CONFIRMATION
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Dated: March 18, 1999
To: PECO Energy Transition Trust
Attention: Xxxxxx Xxxxxxx
Phone Number: 000 000 0000
Facsimile Number: 000 000 0000
Re: Swap Transaction Series 1999-A Class A-3 Transition Bonds
Reference No.: NUUS903280 (6000000A00)
Ladies and Gentlemen:
The purpose of this letter agreement is to confirm the terms and conditions
of the Swap Transaction entered into between us on the Trade Date specified
below (the "Swap Transaction"). This letter agreement constitutes a
"Confirmation" as referred to in the Master Agreement specified below.
The definitions and provisions contained in the 1991 ISDA Definitions (as
published by the International Swaps and Derivatives Association, Inc.
("ISDA")) are incorporated into this Confirmation. For these purposes, all
references in such Definitions to a "Swap Transaction" shall be deemed to
apply to the Transactions referred to herein. In the event of any
inconsistency between those Definitions and provisions and this
Confirmation, this Confirmation will govern. In this Confirmation,
capitalized terms not defined herein or in the 1991 ISDA Definitions shall
have the same meanings as set forth in the Prospectus, dated March 18,
1999, PECO Energy Transition Trust Transition Bonds Issuable in Series.
1. This Confirmation supplements, forms part of, and is subject to, the
ISDA Master Agreement dated as of March 18, 1999, as amended and
supplemented from time to time, between you and us, and the Schedule
thereto (the "Agreement"). All provisions contained in the Agreement govern
this Confirmation except as expressly modified below and, in particular,
Party Y's obligations to make payments to Party X pursuant to the terms of
this confirmation are subject to the Schedule Part 4(o) provision entitled
"No Recourse."
2. The terms of the particular Transaction to which this Confirmation
relates are as follows:
Party X: Xxxxxxx Xxxxx Mitsui Marine Derivative Products, L.P.
Party Y: Peco Energy Transition Trust
Initial Notional Amount: USD 667,000,000
Notional Amount for all Calculation
Periods from and including that which
commences on and includes
the Effective Date to and
including that which ends
on but excludes
March 1, 2001: USD 667,000,000
Notional Amount for all subsequent Calculation Periods:
A USD amount equal to the outstanding principal balance of the Floating Rate
Series 1999-A Class A-3 Transition Bonds as of the close of business on the
preceding Payment Date after giving effect to all payments of principal made to
the holders thereof on such preceding Payment Date pursuant to an optional
redemption, in whole or in part, or pursuant to other expected principal
repayments.
Early Redemption:
In the event that the Notional Amount amortizes in whole on a date other than a
Payment Date as a result of an optional redemption of the Class A-3 Transition
Bonds, then the redemption date shall be deemed to be the Termination Date.
Following any such Optional Redemption and cancellation, the parties shall be
relieved of all further payment obligations hereunder except for payment of all
accrued but yet unpaid amounts calculated to but excluding the redemption date,
if any, and any interest thereon. In the event that the Notional Amount
amortizes in part on a date other than a Payment Date as a result of an optional
redemption in part of the Class A-3 Transition Bonds, then the applicable
redemption date shall be deemed to be a Period End Date only with respect to the
Fixed and Floating Payments applicable to the redeemed portion of the Notional
Amount. On the redemption date, the parties shall be relieved of all further
payment obligations with regard to the redeemed portion of the Notional Amount
except for payment of all accrued but yet unpaid amounts (and any interest
thereon) with regard to the redeemed portion of the Notional Amount calculated
to but excluding the redemption date. Following any such Optional Redemption in
part, the Fixed and Floating Amounts subsequent to the redemption date shall be
adjusted by the Calculation Agent to give effect to such reduction.
Trade Date: March 18, 1999
Effective Date: March 25, 1999
Termination Date: March 1, 2006
Business Day: Philadelphia, PA, Wilmington, DE and New York, NY
Fixed Amounts: Fixed Rate Payer: Party Y
Fixed Rate Payer Period End Dates: Fixed Rate Payer Payment
Dates: Semiannually, on each March 1 and September 1, commencing on
September 1, 1999 and ending on the Termination Date, subject to no adjustment.
One Business Day preceding each Fixed Rate Payer Period End Date
Fixed Rate: 6.577%
Fixed Rate Day Count Fraction: 30/360
Floating Amounts: Floating Rate Payer: Party X
Floating Rate Payer Period End Dates: Floating Rate Payer Payment
Dates: Semiannually, on each March 1 and September 1, commencing on September 1,
1999 and ending on the Termination Date, subject to adjustment in accordance
with the Following Business Day Convention. One Business Day preceding each
Floating Rate Payer Period End Date
Floating Rate Option: USD-LIBOR-BBA
Floating Rate Designated Maturity: 6 months
Floating Rate Spread: Plus 0.125%
Floating Rate Date Count Fraction: Actual/360
Floating Rate Reset Dates: The first Day of each Calculation
Period
3. Additional Provisions:
Early Termination Calculation:
If at any time the Agreement and this Transaction are terminated pursuant
to Section 6 of the Agreement, to the extent that a termination payment is
contemplated pursuant to the Agreement, the Settlement Amount shall be
calculated as though the Notional Amount for this Transaction was as set forth
in Annex A hereto under the column "Expected Notionals" (subject to any
necessary adjustments arising from a partial redemption) but with regard to
calculations related to the Calculation Period in which the Early Termination
Date occurs, the actual Notional Amount in effect on the first day of that
Calculation Period shall be used.
4. Account Details
Payments to Party X:
Account for payments in USD:
ABA/Bank No: 000000000
Account No: 9301034733
Name of Bank: Chase Manhattan Bank, New York
For the Account of: Xxxxxxx Xxxxx Mitsui
Marine Derivative Products, L.P.
Payments to Party Y:
Account for payments in USD:
ABA/Bank No: 000000000
Account No: 760009
Reference: Peco Energy
Transition Trust Ser 1999-A Cl
A-3 Sub A/C
Please confirm that the foregoing currently sets forth the terms of our
agreement by executing the copy of this Confirmation enclosed for that purpose
and returning it to us or by sending to us a letter or telex substantially
similar to this letter, which letter or telex sets forth the material terms of
the Swap Transaction to which this Confirmation relates and indicates Agreement
to those terms.
Except if expressly agreed to by us in writing, we have not acted as your
advisor with respect to the desirability or appropriateness of entering into the
Swap Transaction confirmed hereby or with respect to your risk management needs
generally. This pertains not only to the financial and market risk management
risks and consequences of the confirmed or any proposed transaction, but also to
any legal, regulatory, tax, accounting and credit issues generated by such
transactions, which you must evaluate for yourself and in reliance on your own
professional advisors.
We believe any information provided to you by us in connection with the
confirmed or any proposed transaction to be accurate and reliable, but we cannot
and do not assume any liability for any erroneous information which we might
provide to you, other than information set forth in this Confirmation (Ref. No.:
NUUS903280 (6000000A00)).
Yours sincerely,
XXXXXXX XXXXX MITSUI MARINE
DERIVATIVE PRODUCTS, L.P.
By: GSMMDPGP, Inc.,
General Partner
BY: /s/ Xxxxxxx Xxxxxxx
Name: Xxxxxxx Xxxxxxx
Title: Vice President
Confirmed as of the
date first above written:
PECO ENERGY TRANSITION TRUST
By: /s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx
Beneficiary Trustee
Annex A
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For the Calculation Period Expected Minimum Maximum
ending on but excluding: Notionals: Notionals, Notionals:
9/1/99 667.0 667.0 667.0
3/1/00 667.0 667.0 667.0
9/1/00 667.0 667.0 667.0
3/1/01 667.0 667.0 667.0
9/1/01 667.0 0.0 667.0
3/1/02 608.8 0.0 667.0
9/1/02 549.4 0.O 667.0
3/1/03 481.4 0.0 667.0
9/l/03 330.2 0.0 667.0
3/1/04 161.2 0.0 667.0
9/1/04 0.0 0.0 667.0
3/l/05 0.0 0.0 667.0
9/l/05 0.0 0.0 667.0
3/1/06 0.0 0.0 667.0
