Company: SCE-PL
Filing Date: 2025-11-24
Form Type: 424B1
Source: 0001193125-25-293755
Chunk: 149

Company: SOUTHERN CALIFORNIA EDISON Co
Filing Date: 2025-11-24
Form: 424B1
Chunk 149
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 provided, however, that no such amendment shall (a) increase or reduce in any manner
the amount of, or accelerate or delay the timing of collections of fixed recovery charges or (b) reduce the percentage of the outstanding amount of the bonds, the holders of which are required to consent to any such amendment, without the
consent of the holders of all the outstanding bonds.

HOW A BANKRUPTCY MAY AFFECT YOUR INVESTMENT

Challenge to True Sale Treatment

SCE
will represent and warrant that the transfer of the recovery property in accordance with the sale agreement constitutes a true and valid sale and assignment of that recovery property by SCE to us. It will be a condition of closing for the sale of
the recovery property pursuant to the sale agreement that SCE will take the appropriate actions under the Wildfire Financing Law to perfect this sale. The Wildfire Financing Law provides that a transfer of recovery property by an electrical
corporation to an affiliate or a financing entity (as defined in the Wildfire Financing Law) which the parties have in the governing documentation expressly stated to be a sale or other absolute transfer, in a transaction approved in a financing
order, shall be treated as an absolute transfer of all the transferor’s right, title and interest, as in a “true sale”, and not as a pledge or other financing, of the relevant recovery property, other than for U.S. federal and
state income and franchise tax purposes. We and SCE will treat such a transaction as a sale under applicable law. However, we expect that bonds will be reflected as debt on SCE’s consolidated financial statements. In addition, we anticipate
that the bonds will be treated as debt of SCE for U.S. federal income tax purposes. Please read “Material U.S. Federal Income Tax Consequences” in this prospectus. In the event of a bankruptcy of a party to a sale agreement, if a
party in interest in the bankruptcy were to take the position that the transfer of the recovery property to us pursuant to that sale agreement was a financing transaction and not a true sale under applicable creditors’ rights principles, there
can be no assurance that a court would not adopt this position. Even if a court did not ultimately recharacterize the transaction as a financing transaction, the mere commencement of a bankruptcy of SCE and the attendant possible uncertainty
surrounding the treatment of the transaction could result in delays in payments on the bonds.

In that regard, we note that the bankruptcy
court in In re LTV Steel Company, Inc