<PAGE>
Filed Pursuant to Rule 424(b)(5)
Registration No. 33-51379
PROSPECTUS SUPPLEMENT BOOK-ENTRY ONLY
(To Prospectus Dated January 6, 1997)
$300,000,000
COMMONWEALTH EDISON COMPANY
$150,000,000 7.375% NOTES DUE JANUARY 15, 2004
$150,000,000 7.625% NOTES DUE JANUARY 15, 2007
Interest on the 2004 Notes and the 2007 Notes offered hereby (collectively,
the "Offered Notes") is payable semiannually on January 15 and July 15,
beginning July 15, 1997. The Offered Notes will not be redeemable prior to
maturity. See "Description of the Offered Notes" herein.
The Offered Notes will be registered in the name of Cede & Co., as registered
owner and as nominee for The Depository Trust Company ("DTC"), New York, New
York. Beneficial interests in the Offered Notes will be shown on, and
transfers will be effected only through, records maintained by DTC (with
respect to its participants' interests) and its participants. Except as
described herein, Offered Notes will not be issued in certificated form.
Settlement for the Offered Notes will be made in immediately available funds.
The Offered Notes will trade in DTC's Same-Day Funds Settlement System until
maturity, and secondary market trading activity for the Offered Notes will
therefore settle in immediately available funds. All payments of principal and
interest will be made by Commonwealth Edison Company ("ComEd") in immediately
available funds. See "Description of the Offered Notes" herein.
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 SUPPLEMENT OR THE PROSPECTUS TO WHICH
IT RELATES. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- -------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT COMPANY(1)(2)
Per 2004 Note........................... 99.809% .625% 99.184%
Total................................... $149,713,500 $937,500 $148,776,000
Per 2007 Note........................... 99.908% .650% 99.258%
Total................................... $149,862,000 $975,000 $148,887,000
- --------------------------------------------------------------------------------
</TABLE>
(1) Plus accrued interest, if any, from January 9, 1997.
(2) Before deducting expenses payable by ComEd estimated to be $400,000.
The Offered Notes are offered subject to receipt and acceptance by the
Underwriters, to prior sale and to the Underwriters' right to reject any order
in whole or in part and to withdraw, cancel or modify the offer without
notice. It is expected that delivery of the Offered Notes will be made through
the facilities of DTC on or about January 9, 1997.
SALOMON BROTHERS INC
MERRILL LYNCH & CO.
PAINEWEBBER INCORPORATED
The date of this Prospectus Supplement is January 6, 1997.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OF THE SECURITIES
OFFERED HEREBY AT LEVELS ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
DESCRIPTION OF THE OFFERED NOTES
The following description of the particular terms of the Offered Notes
supplements, and to the extent inconsistent therewith replaces, the
description of the general terms and provisions of Notes set forth in the
Prospectus, to which description reference is hereby made. Capitalized terms
not defined herein have the meanings assigned to such terms in the Prospectus.
GENERAL.
The Offered Notes will be issued in two series of Notes under ComEd's
Indenture dated as of September 1, 1987, as amended and supplemented, and as
further supplemented by a Supplemental Indenture to be dated January 1, 1997,
creating the Offered Notes. The Offered Notes will bear interest at the rates
per annum, and will be due and payable on the dates, specified in their
respective titles on the cover page of this Prospectus Supplement.
The Offered Notes will be issued only in fully registered form and, when
issued, will be registered in the name of Cede & Co., as registered owner and
as nominee for DTC. DTC will act as securities depository for the Offered
Notes. Purchases of beneficial interests in the Offered Notes will be made in
book-entry form only, in denominations of $1,000 or any integral multiple
thereof. Purchasers of such beneficial interests will not receive certificates
representing their beneficial interests in the Offered Notes. See "Book-Entry
Notes" below. No service charge will be made for any transfer or exchange of
Offered Notes, but ComEd may require payment of a sum sufficient to cover any
tax or other governmental charges that may be imposed in connection therewith.
Principal and interest payments on the Offered Notes will be made by ComEd
to Cede & Co. (as nominee of DTC) so long as Cede & Co. is the registered
owner. Disbursement of such payments to the DTC Participants is the
responsibility of DTC, and disbursement of such payments to the beneficial
owners of the Offered Notes is the responsibility of DTC Participants and
Indirect Participants, all as described below under "Book-Entry Notes."
The Offered Notes will not be redeemable prior to maturity and will not be
subject to any sinking fund.
BOOK-ENTRY NOTES.
DTC will act as securities depository for the Offered Notes. The Offered
Notes will be issued as fully-registered securities registered in the name of
Cede & Co., DTC's partnership nominee, and will be deposited with DTC.
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 Securities
Exchange Act of 1934, as amended. DTC holds securities that its participants
("DTC Participants") deposit with DTC. DTC also facilitates the settlement
among DTC Participants of securities transactions, such as transfers and
pledges, in deposited securities through electronic computerized book-entry
changes in DTC Participants' accounts, thereby eliminating the need for
physical movement of securities
S-2
<PAGE>
certificates. DTC Participants include securities brokers and dealers, banks,
trust companies, clearing corporations and certain other organizations. DTC is
owned by a number of the DTC Participants and by the New York Stock Exchange,
Inc., 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 DTC Participant, either
directly or indirectly ("Indirect Participants"). The rules applicable to DTC
and the DTC Participants are on file with the Securities and Exchange
Commission.
Purchases of beneficial ownership interests in the Offered Notes under the
DTC system must be made by or through DTC Participants, which will receive a
credit for the Offered Notes on DTC's records. The ownership interest of each
beneficial owner of an Offered Note (a "Beneficial Owner") is in turn to be
recorded on the DTC Participants' and Indirect Participants' records.
Beneficial Owners will not receive written confirmation from DTC of their
purchase, but Beneficial Owners are expected to receive written confirmations
providing details of the transaction, as well as periodic statements of their
holdings, from the DTC Participant or Indirect Participant through which the
Beneficial Owner entered into the transaction. Transfers of beneficial
ownership interests in the Offered Notes are to be accomplished by entries made
on the books of DTC Participants acting on behalf of Beneficial Owners.
Beneficial Owners will not receive certificates representing their beneficial
ownership interests in the Offered Notes, except in the event that use of the
book-entry only system for the Offered Notes is discontinued as described
below.
To facilitate subsequent transfers, all Offered Notes deposited by DTC
Participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of Offered Notes 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 Offered Notes. DTC's records
reflect only the identity of the DTC Participants to whose accounts such
Offered Notes are credited, which may or may not be the Beneficial Owners. The
DTC Participants will remain responsible for keeping account of their holdings
on behalf of their customers.
Conveyance of notices and other communications by DTC to DTC Participants, by
DTC Participants to Indirect Participants, and by DTC Participants and Indirect
Participants to 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.
Neither DTC nor Cede & Co. will consent or vote with respect to the Offered
Notes. Under its usual procedures, DTC mails an "Omnibus Proxy" to ComEd as
soon as possible after the record date. The "Omnibus Proxy" assigns Cede &
Co.'s consenting or voting rights to those DTC Participants to whose accounts
the Offered Notes are credited on the record date identified in a listing
attached to the "Omnibus Proxy."
Principal and interest payments on the Offered Notes will be made to DTC.
DTC's practice is to credit DTC Participants' accounts on a payment date in
accordance with their respective holdings shown on DTC's records unless DTC has
reason to believe that it will not receive payment on a payment date. Payments
by DTC Participants to Beneficial Owners will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers in bearer form or registered in "street name,"
and will be the responsibility of such DTC Participant and not of DTC, the
Indenture Trustee or ComEd, subject to any statutory or regulatory requirements
as may be in effect from time to time. Payments of principal and interest to
DTC is the responsibility of the Indenture Trustee. Disbursement of such
payments to DTC Participants shall be the responsibility of DTC and
disbursement of such payments to the Beneficial Owners shall be the
responsibility of the DTC Participants and Indirect Participants.
If DTC is at any time unwilling or unable to continue as securities
depository and a successor depository is not appointed by ComEd within 90 days
after notice of such condition, ComEd will issue
S-3
<PAGE>
Offered Notes in certificated form in exchange for each Offered Note issued in
book-entry form. In addition, ComEd may at any time determine that Offered
Notes will not be represented by book-entry notes, and, in such event, will
issue Offered Notes in certificated form in exchange for all Offered Notes
then issued in book-entry form. In any such instance, an owner of book-entry
notes will be entitled to physical delivery in certificated form of Offered
Notes equal in principal amount to such book-entry notes and to have such
Offered Notes registered in such owner's name. Offered Notes so issued in
certificated form will be issued in denominations of $1,000 and integral
multiples of $1,000 in excess thereof and will be issued in registered form
only, without coupons.
The information provided immediately above under this caption has been
prepared from information provided by DTC. No representation is made by ComEd
or the Underwriters as to the accuracy or adequacy of such information or as
to the absence of material adverse changes in such information subsequent to
the date hereof.
For so long as the Offered Notes are registered in the name of DTC or its
nominee, Cede & Co., ComEd and the Indenture Trustee will recognize only DTC
or its nominee, Cede & Co., as the registered owner of the Offered Notes for
all purposes, including payments, notices and voting.
ComEd shall not have any responsibility or obligation with respect to the
accuracy of the records of DTC, its nominee or any DTC Participant or Indirect
Participant relating to any beneficial ownership interest in any Offered Note
or with respect to the payment to any DTC Participant or Indirect Participant
or any other person, other than a registered owner of an Offered Note, of any
amount with respect to the principal of, or interest on, any Offered Note.
SAME-DAY SETTLEMENT AND PAYMENT.
Settlement for the Offered Notes will be made by the Underwriters in
immediately available funds. All payments of principal and interest on the
Offered Notes will be made by ComEd in immediately available funds.
Secondary trading in long-term bonds and notes of corporate issuers is
generally settled in clearing-house or next-day funds. In contrast, the
Offered Notes will trade in DTC's Same-Day Funds Settlement System until
maturity, and secondary market trading activity in the Offered Notes will
therefore be required by DTC to settle in immediately available funds. No
assurance can be given as to the effect, if any, of settlement in immediately
available funds on trading activity in the Offered Notes.
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting agreement
(the "Underwriting Agreement") between ComEd and Salomon Brothers Inc, as
representative of the several underwriters named therein (the "Underwriters"),
ComEd has agreed to sell to each of the Underwriters, and each of the
Underwriters has severally agreed to purchase, the principal amounts of the
Offered Notes set forth after its name below. The Underwriting Agreement
provides that the obligations of the Underwriters are subject to certain
conditions precedent and that the Underwriters will be obligated to purchase
all of the Offered Notes if any are purchased.
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT OF AMOUNT OF
UNDERWRITER 2004 NOTES 2007 NOTES
- ----------- ------------ ------------
<S> <C> <C>
Salomon Brothers Inc................................. $ 50,000,000 $ 50,000,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated................................. 50,000,000 50,000,000
PaineWebber Incorporated............................. 50,000,000 50,000,000
------------ ------------
$150,000,000 $150,000,000
============ ============
</TABLE>
S-4
<PAGE>
The Underwriters have advised ComEd that they propose initially to offer the
Offered Notes to the public at the public offering price set forth on the
cover page of this Prospectus Supplement, and to certain dealers at such price
less a concession not in excess of .375 of 1% and .400 of 1% of the principal
amount of the 2004 Notes and the 2007 Notes, respectively. The Underwriters
may allow and such dealers may reallow a discount not in excess of .25 of 1%
of the principal amount of the 2004 Notes and the 2007 Notes to certain other
dealers. After the initial public offering, the public offering price,
concession and discount may be changed.
ComEd has agreed to indemnify the several Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended, or to contribute with respect to payments which such Underwriters may
be required to make in respect thereof.
ComEd does not intend to apply for listing of the Offered Notes on a
national securities exchange. Each Underwriter may make a market in the
Offered Notes, but such Underwriter is not obligated to do so and may
discontinue market-making at any time without notice. No assurances can be
given as to the liquidity of, or that there will be a secondary market for,
the Offered Notes.
The Underwriters and their affiliates engage or may in the future engage in
transactions with and perform services for ComEd and certain of its affiliates
in the ordinary course of business.
S-5
<PAGE>
COMMONWEALTH EDISON COMPANY
DEBT SECURITIES
CUMULATIVE PREFERENCE STOCK
Commonwealth Edison Company ("ComEd") may offer, from time to time, not to
exceed $805,000,000 aggregate initial offering price of its (i) Debt
Securities (the "Debt Securities"), consisting of First Mortgage Bonds (the
"Bonds"), in one or more series, and Notes (the "Notes"), in one or more
series, and (ii) Cumulative Preference Stock, without par value (the "New
Cumulative Preference Stock"), in one or more series. The Debt Securities and
New Cumulative Preference Stock (together, the "Securities") may be offered
separately or together, in separate series, in amounts, at prices and on terms
to be determined at the time or times of sale. The Bonds will be issued under,
and secured by, a mortgage which constitutes a lien on substantially all of
the properties and franchises of ComEd. The Notes will be unsecured, and the
indenture under which they are to be issued contains no limitations on the
issuance by ComEd of other indebtedness (whether secured or unsecured).
For each offering of Bonds (the "Offered Bonds") or Notes (the "Offered
Notes") for which this Prospectus is being delivered, there is an accompanying
Prospectus Supplement (the "Prospectus Supplement") that sets forth the
specific designation, aggregate principal amount, maturity or maturities, rate
or rates and times of payment of interest, sinking fund provisions, redemption
terms and any other special terms of the Offered Bonds or the Offered Notes,
as the case may be, and any planned listing thereof on a securities exchange
(although no assurance can be given as to the liquidity of, or the trading
market for, any of the Debt Securities). For each offering of New Cumulative
Preference Stock for which this Prospectus is being delivered (the "Offered
Preference"), there is an accompanying Prospectus Supplement that sets forth
the number of shares, public offering price, dividend rate (or method of
calculation thereof), redemption and sinking fund terms and any other special
terms of the Offered Preference, as well as any planned listing thereof on a
securities exchange (although no assurance can be given as to the liquidity
of, or the trading market for, any shares of the New Cumulative Preference
Stock).
ComEd may sell the Securities to or through underwriters or dealers,
directly to other purchasers or through agents. The names of any underwriters,
dealers or agents involved in the distribution of the Offered Bonds, the
Offered Notes or the Offered Preference, as the case may be (the "Offered
Securities"), any applicable discounts, commissions or allowances, any initial
public offering price and the proceeds to ComEd from the sale of the Offered
Securities are set forth in the Prospectus Supplement. See "Plan of
Distribution" herein.
----------------
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 COMMIS-
SION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------------
The date of this Prospectus is January 6, 1997.
<PAGE>
THE 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 eight million as of December 31, 1995 and 1994. It includes the
city of Chicago, an area of about 225 square miles with an estimated
population of approximately three million from which ComEd derived
approximately one-third of its ultimate consumer revenues in the twelve months
ended September 30, 1996. ComEd had approximately 3.4 million electric
customers as of September 30, 1996. ComEd's principal executive offices are
located at 37th Floor, 10 South Dearborn Street, Post Office Box 767, Chicago,
IL 60690-0767, and its telephone number is 312/394-4321.
AVAILABLE INFORMATION
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 94101, the securities exchanges on
which certain of ComEd's securities are listed. ComEd is also subject to the
electronic filing requirements of the Commission. Accordingly, pursuant to the
rules and regulations of the Commission, certain documents, including annual
and quarterly reports and information statements, filed by ComEd with the
Commission have been filed electronically. The Commission also maintains a
World Wide Web site that contains reports, proxy and information statements
and other information regarding registrants (including ComEd) that file
electronically with the Commission at (http://www.sec.gov.). ComEd has filed
with the Commission a Registration Statement on Form S-3 under the Securities
Act of 1933, as amended, with respect to the Securities. This Prospectus does
not contain all of the information set forth in such Registration Statement,
certain parts of which are omitted in accordance with the rules and
regulations of the Commission. For further information, reference is made to
such Registration Statement.
INCORPORATION OF CERTAIN INFORMATION 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,
1995 (the "1995 Form 10-K Report");
(ii) ComEd's Quarterly Reports on Form 10-Q for the quarterly periods
ended March 31, 1996 (the "March 31, 1996 Form 10-Q Report"), June 30, 1996
(the "June 30, 1996 Form 10-Q Report") and September 30, 1996 (the
"September 30, 1996 Form 10-Q Report"); and
(iii) ComEd's Current Reports on Form 8-K dated January 26, 1996,
February 20, 1996, March 14, 1996 and September 19, 1996, and on Form 8-
K/A-1 dated March 14, 1996.
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 or offerings made by this Prospectus, shall be
deemed to be incorporated in this Prospectus by reference and to
2
<PAGE>
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 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, Post Office
Box 767, Chicago, IL 60690-0767 (telephone number 312/394-3126).
SUMMARY INFORMATION
The following summary information is qualified in its entirety by the
information appearing elsewhere in this Prospectus and by the information and
financial statements appearing in the documents incorporated in this Prospectus
by reference.
THE OFFERING
<TABLE>
<S> <C>
Issue.................... Not to exceed $805,000,000 aggregate initial offering
price of Securities, consisting of Bonds, Notes and
New Cumulative Preference Stock
Terms of Debt Securities. To be determined at time or times of sale
Terms of New Cumulative
Preference Stock........ To be determined at time or times of sale
Use of Proceeds.......... For general corporate purposes of ComEd, including to
discharge or refund outstanding long-term debt and
preference stock of ComEd
</TABLE>
COMMONWEALTH EDISON COMPANY
<TABLE>
<S> <C>
Estimated Population of Service Area............................... 8,000,000
Customers (as of September 30, 1996)............................... 3,398,000
Sales (thousands of kilowatthours-12 months ended September 30,
1996)............................................................. 89,470,000
Net Electric Generating Capability, net of summer limitations
(kilowatts)....................................................... 21,965,000
Fuel Sources of Kilowatthour Generation (12 months ended September
30, 1996):
Nuclear........................................................... 70%
Coal.............................................................. 27
Oil............................................................... 1
Natural gas....................................................... 2
----------
100%
==========
</TABLE>
FINANCIAL INFORMATION
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31 TWELVE MONTHS
------------------------------------------------------ ENDED
1991 1992 1993 1994 1995 SEPTEMBER 30, 1996
---------- ---------- ---------- ---------- ---------- ------------------
<S> <C> <C> <C> <C> <C> <C>
Electric Operating
Revenues (thousands of
dollars)............... $6,275,533 $6,026,321 $5,260,440 $6,277,521 $6,909,786 $6,879,333
Net Income (thousands of
dollars)............... $ 94,887 $ 513,981 $ 112,440 $ 423,946 $ 717,154 $ 684,866
Net Income on Common
Stock (thousands of
dollars)............... $ 16,599 $ 443,442 $ 46,388 $ 359,019 $ 647,193 $ 616,482
Earnings per Common
Share.................. $ 0.08 $ 2.08 $ 0.22 $ 1.68 $ 3.02 $ 2.88
Ratios of Earnings to--
Fixed Charges.......... 1.59 2.06 1.19 1.99 2.79 2.78
Fixed Charges and
Preferred and
Preference Stock
Dividend Requirements. 1.36 1.78 1.03 1.73 2.39 2.36
</TABLE>
- --------
See Notes (A) through (G) on pages 4 through 6.
3
<PAGE>
NOTES TO FINANCIAL INFORMATION:
(A) Electric Operating Revenues reflect a provision for revenue refunds of
$18.4 million for the year ended December 31, 1992, relating to a decision
by the Illinois Supreme Court ("Supreme Court") regarding Byron Unit 1.
(B) In November 1993, two settlements (the "Settlements") related to various
proceedings and matters concerning ComEd's rates (the "Rate Matters
Settlement") and its fuel adjustment clause (the "Fuel Matters
Settlement") became final. The recording of the effects of the Settlements
in October 1993 reduced 1993 net income by approximately $354 million or
$1.66 per common share, in addition to the approximately $160 million
effect (or $0.75 per common share) 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"). Refunds related to the
Rate Matters Settlement, and reduced fuel adjustment clause collections
related to the Fuel Matters Settlement, have been completed.
(C) During the years 1991-1993, presented under the subcaption "Finanical
Information" in "Summary 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 Settlements. The uncertainties associated with such
proceedings and related issues, among other things, led to the
Settlements.
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.
Final ICC orders have been issued in fuel reconciliation proceedings for
years prior to 1994. Certain intervenors appealed the ICC order in the 1989
fuel reconciliation proceedings on issues relating to nuclear station
performance. However, in May 1996, the Illinois Appellate Court affirmed the
ICC order in the 1989 proceedings, and in October 1996, the Supreme Court
denied the intervenors' petition for leave to appeal. In 1996, an intervenor
filed testimony in the fuel reconciliation proceeding for 1994 seeking a
refund of approximately $90 million relating to nuclear station performance.
Under the Fuel Matters Settlement, parties to that 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 provide for the purchase of certain coal at
prices substantially above currently prevailing market prices and ComEd has
significant 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
20 of Notes to Financial Statements in the September 30, 1996 Form 10-Q
Report.
(D) 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 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.
(E) On January 9, 1995, the ICC issued its rate order (the "Rate Order") in
the proceedings relating to ComEd's February 1994 rate increase request.
The Rate Order provided, among other things, for (i) an increase in
ComEd's total revenues of approximately $301.8 million (excluding add-on
4
<PAGE>
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 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. See "Depreciation and Decommissioning" in Note 1
of Notes to Financial Statements in the September 30, 1996 Form 10-Q Report
for additional information related to the level of decommissioning cost
collections. 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 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. As of September 30, 1996, electric
operating revenues of approximately $570 million (excluding revenue taxes)
are subject to refund. Intervenors and ComEd have filed appeals of the Rate
Order with the Illinois Appellate Court, and oral argument has been
scheduled for January 28, 1997.
On December 11, 1995, ComEd announced a series of customer initiatives as
part of its larger ongoing effort to address the need to give all customer
classes the opportunity to benefit from increased competition in the
electric utility business, while retaining the benefits (such as
reliability) of current regulation and ensuring utilities' cost recovery for
commitments made under the obligation to serve customers. The initiatives
include a five-year cap on base electric rates at current levels and various
customer service and incentive pricing programs designed to allow customers
more choice and control over the services they seek and the prices they pay.
These initiatives are in addition to previously implemented special discount
contract rate programs for new or existing industrial customers. ComEd
anticipates the initiatives will be fully implemented in 1997 and will
reduce its revenues by approximately $42 million annually (including the
effects of previously implemented initiatives and before income tax effects)
primarily through changes in energy utilization. In September 1996, the ICC
approved ComEd's additional depreciation initiative for 1996. ComEd's costs
will increase by approximately $30 million in the second half of 1996
(before income tax effects), $22 million of which was recorded in September
1996, through the increase in depreciation charges on its nuclear generating
units. ComEd also continues to consider the possibility of additional
depreciation options. Management expects the financial impact of these
initiatives will be substantially offset by ComEd's cost reduction efforts
and expected growth in its business.
Under ComEd's initiatives, the five-year base rate cap at current levels
became effective in December 1995 and will extend until January 1, 2001. The
rate cap does not affect ComEd's fuel cost or nuclear decommissioning cost
recovery provisions. ComEd's fuel cost variances will continue to be
collected through its fuel adjustment clause, and such collections will
continue to be subject to annual reconciliation proceedings before the ICC.
Likewise, nuclear decommissioning costs will continue to be collected as
described in Note 1 of Notes to Financial Statements under "Depreciation and
Decommissioning," in the September 30, 1996 Form 10-Q Report.
See "Management's Discussion and Analysis of Financial Condition and Results
of Operations," subcaption "Changes in the Electric Utility Industry" in the
September 30, 1996 Form 10-Q Report for additional information regarding
deregulation, competition and their possible effects on the recovery of
investment costs and proposed legislation in Illinois.
(F) ComEd recorded an extraordinary loss of $33 million in the fourth quarter
of 1995 related to the early redemption of $645 million of long-term debt,
which loss reduced net income by $20 million (after reflecting income tax
effects of $13 million) or $0.09 per common share.
Operation and maintenance expenses include $97 million and $96 million for
the twelve months ended December 31, 1995 and September 30, 1996,
respectively, related to a voluntary
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separation offer for union employees who accepted and left ComEd's employ
combined with separation plans offered to selected groups of non-union
employees. These employee separation plans reduced net income by $59 million
or $0.27 per common share and $58 million or $0.27 per common share for the
twelve months ended December 31, 1995 and September 30, 1996, respectively.
(G) 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, preferred
securities dividend requirements of subsidiary trust 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.
USE OF PROCEEDS
The proceeds from the sale of Securities offered hereby will be used for
general corporate purposes, including to discharge or refund (by redemption or
by purchase on the open market, in private transactions, by tender offer or
otherwise) outstanding long-term debt and preference stock of ComEd, to
finance ComEd's ongoing capital improvement program, nuclear fuel expenditures
and contributions to nuclear decommissioning trusts, and to supplement working
capital. Long-term debt and preference stock to be discharged or refunded is
expected to consist of maturing debt and/or sinking fund installments on
outstanding preference stock and, should market conditions and the terms of
the related debt instrument or preference stock permit, debt and/or preference
stock to be refinanced with debt and/or preference stock bearing lower
interest or dividend rates. For information concerning ComEd's outstanding
long-term debt and preference stock, see Statements of Consolidated
Capitalization in the September 30, 1996 Form 10-Q Report.
DESCRIPTION OF BONDS
GENERAL.
The Bonds will be issued under ComEd's Mortgage dated July 1, 1923, as
amended and supplemented, and as to be further supplemented by one or more
Supplemental Indentures creating the respective series in which the Bonds are
to be issued. Harris Trust and Savings Bank (the "Trustee") and D. G. Donovan
are the Trustees under such Mortgage, as amended and supplemented, and
Supplemental Indentures thereto (collectively hereinafter called the
"Mortgage"), copies of which are filed as exhibits to the Registration
Statement. The Mortgage provides generally for the issuance of first mortgage
bonds in series.
The following statements are brief summaries of certain of the provisions of
the Mortgage and reference is made to the aforementioned exhibits for a more
complete statement of such provisions. The terms "lien of the Mortgage,"
"mortgage date of acquisition," "permitted lien," "prior lien," "prior lien
bonds," "property additions" and "utilized under the Mortgage" are hereinafter
used with the meanings ascribed to such terms, respectively, by the Mortgage.
(Sections 1.27, 1.28, 1.39, 1.40, 1.41, 1.42 and 1.58) The Mortgage contains
provisions under which substantially all of the properties of ComEd's electric
utility subsidiary, Commonwealth Edison Company of Indiana, Inc. (the "Indiana
Company"), might be subjected to the lien of the Mortgage if ComEd should so
determine, as additional security for ComEd's bonds, whereupon such subsidiary
would become a "mortgaged subsidiary," as defined in the Mortgage. (Section
1.31) Inasmuch as the Indiana Company has entered
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into an agreement to sell, subject to regulatory approval, a substantial
portion of its properties, it is unlikely that ComEd will cause the Indiana
Company to become a mortgaged subsidiary. Consequently, those provisions of the
Mortgage, hereinafter summarized, which relate to a mortgaged subsidiary as
well as to ComEd, are stated as though they relate to ComEd only.
The Bonds will be issued only in fully registered certificated or book-entry
form, without coupons, in the denomination of $1,000 or any authorized multiple
of $1,000. It is expected that the Bonds will be delivered initially in
definitive form. ComEd reserves the right, however, to make initial delivery of
the Bonds in temporary form. No service charge will be made for any transfer or
exchange of any Bonds, except, in the case of transfer, a charge sufficient to
reimburse ComEd for any stamp or other tax or governmental charge required to
be paid will be made.
Principal of the Bonds and interest thereon will be payable in Chicago or in
New York City, except as may otherwise be set forth in the applicable
Prospectus Supplement. Interest on each registered Bond issued in certificated
form (with limited exceptions as provided in the Mortgage) will be paid to the
person in whose name such Bond is registered at the close of business on the
applicable record date specified in the Bond. Payment of interest on Bonds
issued in book-entry form will be made to The Depository Trust Company, New
York, New York, or its nominee.
Any terms of the Bonds which are not summarized herein will be described in
the applicable Prospectus Supplement.
REDEMPTION PROVISIONS.
Any applicable redemption provisions of the Bonds will be fixed for each
series of Bonds at the time of sale of any such series.
SECURITY.
The Bonds will rank equally and ratably with all bonds, irrespective of
series, now outstanding or hereafter issued under the Mortgage. The Mortgage
constitutes a direct first mortgage lien on substantially all property and
franchises (other than expressly excepted property) now owned by ComEd, subject
only to permitted liens. All property and franchises (other than expressly
excepted property and property which may be acquired by ComEd subsequent to the
filing of a bankruptcy proceeding with respect to ComEd under the Bankruptcy
Reform Act of 1978) hereafter acquired by ComEd will become subject to the lien
of the Mortgage, subject only to permitted liens and liens, if any, existing or
placed on such after-acquired property at the time of acquisition thereof.
There are expressly excepted from the lien of the Mortgage, whether now owned
or hereafter acquired, certain real estate not used in the public utility
business, real estate held by ComEd in the name of a nominee, cash and
securities not specifically pledged under the Mortgage, receivables, contracts
(other than leases), materials and supplies not included in utility plant
accounts, merchandise, automobiles, trucks and other transportation equipment
and office furniture and equipment. (Divisions A and B of the Supplemental
Indenture dated August 1, 1944)
ISSUANCE OF ADDITIONAL BONDS.
The Mortgage provides that no bonds may be issued which, as to security, will
rank ahead of the Bonds, but, as hereinafter indicated, ComEd may, subject to
certain limitations, acquire property subject to prior liens.
The aggregate principal amount of other bonds which may be issued under the
Mortgage and which as to security will rank equally with the Bonds is not
limited except as indicated below. Additional bonds of any series may be
issued, subject to the provisions of the Mortgage, in a principal amount
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equal to (a) 66 2/3% of net property additions not previously utilized under
the Mortgage, (b) the amount of cash deposited with the Trustee as the basis
for the issuance of such bonds and (c) the amount of bondable bond retirements
not previously utilized under the Mortgage; provided, however, that no such
bonds in any event may be issued under (a) or (b), or under (c) if the bonds to
be issued bear a higher rate of interest than that borne by the bonds retired
or being retired (except in case such bonds retired or being retired mature
within two years), unless the net earnings of ComEd for a twelve-month period
within the immediately preceding fifteen-month period shall have been equal to
at least two and one-half times the annual interest on all bonds then
outstanding under the Mortgage, including the bonds then applied for but not
including any bonds then being retired, and on all prior lien bonds then
outstanding but not including any prior lien bonds then being retired. For
purposes of such net earnings test, revenues include amounts billed subject to
refund including such amounts collected pursuant to the Rate Order discussed in
Notes to Financial Information. The net earnings calculation under the Mortgage
is not affected by certain accounting write-offs related to plant costs.
(Sections 4.02, 4.03, 4.04, 1.32 and 1.33)
The Mortgage provides that cash deposited with the Trustee as a basis for the
issuance of bonds shall be (a) paid over to ComEd in an amount, certified to
the Trustee, equal to 66 2/3% of the amount of net property additions not
previously utilized under the Mortgage, or in an amount equal to the amount of
bondable bond retirements not previously utilized under the Mortgage, or both,
or (b) applied to the purchase or redemption of bonds. (Section 9.02)
At April 30, 1996, the amount of net property additions, including nuclear
fuel, not previously utilized under the Mortgage was approximately $54 million
(none of which was available to be utilized for the issuance of additional
bonds), and the amount of bondable bond retirements not previously utilized
under the Mortgage was approximately $3,349 million.
"Bondable bond retirements" means an amount equal to the principal amount of
bonds retired by application of funds deposited with the Trustee or by
surrender of bonds to the Trustee for cancellation, whether or not such deposit
of funds or surrender of bonds is pursuant to a sinking fund or purchase fund.
(Section 1.10)
"Net earnings" means the earnings of ComEd as defined in the Mortgage after
deducting all charges except: (a) charges for the amortization, write-down or
write-off of acquisition adjustments or intangibles; (b) property losses
charged to operations; (c) provisions for income and excess or other profits
taxes imposed on income after the deduction of interest charges, or charges
made in lieu of such taxes; (d) interest charges; and (e) amortization of debt
and stock discount and expense or premium. Any net profit or net loss from
merchandising and jobbing is to be deducted from operating expenses or added to
operating expenses, as the case may be. Net non-operating income from property
and securities not subject to the lien of the Mortgage may be included in
revenues but only to the extent of not more than 10% of the total of such net
earnings. No profits or losses on the disposition of property or securities or
on the reacquisition of securities shall be included in net earnings. The net
earnings calculation under the Mortgage is not affected by certain accounting
write-offs related to plant costs. (Section 1.32)
"Net property additions" means the amount of $50 million, plus the cost or
fair value as of the mortgage date of acquisition thereof, whichever is less,
of property additions, less all "current provisions for depreciation" made by
ComEd after December 31, 1944, after deducting from such current provisions for
depreciation the amount of the "renewal fund requirement," if any, for the year
1945 and each subsequent year. (Section 1.44)
"Current provisions for depreciation" for any period means the greater of:
(a) the total of the amounts appropriated by ComEd for depreciation
during such period on all property of the character of property additions
not subject to a prior lien, increased or decreased,
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as the case may be, by net salvage for such period, such amounts not to
include, however, provisions for depreciation charged to surplus, charges
to income or surplus for the amortization, write-down or write-off of
acquisition adjustments or intangibles, property losses charged to
operations or surplus, or charges to income in lieu of income and excess or
other profits taxes; and
(b) an amount equal to one-twelfth of 2% for each calendar month of such
period (or such lesser percentage as may, at stated intervals, be certified
by an independent engineer as adequate) of the original cost, as of the
beginning of such month, of all depreciable property of the character of
property additions not subject to a prior lien. (Section 1.18)
Except as set forth above, the Mortgage does not limit the amount of
additional bonds which can be issued; and it does not contain any restrictions
on the issuance of unsecured indebtedness, such as the Notes. In addition, the
Mortgage does not prohibit a merger or sale of substantially all of ComEd's
assets or a comparable transaction, unless the lien of the Mortgage is
impaired, and does not address the effect on bondholders of a highly leveraged
transaction.
RENEWAL FUND REQUIREMENT.
ComEd covenants that it will, for each year, pay or cause to be paid to the
Trustee an amount of cash, as and for a renewal fund, equal to the excess, if
any, of current provisions for depreciation for such year over the cost or fair
value as of the mortgage date of acquisition thereof, whichever is less, of
property additions for such year, such amount, which will be the renewal fund
requirement for such year, to be subject to reduction by an amount equal to the
amount, certified to the Trustee, of net property additions or bondable bond
retirements, or both, not previously utilized under the Mortgage. (Sections
6.01 and 6.02) There was no renewal fund requirement for any of the years 1945
through 1988, 1991 or 1992, although there were renewal fund requirements of
$140.7 million, $1 million, $50.9 million, $193.6 million and $15 million for
1989, 1990, 1993, 1994 and 1995, respectively. In 1989, 1990, 1993 and 1994,
the renewal fund requirement was satisfied by certifying an equivalent amount
of net property additions. In 1995, the renewal fund requirement was satisfied
by certifying an equivalent amount of bondable bond retirements.
ACQUISITION OF PROPERTY SUBJECT TO PRIOR LIENS.
ComEd covenants that it will not acquire any property subject to a prior lien
if the principal amount of prior lien bonds outstanding thereunder and under
other prior liens upon such prior lien property exceeds 66 2/3% of the fair
value of such part of such property as shall consist of property of the
character of property additions, nor unless the net earnings of such property
for a twelve-month period within the immediately preceding fifteen-month period
shall have been at least two and one-half times the annual interest on all
prior lien bonds secured by prior liens on such property. ComEd also covenants
that it will not transfer all or substantially all its property to any other
corporation, the property of which is subject to a prior lien, unless the
property of such other corporation could be acquired by ComEd under the
provisions of such covenant with respect to the acquisition of property subject
to a prior lien. (Section 7.15)
ComEd covenants that it will not issue additional prior lien bonds under any
prior lien, and that as soon as all prior lien bonds shall cease to be
outstanding under any prior lien, ComEd will promptly procure or cause to be
procured the cancellation and discharge of such prior lien. ComEd further
covenants that upon the discharge of a prior lien it will cause any cash on
deposit with the prior lien trustee (other than cash deposited for the payment
or redemption of outstanding prior lien bonds) to be deposited with the
Trustee, except to the extent required to be deposited with the trustee under
another prior lien. (Section 7.16)
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MODIFICATION OF MORTGAGE.
In general, modifications or alterations of the Mortgage and of the rights
and obligations of ComEd and of the bondholders, and waivers of compliance with
the Mortgage, may, with the approval of ComEd, be made at a meeting of
bondholders upon the affirmative vote of 80% of the bonds entitled to vote at
the meeting with respect to the matter involved, but no such modifications or
alterations or waivers of compliance shall be made which will permit the
extension of the time or times of payment of the principal of or the interest
or the premium, if any, on any bonds, or the reduction in the principal amount
thereof or in the rate of interest or the amount of any premium thereon, or any
other modification in the terms of payment of such principal, interest or
premium, which terms of payment are unconditional, or, otherwise than as
permitted by the Mortgage, the creation of any lien ranking prior to or on a
parity with the lien of the Mortgage with respect to any of the mortgaged
property, all as more fully provided in the Mortgage. (Section 17.07)
CONCERNING THE TRUSTEES.
The Trustee, Harris Trust and Savings Bank, provides general banking
services, including those as a depository, for ComEd and certain of its
subsidiaries. The Trustee also has aggregate commitments of $53 million in
ComEd's and its affiliates' lines of credit and provides to ComEd an
uncommitted short-term line of credit in the amount of $15 million.
D. G. Donovan, Co-Trustee under the Mortgage, is an officer of the Trustee.
RIGHTS UPON DEFAULT.
The Mortgage provides that in case any one or more of certain specified
events (defined as "completed defaults") shall occur and be continuing, the
Trustee or the holders of not less than 25% in principal amount of the bonds
may declare the principal of all bonds, if not already due, together with all
accrued and unpaid interest thereon, to be immediately due and payable. The
Trustee, upon request of the holders of a majority in principal amount of the
outstanding bonds, shall waive such default and rescind any such declaration if
such default is cured. (Sections 11.02 and 11.21)
The Mortgage further provides that upon the occurrence of one or more
completed defaults, the Trustees may proceed by such suits at law or in equity
to foreclose the lien of the Mortgage or to enforce any other appropriate
remedy as the Trustees, being advised by counsel, shall determine. (Section
11.05)
Bondholders have no right to enforce any remedy under the Mortgage unless the
Trustees have first had a reasonable opportunity to do so following notice of
default to the Trustee and request by the holders of not less than 25% in
principal amount of the bonds for action by the Trustees with offer of
indemnity satisfactory to the Trustees against costs, expenses and liabilities
that may be incurred thereby, but such provision does not impair the absolute
right of any bondholder to enforce payment of the principal of and interest on
such bondholder's bonds when due. (Section 11.20)
DEFAULT AND NOTICE THEREOF TO BONDHOLDERS.
The Mortgage provides that the following shall constitute completed defaults:
(a) default shall be made in the payment of any installment of interest
on any of the bonds when due and such default shall continue for 60 days;
(b) default shall be made in the payment of the principal of any of the
bonds when due, whether at maturity or by declaration or otherwise;
(c) default shall be made in the payment of any installment of interest
on any prior lien bonds when due, and such default shall continue for 30
days after written notice given to ComEd
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(following the expiration of the period of grace, if any, specified in the
prior lien securing such prior lien bonds) by the Trustee or to ComEd and
the Trustee by the holders of not less than 5% in principal amount of the
bonds;
(d) default shall be made in the payment of the principal of any prior
lien bonds when due, whether at maturity or by declaration or otherwise,
and such default shall continue for 30 days after written notice to ComEd
by the Trustee or to ComEd and the Trustee by the holders of not less than
5% in principal amount of the bonds;
(e) bankruptcy, receivership or similar proceedings shall be initiated by
ComEd; or any judgment entered in such proceedings initiated against ComEd
shall not have been vacated, set aside or stayed within 45 days after the
entry thereof; and
(f) default shall be made in the observance or performance of any other
of the covenants, conditions or agreements on the part of ComEd contained
in the Mortgage or in the bonds or in any prior lien or prior lien bonds,
and such default shall continue for 90 days after written notice to ComEd
by the Trustee or to ComEd and the Trustee by the holders of not less than
25% in principal amount of the bonds.
Within 90 days after the occurrence of any default which is known to the
Trustees, the Trustees shall give to the bondholders notice of such default
unless it shall have been cured; except that, in case of defaults in the
payment of principal of or interest on the bonds, or in the payment of any
sinking fund or purchase fund installment, the Trustees may withhold such
notice if and so long as the board of directors, the executive committee, or a
trust committee of directors or responsible officers of the Trustee, or any one
or more of them, shall in good faith determine that the withholding of such
notice is in the interests of the bondholders and the Co-Trustee shall in good
faith determine that the withholding of such notice is in the interests of the
bondholders. (Sections 11.02 and 15.03)
CERTIFICATES AND OPINIONS.
Officers' certificates evidencing compliance with the covenants in the
Mortgage relating to the payment of taxes and the maintenance of insurance on
properties of ComEd subject to the lien of the Mortgage must be filed as
exhibits to the certificate of ComEd filed annually with the Trustee. (Sections
2.01, 7.09 and 7.10(c)) In connection with the taking of various actions by the
Trustees or the Trustee upon application of ComEd, including the authentication
and delivery of additional bonds (Article IV), the release of property (Section
8.03), the reduction or withdrawal of cash (Section 8.04) and other matters,
the Mortgage requires that ComEd furnish to the Trustee orders, requests,
resolutions, certificates of officers, engineers, accountants and appraisers,
and opinions of counsel and other documents, the particular documents to be
furnished in each case being dependent upon the nature of the application.
DESCRIPTION OF NOTES
GENERAL.
The Notes will be issued under ComEd's Indenture dated as of September 1,
1987, as amended and supplemented, and as to be further supplemented by one or
more Supplemental Indentures creating the respective series in which the Notes
are to be issued. Citibank, N.A., is the Trustee (the "Indenture Trustee")
under the Indenture and the Supplemental Indentures thereto (collectively
hereinafter called the "Indenture"), copies of which are filed as exhibits to
the Registration Statement. The Indenture provides generally for the issuance
of notes in series. The following statements are brief summaries of the
provisions of the Indenture and reference is made to such exhibits for a more
complete statement of such provisions.
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The Notes will be issued only in fully registered certificated or book-entry
form (unless otherwise indicated in the Prospectus Supplement with respect to
any particular series of Notes) in the denomination of $1,000 or any authorized
multiple of $1,000. It is expected that the Notes will be delivered initially
in definitive form. ComEd reserves the right, however, to make initial delivery
of the Notes in temporary form. No service charge will be made for any transfer
or exchange of any Notes, except ComEd may require payment of a sum sufficient
to cover any tax or other governmental charge in connection therewith.
Principal of the Notes and interest thereon will be payable in New York City,
except as may otherwise be set forth in the applicable Prospectus Supplement.
Interest on each registered Note issued in certificated form (with limited
exceptions as provided in the Indenture) will be paid to the person in whose
name such Note is registered at the close of business on the applicable record
date specified in the Note. Payment of interest on Notes issued in book-entry
form will be made to The Depository Trust Company, New York, New York, or its
nominee.
The Notes will be unsecured and will rank equally with ComEd's outstanding
unsecured indebtedness. Substantially all of the properties and franchises of
ComEd are subject to the lien of the Mortgage under which ComEd's first
mortgage bonds are outstanding. (See "Description of Bonds," subcaption
"Security," herein.)
Any terms of the Notes which are not summarized herein will be described in
the applicable Prospectus Supplement.
SINKING FUND AND REDEMPTION PROVISIONS.
Any applicable sinking fund and redemption provisions of the Notes will be
fixed for each series of Notes at the time of sale of any such series.
ISSUANCE OF ADDITIONAL SECURITIES.
The Indenture does not limit the aggregate principal amount of notes which
may be issued thereunder. There are notes presently outstanding under the
Indenture. Neither the Indenture nor any of the other indentures under which
ComEd's several series of debentures are outstanding contains any limitation on
the issuance by ComEd of other securities either secured or unsecured. In
addition, the Indenture does not address the effect on noteholders of a highly
leveraged transaction.
In addition to the bonds now outstanding under ComEd's Mortgage, bonds of any
series may hereafter be issued under the Mortgage, subject to certain net
earnings and other requirements. (See "Description of Bonds," subcaption
"Issuance of Additional Bonds," herein.)
MODIFICATION OF INDENTURE.
The Indenture provides that with the consent of the holders of a majority in
principal amount of the notes at the time outstanding under the Indenture, of
all series which are affected (or without such consent in the case of
amendments or modifications that do not affect the rights of any noteholder),
ComEd and the Indenture Trustee may enter into supplemental indentures for the
purpose of amending or modifying, in any manner, the provisions of the
Indenture or of any supplemental indenture, provided that no such supplemental
indenture shall, without the consent of the holder of each outstanding note
affected thereby, among other things, (i) change the stated maturity of the
principal of, or any installment of interest on, any note, or reduce the
principal amount thereof or the interest thereon or any premium payable upon
the redemption thereof, or (ii) reduce the percentage in principal amount of
the outstanding notes, the consent of whose holders is required for any such
supplemental indenture. (Sections 11.01 and 11.02)
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CONCERNING THE INDENTURE TRUSTEE.
The Indenture Trustee, Citibank, N.A., provides general banking services,
including those as a depository, for ComEd. The Indenture Trustee also has
aggregate commitments of $116 million in ComEd's and its affiliates' lines of
credit and has issued a letter of credit in the amount of $2.5 million on
behalf of an affiliate of ComEd.
EVENTS OF DEFAULT AND RIGHTS UPON DEFAULT.
The Indenture provides that the following constitute "Events of Default" with
respect to the notes of any series:
(a) default in the payment of any interest upon any note of that series
when it becomes due and payable, and continuance of such default for a
period of 60 days;
(b) default in the payment of the principal of (or premium, if any, on)
any note of that series at its maturity;
(c) default in the deposit of any installment of any sinking fund or
similar payment with respect to notes of that series when and as payable,
and continuance of such default for a period of 60 days;
(d) the entry of a decree or order in bankruptcy, receivership or similar
proceedings initiated against ComEd, and the continuance of any such decree
or order for a period of 45 consecutive days;
(e) the institution by ComEd of, or the consent by ComEd to the
institution of, bankruptcy, insolvency or similar proceedings against
ComEd; and
(f) default in the performance, or breach, of any other covenant or
warranty of ComEd in the Indenture, and continuance of such default or
breach for a period of 90 days after notice to ComEd by the Indenture
Trustee or to ComEd and the Indenture Trustee by the holders of at least
25% in principal amount of the outstanding notes of that series. (Section
7.01)
The Indenture provides that within 90 days after the occurrence of any
default which is known to the Indenture Trustee, the Indenture Trustee shall
give to the noteholders notice of such default, unless such default shall have
been cured or waived; provided that, except in the case of a default in the
payment of the principal of (or premium, if any) or interest on any note of
such series or in the payment of any sinking or purchase fund installment, the
Indenture Trustee may withhold such notice if and so long as the board of
directors, the executive committee, or a trust committee of directors or
responsible officers of the Indenture Trustee, or any one or more of them,
shall in good faith determine that the withholding of such notice is in the
interests of the holders of notes of such series; and provided, further, that
in the case of any default in the performance, or breach, of any covenant or
warranty referred to in clause (f) of the immediately preceding paragraph, no
such notice to holders shall be given until at least 60 days after the
occurrence thereof. (Section 8.02)
If an Event of Default occurs with respect to notes of any series and is
continuing, the Indenture Trustee or the holders of 25% in principal amount of
the outstanding notes of that series may declare the principal of all the notes
of that series due and payable. A majority in principal amount of the
outstanding notes of that series may rescind and annul such declaration if the
default has been cured. (Section 7.02)
The holders of a majority in principal amount of the outstanding notes of all
series affected by an Event of Default may waive any past default under the
Indenture and its consequences, except a default in the payment of the
principal of (or premium, if any) or interest on any note or in respect of a
covenant or provision of the Indenture which cannot be modified or amended
without the consent of the holder of each outstanding note affected. (Section
7.13)
13
<PAGE>
If an Event of Default occurs and is continuing, the Indenture Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
holders of notes by such appropriate judicial proceedings as the Indenture
Trustee shall deem most effectual. (Section 7.03)
The Indenture provides that the holders of a majority in principal amount of
the outstanding notes issued under the Indenture have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Indenture Trustee or exercising any trust or power conferred on the
Indenture Trustee. (Section 7.12) The Indenture Trustee is not obligated to
comply with any request or direction of noteholders pursuant to the Indenture
unless it has been offered indemnity against costs and liabilities which it
might incur in complying with such request or direction. (Section 8.03(e))
ComEd is required to file with the Indenture Trustee annually an officers'
certificate specifying any defaults known to exist under the Indenture.
(Section 3.04)
SATISFACTION AND DISCHARGE OF THE NOTES AND THE INDENTURE.
Unless otherwise provided in the supplemental indenture creating a series of
notes, ComEd shall be deemed to have paid and discharged the entire
indebtedness on all the outstanding notes of any such series when (a) either
(i)(1) ComEd has deposited with the Indenture Trustee for such purpose an
amount sufficient to pay and discharge the entire indebtedness on all
outstanding notes of such series for principal (and premium, if any) and
interest to the stated maturity or any redemption date thereof, or (2) ComEd
has deposited with the Indenture Trustee for such purpose such amount of direct
obligations of, or obligations the principal of and interest on which are fully
guaranteed by, the United States of America and which are not callable at the
option of the issuer thereof as will, together with the income to accrue
thereon without consideration of any reinvestment thereof, be sufficient to pay
and discharge the entire indebtedness on all outstanding notes of such series
for principal (and premium, if any) and interest to the stated maturity or any
redemption date thereof, or (ii) ComEd has properly fulfilled such other means
of satisfaction and discharge as is specified in the supplemental indenture
applicable to the notes of such series; (b) ComEd has paid or caused to be paid
all other sums payable with respect to the outstanding notes of such series;
and (c) ComEd has delivered certain certificates and an opinion of counsel.
(Section 6.03)
The Indenture shall cease to be of further effect (except as to any surviving
rights of registration of transfer or exchange of notes) when (a) either (i)
all notes theretofore authenticated and delivered and all coupons appertaining
thereto have been delivered to the Indenture Trustee for cancellation, or (ii)
all such notes not theretofore delivered to the Indenture Trustee for
cancellation have become due and payable, or will become due and payable at
their stated maturity within one year, or are to be called for redemption
within one year under arrangements satisfactory to the Indenture Trustee and
ComEd has deposited with the Indenture Trustee for such purpose an amount
sufficient to pay and discharge the entire indebtedness on such notes for
principal (and premium, if any) and interest to the date of such deposit (in
the case of notes which have become due and payable), or to their stated
maturity or redemption date, as the case may be; (b) ComEd has paid or caused
to be paid all other sums payable under the Indenture by ComEd; and (c) ComEd
has delivered certain certificates and an opinion of counsel. (Section 6.01)
For federal income tax purposes, any such deposit may be treated as a taxable
exchange of the related notes for an issue of obligations of the trust or a
direct interest in the cash and securities held in the trust. In that case,
holders of such notes would recognize gain or loss as if the trust obligations
or the cash or securities deposited, as the case may be, had actually been
received by them in exchange for their notes. Such holders thereafter would be
required to include in income a share of the income, gain or loss of the trust.
The amount so required to be included in income could be a different amount
than would be includable in the absence of such deposit. Prospective investors
are urged to consult their own tax advisors as to the specific consequences to
them of such deposit.
14
<PAGE>
DESCRIPTION OF STOCK
The authorized stock of ComEd now consists of four classes: prior preferred
stock, par value $100 per share (the "Prior Preferred Stock") (no shares
outstanding); $1.425 convertible preferred stock, without par value--stated
value $31.80 per share (the "$1.425 Convertible Preferred Stock"); preference
stock, without par value (the New Cumulative Preference Stock to constitute one
or more new series of such class); and common stock, par value $12.50 per
share. The number of outstanding shares of each class as of September 30, 1996
is set forth in the Statements of Consolidated Capitalization, and the number
of authorized shares of each class as of such date is set forth in Note 3 of
Notes to Financial Statements, in the September 30, 1996 Form 10-Q Report.
ISSUANCE IN SERIES.
The Board of Directors is authorized to provide for the issuance of shares of
the Prior Preferred Stock and the preference stock from time to time in series
and, as to each series, to fix the designation, dividend rate, redemption price
or prices, voluntary and involuntary liquidation prices, sinking fund
provisions, if any, and conversion provisions, if any, applicable to the shares
of such series.
DIVIDENDS.
Dividends are payable on the Prior Preferred Stock (if and when shares
thereof are issued) in preference to dividends on the $1.425 Convertible
Preferred Stock, the preference stock and the common stock; dividends are
payable on the $1.425 Convertible Preferred Stock in preference to dividends on
the preference stock and the common stock; and dividends are payable on the
preference stock in preference to dividends on the common stock. Dividends are
payable on the Prior Preferred Stock (if and when shares thereof are issued),
the $1.425 Convertible Preferred Stock and each series of preference stock
quarterly on the first day of February, May, August and November in each year.
Dividends are cumulative with respect to the shares of the Prior Preferred
Stock (if and when shares thereof are issued), the $1.425 Convertible Preferred
Stock and each series of preference stock. Accumulations of dividends do not
bear interest.
The dividend rates per share per annum are indicated by the title of the
$1.425 Convertible Preferred Stock and the respective titles of the following
outstanding series of preference stock: $1.90 series, $2.00 series, $1.96
series, $7.24 series, $8.40 series, $8.38 series, $2.425 series, $8.20 series,
$8.40 Series B, $8.85 series, $9.25 series, $9.00 series and $6.875 series.
REDEMPTION AND REPURCHASE PROVISIONS.
Subject to the limitations hereinafter stated and except as otherwise
provided by the Board of Directors in respect of the shares of a particular
series of the Prior Preferred Stock or the preference stock, shares of any one
or more of such series, and shares of the $1.425 Convertible Preferred Stock,
may be redeemed, on not more than 60 nor less than 30 days' notice by mail, in
whole at any time or in part from time to time at the option of ComEd, or in
part from time to time pursuant to any sinking fund or funds created for one or
more series of the Prior Preferred Stock or the preference stock, in each case
by payment of the then applicable redemption price of the shares to be
redeemed. Provision is made whereby, subject to certain conditions, all rights
of the holders of shares called for redemption (except the right to exercise
any then effective privilege of conversion and the right to receive the
redemption moneys) will terminate before the redemption date, upon the deposit
with a bank or trust company of the funds necessary for redemption.
If and so long as ComEd shall be in default in the payment of any quarterly
dividend on shares of any series of the preference stock, or in the making or
setting aside of any payment under any sinking fund for any such series, ComEd
may not (other than by the use of unapplied sinking fund moneys)
15
<PAGE>
(1) redeem any shares of the preference stock unless all shares are redeemed or
(2) purchase or otherwise acquire for a consideration any such shares, except
pursuant to offers of sale made by holders of the preference stock in response
to an invitation for tenders given simultaneously by ComEd by mail to the
holders of record of all shares of the preference stock then outstanding. The
Restated Articles of Incorporation of ComEd contain corresponding provisions
applicable to the Prior Preferred Stock and, as to dividend defaults, the
$1.425 Convertible Preferred Stock.
See Notes 6 and 7 of Notes to Financial Statements in the September 30, 1996
Form 10-Q Report for information relating to the redemption provisions
applicable to the presently outstanding shares of $1.425 Convertible Preferred
Stock and of each presently outstanding series of preference stock.
SINKING FUNDS.
The $1.425 Convertible Preferred Stock and the $1.90 series, $2.00 series,
$1.96 series, $7.24 series, $8.40 series, $2.425 series and $8.38 series of
preference stock do not have sinking funds. The $8.20 series, $8.40 Series B,
$8.85 series, $9.25 series, $9.00 series and $6.875 series of preference stock
have mandatory sinking funds and the $8.40 Series B and $9.00 series of
preference stock also have optional sinking funds. Each series of Prior
Preferred Stock (if and when shares thereof are issued) may have a sinking
fund, at the discretion of the Board of Directors, along with such other
provisions as shall be fixed and determined by such Board. See Note 7 of Notes
to Financial Statements in the September 30, 1996 Form 10-Q Report for
information relating to the preference stock sinking fund provisions.
CONVERSION OF $1.425 CONVERTIBLE PREFERRED STOCK.
The shares of $1.425 Convertible Preferred Stock are convertible, at the
option of the respective holders, into shares of common stock of ComEd
currently at the rate of 1.02 shares of common stock for each share of $1.425
Convertible Preferred Stock. Provision is made for adjustment of the conversion
price, under certain conditions, in order to protect the conversion rights
against dilution. Shares of the $1.425 Convertible Preferred Stock may be
converted at any time except that in case of call for redemption the conversion
rights will terminate on the tenth day prior to the redemption date. No payment
or adjustment with respect to dividends on shares of the $1.425 Convertible
Preferred Stock or on the common stock will be made in connection with any
conversion.
LIQUIDATION PREFERENCES.
In the event of dissolution, liquidation or winding up of ComEd, voluntary or
involuntary, holders of the Prior Preferred Stock (if any shares thereof are
then issued) will be entitled to payment of the applicable liquidation price or
prices, out of the assets of ComEd, in preference to the holders of the $1.425
Convertible Preferred Stock, the preference stock and the common stock; holders
of the $1.425 Convertible Preferred Stock will be entitled to such payment in
preference to the holders of the preference stock and the common stock; and
holders of the preference stock will be entitled to such payment in preference
to the holders of the common stock.
In the event of voluntary or involuntary dissolution, liquidation or winding
up of ComEd, holders of the common stock will be entitled to receive, ratably,
assets of ComEd available for payment to stockholders remaining after payment
in full of the preferential amounts on the Prior Preferred Stock (if any), the
$1.425 Convertible Preferred Stock and preference stock on such dissolution,
liquidation or winding up.
The current per share voluntary liquidation prices of the outstanding shares
of the preference stock are: $8.20 series, $103 through October 31, 1997, and
$101 thereafter; $8.40 Series B, $101; $8.85 series, $103 through July 31,
1998, and $101 thereafter; $9.25 series, $103 through July 31,
16
<PAGE>
1999, and $101 thereafter; $9.00 series, $103 through July 31, 1997, $102
through July 31, 1998, $101 through July 31, 1999, and $100 thereafter; $6.875
series, $103.50 through April 30, 1997, $102.375 through April 30, 1998,
$101.25 through April 30, 1999, and $100 thereafter; plus, in each case,
accrued and unpaid dividends, if any, to the date fixed for payment; and after
such respective dates at the applicable optional redemption prices (if any) for
the respective series. The per share voluntary liquidation prices of the
outstanding shares of the $1.90 series, $2.00 series, $1.96 series, $7.24
series, $8.40 series, $2.425 series and $8.38 series of the preference stock
and the $1.425 Convertible Preferred Stock are the respective optional
redemption prices in effect on the date of liquidation. See Notes 6 and 7 of
Notes to Financial Statements in the September 30, 1996 Form 10-Q Report for
information concerning the involuntary liquidation prices applicable to the
presently outstanding shares of such stock.
VOTING RIGHTS.
Holders of shares at any time outstanding, regardless of class, are entitled
to one vote for each share held on each matter submitted to a vote at a meeting
of stockholders, with the right to cumulate votes in all elections for
directors. Unicom Corporation owns 214,206,359 shares of ComEd Common Stock,
representing approximately 99.99% of the outstanding shares of such stock at
September 30, 1996.
Without the vote or consent of the holders of at least two-thirds of the
outstanding shares, if any, of the Prior Preferred Stock, no stock of any prior
or parity class may be created, nor may the Restated Articles of Incorporation
of ComEd be amended so as to affect any of the preferences or rights of the
Prior Preferred Stock as a class. Without the vote or consent of the holders of
at least two-thirds of the outstanding shares of the preference stock, no stock
of any class, other than the Prior Preferred Stock, ranking prior to or on a
parity with the preference stock may be created, nor may the Restated Articles
of Incorporation of ComEd be amended so as to affect any of the preferences or
rights of the preference stock as a class. The Restated Articles of
Incorporation contain corresponding provisions applicable to the $1.425
Convertible Preferred Stock as a class. No amendment so affecting a single
series of either the Prior Preferred Stock or the preference stock (when more
than one series of such class is outstanding) nor any amendment of the
resolution of the Board of Directors establishing such series may be made that
affects any of the preferences or rights of the holders of the shares of such
series without the vote or consent of the holders of at least two-thirds of the
outstanding shares of such series, but in such case the class vote or consent
of the holders of shares of no other series will be required.
Without the vote or consent of the holders of a majority of the outstanding
shares, if any, of the Prior Preferred Stock, no shares of the class (in
addition to the 850,000 shares now authorized) or of any class ranking prior to
or on a parity with the Prior Preferred Stock may be issued (other than for the
retirement of a like amount of stock of such class or classes) if, after such
issue, the aggregate stated capital (including paid-in surplus) represented by
the outstanding shares of such class or classes (after giving effect to any
retirement of shares of such class or classes made in connection with such
issue) would exceed 75% of the aggregate stated capital (including paid-in
surplus) represented by the then outstanding shares of all subordinate classes,
plus consolidated retained earnings of ComEd and consolidated subsidiaries as
of the end of the preceding fiscal year.
Without the vote or consent of the holders of a majority of the outstanding
shares, if any, of the Prior Preferred Stock, the $1.425 Convertible Preferred
Stock and the preference stock, each voting as a class, ComEd may not (except
where the parties are in a parent-subsidiary relationship, or when ordered by
governmental commission or agency) consolidate with or merge into any other
corporation or sell all or substantially all of its property and business.
17
<PAGE>
PREEMPTIVE RIGHTS.
Holders of the Prior Preferred Stock, the $1.425 Convertible Preferred Stock,
the preference stock and the common stock have no preemptive rights to purchase
any securities of ComEd.
MISCELLANEOUS.
The outstanding shares of the $1.425 Convertible Preferred Stock, the
preference stock and the common stock are, and the shares of the New Cumulative
Preference Stock offered hereby will be, when issued, fully paid and
nonassessable.
The Transfer Agent and Registrar for the New Cumulative Preference Stock will
be:
THE FIRST CHICAGO TRUST COMPANY OF NEW YORK
30 West Broadway
New York, New York 10007-2192
and
1 North State Street
Chicago, Illinois 60670-0123
PLAN OF DISTRIBUTION
The Securities may be sold (i) by selecting and negotiating with a managing
underwriter or underwriters for the sale, (ii) by a sale directly to a limited
number of purchasers or to a single purchaser or (iii) through agents.
Securities may be sold outside the United States.
The Prospectus Supplement sets forth the manner and terms of the offering of
the Offered Securities, including the name or names of any underwriters,
dealers or agents, the purchase price or prices of the Offered Securities, the
proceeds to ComEd from the sale of the Offered Securities, any initial public
offering price, any underwriting discount or commission and any discounts,
concessions or commissions allowed or reallowed or paid by any underwriter to
other dealers. Any initial public offering price and any discounts, concessions
or commissions allowed or reallowed or paid to dealers may be changed from time
to time. Unless otherwise indicated in the Prospectus Supplement, any agent
will be acting on a best efforts basis for the period of its appointment.
Underwriters, dealers and agents who participate in the distribution of the
Securities, and their officers, directors and controlling persons, may be
entitled under agreements to be entered into with ComEd to indemnification by
ComEd against certain liabilities, including liabilities under the Securities
Act of 1933, or to contribution with respect to payments which such
underwriters, dealers or agents may be required to make in respect of such
liabilities.
Unless otherwise set forth in the Prospectus Supplement, the obligations of
any underwriter or underwriters to purchase the Offered Securities will be
subject to certain conditions precedent and such underwriter or underwriters
with respect to the sale of such Offered Securities will be obligated to
purchase all of such Offered Securities if any are purchased.
The Prospectus Supplement sets forth any planned listing of the Offered
Securities on a national securities exchange and indicates whether any
underwriters, dealers or agents intend to make a market in the Offered
Securities as permitted by applicable laws and regulations. No assurance can be
given as to the liquidity of or the trading market for the Securities.
18
<PAGE>
LEGAL OPINIONS
The legality of the Securities will be passed upon by Sidley & Austin, One
First National Plaza, Chicago, Illinois 60603, counsel for ComEd, and by
Winston & Strawn, 35 West Wacker Drive, Chicago, Illinois 60601, counsel for
the underwriters, dealers, purchasers or agents. Winston & Strawn acts from
time to time as counsel for ComEd in certain matters. The statements as to
matters of law and legal conclusions made under "Description of Bonds,"
subcaption "Security," and "Description of Stock" herein are made on the
authority of Sidley & Austin.
EXPERTS
The financial statements and schedules included or incorporated by reference
in the 1995 Form 10-K, the January 26, 1996 Form 8-K Report, the March 31, 1996
Form 10-Q Report, the June 30, 1996 Form 10-Q Report and the September 30, 1996
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.
19
<PAGE>
No dealer, salesman or other person has been authorized to give any informa-
tion or to make any representations other than those contained in this Pro-
spectus Supplement and the accompanying Prospectus in connection with the of-
fer contained in this Prospectus Supplement and the accompanying Prospectus,
and, if given or made, such information or representations must not be relied
upon as having been authorized by ComEd or by any of the Underwriters. Neither
the delivery of this Prospectus Supplement and the accompanying Prospectus nor
any sale made hereunder shall under any circumstances create an implication
that there has been no change in the affairs of ComEd since the date hereof.
This Prospectus Supplement and the accompanying Prospectus shall not consti-
tute an offer or solicitation by anyone in any jurisdiction in which such of-
fer 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
<TABLE>
<CAPTION>
PAGE
----
PROSPECTUS SUPPLEMENT
<S> <C>
Description of the Offered Notes........................................... S-2
Underwriting............................................................... S-4
PROSPECTUS
The Company................................................................ 2
Available Information...................................................... 2
Incorporation of Certain Information by
Reference................................................................. 2
Summary Information........................................................ 3
Use of Proceeds............................................................ 6
Description of Bonds....................................................... 6
Description of Notes....................................................... 11
Description of Stock....................................................... 15
Plan of Distribution....................................................... 18
Legal Opinions............................................................. 19
Experts.................................................................... 19
</TABLE>
$300,000,000
COMMONWEALTH
EDISON COMPANY
$150,000,000 7.375% NOTES DUE JANUARY 15, 2004
$150,000,000 7.625% NOTES DUE JANUARY 15, 2007
[LOGO OF ComEd]
SALOMON BROTHERS INC
MERRILL LYNCH & CO.
PAINEWEBBER INCORPORATED
PROSPECTUS SUPPLEMENT
DATED JANUARY 6, 1997
