The 'BBB-' corporate credit rating on Rosemead, Calif.-based utility holding company Edison International (EIX) reflects the consolidated credit quality of EIX's family of companies. EIX's consolidated business risk profile is strong -- which reflects its ownership of electric utility Southern California Edison (SCE; BBB+/Stable/A-2), to which we have assigned an excellent business risk profile -- but is constrained by the vulnerable business risk profile of Edison Mission Energy (EME; B-/Negative/--). EIX's consolidated financial risk profile is aggressive, reflecting both consolidated leverage (adjusted debt to total capitalization was 63% as of Sept. 30, 2011) and the risks that EME's merchant operations impose on EIX. In 2012, the dominant challenge for EIX is whether EME will be able to survive. The merchant
