By Devika Patel
Knoxville, Tenn., Sept. 29 - Reliant Energy Inc. has arranged to raise $1 billion through a $650 million term loan from GS Loan Partners and an agreement to issue $350 million of convertible preferred stock, which will be issued to First Reserve Corp., according to an 8-K filed Monday with the Securities and Exchange Commission.
Each of these deals is contingent upon certain conditions, including reaching definitive agreements with Merrill Lynch regarding termination of the credit-enhanced retail structure.
The loan matures in November 2012. It has an initial interest at Libor plus 4.5% with a floor of Libor plus 3.75%.
The 350,000 preferreds will be sold at $1,000 apiece. They pay 14% in cash dividends and are convertible at the lesser of $11 and lowest 20-day volume weighted average price of the company's common stock during the six months after closing, with a floor of $8.00.
Holders may force redemption if a change-of-control event occurs, or after the seventh anniversary.
The company may call the preferreds after the third anniversary for the face amount plus dividends, plus a make-whole premium if the redemption is before the fifth anniversary.
Reliant Energy, based in Houston, provides electricity and energy services to retail and wholesale customers in the United States.
| Issuer: | Reliant Energy Inc.
|
| Issue: | Term loan, convertible preferred stock
|
| Amount: | $1 billion
|
| Warrants: | No
|
| Pricing date: | Sept. 29
|
| Stock symbol: | NYSE: RRI
|
| Stock price: | $10.08 at close Sept. 29
|
|
|
| Term loan
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| Amount: | $650 million
|
| Maturity: | November 2012
|
| Coupon: | Libor plus 4.5%
|
| Price: | Par
|
| Yield: | Libor plus 4.5%
|
| Investor: | GS Loan Partners
|
|
|
| Preferreds
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| Amount: | $350 million
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| Shares: | 350,000
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| Price: | $1,000
|
| Dividends: | 14%
|
| Conversion price: | The lesser of $11 and lowest 20-day volume weighted average price of the company's common stock during the six months after closing, floor of $8.00
|
| Investor: | First Reserve Corp.
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