8-KOther Events

EXELON CORP 8-K Report (Jul 29, 2003)

Filed July 29, 2003For Securities:EXC

Summary

This 8-K filing from Exelon Corporation (EXC) on July 29, 2003, addresses significant developments concerning its indirect subsidiary, Exelon Boston Generating, LLC (EBG), and its associated generation projects (Mystic 8 and 9, and Fore River). EBG has approximately $1.1 billion in debt under a credit facility that required project completion by June 12, 2003. While extensions were negotiated, EBG will not meet the August 29, 2003, deadline for project completion. Exelon has decided to initiate an orderly transition out of ownership of EBG and these projects, stating it will not provide additional funding beyond existing contractual obligations. Lenders have agreed not to exercise remedies during a specific period while this transition is underway.

Key Highlights

  • 1Exelon is exiting its ownership of Exelon Boston Generating, LLC (EBG) and its associated generation projects.
  • 2The EBG credit facility has a deadline for project completion which EBG will not meet.
  • 3Exelon will not provide additional funding to the projects beyond existing contractual obligations.
  • 4Lenders have agreed to a temporary moratorium on exercising remedies related to EBG's failure to meet project completion deadlines.
  • 5Exelon expects to incur an impairment charge of approximately $550 million after taxes related to its EBG assets.
  • 6The EBG debt is non-recourse to Exelon Corporation and Exelon Generation Company, LLC, and defaults are not cross-defaulted with other Exelon debt.

Frequently Asked Questions

Exelon expects to incur an impairment charge of approximately $550 million after taxes related to its EBG assets due to the decision to exit ownership of the projects.

No, the debt under the EBG Facility is non-recourse to Exelon Corporation and Exelon Generation Company, LLC. This means Exelon is not directly liable for this debt, and a default on this facility does not trigger defaults on other Exelon debt.

Exelon is initiating an orderly transition out of ownership. For a period, Exelon expects to continue providing administrative and operational services to EBG in its operation of the projects, but will not provide additional funding beyond existing contractual obligations.

The company states that it cannot predict the timing of the transition. This suggests the process may be complex and dependent on ongoing discussions with lenders and regulatory requirements.