SCE Wins $1.8 Billion in Financing to Repay Debts

Southern California Edison said it secured $1.8 billion in financing to repay most of its $5.5 billion in electricity-related debts as scheduled Friday, a move that won the Rosemead utility a boost in its credit rating.

SCE’s credit still is in junk territory despite the increase by Moody’s Investors Service, which raised SCE’s first mortgage bonds to Ba2 from B3 and upgraded SCE’s senior unsecured debt to Ba3 from Caa2. Moody’s upgraded the senior debt of SCE parent Edison International to B3 from Caa3.

SCE said it closed Friday on a $1.6-billion loan from a group led by J.P. Morgan Chase & Co. and Citigroup Inc.’s Salomon Smith Barney and sold $200 million in pollution control bonds. Combined with cash on hand accumulated because of electricity rates that are higher than current costs, this allowed the utility to pay off $4.8 billion in power debts and other defaults that piled up during the state’s electricity crisis.

The remaining amount will be repaid during the next few months, SCE said.

PG&E; Corp.’s Pacific Gas & Electric Co. filed for bankruptcy-law protection, but SCE pursued a settlement--first with Gov. Gray Davis and the state Legislature and then through state regulators. The Utility Reform Network, a San Francisco consumer group, is fighting the settlement in court.

“This major step in returning Southern California Edison to financial health will hasten the state’s exit from the power purchase business,” Davis said. “That is clearly in the best interests of all consumers and our state’s economy.”