EXHIBIT 99
New ABS Lead-Managed Transaction
Computational Materials
ATLANTIC CITY ELECTRIC COMPANY
AN INDIRECT, WHOLLY OWNED SUBSIDIARY OF
PEPCO HOLDINGS, INC.
Atlantic City Electric Transition Funding LLC,
Issuer
$440,000,000
Transition Bonds, Series 2002-1
This information is furnished on a confidential basis and may not be reproduced
in whole or in part and is being delivered to a specific number of prospective
sophisticated investors in order to assist them in determining whether they have
an interest in the type of security described herein. 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 Atlantic City Electric Transition Funding LLC and Atlantic City
Electric Company with respect to the expected characteristics of the transition
property securing these securities. The actual characteristics and performance
of the 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.
Morgan Stanley & Co. Incorporated makes 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offering, this information shall be deemed superseded, amended and supplemented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. Morgan
Stanley & Co. Incorporated disclaims 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. Morgan Stanley &
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effect transactions in, securities and instruments of issuers mentioned herein
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issuers of such securities and instruments. 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. Morgan Stanley & Co. Incorporated is acting as the lead
underwriter and not acting as agent for the issuer or its affiliates in
connection with the proposed transaction. To our readers worldwide: In addition,
please note that this publication has been issued by Morgan Stanley & Co.
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Atlantic City Transition Funding LLC
$440,000,000
Transition Bonds, Series 2002-1
Transaction Highlights
Anticipated Transition Bond Structure
- ---------- ------------ ----------- ------------------ ------------- ------------- --------------- ------------- -------------
Expected
Size Tranche Expected Ratings Fixed/ Average Payment Window Scheduled
Class ($MM) Type (MDY/S&P/Fitch) Floating Life (Years) (Mo/Yr) Final Legal Final
- ---------- ------------ ----------- ------------------ ------------- ------------- --------------- ------------- -------------
A-1 109.0 Sequential Aaa/AAA/AAA Fixed 3.00 10/03-7/08 7/20/08 7/20/10
- ---------- ------------ ----------- ------------------ ------------- ------------- --------------- ------------- -------------
A-2 66.0 Sequential Aaa/AAA/AAA Fixed 7.00 7/08-4/11 4/20/11 4/20/13
- ---------- ------------ ----------- ------------------ ------------- ------------- --------------- ------------- -------------
A-3 118.0 Sequential Aaa/AAA/AAA Fixed 10.50 4/11-7/15 7/20/15 7/20/17
- ---------- ------------ ----------- ------------------ ------------- ------------- --------------- ------------- -------------
A-4 147.0 Sequential Aaa/AAA/AAA Fixed 15.39 7/15-10/21 10/20/21 10/20/23
- ---------- ------------ ----------- ------------------ ------------- ------------- --------------- ------------- -------------
Issuer........................ Atlantic City Electric Transition Funding LLC
Seller........................ Atlantic City Electric Company ("ACE")
Servicer...................... Atlantic City Electric Company
Trustee....................... Bank of New York
Lead Manager.................. Morgan Stanley
Co-Managers................... Banc of America Securities; Banc One Capital
Markets; Credit Suisse First Boston; PNC Capital
Markets; Wachovia Securities
Expected Pricing.............. Week of December 9, 2002
Expected Settlement........... December 19, 2002
Interest Payments............. Quarterly on the 20th day of January, April,
July and October
Principal Payments............ Quarterly on the 20th day of January, April,
July and October
First Interest Payment........ October 20, 2003
First Principal Payment....... October 20, 2003
Day Count Basis............... 30/360
Credit Enhancement............ 1. Mandatory true-up mechanism: enables
Transition Bond Charges ("TBCs") to be
adjusted to cover scheduled debt service,
pay expenses, fund the overcollateralization
subaccount and replenish the capital
subaccount
2. Capital subaccount: upfront deposit of
0.5% of initial aggregate principal
balance, corresponding to $2.2MM
3. Overcollateralization subaccount: 0.5% of
initial aggregate principal balance,
initially $0 and funded ratably over life
of Transition Bonds to reach an aggregate
balance of $2.2MM
True-Up Adjustments........... Frequency Period
------------------- ---------------------------
Yearly October 2003 - October 2020
Quarterly October 2020 - October 2021
The BPU order also gives ACE, as servicer, the
ability to apply for quarterly true-ups over the
life of the transaction, and to file for monthly
true-ups beginning two years before the expected
maturity of the last class of transition bonds
Optional Clean-up Call........ 5% of initial total principal balance
ERISA Eligibility............. All classes, subject to applicable ERISA
exemptions
Min. Denomination............. $1,000
Use of Proceeds............... Retire a portion of its debt or equity, or both,
and buy-out, buy-down or otherwise
restructure its existing NUG Contracts
Scheduled Amortization
Projected Securitization Bond Amortization Schedule
- --------------------------------------------------------------------------------
Payment Date Class A-1 Class A-2 Class A-3 Class A-4
- --------------------------------------------------------------------------------
12/19/2002 109,000,000 66,000,000 118,000,000 147,000,000
- --------------------------------------------------------------------------------
10/20/2003 94,478,685 66,000,000 118,000,000 147,000,000
- --------------------------------------------------------------------------------
01/20/2004 89,313,865 66,000,000 118,000,000 147,000,000
- --------------------------------------------------------------------------------
04/20/2004 85,041,442 66,000,000 118,000,000 147,000,000
- --------------------------------------------------------------------------------
07/20/2004 80,968,805 66,000,000 118,000,000 147,000,000
- --------------------------------------------------------------------------------
10/20/2004 75,177,524 66,000,000 118,000,000 147,000,000
- --------------------------------------------------------------------------------
01/20/2005 70,350,820 66,000,000 118,000,000 147,000,000
- --------------------------------------------------------------------------------
04/20/2005 65,780,125 66,000,000 118,000,000 147,000,000
- --------------------------------------------------------------------------------
07/20/2005 61,370,281 66,000,000 118,000,000 147,000,000
- --------------------------------------------------------------------------------
10/20/2005 55,207,312 66,000,000 118,000,000 147,000,000
- --------------------------------------------------------------------------------
01/20/2006 50,148,130 66,000,000 118,000,000 147,000,000
- --------------------------------------------------------------------------------
04/20/2006 45,426,538 66,000,000 118,000,000 147,000,000
- --------------------------------------------------------------------------------
07/20/2006 40,859,329 66,000,000 118,000,000 147,000,000
- --------------------------------------------------------------------------------
10/20/2006 34,534,101 66,000,000 118,000,000 147,000,000
- --------------------------------------------------------------------------------
01/20/2007 29,300,043 66,000,000 118,000,000 147,000,000
- --------------------------------------------------------------------------------
04/20/2007 24,404,034 66,000,000 118,000,000 147,000,000
- --------------------------------------------------------------------------------
07/20/2007 19,655,334 66,000,000 118,000,000 147,000,000
- --------------------------------------------------------------------------------
10/20/2007 13,134,377 66,000,000 118,000,000 147,000,000
- --------------------------------------------------------------------------------
01/20/2008 7,711,452 66,000,000 118,000,000 147,000,000
- --------------------------------------------------------------------------------
04/20/2008 2,637,079 66,000,000 118,000,000 147,000,000
- --------------------------------------------------------------------------------
07/20/2008 -- 63,699,783 118,000,000 147,000,000
- --------------------------------------------------------------------------------
10/20/2008 56,974,386 118,000,000 147,000,000
- --------------------------------------------------------------------------------
01/20/2009 51,326,125 118,000,000 147,000,000
- --------------------------------------------------------------------------------
04/20/2009 46,014,715 118,000,000 147,000,000
- --------------------------------------------------------------------------------
07/20/2009 40,810,984 118,000,000 147,000,000
- --------------------------------------------------------------------------------
10/20/2009 33,800,148 118,000,000 147,000,000
- --------------------------------------------------------------------------------
01/20/2010 27,866,786 118,000,000 147,000,000
- --------------------------------------------------------------------------------
04/20/2010 22,271,797 118,000,000 147,000,000
- --------------------------------------------------------------------------------
07/20/2010 16,779,574 118,000,000 147,000,000
- --------------------------------------------------------------------------------
10/20/2010 9,476,493 118,000,000 147,000,000
- --------------------------------------------------------------------------------
01/20/2011 3,247,087 118,000,000 147,000,000
- --------------------------------------------------------------------------------
04/20/2011 -- 115,352,326 147,000,000
- --------------------------------------------------------------------------------
07/20/2011 109,552,176 147,000,000
- --------------------------------------------------------------------------------
10/20/2011 101,927,553 147,000,000
- --------------------------------------------------------------------------------
01/20/2012 95,359,754 147,000,000
- --------------------------------------------------------------------------------
04/20/2012 89,111,329 147,000,000
- --------------------------------------------------------------------------------
07/20/2012 82,947,089 147,000,000
- --------------------------------------------------------------------------------
10/20/2012 74,953,324 147,000,000
- --------------------------------------------------------------------------------
01/20/2013 68,011,260 147,000,000
- --------------------------------------------------------------------------------
04/20/2013 61,383,374 147,000,000
- --------------------------------------------------------------------------------
07/20/2013 54,834,408 147,000,000
- --------------------------------------------------------------------------------
10/20/2013 46,450,580 147,000,000
- --------------------------------------------------------------------------------
01/20/2014 39,113,040 147,000,000
- --------------------------------------------------------------------------------
04/20/2014 32,084,191 147,000,000
- --------------------------------------------------------------------------------
07/20/2014 25,128,699 147,000,000
- --------------------------------------------------------------------------------
10/20/2014 16,332,704 147,000,000
- --------------------------------------------------------------------------------
01/20/2015 8,577,278 147,000,000
- --------------------------------------------------------------------------------
04/20/2015 1,124,746 147,000,000
- --------------------------------------------------------------------------------
07/20/2015 -- 140,739,692
- --------------------------------------------------------------------------------
10/20/2015 131,499,097
- --------------------------------------------------------------------------------
01/20/2016 123,279,503
- --------------------------------------------------------------------------------
04/20/2016 115,344,445
- --------------------------------------------------------------------------------
07/20/2016 107,458,663
- --------------------------------------------------------------------------------
10/20/2016 97,708,036
- --------------------------------------------------------------------------------
01/20/2017 91,352,635
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Payment Date Class A-1 Class A-2 Class A-3 Class A-4
- --------------------------------------------------------------------------------
04/20/2017 86,588,446
- --------------------------------------------------------------------------------
07/20/2017 81,918,199
- --------------------------------------------------------------------------------
10/20/2017 76,077,755
- --------------------------------------------------------------------------------
01/20/2018 71,552,501
- --------------------------------------------------------------------------------
04/20/2018 67,577,225
- --------------------------------------------------------------------------------
07/20/2018 63,647,566
- --------------------------------------------------------------------------------
10/20/2018 58,741,209
- --------------------------------------------------------------------------------
01/20/2019 54,296,251
- --------------------------------------------------------------------------------
04/20/2019 49,958,991
- --------------------------------------------------------------------------------
07/20/2019 45,645,183
- --------------------------------------------------------------------------------
10/20/2019 40,328,642
- --------------------------------------------------------------------------------
01/20/2020 35,563,241
- --------------------------------------------------------------------------------
04/20/2020 30,949,685
- --------------------------------------------------------------------------------
07/20/2020 26,357,187
- --------------------------------------------------------------------------------
10/20/2020 20,759,913
- --------------------------------------------------------------------------------
01/20/2021 15,704,876
- --------------------------------------------------------------------------------
04/20/2021 10,795,050
- --------------------------------------------------------------------------------
07/20/2021 5,901,527
- --------------------------------------------------------------------------------
10/20/2021 --
- --------------------------------------------------------------------------------
Scheduled Amortization
Decrement Table to Maturity
- --------------------------------------------------------------------------------
Payment Date Class A-1 Class A-2 Class A-3 Class A-4
% % % %
- --------------------------------------------------------------------------------
12/19/2002 100 100 100 100
- --------------------------------------------------------------------------------
10/20/2003 87 100 100 100
- --------------------------------------------------------------------------------
01/20/2004 82 100 100 100
- --------------------------------------------------------------------------------
04/20/2004 78 100 100 100
- --------------------------------------------------------------------------------
07/20/2004 74 100 100 100
- --------------------------------------------------------------------------------
10/20/2004 69 100 100 100
- --------------------------------------------------------------------------------
01/20/2005 65 100 100 100
- --------------------------------------------------------------------------------
04/20/2005 60 100 100 100
- --------------------------------------------------------------------------------
07/20/2005 56 100 100 100
- --------------------------------------------------------------------------------
10/20/2005 51 100 100 100
- --------------------------------------------------------------------------------
01/20/2006 46 100 100 100
- --------------------------------------------------------------------------------
04/20/2006 42 100 100 100
- --------------------------------------------------------------------------------
07/20/2006 37 100 100 100
- --------------------------------------------------------------------------------
10/20/2006 32 100 100 100
- --------------------------------------------------------------------------------
01/20/2007 27 100 100 100
- --------------------------------------------------------------------------------
04/20/2007 22 100 100 100
- --------------------------------------------------------------------------------
07/20/2007 18 100 100 100
- --------------------------------------------------------------------------------
10/20/2007 12 100 100 100
- --------------------------------------------------------------------------------
01/20/2008 7 100 100 100
- --------------------------------------------------------------------------------
04/20/2008 2 100 100 100
- --------------------------------------------------------------------------------
07/20/2008 0 97 100 100
- --------------------------------------------------------------------------------
10/20/2008 86 100 100
- --------------------------------------------------------------------------------
01/20/2009 78 100 100
- --------------------------------------------------------------------------------
04/20/2009 70 100 100
- --------------------------------------------------------------------------------
07/20/2009 62 100 100
- --------------------------------------------------------------------------------
10/20/2009 51 100 100
- --------------------------------------------------------------------------------
01/20/2010 42 100 100
- --------------------------------------------------------------------------------
04/20/2010 34 100 100
- --------------------------------------------------------------------------------
07/20/2010 25 100 100
- --------------------------------------------------------------------------------
10/20/2010 14 100 100
- --------------------------------------------------------------------------------
01/20/2011 5 100 100
- --------------------------------------------------------------------------------
04/20/2011 0 98 100
- --------------------------------------------------------------------------------
07/20/2011 93 100
- --------------------------------------------------------------------------------
10/20/2011 86 100
- --------------------------------------------------------------------------------
01/20/2012 81 100
- --------------------------------------------------------------------------------
04/20/2012 76 100
- --------------------------------------------------------------------------------
07/20/2012 70 100
- --------------------------------------------------------------------------------
10/20/2012 64 100
- --------------------------------------------------------------------------------
01/20/2013 58 100
- --------------------------------------------------------------------------------
04/20/2013 52 100
- --------------------------------------------------------------------------------
07/20/2013 46 100
- --------------------------------------------------------------------------------
10/20/2013 39 100
- --------------------------------------------------------------------------------
01/20/2014 33 100
- --------------------------------------------------------------------------------
04/20/2014 27 100
- --------------------------------------------------------------------------------
07/20/2014 21 100
- --------------------------------------------------------------------------------
10/20/2014 14 100
- --------------------------------------------------------------------------------
01/20/2015 7 100
- --------------------------------------------------------------------------------
04/20/2015 1 100
- --------------------------------------------------------------------------------
07/20/2015 0 96
- --------------------------------------------------------------------------------
10/20/2015 89
- --------------------------------------------------------------------------------
01/20/2016 84
- --------------------------------------------------------------------------------
04/20/2016 78
- --------------------------------------------------------------------------------
07/20/2016 73
- --------------------------------------------------------------------------------
10/20/2016 66
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Payment Date Class A-1 Class A-2 Class A-3 Class A-4
% % % %
- --------------------------------------------------------------------------------
01/20/2017 62
- --------------------------------------------------------------------------------
04/20/2017 59
- --------------------------------------------------------------------------------
07/20/2017 56
- --------------------------------------------------------------------------------
10/20/2017 52
- --------------------------------------------------------------------------------
01/20/2018 49
- --------------------------------------------------------------------------------
04/20/2018 46
- --------------------------------------------------------------------------------
07/20/2018 43
- --------------------------------------------------------------------------------
10/20/2018 40
- --------------------------------------------------------------------------------
01/20/2019 37
- --------------------------------------------------------------------------------
04/20/2019 34
- --------------------------------------------------------------------------------
07/20/2019 31
- --------------------------------------------------------------------------------
10/20/2019 27
- --------------------------------------------------------------------------------
01/20/2020 24
- --------------------------------------------------------------------------------
04/20/2020 21
- --------------------------------------------------------------------------------
07/20/2020 18
- --------------------------------------------------------------------------------
10/20/2020 14
- --------------------------------------------------------------------------------
01/20/2021 11
- --------------------------------------------------------------------------------
04/20/2021 7
- --------------------------------------------------------------------------------
07/20/2021 4
- --------------------------------------------------------------------------------
10/20/2021 0
- --------------------------------------------------------------------------------
Average Life Sensitivity
The following table highlights the sensitivity of the average lives of the
various tranches to decreases in forecasted energy consumption.
- -----------------------------------------------------------------------------------------------------------
Targeted Annual Declines in Forecasted Energy Consumption
Class Avg. Life 0% 5% 10% 15%
- -----------------------------------------------------------------------------------------------------------
A-1 3.00 3.00 3.00 3.09 3.21
- -----------------------------------------------------------------------------------------------------------
A-2 7.00 7.00 7.00 7.07 7.18
- -----------------------------------------------------------------------------------------------------------
A-3 10.50 10.50 10.50 10.55 10.65
- -----------------------------------------------------------------------------------------------------------
A-4 15.39 15.39 15.39 15.40 15.45
- -----------------------------------------------------------------------------------------------------------