November 20, 2012 / 4:20 PM / in 5 years

TEXT-Fitch cuts Edison Mission Energy, Midwest Generation to 'C'

Nov 20 - Fitch Ratings has downgraded Edison Mission Energy (EME) and
Midwest Generation LLC's (MWG) Long-term Issuer Default (IDR) ratings to 'C'
from 'CC'. Fitch has also affirmed EME's senior unsecured debt and recovery
ratings at 'C' and RR5, respectively. Fitch notes that MWG's secured working
capital facility expired in June 2012. Approximately $3.7 billion of long-term,
senior unsecured debt is affected by the rating action.

The ratings of Edison International (EIX) and Southern California Edison
 (SCE) are not affected by the rating action. EIX has managed EME on
a stand-alone basis. Fitch does not expect any direct financial exposure to
result from the anticipated EME bankruptcy. Similarly, SCE operations are
separate from EIX and EME consistent with prevailing California Public Utilities
Commission regulations.

Fitch considers 'C' category credits to possess exceptionally high levels of
credit risk. The 'C' category also indicates default is imminent or inevitable,
or the issuer is in standstill.

Conditions indicative of a 'C' category rating include:
--That the issuer has entered into a grace or cure period following non-payment
of a material financial obligation;
--The issuer has entered into a temporary negotiated waiver or standstill
agreement following a payment default on a material financial obligation; or
--Fitch Ratings otherwise believes a condition of 'RD' (Restricted Default) or
'D' (Default) to be imminent or inevitable, including through the formal
announcement of a distressed debt exchange.

On Nov. 15, 2012, EME filed form 8k with the Securities and Exchange Commission
indicating that the company elected not to make interest payments totaling $97
million on senior unsecured debt scheduled to mature in 2017, 2019 and 2027. EME
bond documents provide a 30-day grace period, which expires on Dec. 17, 2012. If
the interest payment is not made prior to the end of the grace period on
December 17th, the company is likely to file for Chapter 11 protection under the
U.S. Bankruptcy Code.

An EME bankruptcy would be an event of default under Midwest Generation, LLC's
Powerton-Joliet lease.

'C' is the lowest rating assigned to debt instruments in Fitch's rating scale.
The 'RR5' Recovery Rating is based on a recovery level of approximately 11% to
30% of principal claims by senior unsecured creditors.

Contact:

Primary Analyst
Philip W. Smyth, CFA
Senior Director
+1-212-908-0531
Fitch, Inc.
One State Street Plaza
New York, NY 10004

Secondary Analyst
Glen Grabelsky
Managing Director
+1-212-908-0577

Committee Chairperson
Sharon Bonelli
Managing Director
+1-212-908-0581


Media Relations: Brian Bertsch, New York, Tel: +1 212-908-0549, Email:
brian.bertsch@fitchratings.com.

Additional information is available at 'www.fitchratings.com'. The ratings above
were solicited by, or on behalf of, the issuer, and therefore, Fitch has been
compensated for the provision of the ratings.

Applicable Criteria and Related Research:
--'Corporate Rating Methodology' (Aug. 8, 2012);
-- Recovery Ratings and Notching Criteria for Non-Financial Corporate Issuers'
(Nov. 13, 2012);
--'Parent and Subsidiary Rating Linkage' (Aug. 8, 2012).

Applicable Criteria and Related Research:
Corporate Rating Methodology
Recovery Ratings and Notching Criteria for Non-Financial Corporate Issuers
Parent and Subsidiary Rating Linkage

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS.
PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK:
here. IN ADDITION, RATING
DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S
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METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF
CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE
AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF
CONDUCT' SECTION OF THIS SITE.


     

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