Edison International’s Bonds Decline as Southern California Wildfires Continue

Edison International’s bonds experienced further weakening on Monday, continuing a week-long trend of losses, as wildfires ravaged Southern California, where the company’s electric utility operates.

The risk premiums on Edison International’s debt increased, with bonds at the parent company performing worse than the secured debt at its utility subsidiary. The company’s 4.95% senior unsecured bonds maturing in April saw a widening of 270 basis points, reaching 348 basis points by 1:02 p.m. New York time. Meanwhile, its 5.75% bonds due in 2027 widened by 76 basis points to 198 basis points.

On the other hand, spreads on bonds issued by Southern California Edison, the utility arm of the company, fared better. The utility’s 5.2% first lien bonds maturing in 2034 only widened by 19 basis points to 114 basis points.

Southern California, including Los Angeles, is currently grappling with a second week of strong winds, which are worsening the wildfires. Edison International has filed two incident reports with the California Public Utilities Commission regarding the fires. Preliminary assessments of transmission lines in the Eaton Canyon area revealed no abnormalities prior to the fire, according to the company.

Despite the negative credit implications of these reports, GimmeCredit analyst Carol Levenson noted in a Monday note that previous legislative actions aimed at protecting the financial stability of California’s utilities offer some reassurance.

Edison International, based in Rosemead, California, has also pledged $1 million to support relief efforts and assist those impacted by the wildfires. Southern California Edison provides electricity to approximately 15 million people across Southern, Central, and Coastal California.