Exelon 2003 Annual Report Download - page 119

117Notes to Consolidated Financial Statements
EXELON CORPORATION AND SUBSIDIARY COMPANIES
Mandatorily Redeemable Preferred Securities
See Note 1—Significant Accounting Policies for a discussion
of the adoptions of FIN No. 46 and FIN No. 46-R and the re-
sulting deconsolidation of ComEd Financing II, ComEd
Financing III, PECO Trust III and PECO Trust IV from Exelon’s
consolidated financial statements.
At December 31, 2002, the preferred securities of the fi-
nancing trusts of ComEd and PECO were recorded in the
consolidated financial statements of Exelon as follows:
Mandatory
Redemption
Date
Distribution
Rate
Liquidation
Value
Trust
Securities
Outstanding
Dollar
Amount
PECO Energy Capital Trust II 2037 8.00% $ 25 2,000,000 $ 50
PECO Energy Capital Trust III 2028 7.38% 1,000 78,105 78
Total 2,078,105 $ 128
ComEd Financing I 2035 8.48% $ 25 8,000,000 $200
ComEd Financing II 2027 8.50% 1,000 150,000 150
Unamortized discount (20)
Total 8,150,000 $ 330
During 2003, the following mandatorily redeemable preferred securities were issued:
Company Type Amount Rate Maturity
ComEd Mandatorily Redeemable Preferred
Securities–ComEd Financing III $200 6.35% March 15, 2033
During 2003, the following mandatorily redeemable preferred securities were retired or redeemed:
Company Type Amount Rate Maturity
ComEd Mandatorily Redeemable Preferred
Securities–ComEd Financing I $200 8.48% September 30, 2035
PECO Mandatorily Redeemable Preferred
Securities–PECO Energy Capital Trust II $ 50 8.00% June 6, 2037
The securities issued by the PECO trusts represent
Company—Obligated Mandatorily Redeemable Preferred
Securities of a Partnership (COMPrS) having a distribution
rate and liquidation value equivalent to the trust securities.
The COMPrS are the sole assets of these trusts and represent
limited partnership interests of PECO Energy Capital, L.P.
(Partnership), a Delaware limited partnership. Each holder of
a trust’s securities is entitled to withdraw the corresponding
number of COMPrS from the trust in exchange for the trust
securities so held. Each series of COMPrS is supported by
PECO’s deferrable interest subordinated debentures, held by
the Partnership, which bear interest at rates equal to the dis-
tribution rates on the related series of COMPrS.
On March 20, 2003, ComEd Financing I, a financing sub-
sidiary of ComEd, redeemed $200 million of 8.48% trust pre-
ferred securities at a redemption price of 100% of the
principal amount, plus accrued distributions. ComEd re-
deemed $206 million of 8.48% subordinated debentures is-
sued to ComEd Financing I. The preferred securities were
refinanced with the proceeds from a March 17, 2003 issue of
$200 million of 6.35% trust preferred securities by ComEd
Financing III, a financing subsidiary of ComEd, which are
mandatorily redeemable in 2033. The 8.48% subordinated
debentures were refinanced with the proceeds from a March
17, 2003 issue of $206 million of 6.35% subordinated de-
bentures due 2033 from ComEd to ComEd Financing III.
During June 2003, PECO issued $103 million of 5.75% sub-
ordinated debentures due 2033 to PECO Trust IV in con-
nection with the issuance by PECO Trust IV of $100 million of
5.75% preferred securities that are mandatorily redeemable
in 2033. The proceeds of the issue were used to redeem the
trust preferred securities discussed below and preferred
stock as disclosed below.
Also on June 24, 2003, PECO Energy Capital Trust II, a fi-
nancing subsidiary of PECO, redeemed $50 million of its
8.00% trust preferred securities at a redemption price of $25
per trust receipt, plus accrued and unpaid distributions.
PECO redeemed $52 million of 8.00% subordinated de-
bentures to PECO Energy Capital Trust II.