10-K: SCE Recovery Funding Affirms 2025 Servicing Compliance

SCE Recovery Funding LLC and its servicers confirm material compliance with SEC Regulation AB servicing criteria for asset-backed securities for the fiscal year ended December 31, 2025.

Summary

• SCE Recovery Funding LLC, as the Issuing Entity, filed its annual report on Form 10-K for the fiscal year ended December 31, 2025.
• Southern California Edison Company (SCE), as the servicer, asserted material compliance with the applicable servicing criteria set forth in Item 1122(d) of Regulation AB for asset-backed securities transactions.
• PricewaterhouseCoopers LLP, an independent registered public accounting firm, issued an attestation report confirming SCE's material compliance with the applicable servicing criteria for the period ended December 31, 2025.
• The Bank of New York Mellon (and its affiliates), as the trustee/securities administrator, also asserted material compliance with its applicable servicing criteria under Regulation AB for the twelve months ended December 31, 2025.
• KPMG LLP, an independent registered public accounting firm, issued an attestation report confirming The Bank of New York Mellon's material compliance with its applicable servicing criteria.
• Certain servicing criteria were deemed inapplicable by both SCE and The Bank of New York Mellon based on their specific roles and the nature of the transactions.
• Brendan Bond, Vice President and Treasurer of Southern California Edison Company, certified the servicer's fulfillment of obligations under the Recovery Property Servicing Agreements in all material respects.

Sentiment

Score: 8

Explanation: StockSavvy.ai views this as a positive and reassuring report, indicating strong operational compliance within the structured finance framework. The unqualified attestation reports from two major accounting firms for both the servicer and the trustee demonstrate robust internal controls and adherence to regulatory standards, which is crucial for investor confidence in asset-backed securities.

Positives

• Southern California Edison Company (SCE) demonstrated material compliance with all applicable SEC Regulation AB servicing criteria for the asset-backed securities platform for the fiscal year ended December 31, 2025.
• PricewaterhouseCoopers LLP provided an unqualified attestation report, confirming SCE's assertion of compliance.
• The Bank of New York Mellon (and its affiliates) also achieved material compliance with its applicable servicing criteria as trustee/securities administrator for the twelve months ended December 31, 2025.
• KPMG LLP provided an unqualified attestation report, confirming The Bank of New York Mellon's assertion of compliance.
• No material instances of non-compliance were identified by management or the independent auditors for either the servicer or the trustee.

Risks

• No specific risks related to the company's operations or financial health were detailed in the provided sections of this specialized 10-K filing, as many standard risk factor disclosures were omitted pursuant to General Instruction J of Form 10-K.

Future Outlook

The filing does not provide forward-looking statements or guidance, as its primary purpose is to report on compliance with servicing criteria for a past fiscal period.

Management Comments

• Brendan Bond, Vice President and Treasurer of Southern California Edison Company, certified that the Exchange Act periodic reports, taken as a whole, do not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made not misleading.
• Brendan Bond also certified that the servicer has fulfilled its obligations under each of the Recovery Property Servicing Agreements in all material respects throughout the reporting period.

Industry Context

StockSavvy.ai notes that this filing is a routine, but critical, compliance report for an issuing entity involved in asset-backed securities. Compliance with Regulation AB is a fundamental requirement for transparency and investor protection in the structured finance market. The dual attestation by independent auditors (PricewaterhouseCoopers and KPMG) for both the servicer and the trustee reinforces the robust oversight mechanisms in place for these financial instruments, which are essential for maintaining investor confidence in the asset-backed securities market.

Comparison to Industry Standards

• Compliance with SEC Regulation AB Item 1122(d) servicing criteria is a standard regulatory requirement for all publicly issued asset-backed securities in the U.S. market.
• The engagement of two separate independent registered public accounting firms (PricewaterhouseCoopers LLP for SCE and KPMG LLP for The Bank of New York Mellon) to provide attestation reports is consistent with best practices for ensuring independent verification of compliance across different parties in an asset-backed securities transaction.
• The detailed breakdown of applicable and inapplicable servicing criteria by both the servicer and the trustee, along with the auditors' review, aligns with the specificity required by Regulation AB, similar to other major ABS servicers and trustees like Wells Fargo, U.S. Bank, or Deutsche Bank Trust Company Americas in their respective roles.

Management Changes

Corporate Governance

Legal Proceedings

• No legal proceedings were reported under Item 1117, which was substituted in accordance with General Instruction J to Form 10-K.

Related Party Transactions

• SCE Recovery Funding LLC is a wholly-owned subsidiary of Southern California Edison Company (SCE), which in turn is a wholly-owned subsidiary of Edison International. SCE acts as the depositor, sponsor, and servicer for the asset-backed securities.
• Sean L. Emerick, an independent manager of the Issuing Entity, is an employee of CT Corporation Staffing, Inc., which receives an annual independent manager fee of $2,500.

Stakeholder Impact

• Shareholders of Edison International (the ultimate parent) benefit from the confirmed compliance, which reduces regulatory risk associated with its structured finance activities.
• Investors in the asset-backed securities issued by SCE Recovery Funding LLC receive assurance that the servicing of their underlying recovery property is being conducted in material compliance with SEC regulations, enhancing confidence in the stability and integrity of their investments.
• Regulatory authorities (SEC) are provided with the required transparency and attestation of compliance, fulfilling mandated disclosure requirements.

Key Dates

Keywords

SEC Regulation AB, Asset-Backed Securities, Servicing Compliance, Southern California Edison Company, SCE Recovery Funding LLC, Attestation Report, 10-K Filing, Corporate Governance, Financial Reporting, Trustee, PricewaterhouseCoopers, KPMG