Edison International (EIX) and its subsidiary Southern California Edison (SCE) announced a cash tender offer to purchase all outstanding shares of three preferred‑equity instruments: the 5.00% Fixed‑Rate Reset Cumulative Perpetual Preferred Stock, Series B; the 5.375% Fixed‑Rate Reset Cumulative Perpetual Preferred Stock, Series A; and the 5.45% Fixed‑to‑Floating Rate Trust Preference Securities issued by SCE Trust V, a Delaware statutory trust subsidiary of SCE. The offer is structured to retire these preferred instruments and replace them with lower‑cost debt or equity, thereby reducing long‑term interest obligations and simplifying the company’s capital structure.
The tender offers set purchase prices of $995 per $1,000 liquidation preference for Series B and $1,000 per $1,000 for Series A, with the trust securities priced at $1,000 per $1,000. The offers expire on December 19 2025, giving shareholders a 30‑day window to submit tendered shares. The total potential proceeds could reach approximately $1.2 billion, reflecting the combined market value of the preferred stock outstanding.
Strategically, the buyback aligns with Edison’s $28‑$29 billion capital plan through 2028, which focuses on grid modernization, reliability upgrades, and clean‑energy initiatives. By retiring higher‑yield preferred equity, the company can lower its weighted average cost of capital and free up capital for these projects. The move also follows a similar tender offer in late 2023, indicating a continued focus on optimizing the capital structure in response to favorable interest‑rate conditions.
The timing of the offer coincides with a broader shift in the utility sector toward lower‑cost financing. Rising interest rates have made debt financing more attractive relative to preferred equity, and the fixed‑rate reset feature of the targeted series means future dividend rates could increase if market rates rise. Retiring the preferred stock now locks in current rates and eliminates the risk of higher future payouts.
The tender offers are expected to reduce Edison’s long‑term interest expense by an estimated $50 million annually, while also improving debt‑to‑equity ratios and potentially enhancing credit metrics. The company will seek regulatory approval and shareholder acceptance before the December 19 deadline, after which the offers will be withdrawn if not fully subscribed.
Overall, the cash tender offers represent a proactive financial management strategy designed to strengthen Edison’s balance sheet, support its capital‑intensive grid‑upgrade agenda, and position the company for continued growth in a regulated environment with evolving wildfire and climate‑related risks.
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