NRG Energy begins tender offers, consent solicitations for $4.7 billion of notes

By Angela McDaniels

Tacoma, Wash., Nov. 2 - NRG Energy, Inc. said it began conditional cash tender offers to purchase any of its 7¼% senior notes due 2014, 7 3/8% senior notes due 2016 and 7 3/8% senior notes due 2017 at 101% of par plus accrued interest.

The company also began an alternative consent solicitation. Noteholders may tender their notes or deliver consents but not both.

Each noteholder that provides consent will forgo its right to require NRG Energy to make a change-of-control offer for the notes. In return, consenting noteholders will receive a minimum consent fee of $1.25 per $1,000 principal amount of notes.

For each series of notes, if holders of a majority of notes deliver consents, consenting noteholders will receive a consent fee per $1,000 principal amount of notes equal to $1.25 divided by the percentage of notes of that series for which consents were delivered.

The tender offers and the consent solicitations expire at 9 a.m. ET on Dec. 4.

NRG Energy said it is holding the tender offers and consent solicitation in connection with its plan to create a new holding company structure via a merger agreement among NRG Energy and two newly formed subsidiaries, NRG Holdings, Inc. (Holdco) and NRG Merger Sub, Inc. The new structure is intended to facilitate the company's capital allocation plan.

The tender offers are conditioned on the consummation of the merger.

NRG Energy will remain the issuer of the notes following the merger but will become a wholly owned subsidiary of Holdco, which constitutes a change of control. The conditional cash tender offers will fulfill the company's obligation to hold a change-of-control tender offer for the notes.

The consent fees will be paid upon consummation of the merger.

The company said it received a $4.2 billion senior unsecured debt financing commitment from Bank of America to fund the tender offers. The offers will also be funded with cash on hand.

Banc of America Securities LLC (888 292-0070 or 212 847-5188) is the dealer manager and solicitation agent. MacKenzie Partners, Inc. (800 322-2885 or 212 929-5500) is the information agent.

NRG Energy owns and operates a portfolio of power-generating facilities and is based in Princeton, N.J.

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