ComEd 2002 Annual Report Download - page 122

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Notes To Consolidated Financial Statements
exelon corporation and subsidiary companies
120
note 23 • subsequent events
On January 22, 2003, ComEd issued $350 million of 3.70% First
Mortgage Bonds, due on February 1, 2008 and $350 million of
5.875% FirstMortgage Bonds,due on February 1,2033.These bond
proceeds were used to refinance long-term debt that had been
retired during the third and fourth quarters of 2002. As part of
these bond issuances, ComEd settled various forward starting
interest rate swaps, for $43 million, which will be recorded as a
regulatory asset and amortized over the life of the debtissuance.
On January 31, 2003, ComEd called $236 million of its First
Mortgage Bonds at a redemption price of 103.86% of the prin-
cipal amount, plus accrued interest to the March 18, 2003
redemption date. The bonds, which carried an interest rate
of 8.375% and had a maturity date of February 15, 2023, are
expected to be refinanced with long-term debt.
On February 14, 2003, ComEd called $200 million of its Trust
Preferred securities at a redemption price of 100% of the prin-
cipal amount,plus accrued interest to the March 20,2003 redemp-
tion date. The preferred securities,which carried an interest rate
of 8.48% and had a maturity date of September 30, 2035, are
expected to be refinanced with trust preferred securities.
On February 20, 2003, ComEd entered into separate agree-
ments with the City of Chicago (City) and with Midwest
Generation (Midwest Agreement). Under the terms of the
agreement with the City, ComEd will pay the City $60 million
over ten years and be relieved of a requirement,originally trans-
ferred to Midwest Generation upon the sale of ComEd’s fossil
stations in 1999, to build a 500-MW generation facility. Under
the terms of the Midwest Agreement, ComEd will receive from
Midwest Generation $36 million over ten years, $22 million of
which was received on February 20, 2003, to relieve Midwest
Generation’s obligation under the fossil sale agreement.
Midwest Generation will also assume from the City a Capacity
Reservation Agreement which the City had entered into with
Calumet Energy Team, LLC (CET), that is effective through June
2012.ComEd will reimburse the City for any nonperformance by
Midwest Generation under the Capacity Reservation Agreement
and will pay approximately $2 million for amounts owed to CET
by the City at the time the agreement is executed.The net effect
of the settlement to ComEd will be amortized over the remaining
life of the franchise agreement with the City.