FirstEnergy greenshoe lifts 4% convertibles due 2026 to $1.5 billion

By Marisa Wong

Los Angeles, May 4 – The initial purchasers of FirstEnergy Corp.’s 4% convertible senior notes due May 1, 2026 exercised their $200 million over-allotment option in full, bringing the total issue size to $1.5 billion, according to an 8-K filing with the Securities and Exchange Commission.

FirstEnergy priced an upsized $1.3 billion of three-year convertible notes after the market close on May 1 at par at the cheap end of talk with a coupon of 4% and an initial conversion premium of 20%, as previously reported.

Price talk was for a coupon of 3.5% to 4% and an initial conversion premium of 20% to 25%.

Morgan Stanley & Co. LLC (lead left), Barclays and J.P. Morgan Securities LLC were bookrunners for the Rule 144A offering.

Initially, the offering was for $1 billion with a greenshoe of $150 million.

The notes are non-callable.

They are putable upon a fundamental change.

There is dividend protection above 39 cents per quarter.

The notes will be settled in cash, shares or a combination of both at the company’s option.

Proceeds will be used to refinance existing debt, to fund its pension plan and for general corporate purposes.

FirstEnergy is an Akron, Ohio-based electric utility company.

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