Ameren Illinois begins tender offer for 9.75% notes, 6.25% notes

By Angela McDaniels

Tacoma, Wash., July 30 - Ameren Corp. subsidiary Ameren Illinois Co. began a tender offer for its $400 million of 9.75% senior secured notes due 2018 and $337 million of 6.25% senior secured notes due 2018, according to a company news release.

The total purchase price is capped at $450 million, excluding interest. The acceptance priority level is one for the 9.75% notes and two for the 6.25% notes.

The tender offer will expire at midnight ET on Aug. 24.

The company will set the purchase prices at 2 p.m. ET on Aug. 13 by reference to the 0.5% Treasury note due July 31, 2017 plus a spread of 225 basis points for the 9.75% notes and 140 bps for the 6.25% notes.

The price will include an early tender premium of $30 per $1,000 principal amount of notes tendered by 5 p.m. ET on Aug. 10, the early tender date.

Holders will also receive accrued interest up to but excluding the settlement date, which is expected to be Aug. 27.

The company will fund the tender offer with the proceeds of an offering of senior secured debt securities. The tender offer is subject to the completion of the debt offering.

Ameren Illinois said the tender offer and debt offering are meant to reduce the weighted average interest rate and enhance the maturity profile of its debt.

The dealer manager for the tender offer is J.P. Morgan Securities LLC (866 834-4666 or 212 834-4811). The depositary and information agent is Global Bondholder Services Corp. (866 470-3700 or 212 430-3774).

Ameren is a public utility holding company based in St. Louis. Ameren Illinois supplies electricity and natural gas to customers in Illinois and is based in Peoria, Ill.

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