Terms

Series

5.00% Trust Preference Securities (Series L Preference Stock underlying)

Liquidation Preference

$25.00

Coupon Rate

5%

Rate Type

Fixed

Annual Dividend

$1.25

Payment Frequency

Quarterly

Cumulative

Yes

Perpetual

Yes

Convertible

No

Callable

Yes

First Call Date

June 26, 2022

First Call Price

$25.00

Redemption Notice Period

30 days

Capital Stack Ranking

Junior To: Cumulative Preferred Stock, Secured Debt, Unsecured Debt; Pari Passu With: Series E Preference Stock, Series F Preference Stock, Series G Preference Stock, Series H Preference Stock, Series J Preference Stock, Series K Preference Stock; Senior To: Common Stock

Regulatory (Basel III) Call

No

Tax Classification

Qualified Dividend

Qualifies for QDI

Yes

Qualifies for DRD

Yes

Depositary Share Fraction

0.01

Shares Offered

19,000,000

Prospectus Summary

SCE Trust VI, a Delaware statutory trust subsidiary of Southern California Edison Company (SCE), is issuing 19,000,000 Trust Preference Securities at $25 liquidation amount per security, each representing a 1/100th beneficial interest in SCE's 5.00% Series L Preference Stock. The fixed 5.00% annual coupon translates to $0.3125 per security per quarter, paid on March 15, June 15, September 15, and December 15, beginning September 15, 2017. These securities are cumulative, meaning that any skipped distributions accrue and must be paid in full before SCE can resume dividends on junior securities. SCE has the option to redeem on or after June 26, 2022 at $25 per security; special early redemptions are permitted (at modest premiums) for tax law changes or rating agency equity-credit reclassification events. The Trust Preference Securities effectively carry the same ranking as the underlying Series L Preference Shares: pari passu with SCE's outstanding Series E, F, G, H, J, and K Preference Stock; junior to SCE's cumulative preferred stock and all secured and unsecured debt; and senior only to common stock. Because the Trust is a pass-through vehicle that holds Series L Preference Shares issued directly by the operating utility SCE (not a holding company), there is no structural subordination concern. However, there is no regulatory capital (Tier 1) call provision—the special early redemption triggers are limited to tax law changes and rating agency equity-credit criteria changes. Critically, if SCE defaults on any debt payment or fails to pay dividends on its cumulative preferred stock, no dividends may flow to the Series L Preference Shares and therefore no distributions reach Trust Preference Security holders. At the $25 liquidation amount, the 5.00% coupon yields 5.00% annually ($1.25/year; $0.3125/quarter). Distributions qualifying as dividend income from SCE generally constitute 'qualified dividend income' (QDI) taxable at preferential 15%/20% capital gains rates for non-corporate U.S. holders, and generally qualify for the dividends-received deduction (DRD) for U.S. corporate holders, subject to holding-period and hedging limitations. Record dates fall one business day before each payment date while securities remain in book-entry form. Distributions can be interrupted if SCE fails to declare dividends on the Series L Preference Shares (dividends are 'when, as, and if declared'), or if SCE is in default on debt or behind on cumulative preferred dividends—in those cases the Guarantee does not cover the shortfall.

Summarized from the SEC prospectus filing.

Distribution History

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

Dividends on the Series L Preference Shares (and therefore distributions on the Trust Preference Securities) cannot be paid if SCE is in default on any secured or unsecured debt payment or has failed to pay dividends on its senior cumulative preferred stock.

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 63 (Strong)