S&P rates Midwest Generation

Standard & Poor's said it has assigned its B corporate credit rating to Midwest Generation LLC and assigned its B+ rating and its 1 recovery rating to Midwest Generation's planned $700 million first lien term loan due 2011 and $200 million first lien working capital facility due 2009.

The outlook is negative.

S&P also assigned its B- rating and 3 recovery rating to Midwest Finance Corp.'s $1 billion in second lien notes due 2034. Midwest Finance is a newly created issuing entity for the notes whose repayment obligations are guaranteed by its parent, Midwest Generation.

Edison Mission Energy is restructuring Midwest Generation by refinancing debt maturing in 2004, structuring new debt with bullet maturities to stabilize near-term obligations, and eliminating the onerous Collins lease. Midwest Generation plans to use the proceeds of the term loan and notes to terminate the Collins Station lease, which involves retiring $774 million in notes issued by Midwest Funding LLC (B/negative/--) due December 2004 and making a $196 million payment to the lease equity, PSE&G Corp.

Additionally, Midwest Generation will use the proceeds to retire $693 million in credit facility obligations of EMMH due in December 2004. The new $200 million working capital facility replaces the undrawn $150 million working capital facility due 2004.

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