SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 18, 2001
EDISON INTERNATIONAL
(Exact name of registrant as specified in its charter)
CALIFORNIA 001-9936 95-4137452
(State or principal jurisdiction of (Commission file (I.R.S. employer
incorporation or organization) number) identification no.)
2244 Walnut Grove Avenue
(P.O. Box 800)
Rosemead, California 91770
(Address of principal executive offices, including zip code)
626-302-2222
(Registrant's telephone number, including area code)
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Items 1 through 4, 6, 8 and 9 are not included because they are inapplicable.
Item 5. Other Events
On January 18, 2001, the board of directors of Southern California Edison
Company (SCE), the utility subsidiary of Edison International (EIX) decided not
to declare the regular quarterly dividends that would have been paid on February
28, 2001 to holders of SCE's Cumulative Preferred Stock, 4.08% Series, 4.24%
Series, and 4.78% Series ($25 par value). The aggregate amount of the dividends
at the specified rate for such series would have been about $960,000. So long as
any accumulated dividends on any series of SCE's Cumulative Preferred Stock ($25
par value) or $100 Cumulative Preferred Stock ($100 par value) remain unpaid,
SCE cannot declare or pay future cash dividends on any series of such preferred
stock or on SCE's common stock, and SCE cannot repurchase any shares of its
common stock. If six or more quarterly dividends on any series of SCE's
preferred stock become in default, the holders of all the preferred stock,
voting together as a single class, will be entitled to elect two directors to
SCE's board of directors.
As previously reported, SCE has temporarily suspended payment of certain other
obligations. On January 16, 2001, SCE failed to pay maturing principal and
accrued interest totaling $206 million with respect to its 5-7/8% Notes. On the
same date, SCE also failed to make scheduled interest payments, aggregating
about $24 million, on two other series of its senior notes, the 6-3/8% Notes Due
2006 and the 7-5/8% Notes Due 2010, and on one series of its first and refunding
mortgage bonds, Series 93G Due 2025. Under the respective indentures for the
senior notes and the first mortgage bonds, a failure to pay an installment of
interest does not become an event of default unless it continues for 30 days as
to the senior notes or 60 days as to the first mortgage bonds. On January 18,
2001, SCE failed to pay $32 million of maturing commercial paper. Through
January 31, 2001, approximately $223 million of SCE's commercial paper will
mature. SCE currently expects to suspend payments on those maturities, pending
further developments in the ongoing energy and liquidity crisis.
As previously reported, SCE suspended payment of $215 million that originally
was due to the California Power Exchange (PX) on January 16, 2001. At the
request of the PX, the Federal Energy Regulatory Commission extended the payment
deadline to 12:00 noon on January 18, 2001. On January 16, 2001, the PX notified
SCE that, due to the rating agency downgrades described below, SCE is required
by the PX's tariff to post collateral for all transactions in the PX's day-ahead
and day-of markets. The PX also stated that, if SCE cannot comply with this
requirement, the PX will suspend SCE's market trading privileges effective
January 18, 2001 for the day-of market and January 19, 2001 for the day-ahead
market. On January 17, 2001, SCE notified the PX that SCE will not be performing
all of its obligations under the PX tariff related to payment of invoices and
posting of collateral for transactions in those markets due to uncontrollable
forces, as defined in the tariff, namely regulation and restrictions imposed by
governmental authorities. SCE stated that, because its actions are due to
uncontrollable forces, the PX should not attempt to exercise any remedies
against SCE for non-performance. SCE cannot provide any assurance that the PX
will not seek to exercise any remedies against SCE.
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On January 17, 2001, following rolling blackouts in the northern California
service territory of Pacific Gas and Electric Company (PG&E), California
Governor Gray Davis signed an order declaring an emergency and authorizing the
California Department of Water Resources to purchase power in order to prevent
further blackouts. Governor Davis stated that major power suppliers, in meetings
with the Governor, were threatening to force SCE and PG&E into involuntary
bankruptcy if the California legislature did not take immediate action
authorizing the state to buy power. Governor Davis called upon the legislature
to act promptly. A bill passed by the Assembly on January 16, 2001 would
authorize the Department of Water Resources to purchase and sell electric power.
The bill was sent to the Senate for consideration. The Senate has not yet taken
action on the bill. SCE cannot predict what actions the California legislature
or other parties will take.
On January 16, 2001, in response to SCE's announcement that it is suspending
certain payments, both Moody's Investors Service and Standard & Poor's lowered
their credit ratings of EIX and SCE to substantially below investment grade
levels. Standard & Poor's cut EIX's senior unsecured and short-term debt ratings
both to "C." Standard & Poor's also dropped SCE's senior unsecured debt rating
to "CC" and its short-term debt rating to "C." Moody's cut its ratings of senior
unsecured debt of EIX to "Caa3" and of SCE to "Caa2," and the short-term debt
ratings of both EIX and SCE to "Not Prime." Corresponding reductions were made
in the ratings of other securities of EIX and SCE. The ratings remain under
review for potential further downgrades. The reduced ratings do not constitute
an event of default under any of EIX's or SCE's credit facilities or other
financing instruments. However, the failure by SCE to make the $200 million
principal payment on the 5-7/8% Notes, as described above, is an event of
default under both EIX's and SCE's bank credit facilities. EIX and SCE are in
discussions with the bank lenders regarding the possibility of a limited waiver
or forbearance as to such default.
The rating agencies have also lowered their ratings on other subsidiaries of
EIX. Edison Funding Company, the financing subsidiary of Edison Capital, had its
senior unsecured and short-term debt ratings reduced to "CC" and "C" by Standard
& Poor's, and "B2" and "Not Prime" by Moody's. The ratings remain under review
for possible downgrade. Edison Mission Energy's senior unsecured and short-term
debt ratings, although lowered, are still investment grade at "BBB-" and "A-3"
from Standard & Poor's, and "Baa3" and "P-3" from Moody's. Standard & Poor's
attributed the investment grade ratings primarily to the ring-fencing provisions
recently adopted by Edison Mission Energy. Both agencies said the rating outlook
for Edison Mission Energy is stable.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Not applicable
(b) Not applicable
(c) Not applicable
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
EDISON INTERNATIONAL
(Registrant)
KENNETH S. STEWART
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KENNETH S. STEWART
Assistant General Counsel and Assistant Secretary
January 18, 2001
