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ONCOR ELECTRIC DELIVERY PRELIMINARY FEBRUARY 26, 2004
TRANSITION BOND COMPANY LLC
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PRELIMINARY TERM SHEET AND COMPUTATIONAL MATERIALS
ONCOR ELECTRIC DELIVERY
TRANSITION BOND COMPANY LLC,
[GRAPHIC ISSUER [GRAPHIC
OMITTED] OMITTED]
$790,000,000*
TRANSITION BONDS, SERIES 2004-1
ONCOR ELECTRIC DELIVERY COMPANY,
SERVICER
TRANSACTION OVERVIEW
This transaction is pursuant to the Texas Electric Utility Restructuring Act
enacted in June 1999 ("Restructuring Act"). The Restructuring Act authorizes
Texas electric utilities to recover the costs of their generation-related
regulatory assets and certain qualified costs using transition bonds supported
by irrevocable financing orders issued by the Public Utility Commission of Texas
("PUCT").
Pursuant to the PUCT's irrevocable financing order of August 5, 2002 (the
"Financing Order"), Oncor Electric Delivery Company ("Oncor") established a
bankruptcy-remote special purpose subsidiary company ("Issuer") that will issue
transition bonds ("series 2004-1 bonds"). The PUCT has authorized a special
non-bypassable financial charge ("Transition Charge" or "TC") on all retail
electric consumers, including the State of Texas and other governmental
entities, in Oncor's service territory (approximately 2.7 million consumers) to
pay principal and interest and other administrative expenses of the offering.
Oncor will collect Transition Charges on behalf of the Issuer and remit the
Transition Charges daily to the Indenture Trustee. Transition Charges are
required to be adjusted annually, and in some instances every six months, to
ensure timely payment of principal and interest.
The PUCT guarantees that it will take specific actions pursuant to the Financing
Order, as expressly authorized by the Restructuring Act, to ensure that
Transition Charge revenues are sufficient to pay principal and interest on the
series 2004-1 bonds. The series 2004-1 bonds will not be a liability of Oncor or
any of its affiliates (other than the Issuer). The series 2004-1 bonds will not
be a debt or obligation of the State of Texas, the PUCT or any other
governmental agency or instrumentality, and are not a charge on the full faith
and credit or taxing power of the State of Texas.
XXXXXXX XXXXX & CO. WACHOVIA SECURITIES
BANC OF AMERICA SECURITIES LLC BEAR, XXXXXXX & CO. INC.
CITIGROUP CREDIT SUISSE FIRST BOSTON
X.X. XXXX & COMPANY
-----------------
SABER PARTNERS, LLC
Financial Advisor to the Public Utility Commission of Texas
* Preliminary; subject to change
[GRAPHIC OMITTED]
Texas Transition Bonds
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ONCOR ELECTRIC DELIVERY PRELIMINARY FEBRUARY 26, 2004
TRANSITION BOND COMPANY LLC
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$790,000,000*
ONCOR ELECTRIC DELIVERY TRANSITION BOND COMPANY LLC
TRANSITION BONDS, SERIES 2004-1
SUMMARY OF TERMS
ANTICIPATED BOND STRUCTURE
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SIZE EXPECTED AVERAGE LIFE SCHEDULED PAYMENT WINDOW
TRANCHE/1/ ($MM) (YEARS) MATURITY/2/ (MONTHS) INTEREST RATE
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ISSUER.................... Oncor Electric Delivery Transition Bond Company LLC,
a bankruptcy-remote limited liability company,
wholly-owned by Oncor, which carries out
non-commercial functions at the behest of, and is
responsible to, the State of Texas and the PUCT.
EXPECTED RATINGS ......... Aaa/AAA/AAA by Xxxxx'x, S&P and Fitch, respectively.
PARENT/SELLER/SERVICER.... Oncor is a State of Texas fully regulated electric
transmission and distribution utility wholly-owned
by TXU US Holdings Company, a wholly-owned
subsidiary of TXU Corp.
Oncor provides delivery services to retail electric
providers in its service territory, which sell
electricity to over 2.7 million consumers in
north-central, eastern and western Texas.
PUCT
FINANCIAL ADVISOR......... Saber Partners, LLC ("Saber") (co-equal decision
maker with Issuer).
BOND STRUCTURE............ Sinking fund bond; tranches pay sequentially.
PAYMENT DATES AND
INTEREST ACCRUAL.......... Semi-annually, [February] and [August]. Interest
will be calculated on a [30/360] basis. The first
scheduled payment date is [August 15], 2004.
OPTIONAL REDEMPTION....... None. Non-call life.
WEIGHTED AVERAGE LIFE
PROFILE................... Stable. There is no prepayment risk. Extension risk
is statistically insignificant.
Please see "Mandated True-up Mechanism to Ensure
Payment Schedule" and "Mandated True-up Mechanism"
below.
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1 Each tranche pays sequentially.
2 The final maturity (i.e., the date by which the principal must be repaid to
prevent a default) of each tranche of the series 2004-1 bonds is two years
after the scheduled maturity date for such tranche.
* Preliminary; subject to change.
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The information herein has been prepared solely for informational purposes and
is not an offer to buy or sell or a solicitation of an offer to buy or sell any
security or instrument or to participate in any trading strategy. No
representation or warranty can be given with respect to the accuracy or
completeness of the information herein, or that any future offer of securities,
instruments or transactions will conform to the terms hereof. Please refer to
the important information and qualification on the last page hereof when
reviewing this information.
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ONCOR ELECTRIC DELIVERY PRELIMINARY FEBRUARY 26, 2004
TRANSITION BOND COMPANY LLC
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SECURITY.................. The irrevocable right, pursuant to the Financing
Order implemented by the PUCT, to bill and collect a
non-bypassable consumption-based charge from all
retail consumers of electricity, including the State
of Texas and other governmental entities, in Oncor's
historic service territory ("Series 2004-1
Transition Property").
In addition, there is an overcollateralization
subaccount (accumulated in equal installments over
the life of the series 2004-1 bonds up to 0.5% of
the initial principal balance of the bonds), a
capital subaccount (upfront deposit of 0.5% of the
series 2004-1 bonds' initial principal balance), and
a reserve subaccount (containing excess amounts, if
any, not needed to make payments on the series
2004-1 bonds).
MANDATED TRUE-UP
MECHANISM TO
ENSURE PAYMENT SCHEDULE... The Restructuring Act requires Transition Charges on
all retail electric consumers, including the State
of Texas and other governmental entities, to be
adjusted annually, and in some instances every six
months, to ensure timely payment of principal and
interest. There is no "cap" on the level of
Transition Charges that may be imposed on consumers
of electricity, including the State of Texas and
other governmental entities, to meet scheduled
principal and interest on the series 2004-1 bonds.
The True-up Mechanism is intended to guarantee the
recovery of Transition Charges in amounts sufficient
to pay interest, scheduled principal and other
required amounts on a timely basis.
The True-up Mechanism and all other obligations of
the State of Texas and the PUCT set forth in the
Financing Order are direct, explicit, irrevocable
and unconditional upon issuance of the series 2004-1
bonds, and are legally enforceable against the State
of Texas and the PUCT. Please see "Mandated True-up
Mechanism" below.
TYPE OF OFFERING ......... SEC registered.
ADDITIONAL ONGOING
DISCLOSURE;
TRANSPARENCY (WEBSITE).... The indenture under which the series 2004-1 bonds
will be issued requires all of the periodic reports
that the Issuer files with the SEC, the principal
transaction documents and other information
concerning the Transition Charges and security
relating to the series 2004-1 bonds to be posted on
the website associated with the Issuer's parent,
located at XXX.XXXXXXXXXX.XXX. Furthermore, so long
as any series 2004-1 bonds are outstanding, the
Issuer also is obligated to continue filing periodic
reports under the Securities Exchange Act of 1934
and the rules, regulations or orders of the SEC,
even if it would otherwise be permitted to suspend
such filings.
TAX TREATMENT............. Fully taxable.
ERISA ELIGIBLE ........... Yes.
INDENTURE TRUSTEE......... The Bank of New York.
EXPECTED SETTLEMENT....... [________, 2004], settling flat. DTC, Clearstream
and Euroclear.
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The information herein has been prepared solely for informational purposes and
is not an offer to buy or sell or a solicitation of an offer to buy or sell any
security or instrument or to participate in any trading strategy. No
representation or warranty can be given with respect to the accuracy or
completeness of the information herein, or that any future offer of securities,
instruments or transactions will conform to the terms hereof. Please refer to
the important information and qualification on the last page hereof when
reviewing this information.
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ONCOR ELECTRIC DELIVERY PRELIMINARY FEBRUARY 26, 2004
TRANSITION BOND COMPANY LLC
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USE OF PROCEEDS........... Paid to the parent company, Oncor, to retire debt or
equity. May not be used for general corporate
purposes or commercial purposes.
RELATIONSHIP TO THE
SERIES 2003-1 BONDS....... On August 21, 2003, the Issuer issued and sold
$500,000,000 of transition bonds ("series 2003-1
bonds") in accordance with the Financing Order.
Issuance of the series 2004-1 bonds does not require
the prior approval of the holders of the series
2003-1 bonds. However, the series 2004-1 bonds may
not be issued unless the applicable rating agencies
confirm that such issuance would not result in a
reduction or withdrawal of the then-current ratings
on the outstanding series 2003-1 bonds.
The security pledged to secure the series 2004-1
bonds will be separate from that securing the series
2003-1 bonds or any other series of transition
bonds. The collection of Transition Charges and the
timely payment of all amounts in respect of the
series 2003-1 bonds will not adversely affect
collections of Transition Charges and timely payment
of all amounts in respect of the series 2004-1
bonds.
The outstanding series 2003-1 bonds are currently
rated Aaa/AAA/AAA.
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The information herein has been prepared solely for informational purposes and
is not an offer to buy or sell or a solicitation of an offer to buy or sell any
security or instrument or to participate in any trading strategy. No
representation or warranty can be given with respect to the accuracy or
completeness of the information herein, or that any future offer of securities,
instruments or transactions will conform to the terms hereof. Please refer to
the important information and qualification on the last page hereof when
reviewing this information.
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ONCOR ELECTRIC DELIVERY PRELIMINARY FEBRUARY 26, 2004
TRANSITION BOND COMPANY LLC
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PARTIES TO TRANSACTION
The following chart represents the parties to the transactions underlying the
offering of the series 2004-1 bonds. It describes their roles and relationships
to the other parties:
[Chart summarizing the parties to the transactions underlying the offering of
the transition bonds, their roles and relationships to the other parties. The
PUCT issues a financing order. Oncor Electric Delivery Transition Bond Company,
LLC issues the Transition Bonds and purchases Transition Property from Oncor.
Oncor, as servicer, calculates charges by customer class to meet the payment
schedule, prepares true-ups and submits filings to the PUCT, which approves the
transition charges on customer bills. The 2.7 million retail electric consumers
pay the transition charges based on consumption to retail electric providers who
pay the billed transition charges, whether or not received, to Oncor, as
servicer. Oncor, as servicer, then pays on a daily basis, all transition
charges collected to the Transition Bond Indenture Trustee, who then pays
principal and interest semi-annually to the Bondholders.]
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The information herein has been prepared solely for informational purposes and
is not an offer to buy or sell or a solicitation of an offer to buy or sell any
security or instrument or to participate in any trading strategy. No
representation or warranty can be given with respect to the accuracy or
completeness of the information herein, or that any future offer of securities,
instruments or transactions will conform to the terms hereof. Please refer to
the important information and qualification on the last page hereof when
reviewing this information.
Page 4 of 9
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ONCOR ELECTRIC DELIVERY PRELIMINARY FEBRUARY 26, 2004
TRANSITION BOND COMPANY LLC
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WEIGHTED AVERAGE LIFE SENSITIVITY
Changes in the expected weighted average lives ("WAL") (months) of three
hypothetical tranches of series 2004-1 bonds with weighted average lives of 3, 7
and 10.46 years, respectively, in relation to variances in actual energy
consumption levels (retail electric sales) from forecasted levels are shown
below. There can be no assurance that the weighted average lives of the actual
tranches of the series 2004-1 bonds will be as shown below.
[Chart reflecting changes in the weighted average lives of three hypothetical
tranches of series 2004-1 bonds with weighted average lives of 3, 7 and 10.46
years in relation to variances in actual energy consumption levels from certain
forecasted levels. Comparisons are made with a base case (0% stress), 5% stress
case and 15% stress case.]
SEVERE STRESS CASES
Over the last ten years ending December 31, 2002, Oncor's annual forecast error
has not exceeded 6%, and its ten-year average forecast error is less than 1%
(0.77%).
EXAMPLE #1: 5% DECLINE IN CONSUMPTION (1.5 STANDARD DEVIATIONS FROM MEAN) VS.
FORECASTED LEVELS RESULTS IN NO CHANGE IN WAL
If retail electric sales are 5% less than the forecasted energy consumption each
year for twelve consecutive years, there would be no change in the WAL of any
tranche of series 2004-1 bonds.
EXAMPLE #2: 15% DECLINE IN CONSUMPTION (5 STANDARD DEVIATIONS FROM MEAN) VS.
FORECASTED LEVELS RESULTS IN 0.7-1.6 MONTHS CHANGE IN WAL
If retail electric sales are 15% less than the forecasted energy consumption
each year for twelve consecutive years, the WAL of Tranche 3 would extend by
less than a month. The WAL of the other tranches would extend from approximately
1.2 to 1.6 months.
-------------
For the purposes of preparing the chart and examples above, the following
assumptions, among others, have been made:
o The forecast error stays constant over the life of the series 2004-1 bonds
and is equal to 5% or 15% as stated in the chart above. The servicer will
true-up Transition Charges so as to ensure the billing of TCs expected to
be necessary to generate the collection of amounts sufficient to (a) pay
ongoing fees and expenses, (b) timely provide for all scheduled payments of
principal and interest and (c) fund the capital and overcollateralization
subaccounts to their required levels;
o Periodic annual standard true-ups on a transaction year basis;
o Interim true-ups have been modeled to be implemented only after a 5%
variance from the expected amortization schedule (taking into account
amounts in the reserve subaccount) has occurred;
o No non-standard true-ups have been modeled; and
o Settlement date of March 2004.
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The information herein has been prepared solely for informational purposes and
is not an offer to buy or sell or a solicitation of an offer to buy or sell any
security or instrument or to participate in any trading strategy. No
representation or warranty can be given with respect to the accuracy or
completeness of the information herein, or that any future offer of securities,
instruments or transactions will conform to the terms hereof. Please refer to
the important information and qualification on the last page hereof when
reviewing this information.
Page 5 of 9
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ONCOR ELECTRIC DELIVERY PRELIMINARY FEBRUARY 26, 2004
TRANSITION BOND COMPANY LLC
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MANDATED TRUE-UP MECHANISM
The PUCT's irrevocable Financing Order requires that Transition Charges be
reviewed and adjusted at least annually with respect to the series 2004-1 bonds.
In addition, under the servicing agreement between the Issuer and Oncor, Oncor
must seek interim (every six months) and non-standard (adjustments between and
among customer classes) true-up adjustments when certain conditions are met.
Please see "Mandated True-up Mechanism to Ensure Payment Schedule" in the
Summary of Terms above and descriptions below.
REQUIRED ANNUAL TRUE-UPS
STEP 1: Each year, Oncor computes the total dollar requirement for the series
2004-1 bonds for the coming year, which includes scheduled principal
and interest payments and all other permitted costs of the
transaction.
STEP 2: Oncor allocates this total dollar requirement among specific customer
classes (e.g., residential, commercial, industrial).
STEP 3: Oncor forecasts consumption by each customer class.
STEP 4: Oncor divides the total dollar requirement for each customer class by
the forecast consumption to determine the transition charge for that
customer class.
STEP 5: Oncor must make a true-up filing with the PUCT, specifying such
adjustments to the Transition Charges as may be necessary, regardless
of the reason for the difference between forecasted and required
collections. Adjustments to the Transition Charges are immediately
reflected in customer bills, beginning with their next monthly billing
cycle.
-------------
REQUIRED AND OPTIONAL INTERIM TRUE-UPS
Oncor must seek an interim true-up once every six months if
(i) Oncor expects, at the next payment date, more than a 5% variation
between actual principal balance of the series 2004-1 bonds plus amounts on
deposit in the reserve subaccount and the bond amortization schedule or
(ii) an interim true-up is needed to meet any rating agency requirement
that the series 2004-1 bonds be paid in full at scheduled maturity.
Furthermore, Oncor may seek interim true-up adjustments at any time during
the term of the series 2004-1 bonds (but not more often than once every six
months) to correct any undercollection or overcollection of Transition Charges,
regardless of cause, based on rating agency and bondholder considerations.
-------------
REQUIRED NON-STANDARD TRUE-UPS
Oncor must seek a non-standard true-up if forecasted consumption for any
customer class for an upcoming period has decreased by more than 10% as compared
to consumption for each class for the 12 months ended April 30, 1999, in order
to reallocate charges among all customer classes (subject to a 90-day review by
the PUCT prior to implementation).
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The information herein has been prepared solely for informational purposes and
is not an offer to buy or sell or a solicitation of an offer to buy or sell any
security or instrument or to participate in any trading strategy. No
representation or warranty can be given with respect to the accuracy or
completeness of the information herein, or that any future offer of securities,
instruments or transactions will conform to the terms hereof. Please refer to
the important information and qualification on the last page hereof when
reviewing this information.
Page 6 of 9
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ONCOR ELECTRIC DELIVERY PRELIMINARY FEBRUARY 26, 2004
TRANSITION BOND COMPANY LLC
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QUESTIONS AND ANSWERS ON TRUE-UP
Q: Can customers avoid paying Transition Charges if they switch electricity
providers?
A: No. The Restructuring Act provides that the TCs are nonbypassable.
Nonbypassable means that these charges are collected from all existing retail
customers of a utility and all future retail consumers of electricity located
within the utility's historical certificated service area as it existed on May
1, 1999. The Issuer is generally entitled to collect TCs from those consumers
even if they elect to purchase electricity from another supplier or choose to
operate self-generation equipment. The Issuer is entitled to collect TCs from
these consumers even if the utility goes out of business and the utility's
service area is acquired by another utility or is municipalized.
Q: Are there any circumstances, or any reason, in which the True-up Mechanism
would not be applied to customer bills, e.g., economic recession, temporary
power shortages, blackouts, bankruptcy of the parent company?
A: No. Once the series 2004-1 bonds are issued, the irrevocable Financing
Order including the True-up Mechanism is unconditional. If collections fall
below forecasted revenues, regardless of the reason, Oncor is required annually
to submit to the PUCT an adjustment to the charge. If, after six months,
collections fall below forecast by 5% or more for any reason, Oncor must submit
to the PUCT another True-up adjustment. The PUCT will confirm the mathematical
accuracy of the submission and has authorized the imposition of the adjusted
charge in the customer's next billing cycle.
Q: Could the Financing Order be rescinded or altered or the PUCT fail to act
to implement the True-up mechanism?
A: No. The Financing Order is irrevocable. The True-up Mechanism and all other
obligations of the State of Texas and the PUCT set forth in the Financing Order
are direct, explicit, irrevocable and unconditional upon issuance of the series
2004-1 bonds and are legally enforceable against the State of Texas and the
PUCT.
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The information herein has been prepared solely for informational purposes and
is not an offer to buy or sell or a solicitation of an offer to buy or sell any
security or instrument or to participate in any trading strategy. No
representation or warranty can be given with respect to the accuracy or
completeness of the information herein, or that any future offer of securities,
instruments or transactions will conform to the terms hereof. Please refer to
the important information and qualification on the last page hereof when
reviewing this information.
Page 7 of 9
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ONCOR ELECTRIC DELIVERY PRELIMINARY FEBRUARY 26, 2004
TRANSITION BOND COMPANY LLC
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GLOSSARY
"SECURITY" All assets held by the indenture trustee for the benefit of
the holders of the series 2004-1 bonds. Most assets of the
Issuer in respect of the series 2004-1 bonds will be held by
the indenture trustee in a segregated account established
pursuant to an indenture (the "series 2004-1 Collection
Account"). The Issuer's principal asset securing the series
2004-1 bonds will be Series 2004-1 Transition Property. Series
2004-1 Transition Property is a present property right created
pursuant to the Texas Electric Utility Restructuring Act and
the Financing Order, which became final and non-appealable on
January 30, 2003. The Series 2004-1 Transition Property is not
a receivable. It is the irrevocable right to impose, collect
and receive non-bypassable TCs. Please see "Security" under
Summary of Terms, above. Collateral pledged to secure the
series 2004-1 bonds will be separate from that securing the
series 2003-1 bonds or any other series of transition bonds.
Please see "Relationship to the Series 2003-1 Bonds."
"LEGAL The Restructuring Act provides, among other things, that the
STRUCTURE" Series 2004-1 Transition Property is a present property right
created pursuant to such Act and the Financing Order. The
Financing Order includes affirmative findings to the effect
that (i) the Financing Order is final and not subject to PUCT
rehearing, (ii) the Issuer's right to collect Transition
Charges is a property right against which bondholders will
have a perfected lien upon execution and delivery of a
security agreement and filing of notice with the Secretary of
State, and (iii) the State of Texas (including the PUCT) has
pledged not to take or permit any action that would impair the
value of the transition property, or, except for the periodic
true-up, reduce, alter or impair the Transition Charges to be
imposed, collected and remitted to bondholders, until the
bonds have been paid in full.
"PRINCIPAL Principal will be paid sequentially. No tranches will receive
PAYMENTS" principal payments until all tranches of a higher numerical
designation have been paid in full unless there is an
acceleration of the series 2004-1 bonds following an event of
default in which case principal will be paid to all tranches
on a pro-rata basis. Please see "Scheduled Amortization."
"RATINGS" A security rating is not a recommendation to buy, sell or hold
securities and may be subject to revision or withdrawal at any
time by the assigning rating agency. No person is obligated to
maintain the rating on any series 2004-1 bond, and,
accordingly, there can be no assurance that the ratings
assigned to any tranche of series 2004-1 bonds upon initial
issuance will not be revised or withdrawn by a rating agency
at any time thereafter.
"STATE PLEDGE" The State of Texas (including the PUCT) has pledged that it
will not take or permit any action that would impair the value
of the Series 2004-1 Transition Property or reduce, alter or
impair the TCs until the related series 2004-1 bonds are fully
repaid or discharged, other than specified true-up adjustments
to correct any overcollections or undercollections. No voter
initiative or referendum process currently exists in Texas.
"TRANSITION TCs are statutorily-created, non-bypassable, consumption-based
CHARGES OR TCS" per kilowatt hour and per kilowatt charges. TCs are
irrevocable and payable, through retail electric providers, by
retail electric consumers, including the State of Texas and
other governmental entities, within Oncor's historic service
territory. There is no "cap" on the level of Transition
Charges that may be imposed on future consumers of
electricity, including the State of Texas and other
governmental entities, to meet scheduled principal and
interest on the series 2004-1 bonds.
TCs are calculated to ensure collection of revenues sufficient
to (a) pay periodic expenses associated with the series 2004-1
bonds; (b) make scheduled payments of principal and interest
(including required payments to the swap counterparty, if any)
on the series 2004-1 bonds; (c) fund scheduled deposits to the
overcollateralization subaccount; and (d) replenish any
amounts previously withdrawn from the overcollateralization
subaccount or the capital subaccount.
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The information herein has been prepared solely for informational purposes and
is not an offer to buy or sell or a solicitation of an offer to buy or sell any
security or instrument or to participate in any trading strategy. No
representation or warranty can be given with respect to the accuracy or
completeness of the information herein, or that any future offer of securities,
instruments or transactions will conform to the terms hereof. Please refer to
the important information and qualification on the last page hereof when
reviewing this information.
Page 8 of 9
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ONCOR ELECTRIC DELIVERY PRELIMINARY FEBRUARY 26, 2004
TRANSITION BOND COMPANY LLC
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All information in this Preliminary Term Sheet and Computational Materials,
whether regarding the assets backing any securities discussed herein or
otherwise, is preliminary and will be superseded by the information contained in
any final Prospectus and related Prospectus Supplement for any securities
actually sold to you. It has been prepared solely for information purposes and
is not an offer to buy or sell or a solicitation of an offer to buy or sell any
security or instrument or to participate in any trading strategy. This material
is based on information provided by Oncor Electric Delivery Transition Bond
Company LLC and Oncor Electric Delivery Company with respect to the expected
characteristics of the Series 2004-1 Transition Property securing these
securities. The actual characteristics and performance of the Series 2004-1
Transition Property will differ from the assumptions used in preparing these
materials, which are hypothetical in nature. Changes in the assumptions may have
a material impact on the information set forth in these materials. Saber
Partners, LLC, Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, Wachovia
Capital Markets, LLC, Banc of America Securities LLC, Bear, Xxxxxxx & Co. Inc.,
Credit Suisse First Boston LLC, Citigroup Global Markets Inc., and X.X. Xxxx &
Company, and their affiliates make no representation or warranty with respect to
the appropriateness, usefulness, accuracy or completeness of the information, or
with respect to the terms of any future offer of securities conforming to the
terms hereof. Any such offer of securities would be made pursuant to a
definitive Prospectus and Prospectus Supplement prepared by the Issuer which
could contain material information not contained herein and to which the
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded, amended and supplemented in its entirety
by such Prospectus and Prospectus Supplement. Such Prospectus and Prospectus
Supplement will contain all material information in respect of any securities
offered thereby and any decision to invest in such securities should be made
solely in reliance upon such Prospectus and Prospectus Supplement. The
information contained in this material may be based on assumptions regarding
market conditions and other matters as reflected therein and is therefore
subject to change. We make no representations regarding the reasonableness of
such assumptions or the likelihood that any of such assumptions will coincide
with actual market conditions or events, and this material should not be relied
on for such purposes. No representation is made that any returns indicated will
be achieved. Changes to the assumptions may have a material impact on any
returns detailed. Although the analyses herein may not show a negative return on
the securities referred to herein, such securities are not principal protected
and, in certain circumstances, investors in such securities may suffer a
complete or partial loss on their investment. Saber Partners, LLC, Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, Wachovia Capital Markets, LLC, Banc
of America Securities LLC, Bear, Xxxxxxx & Co. Inc., Credit Suisse First Boston
LLC, Citigroup Global Markets Inc., and X.X. Xxxx & Company disclaim any and all
liability relating to this information, including without limitation any express
or implied representations or warranties for, statements contained in, and
omissions from, this information. Additional information is available upon
request. Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, Wachovia Capital
Markets, LLC, Banc of America Securities LLC, Bear, Xxxxxxx & Co. Inc., Credit
Suisse First Boston LLC, Citigroup Global Markets Inc., and X.X. Xxxx & Company,
and others associated with them may have positions in, and may effect
transactions in, securities and instruments of the Issuer and may also perform
or seek to perform investment banking services for the Issuer and Oncor. Past
performance is not necessarily indicative of future results. Price and
availability are subject to change without notice. Information contained in this
material is current as of the date appearing on this material only. Information
in this material regarding any assets backing any securities discussed herein
supercedes all prior information regarding such assets. Saber Partners, LLC is
acting as financial advisor to the PUCT. Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated, Wachovia Capital Markets, LLC, Banc of America Securities LLC,
Bear, Xxxxxxx & Co. Inc., Credit Suisse First Boston LLC, Citigroup Global
Markets Inc., and X.X. Xxxx & Company are acting as underwriters. Neither Saber
Partners, LLC, Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, Wachovia
Capital Markets, LLC, Banc of America Securities LLC, Bear, Xxxxxxx & Co. Inc.,
Credit Suisse First Boston, LLC, Citigroup Global Markets Inc., nor X.X. Xxxx &
Company is acting as an agent for the Issuer or its affiliates in connection
with the proposed transaction. NOT FOR DISTRIBUTION TO PRIVATE CUSTOMERS AS
DEFINED BY THE U.K. SECURITIES AND FUTURES AUTHORITY.
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