NRG Energy talks $500 million 30-year convertible notes to yield 2.25% to 2.75%, up 40% to 45%

By Abigail W. Adams

Portland, Me., May 21 – NRG Energy Inc. plans to price $500 million of 30-year convertible notes after the market close on Monday with price talk for a coupon of 2.25% to 2.75% and an initial conversion premium of 40% to 45%, according to a market source.

BofA Merrill Lynch, Credit Agricole, Credit Suisse Securities LLC and BNP Paribas are bookrunners for the Rule 144A deal, which carries a greenshoe of $75 million.

The notes are non-callable until June 1, 2025. There are investor puts on Sept. 1, 2025, June 1, 2033 and June 1, 2040.

The notes are convertible into cash, shares or a combination of both at the company’s option.

In connection with the offering, NRG intends to use cash on hand to complete the previously announced $500 million share repurchase program with shares repurchased from the initial purchasers of the notes and through accelerated share repurchase transactions, according to a company news release.

The accelerated share repurchase transactions are contingent on the closing of the convertible notes offering.

Proceeds will be used to repay outstanding debt and to pay fees and expenses related to the offering. He offering is expected to be leverage neutral, according to the news release.

NRG Energy is a Princeton, N.J.-based integrated power company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.