Filed Pursuant to Rule 433
Registration No. 333-145691-03
March 24, 2008
POTOMAC ELECTRIC
POWER COMPANY
$250,000,000
6.50% Senior Notes due 2037
| Issuer: |
Potomac Electric Power Company | |
| Issue: |
6.50% Senior Notes due 2037 | |
| Ratings:* |
Baa1 (stable) /BBB+ (stable) /A (stable) (Moody’s/S&P/Fitch) | |
| Offering Size: |
$250,000,000 (Reopening of $250,000,000 of 6.50% Senior Notes due 2037 issued on November 16, 2007) | |
| Coupon: |
6.50% | |
| Trade Date: |
March 24, 2008 | |
| Settlement Date: |
March 31, 2008 (T+5) | |
| Stated Maturity: |
November 15, 2037 | |
| Initial Public Offering Price: |
96.917% per Senior Note plus accrued interest from November 16, 2007 | |
| Proceeds to Issuer (before expenses and accrued interest): |
$240,105,000 | |
| Yield to Maturity: |
6.741% | |
| Benchmark Treasury: |
5.00%, due May 15, 2037 | |
| Benchmark Treasury Yield: |
4.291% | |
| Spread to Benchmark Treasury: |
+245 bps | |
| Optional Redemption: |
Make-whole call, 35 bps spread over U.S. Treasuries | |
| Interest Payment Dates: |
May 15 and November 15 of each year, commencing on May 15, 2008 | |
| Initial Interest Accrual Date: |
November 16, 2007 | |
| Accrued Interest Payable to Issuer: |
$6,093,750 accrued from November 16, 2007 to but excluding March 31, 2008 | |
| CUSIP Number: |
737679 DB3 | |
| Bookrunners: |
Citigroup Global Markets Inc. J.P. Morgan Securities Inc. |
* A security rating is not a recommendation to buy, sell or hold securities and should be evaluated independently of any other rating. The rating is subject to revision or withdrawal at any time by the assigning rating organization.
The issuer has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (the “SEC”) for the offering to which the communication relates. Before you invest, you should read the prospectus in that registration statement and other documents the issuer has filed with the SEC for more complete information about the issuer and this offering. You may obtain these documents free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the issuer, any underwriters or any dealer participating in the offering will arrange to send you the prospectus if you request it by calling Citigroup Global Markets Inc. at 1-877-858-5407 or J.P. Morgan Securities Inc. at 1-212-834-4533.