8-KFinancial EventsExhibits & Filings

CONSOLIDATED EDISON INC 8-K Report, Financial Obligation (Jun 1, 2005)

Filed June 1, 2005For Securities:ED

Summary

This Form 8-K filing by Consolidated Edison, Inc. (ED) on behalf of its subsidiary, Consolidated Edison Company of New York, Inc., reports on the creation of a direct financial obligation related to bond refinancing. On May 25, 2005, Con Edison of New York entered into an agreement to issue $126.3 million in Facilities Revenue Bonds, Series 2005A, through the New York State Energy Research and Development Authority (NYSERDA). The primary purpose of this issuance is to refund existing debt, specifically $128.3 million of Series 1995 A Facilities Refunding Revenue Bonds, which will be redeemed on July 1, 2005. This refinancing is expected to provide Con Edison of New York with a lower initial interest rate, as the new bonds bear interest at a variable weekly rate, starting at 3.00%, compared to the prior bonds' fixed 6.10% rate. The new bonds mature in 2039 and have provisions for optional and mandatory redemption.

Key Highlights

  • 1Consolidated Edison Company of New York, Inc. issued $126.3 million in NYSERDA Facilities Revenue Bonds, Series 2005A.
  • 2The issuance occurred on May 25, 2005, with the bonds issued on May 26, 2005.
  • 3The purpose is to refund $128.3 million of Series 1995 A Facilities Refunding Revenue Bonds, scheduled for redemption on July 1, 2005.
  • 4The new bonds mature on May 1, 2039, and are subject to optional and mandatory redemption.
  • 5Interest on the new bonds is at a variable weekly rate, which initially was 3.00% per annum.
  • 6The refinancing is expected to lower interest costs for Con Edison of New York.
  • 7The transaction involves covenants related to tax-exempt status, liquidity, credit facilities, and debt-to-capital ratios.

Frequently Asked Questions

The primary financial event is the creation of a direct financial obligation by Consolidated Edison Company of New York, Inc. through the issuance of $126.3 million in NYSERDA Facilities Revenue Bonds, Series 2005A, to refinance existing debt.

The refinancing is significant as it allows Con Edison of New York to replace older, higher-interest debt (6.10% fixed) with new debt that has a lower initial interest rate (variable weekly, starting at 3.00%). This is likely to reduce the company's interest expenses.

The new Refunding Bonds mature on May 1, 2039. They are subject to optional redemption by Con Edison of New York at 100% of the principal amount plus accrued interest. They are also subject to mandatory redemption on or after May 26, 2025, if the State of New York requires it.

Yes, Con Edison of New York has agreed to certain covenants related to maintaining the tax-exempt status of the financing, liquidity, and credit facilities. Additionally, under the Reimbursement Agreement, the company must maintain a debt-to-total capital ratio not exceeding 0.65 to 1 and has agreed that default in other debt obligations exceeding $100 million will be an event of default. Failure to comply with these covenants could lead to the bonds becoming immediately due and payable.