair the ability to transfer beneficial interests in such a Global
Security.
Except as provided below, owners of beneficial interests in such a
Global Security will not be entitled to receive physical delivery of
Subordinated Notes in definitive form and will not be considered the holders (as
defined in the Indenture) thereof for any purpose under the Indenture, and no
Global Security representing Subordinated Notes shall be exchangeable, except
for another Global Security of like denomination and tenor to be registered in
the name of the depositary or its nominee or to a successor depositary or its
nominee. Accordingly, each beneficial owner must rely on the procedures of the
depositary and, if such person is not a Participant, on the procedures of the
Participant through which such person owns its interest, to exercise any rights
of a Holder under the Indenture.
If Subordinated Notes are distributed to holders of Preferred
Securities in liquidation of such holders' interests in the Trust, DTC will act
as securities depositary for the Subordinated Notes. For a description of DTC
and the specific terms of the depository arrangements, see "Description of the
Preferred Securities -- Book-Entry Only Issuance -- The Depository Trust
Company." The description therein of DTC's book-entry system and DTC's
practices as they relate to purchases, transfers, notices and payments with
respect to the Preferred Securities apply in all material respects to any debt
obligations represented by one or more Global Securities held by DTC. ComEd may
appoint a successor to DTC or any successor depositary in the event DTC or such
successor depositary is unable or unwilling to continue as depositary.
None of ComEd, the Trust, the Debt Trustee, any paying agent and any
other agent of ComEd or the Debt Trustee will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests in a Global Security for such Subordinated
Notes or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
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A Global Security shall be exchangeable for Subordinated Notes
registered in the names of persons other than the depositary or its nominee only
if (i) the depositary notifies ComEd that it is unwilling or unable to continue
as a depositary for such Global Security and no successor depositary shall have
been appointed, or if at any time the depositary ceases to be registered or in
good standing under the Exchange Act (or other applicable statute or regulation)
at a time when the depositary is required to be so registered to act as such
depositary and no successor depositary shall have been appointed by ComEd within
90 days after ComEd receives such notice or becomes aware of such condition,
(ii) ComEd in its sole discretion determines that such Global Security shall be
so exchangeable or (iii) there shall have occurred an Event of Default with
respect to such Subordinated Notes. Any Global Security that is exchangeable
pursuant to the preceding sentence shall be exchangeable for Subordinated Notes
registered in such names as the depositary shall direct. It is expected that
such instructions will be based upon directions received by the depositary from
its Participants with respect to ownership of beneficial interests in such
Global Security.
In the event the Subordinated Notes are not represented by one or more
Global Securities, certificates evidencing Subordinated Notes may be presented
for registration of transfer (with the form of transfer endorsed thereon duly
executed) or exchange, at the office of the Note Registrar or at the office of
any transfer agent designated by ComEd for such purpose with respect to the
Subordinated Notes, without service charge and upon payment of any taxes and
other governmental charges as described in the Indenture. Such transfer or
exchange will be effected upon the Note Registrar or such transfer agent, as the
case may be, being satisfied with the documents of title and identity of the
person making the request. ComEd has appointed the Debt Trustee as Note
Registrar with respect to the Subordinated Notes. ComEd may at any time rescind
the designation of any such transfer agent or approve a change in the location
through which any such transfer agent acts, except that ComEd will be required
to maintain a transfer agent at the place of payment. ComEd may at any time
designate additional transfer agents with respect to the Subordinated Notes.
In the event of any redemption in part, ComEd shall not be required to
(i) issue, exchange or register the transfer of Subordinated Notes during a
period beginning at the opening of business 15 days before the day of the
mailing of a notice of redemption of less than all of the Subordinated Notes and
ending at the close of business on the date of such mailing and (ii) register
the transfer of or exchange any Subordinated Notes so selected for redemption,
in whole or in part, except the unredeemed portion of any Subordinated Notes
being redeemed in part.
PAYMENT AND PAYING AGENTS
Payment of principal of and premium (if any) on the Subordinated Notes
will be made only against surrender to the Paying Agent of the Subordinated
Notes. Principal of and any premium and interest, if any, on Subordinated Notes
will be payable, subject to any applicable laws and regulations, at the office
of such Paying Agent or Paying Agents as ComEd may designate from time to time,
except that at the option of ComEd payment of any interest may be made by check
mailed to the address of the person entitled thereto as such address shall
appear in the Note Register with respect to the Subordinated Notes. Payment of
interest on the Subordinated Notes on any Interest Payment Date will be made to
the person in whose name the Subordinated Note (or predecessor security) is
registered at the close of business on the Regular Record Date for such interest
payment.
The Debt Trustee will act as Paying Agent with respect to the
Subordinated Notes. ComEd may at any time designate additional Paying Agents or
rescind the designation of any Paying Agents or approve a change in the office
through which any Paying Agent acts, except that ComEd will be required to
maintain a Paying Agent at the place of payment.
All moneys paid by ComEd to a Paying Agent for the payment of the
principal of or premium or interest, if any, on the Subordinated Notes which
remain unclaimed at the end of two years after such principal, premium, if any,
or interest shall have become due and payable will be repaid to
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ComEd and the holder of such Subordinated Notes will thereafter look only to
ComEd for payment thereof.
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting ComEd and the Debt
Trustee, with the consent of the holders of not less than a majority in
principal amount of the Subordinated Notes, to modify the Indenture or any
supplemental indenture affecting that series or the rights of the holders of the
Subordinated Notes; provided that no such modification may, without the consent
of the holder of each outstanding Subordinated Note affected thereby, (i) extend
the fixed maturity of the Subordinated Notes, or reduce the principal amount
thereof, or reduce the rate or extend the time of payment of interest thereon,
or reduce any premium payable upon the redemption thereof, without the consent
of the holder of the Subordinated Notes so affected or (ii) reduce the
percentage of Subordinated Notes, the holders of which are required to consent
to any such supplemental indenture, without the consent of the holders of each
Subordinated Note then outstanding and affected thereby.
In addition, ComEd and the Debt Trustee may execute, without the
consent of holders of the Subordinated Notes, any supplemental indenture for
certain other usual purposes including the creation of any new series of
subordinated debt securities.
CONSOLIDATION, MERGER AND SALE
The Indenture does not contain any covenant which restricts the
Trust's or ComEd's ability to merge or consolidate with or into any other
corporation, sell or convey all or substantially all of its assets to any
person, firm or corporation or otherwise engage in restructuring transactions.
DEFEASANCE AND DISCHARGE
Under the terms of the Indenture, ComEd will be discharged from any
and all obligations in respect of the Subordinated Notes (except in each case
for certain obligations with respect to denominations and provisions for payment
of the Subordinated Notes and obligations to register the transfer or exchange
of Subordinated Notes, replace stolen, lost or mutilated Subordinated Notes,
maintain paying agencies and hold moneys for payment in trust) if ComEd (i)
deposits with the Debt Trustee, in trust, moneys or governmental obligations, in
an amount sufficient to pay all the principal of, and interest on, the
Subordinated Notes on the dates such payments are due in accordance with the
terms of such Subordinated Notes and (ii) delivers to the Debt Trustee an
opinion of counsel to the effect that, based upon ComEd's receipt from, or the
publication by, the Internal Revenue Service of a ruling or a change in law, the
holders of the Subordinated Notes will not recognize income, gain or loss for
United States federal income tax purposes as a result of the deposit, defeasance
and discharge and will be subject to United States federal income tax on the
same amount and in the same manner and at the same times as would have been the
case if such deposit, defeasance or discharge had not occurred.
GOVERNING LAW
The Indenture and the Subordinated Notes will be governed by, and
construed in accordance with, the internal laws of the State of New York.
INFORMATION CONCERNING THE DEBT TRUSTEE
The Debt Trustee, prior to default, undertakes to perform only such
duties as are specifically set forth in the Indenture and, after default, shall
exercise the same degree of care as a prudent individual would exercise in the
conduct of his or her own affairs. Subject to such provision,
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the Debt Trustee is under no obligation to exercise any of the powers vested in
it by the Indenture at the request of any holder of Subordinated Notes, unless
offered reasonable indemnity by such holder against the costs, expenses and
liabilities which might be incurred thereby; but the foregoing shall not relieve
the Debt Trustee, upon the occurrence of an Indenture Event of Default, from
exercising the rights and powers vested in it by the Indenture. The Debt Trustee
is not required to expand or risk its own funds or otherwise incur personal
financial liability in the performance of its duties if the Debt Trustee
reasonably believes that repayment or adequate indemnity is not reasonably
assured to it.
MISCELLANEOUS
ComEd will have the right at all times to assign any of its rights or
obligations under the Indenture to a direct or indirect wholly-owned subsidiary
of ComEd; provided that, in the event of any such assignment, ComEd will remain
liable for all of their obligations. Subject to the foregoing, the Indenture
will be binding upon and inure to the benefit of the parties thereto and their
respective successors and assigns. The Indenture provides that it may not
otherwise be assigned by the parties thereto.
The Indenture will provide that ComEd will pay all fees and expenses
related to (i) the offering of the Trust Securities and the Subordinated Notes,
(ii) the organization, maintenance and dissolution of the Trust, (iii) the
retention of the ComEd Trustees and (iv) the enforcement by the Property Trustee
of the rights of holders of Preferred Securities.
EFFECT OF OBLIGATIONS UNDER THE SUBORDINATED NOTES
AND THE PREFERRED SECURITIES GUARANTEE
As set forth in the Declaration, the sole purposes of the Trust are to
(i) issue Trust Securities, (ii) invest the proceeds thereof in the Subordinated
Notes and (iii) engage in only those other activities necessary or incidental
thereto.
As long as payments of interest and other payments are made when due
on the Subordinated Notes, such payments will be sufficient to cover
distributions and payments due on the Trust Securities primarily because (i) the
aggregate principal amount of Subordinated Notes will be equal to the sum of the
aggregate stated liquidation amount of the Trust Securities; (ii) the interest
rate and interest and other payment dates on the Subordinated Notes will match
the distribution rate and distribution and other payment dates for the Preferred
Securities; (iii) ComEd shall pay for all costs and expenses of the Trust; and
(iv) the Declaration provides that the ComEd Trustees shall not cause or permit
the Trust to, among other things, engage in any activity that is not consistent
with the purposes of the Trust.
Payments of distributions (to the extent funds therefor are available)
and other payments due on the Preferred Securities (to the extent funds therefor
are available) are guaranteed by ComEd as and to the extent set forth under
"Description of the Preferred Securities Guarantee". If ComEd does not make
interest payments on the Subordinated Notes purchased by the Trust, it is
expected that the Trust will not have sufficient funds to pay distributions on
the Preferred Securities. The Preferred Securities Guarantee is a full and
unconditional guarantee from the time of its issuance, but does not apply to any
payment of distributions unless and until the Trust has sufficient funds for the
payment of such distributions.
If ComEd fails to make interest or other payments on the Subordinated
Notes when due (taking into account any Extension Period), the Declaration
provides a mechanism whereby the holders of the Preferred Securities, using the
procedures described in "Description of the Preferred Securities -- Voting
Rights," may direct the Property Trustee to enforce its rights under the
Subordinated Notes, including proceeding directly against ComEd to enforce the
Subordinated Notes. If the Property
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Trustee fails to enforce its rights under the Subordinated Notes, a holder of
Preferred Securities may, after a period of 30 days has elapsed from such
holder's written request to the Property Trustee to enforce such rights,
institute a legal proceeding directly against ComEd to enforce the Property
Trustee's rights under the Subordinated Notes without first instituting any
legal proceeding against the Property Trustee or any other person or entity,
including the Trust.
If ComEd fails to make payments under the Preferred Securities
Guarantee, the Preferred Securities Guarantee provides a mechanism whereby the
holders of the Preferred Securities may direct the Preferred Guarantee Trustee
to enforce its rights thereunder. If the Preferred Guarantee Trustee fails to
enforce the Preferred Securities Guarantee, any holder of Preferred Securities
may institute a legal proceeding directly against ComEd to enforce the Preferred
Guarantee Trustee's rights under the Preferred Securities Guarantee, without
first instituting a legal proceeding against the Trust, the Preferred Guarantee
Trustee or any other person or entity.
The above mechanisms and obligations, taken together, are equivalent
to a full and unconditional guarantee by ComEd of payments due on the Preferred
Securities. See "Description of the Preferred Securities Guarantees --
General."
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of certain of the principal United States
federal income tax consequences of the purchase, ownership and disposition of
the Preferred Securities to a holder that is a citizen or resident of the United
States, a corporation, partnership or other entity created or organized under
the laws of the United States or any state thereof or the District of Columbia
or an estate or trust the income of which is subject to United States federal
income taxation regardless of source (a "Holder"). This summary does not
address the United States federal income tax consequences to persons other than
Holders.
This summary is based on the United States federal income tax laws,
regulations and rulings and decisions now in effect, all of which are subject to
change, possibly on a retroactive basis. This summary does not address the tax
consequences applicable to investors that may be subject to special tax rules
such as banks, thrifts, real estate investment trusts, regulated investment
companies, insurance companies, dealers in securities or currencies, tax-exempt
investors or persons that will hold the Preferred Securities as a position in a
"straddle," as part of a "synthetic security" or "hedge," as part of a
"conversion transaction" or other integrated investment or as other than a
capital asset. This summary also does not address the tax consequences to
persons that have a functional currency other than the U.S. dollar or the tax
consequences to shareholders, partners or beneficiaries of a Holder. Further,
it does not include any description of any alternative minimum tax consequences
or the tax laws of any state or local government or of any foreign government
that may be applicable to a Holder.
CLASSIFICATION OF COMED FINANCING
Sidley & Austin, counsel to ComEd and special counsel to the Trust, is
of the opinion that, under current law and assuming full compliance with the
terms of the Indenture and the Declaration (and certain other documents), the
Trust will be classified as a "grantor trust" for federal income tax purposes
and will not be classified as an association taxable as a corporation or a
partnership. Each Holder will be treated as owning an undivided beneficial
interest in the Subordinated Notes. Accordingly, each Holder will be required
to include in its gross income the original issue discount ("OID") accrued with
respect to its allocable share of Subordinated Notes. Investors should be aware
that the opinion of Sidley & Austin does not address any other issue and is not
binding on the Internal Revenue Service (the "Service") or the courts.
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ORIGINAL ISSUE DISCOUNT, PREMIUM AND MARKET DISCOUNT
Because of the option that ComEd has, under the terms of the
Subordinated Notes, to defer payments of interest by extending interest payment
periods for up to 20 quarters, the Subordinated Notes will be treated as issued
with OID in an amount equal to all of the stated interest payments on the
Subordinated Notes. Holders must include the OID attributable to the
Subordinated Notes in income on an economic accrual basis before the receipt of
cash attributable to the interest, regardless of their method of tax accounting.
The amount of OID that accrues in any month will approximately equal the amount
of the interest that accrues in that month at the stated interest rate. In the
event that the interest payment period is extended, Holders will continue to
accrue OID approximately equal to the amount of the interest payment due at the
end of the extended interest payment period on an economic accrual basis over
the length of the extended interest period. Corporate Holders will not be
entitled to a dividends-received deduction with respect to any income earned
with respect to the Preferred Securities.
To the extent a Holder acquires its Preferred Securities at a price
that is greater or less than the adjusted issue price of such Holder's share of
Subordinated Notes (which generally should approximate par plus accrued but
unpaid interest), the Holder will be deemed to have acquired its interest in the
Preferred Securities with acquisition premium or with market discount, as the
case may be. A Holder acquiring Preferred Securities at a premium will be
permitted to reduce the amount of OID required to be included in income to
reflect the acquisition premium. A Holder acquiring Preferred Securities at a
market discount will also include the amount of such discount in income in
accordance with the market discount rules described below.
A Holder acquiring Preferred Securities at a market discount generally
will be required to recognize ordinary income to the extent of accrued market
discount upon the retirement of the underlying Subordinated Notes or, to the
extent of any gain, upon the disposition of the Preferred Securities. Such
market discount would accrue ratably, or, at the election of the Holder, under a
constant yield method over the remaining term of the Subordinated Notes. A
Holder will also be required to defer the deduction of a portion of the interest
paid or accrued on indebtedness incurred to purchase or carry Preferred
Securities acquired with market discount. In lieu of the foregoing, a Holder
may elect to include market discount in income currently as it accrues on all
market discount instruments acquired by such Holder in the taxable year of the
election or thereafter, in which the interest deferral rule will not apply. A
Holder may elect, in lieu of applying the market discount or premium rules
described above, to account for all income under the Preferred Securities as if
it were OID.
RECEIPT OF SUBORDINATED NOTES UPON LIQUIDATION OF THE TRUST
Under certain circumstances, as described under the caption
"Description of the Preferred Securities -- Special Event Redemption or
Distribution," Subordinated Notes may be distributed to Holders in exchange for
the Preferred Securities and in liquidation of the Trust. Such a distribution
would be treated as a non-taxable event to each Holder and each Holder would
receive an aggregate tax basis in the Subordinated Notes equal to such Holder's
aggregate tax basis in the Preferred Securities. A Holder's holding period in
the Subordinated Notes so received in liquidation of the Trust would include the
period for which the Preferred Securities were held by such Holder.
SALE OF PREFERRED SECURITIES
A Holder that sells Preferred Securities will recognize gain or loss
equal to the difference between its adjusted tax basis in the Preferred
Securities and the amount realized on the sale. A Holder's adjusted tax basis
in the Preferred Securities generally will be its initial purchase price
increased by original issue discount previously includible in such Holder's
gross income to the date of
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disposition (and the accrual of market discount, if any) and decreased by
payments received on the Preferred Securities. Subject to the market discount
rules described above, any such gain or loss generally will be capital gain or
loss.
The Preferred Securities may trade at a price that does not accurately
reflect the value of accrued but unpaid interest with respect to the underlying
Subordinated Notes. A Holder disposing of its Preferred Securities between
record dates for payments of distributions thereon will be required to include
accrued but unpaid interest through the date of disposition in income as
ordinary income (i.e. OID), and to add such amount to its adjusted tax basis in
its Preferred Securities. To the extent the selling price is less than the
Holder's adjusted tax basis (which will include, in the form of OID, all accrued
but unpaid interest), a Holder will recognize a capital loss. Subject to
certain limited exceptions, capital losses cannot be applied to offset ordinary
income for United States federal income tax purposes.
FOREIGN INVESTORS
Subject to the discussion of backup withholding below, interest
(including OID) with respect to the Preferred Securities paid to a nonresident
alien individual, foreign corporation, foreign partnership or foreign estate or
trust will be exempt from U.S. withholding tax, provided that the holder
complies with applicable certification requirements (and does not actually or
constructively own ten percent or more of the voting stock of ComEd and is not a
controlled foreign corporation related to ComEd or its affiliates).
INFORMATION REPORTING TO HOLDERS
Subject to the qualifications discussed below, income on the Preferred
Securities will be reported to Holders on Form 1099, which forms should be
mailed to Holders of Preferred Securities by January 31 following each calendar
year.
The Trust will be obligated to report annually to Cede & Co., as
Holder of record of the Preferred Securities, the OID with respect to the
Preferred Securities that accrued during that year. The Trust currently intends
to report such information on Form 1099 prior to January 31 following each
calendar year even though the Trust is not legally required to report to record
Holders until April 15 following each calendar year. The Underwriters have
indicated to the Trust that, to the extent that they hold Preferred Securities
as nominees for beneficial Holders, they currently expect to report to such
beneficial Holders on Forms 1099 by January 31 following each calendar year.
Under current law, Holders of Preferred Securities who hold as nominees for
beneficial Holders will not have any obligation to report information regarding
the beneficial Holders to the Trust. The Trust, moreover, will not have any
obligation to report to beneficial Holders who are not also record holders.
Thus, beneficial Holders of Preferred Securities who hold their Preferred
Securities through the Underwriters will receive Forms 1099 reflecting the
income on their Preferred Securities from such nominee Holders rather than the
Trust.
BACKUP WITHHOLDING
Payments made on, and proceeds from the sale of, the Preferred
Securities may be subject to a "backup" withholding tax of 31% unless the Holder
complies with certain identification requirements. Any withheld amounts will be
allowed as a credit against the Holder's federal income tax, provided that
required information is provided to the Service.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR
GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S
PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO
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THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE
PREFERRED SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN
AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN FEDERAL OR OTHER TAX
LAWS.
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting
agreement (the "Underwriting Agreement"), the Trust has agreed to sell to each
of the underwriters named below (the "Underwriters"), and each of the
Underwriters, for whom Merrill Lynch, Pierce, Fenner & Smith Incorporated, Dean
Witter Reynolds Inc., A.G. Edwards & Sons, Inc., Furman Selz Incorporated,
PaineWebber Incorporated, Salomon Brothers Inc and Smith Barney Inc. are acting
as representatives (the "Representatives"), has severally agreed to purchase the
number of Preferred Securities set forth opposite its name below. In the
Underwriting Agreement, the several Underwriters have agreed, subject to the
terms and conditions set forth therein, to purchase all of the Preferred
Securities offered hereby if any of the Preferred Securities are purchased. In
the event of default by an Underwriter, the Underwriting Agreement provides
that, in certain circumstances, the purchase commitments of the nondefaulting
Underwriters may be increased or the Underwriting Agreement may be terminated.
NUMBER OF
UNDERWRITER PREFERRED SECURITIES
----------- --------------------
Merrill Lynch & Co.
Dean Witter Reynolds Inc.
A.G. Edwards & Sons, Inc.
Furman Selz Incorporated
PaineWebber Incorporated
Salomon Brothers Inc
Smith Barney Inc.
_______
Total............................
=======
The Underwriters propose to offer the Preferred Securities in part
directly to the public at the initial public offering price, as set forth on the
cover page of this Prospectus, and in part to certain securities dealers at such
price less a concession of $ ____ per Preferred Security. The Underwriters may
allow, and such dealers may reallow, a concession not in excess of $ ____ per
Preferred Security to certain brokers and dealers. After the Preferred
Securities are released for sale to the public, the offering price and other
selling terms may from time to time be varied by the Representative.
In view of the fact that the proceeds of the sale of the Preferred
Securities will be used to purchase the Subordinated Notes of ComEd, the
Underwriting Agreement provides that ComEd will agree to pay as compensation
("Underwriters' Compensation") to the Underwriters for the Underwriters'
arranging the investment therein of such proceeds, an amount in New York
Clearing House (next day) funds of $ ____ per Preferred Security (or $ ____ in
the aggregate) for the accounts of the several Underwriters, provided that such
compensation for sales of 10,000 or more Preferred Securities to any single
purchaser will be $ ____ per Preferred Security. Therefore, to the extent of
such sales, the actual amount of Underwriters' Compensation will be less than
the aggregate amount specified in the preceding sentence.
During a period of 30 days from the date of the pricing of the
Preferred Securities, neither the Trust nor ComEd will, without the prior
written consent of the Representatives, directly or indirectly, sell, offer to
sell, contract to sell, grant any option for the sale of, or otherwise dispose
of, any Preferred Securities, any security convertible into or exchangeable into
or exercisable for Preferred Securities or the Subordinated Notes or any debt
securities substantially similar to the Subordinated
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Notes or any equity securities substantially similar to the Preferred Securities
(except for any series of subordinated debt securities and the Preferred
Securities offered hereby).
An application will be filed with the New York Stock Exchange for the
listing of the Preferred Securities, subject to official notice of issuance. If
approved for listing, trading of the Preferred Securities on the New York Stock
Exchange is expected to commence within a 30 day period after the initial
delivery of the Preferred Securities. The Representatives have advised the Trust
that the Underwriters intend to make a market in the Preferred Securities prior
to the commencement of trading on the New York Stock Exchange. The Underwriters
will have no obligation to make a market in the Preferred Securities, however,
and may cease market making activities, if commenced, at any time.
Prior to this offering, there has been no public market for the
Preferred Securities. In order to meet one of the requirements for listing the
Preferred Securities on the New York Stock Exchange, the Underwriters will
undertake to sell lots of 100 or more Preferred Securities to a minimum of 400
beneficial holders.
ComEd and the Trust have agreed to indemnify the Underwriters against,
or to contribute to payments that the Underwriters may be required to make in
respect of, certain liabilities, including liabilities under the Securities Act.
Certain of the Underwriters engage in transactions with, and, from
time to time, have performed services for, ComEd in the ordinary course of
business.
It is expected that delivery of the Preferred Securities will be made
against payment therefor on or about the date specified in the last paragraph of
the cover page hereof, which is the fifth business day following the date
hereof. Under Rule 15c6-1 recently adopted by the Commission under the Exchange
Act, trades in the secondary market generally are required to settle in three
business days, unless the parties to any such trade expressly agree otherwise.
Accordingly, purchasers who wish to trade the Preferred Securities on the date
hereof or the next succeeding business day will be required, by virtue of the
fact that the Preferred Securities initially will settle in T+5, to specify
alternate arrangements to prevent a failed settlement.
LEGAL MATTERS
Certain matters of Delaware law relating to the validity of the
Preferred Securities will be passed upon on behalf of the Trust by Richards,
Layton & Finger, special Delaware counsel to the Trust. The validity of the
Subordinated Notes, the Preferred Securities Guarantee and certain matters
relating thereto will be passed upon on behalf of ComEd by Sidley & Austin,
Chicago, Illinois. Certain legal matters will be passed upon on behalf of the
Underwriters by their counsel. Certain United States federal income taxation
matters will be passed upon for ComEd and the Trust by Sidley & Austin.
EXPERTS
The financial statements and schedules included or incorporated by
reference in the 1994 Form 10-K Report, the January 27, 1995 Form 8-K Report,
the March 31, 1995 Form 10-Q Report and the June 30, 1995 Form 10-Q Report have
been audited by Arthur Andersen LLP, independent certified public accountants,
as indicated in their reports with respect thereto, and are incorporated herein
in reliance upon the authority of said firm as experts in accounting and
auditing in giving said reports. Reference is made to said reports included or
incorporated by reference in the 1994 Form 10-K Report and the January 27, 1995
Form 8-K Report, each of which includes an explanatory paragraph with respect to
a change in the method of accounting for postretirement health care benefits and
income taxes, as discussed in Notes 13 and 14 to the financial statements,
respectively.
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DEFINITIONS
<TABLE>
<CAPTION>
TERM PAGE
---- ----
<S> <C>
Additional Interest.................................................... 31
Base Indenture......................................................... 27
Beneficial Owner....................................................... 22
Business Day........................................................... 15
Change in 1940 Act Law................................................. 16
ComEd.................................................................. 1
ComEd Trustees......................................................... 8
Commission............................................................. 3
Common Securities...................................................... 1
Common Securities Guarantee............................................ 25
Company................................................................ 1
DTC.................................................................... 22
Debt Trustee........................................................... 27
Declaration............................................................ 8
Declaration Event of Default........................................... 19
Direct Participants.................................................... 22
Dissolution Tax Opinion................................................ 16
distributions.......................................................... 2
Exchange Act........................................................... 3
Extension Period....................................................... 2
Fuel Matters Settlement................................................ 11
Global Security........................................................ 32
Guarantee Payments..................................................... 25
Holder................................................................. 36
ICC.................................................................... 10
Indenture.............................................................. 27
Indenture Event of Default............................................. 19
Indirect Participants.................................................. 22
Interest Payment Date.................................................. 30
Investment Company Event............................................... 16
January 27, 1995 Form 8-K Report....................................... 3
June 30, 1995 Form 10-Q Report......................................... 3
Liquidation Distribution............................................... 18
March 31, 1995 Form 10-Q Report........................................ 3
New York Stock Exchange................................................ 1
1940 Act............................................................... 16
1994 Form 10-K Report.................................................. 3
No Recognition Opinion................................................. 16
OID.................................................................... 36
Participants........................................................... 22
Payment................................................................ 27
Preferred Guarantee Trustee............................................ 9
Preferred Securities................................................... 1
Preferred Securities Guarantee......................................... 2
Property Account....................................................... 9
Property Trustee....................................................... 8
Rate Matters Settlement................................................ 11
Rate Order............................................................. 12
Redemption Price....................................................... 2
Redemption Tax Opinion................................................. 17
Registration Statement................................................. 3
Regular Trustees....................................................... 8
Remand Order........................................................... 11
Representative......................................................... 39
Securities Act......................................................... 3
Senior Indebtedness.................................................... 28
Service................................................................ 36
Special Event.......................................................... 16
Sponsor................................................................ 8
Successor Securities................................................... 21
Subordinated Notes..................................................... 1
Super-Majority......................................................... 19
Supreme Court.......................................................... 10
Tax Event.............................................................. 16
Trust.................................................................. 1
Trust Act.............................................................. 9
Trust Indenture Act.................................................... 8
Trust Securities....................................................... 1
Underwriters........................................................... 39
Underwriters' Compensation............................................. 39
Underwriting Agreement................................................. 39
</TABLE>
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================================================================================
No dealer, salesperson or other individual has been authorized to give any
information or to make any representation other than those contained or
incorporated by reference in this Prospectus in connection with the offer made
by this Prospectus and, if given or made, such information or representations
must not be relied upon as having been authorized by Commonwealth Edison
Company, ComEd Financing I or the Underwriters. Neither the delivery of this
Prospectus nor any sale made hereunder shall under any circumstance create an
implication that there has been no change in the affairs of Commonwealth Edison
Company or ComEd Financing I, since the date hereof. This Prospectus does not
constitute an offer or solicitation by anyone in any state in which such offer
or solicitation is not authorized or in which the person making such offer or
solicitation is not qualified to do so or to anyone to whom it is unlawful to
make such offer or solicitation.
---------------------
TABLE OF CONTENTS
Prospectus
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information.................... 3
Incorporation of Certain Documents by
Reference.............................. 3
Prospectus Summary....................... 4
Risk Factors............................. 5
Commonwealth Edison Company.............. 8
ComEd Financing I........................ 8
Selected Financial Information........... 9
Capitalization of ComEd.................. 13
Accounting Treatment..................... 13
Use of Proceeds.......................... 14
Description of the Preferred Securities.. 14
Description of the Preferred Securities
Guarantee.............................. 24
Description of the Subordinated Notes.... 27
Effect of Obligations Under the
Subordinated Notes and the Preferred
Securities Guarantee................... 35
Certain Federal Income Tax Consequences.. 36
Underwriting............................. 39
Legal Matters............................ 40
Experts.................................. 40
Definitions.............................. 41
</TABLE>
8,000,000
PREFERRED SECURITIES
COMED FINANCING I
____% TRUST ORIGINATED
PREFERRED SECURITIES(SM) ("TOPrS(SM)")
GUARANTEED TO THE EXTENT SET
FORTH HEREIN BY
COMMONWEALTH EDISON COMPANY
_____________________
P R O S P E C T U S
_____________________
MERRILL LYNCH & CO.
DEAN WITTER REYNOLDS INC.
A.G. EDWARDS & SONS, INC.
FURMAN SELZ INCORPORATED
PAINEWEBBER INCORPORATED
SALOMON BROTHERS INC
SMITH BARNEY INC.
SEPTEMBER , 1995
================================================================================
<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<TABLE>
<CAPTION>
<S> <C>
Securities and Exchange Commission filing fee........... $ 68,966
New York Stock Exchange listing fee..................... 58,300
Rating Agency fees...................................... 120,000
Trustees' expenses...................................... 35,000
Printing and engraving fees............................. 70,000
Accounting fees and expenses............................ 25,000
Legal fees and expenses................................. 100,000
Miscellaneous........................................... 22,734
--------
Total................................................... $500,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Certain provisions of the Illinois Business Corporation Act of 1983
(the "BCA") provide that ComEd may, and in some circumstances must, indemnify
the directors and officers of ComEd and of each subsidiary company against
liabilities and expenses incurred by any such person by reason of the fact that
such person was serving in such capacity, subject to certain limitations and
conditions set forth in the statute. ComEd's By-laws provide that ComEd will
indemnify its directors and officers, and any person serving as a director or
officer of another business entity at ComEd's request, to the extent permitted
by the statute. In addition, ComEd's Restated Articles of Incorporation
provide, as permitted by the BCA, that directors shall not be personally liable
for monetary damages for breach of fiduciary duty as a director, except (i) for
breaches of their duty of loyalty to ComEd or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 8.65 of the BCA, and (iv) for transactions
from which a director derived an improper personal benefit.
ComEd has purchased liability insurance policies which indemnify
ComEd's directors and officers, the directors and officers of subsidiaries of
ComEd, the trustees of the Service Annuity Funds, and officers of ComEd serving
as directors and officers on behalf of ComEd with certain other entities,
against loss arising from claims by reason of their legal liability for acts as
such directors, officers or trustees, subject to certain limitations and
conditions set forth in the policies.
ComEd indemnifies assistant officers and certain other employees
against liabilities and expenses incurred by reason of acts performed in
connection with the operations of the various employee benefit systems of ComEd
and its subsidiaries.
The Declaration of Trust provides that no Regular Trustee, affiliate
of any Regular Trustee, or any officers, directors, shareholders, members,
partners, employees, representatives, or agents of any Regular Trustee, or any
employee or agent of the Trust or its affiliates (each an "Indemnified Person")
shall be liable, responsible or accountable in damages or otherwise to the Trust
or any employee or agent of the trust or its affiliates for any loss, damage or
claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by the Declaration or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's gross negligence or willful
misconduct with respect to such act or omission. The Declaration of Trust also
provides that, to the fullest extent permitted by applicable law, ComEd shall
indemnify and hold harmless each Indemnified Person from and against any loss,
damage or claim incurred by such Indemnified Person by reason of any act or
omission performed or omitted by such Indemnified Person in good faith on behalf
of the Trust and in a manner such Indemnified Person
S-1
<PAGE>
reasonably believed to be within the scope of authority conferred on such
Indemnified Person by such Declaration, except that no Indemnified Person
shall be entitled to be indemnified in respect of any loss, damage or claim
incurred by such Indemnified Person by reason of gross negligence or willful
misconduct with respect to such act or omission. The Declaration of Trust
further provides that, to the fullest extent permitted by applicable law,
expenses (including legal fees) incurred by an Indemnified Person in defending
any claim, demand, action, suit or proceeding shall, from time to time, be
advanced by ComEd prior to the final disposition of such claim, demand, action,
suit or proceeding upon receipt by ComEd of an undertaking by or on behalf of
the Indemnified Person to repay such amount if it shall be determined that the
Indemnified Person is not entitled to be indemnified for the underlying cause of
action as authorized by such Declaration.
ITEM 16. EXHIBITS.
The following exhibits are filed herewith. Documents indicated by an
asterisk (*) have been previously filed.
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------- ------------------------------------------------------------
*(1) Form of underwriting agreement for offering of Preferred Securities.
*(4)-1 Certificate of Trust of the Trust.
*(4)-2 Form of Amended and Restated Declaration of Trust.
*(4)-3 Form of Indenture between ComEd and Wilmington Trust Company, as
Trustee.
*(4)-4 Form of Supplemental Indenture to Indenture to be used in connection
with the issuance of Subordinated Notes.
*(4)-5 Form of Preferred Security (included in (4)-2).
*(4)-6 Form of Subordinated Note Security (included in (4)-4).
*(4)-7 Form of Preferred Securities Guarantee.
*(5)-1 Opinion re legality of Preferred Securities.
*(5)-2 Opinion re legality of Subordinated Notes and the Preferred
Securities Guarantee.
*(8) Opinion re tax matters.
*(12) Statement re Computation of Ratios of Earnings to Fixed Charges and
Ratios of Earnings to Fixed Charges and Preferred and Preference Stock
Dividend Requirements.
*(23)-1 Consent of Richards, Layton & Finger (included in (5)-1).
*(23)-2 Consent of Sidley & Austin (included in (5)-2).
(23)-3 Consent of Experts.
*(24) Powers of attorney of Directors whose names are signed to this
registration statement pursuant to such powers.
*(25)-1 Statement of Eligibility of Property Trustee.
S-2
<PAGE>
*(25)-2 Statement of Eligibility of Debt Trustee.
*(25)-3 Statement of Eligibility of Preferred Guarantee Trustee.
*(27) Financial Data Schedule.
ITEM 17. UNDERTAKINGS.
THE UNDERSIGNED REGISTRANTS HEREBY UNDERTAKE:
(1) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to section
13(a) or section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(2) That for purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrants pursuant to Rule 424(b)(1) or (4) under
the Securities Act of 1933 shall be deemed to be part of this registration
statement as of the time it was declared effective.
(3) That for purposes of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrants pursuant to the provisions described in Item 15, or
otherwise, the registrants have been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by a
registrant of expenses incurred or paid by a director, officer or controlling
person of such registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, such registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
The undersigned Trust registrant hereby undertakes to provide to the
underwriters at the closing specified in the underwriting agreement certificates
in such denominations and registered in such names as required by the
underwriters to permit prompt delivery to each purchaser.
S-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Commonwealth
Edison Company certifies that it has reasonable grounds to believe that it meets
all the requirements for filing on Form S-3 and has duly caused this amendment
no. 1 to its registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Chicago, and State of
Illinois, on this 8th day of September, 1995.
COMMONWEALTH EDISON COMPANY
By James J. O'Connor
-------------------------------------
James J. O'Connor, Chairman and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this amendment
no. 1 to the registration statement has been signed below by the following
persons in the capacities indicated on this 8th day of September, 1995.
Signature Title
--------- -----
James J. O'Connor Chairman and Chief Executive
--------------------------------------
James J. O'Connor Officer and Director
(principal executive officer)
John C. Bukovski Vice President
--------------------------------------
John C. Bukovski (principal financial officer)
Roger F. Kovack Comptroller
--------------------------------------
Roger F. Kovack (principal accounting officer)
Jean Allard* Director
James W. Compton* Director
Sue L. Gin* Director
Donald P. Jacobs* Director
Edgar D. Jannotta* Director
George E. Johnson* Director
Edward A. Mason* Director
Frank A. Olson* Director
Samuel K. Skinner* President and Director
*By David A. Scholz
--------------------------------------
David A. Scholz, Attorney-in-fact
S-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, ComEd Financing
I certifies that is has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amendment no. 1 to
its registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Chicago, State of Illinois, on the 8th
day of September, 1995.
COMED FINANCING I
By John C. Bukovski
------------------------------
John C. Bukovski
Trustee
By Dennis F. O'Brien
------------------------------
Dennis F. O'Brien
Trustee
WILMINGTON TRUST COMPANY, as Trustee
By ______________________________
[Name]
[Title]
S-5
<PAGE>
EXHIBIT INDEX
The following exhibits are filed herewith. Documents indicated by an asterisk
(*) have been previously filed.
Exhibit
Number Description of Document
------ ----------------------------------------------------------------------
*(1) Form of underwriting agreement for offering of Preferred Securities.
*(4)-1 Certificate of Trust of the Trust.
*(4)-2 Form of Amended and Restated Declaration of Trust.
*(4)-3 Form of Indenture between ComEd and Wilmington Trust Company, as
Trustee.
*(4)-4 Form of Supplemental Indenture to Indenture to be used in connection
with the issuance of Subordinated Notes.
*(4)-5 Form of Preferred Security (included in (4)-2).
*(4)-6 Form of Subordinated Note Security (included in (4)-4).
*(4)-7 Form of Preferred Securities Guarantee.
*(5)-1 Opinion re legality of Preferred Securities.
*(5)-2 Opinion re legality of Subordinated Notes and the Preferred Securities
Guarantee.
*(8) Opinion re tax matters.
*(12) Statement re Computation of Ratios of Earnings to Fixed Charges and
Ratios of Earnings to Fixed Charges and Preferred and Preference
Stock Dividend Requirements.
*(23)-1 Consent of Richards, Layton & Finger (included in (5)-1).
*(23)-2 Consent of Sidley & Austin (included in (5)-2).
(23)-3 Consent of Experts.
*(24) Powers of attorney of Directors whose names are signed to this
registration statement pursuant to such powers.
*(25)-1 Statement of Eligibility of Property Trustee.
*(25)-2 Statement of Eligibility of Debt Trustee.
*(25)-3 Statement of Eligibility of Preferred Guarantee Trustee.
*(27) Financial Data Schedule.
<PAGE>
Exhibit (23)-3
Commonwealth Edison Company
Amendment No. 1 to Form S-3
File No. 33-61343
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this Amendment No. 1 to Form S-3 Registration Statement of
our reports dated January 27, 1995, included or incorporated by reference in
Commonwealth Edison Company's Annual Report on Form 10-K for the year ended
December 31, 1994; our report dated May 9, 1995, included in Commonwealth Edison
Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31,
1995 and our report dated August 8, 1995, included in Commonwealth Edison
Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30,
1995. We also hereby consent to all references to our Firm included in this
Amendment No. 1 to Form S-3 Registration Statement.
ARTHUR ANDERSEN LLP
Chicago, Illinois
September 8, 1995
