RWE begins consent bids for 15 series of notes, exchange offer for two

By Angela McDaniels

Tacoma, Wash., Nov. 15 – RWE AG and two subsidiaries began consent solicitations for 15 series of notes and an exchange offer for two series of notes, according to company announcements.

RWE is soliciting consents from the holders of its

• €100 million floating-rate notes due Nov. 15, 2017;

• $50 million 3.8% notes due April 5, 2033;

• €100 million 3.5% notes due Dec. 3, 2042; and

• €150 million 3.55% notes due Feb. 13, 2043.

RWE is asking to substitute innogy SE as the debtor under its notes, subject to the proviso that RWE will not become guarantor of the notes.

innogy Finance BV, formerly RWE Finance BV, is soliciting consents from the holders of its

• €980 million 5.125% notes due July 23, 2018;

• €1 billion 6.625% notes due Jan. 31, 2019;

• €750 million 1.875% notes due Jan. 30, 2020;

• £570 million 6.5% notes due April 20, 2021;

• €1 billion 6.5% notes due Aug. 10, 2021;

• £500 million 5.5% notes due July 6, 2022;

• £487.5 million 5.625% notes due Dec. 6, 2023;

• €800 million 3% notes due Jan. 17, 2024;

• £760 million 6.25% notes due June 3, 2030;

• £600 million 4.75% notes due Jan. 31, 2034; and

• £1 billion 6.125% notes due July 6, 2039.

Finally, innogy Finance II BV, formerly RWE Finance II BV, is soliciting consents from the holders of its €600 million 5.75% notes due Feb. 14, 2033.

The two subsidiaries are seeking consents to replace RWE with innogy as guarantor.

RWE and the subsidiaries are also seeking to amend the conditions of some of the notes to make the German Act on Debt Securities applicable to the conditions.

The deadline for submitting voting instructions is 5:59 p.m. ET on Dec. 6. The voting period will begin Dec. 7 and end Dec. 12.

At least 75% of the votes cast must be in favor of the change in order for it to pass.

Consent bid rationale

The company is seeking the changes in order to reflect the separation of innogy from the RWE Group and in order to simplify the intra-group financing structure.

On Dec. 1, 2015, RWE announced plans to pool the grid and infrastructure, retail and renewables business segments of the former RWE Group in Germany and abroad into a newly established subsidiary, innogy.

These segments have been separated from the company’s conventional and nuclear power generation and trading activities and either merged or transferred by way of a share transfer to innogy, which is no longer part of the RWE Group.

The proceeds of the notes have been on-lent from RWE to innogy.

Fitch Ratings has assigned a preliminary BBB+ rating to innogy and a preliminary A- rating to any senior obligations assumed by it. S&P has assigned a BBB- rating to innogy.

RWE is rated BBB by Fitch Ratings, Baa3 by Moody’s Investors Service and BBB- by S&P Global Ratings.

Exchange offer

RWE is offering new notes issued by innogy in exchange for its €500 million 3.5% notes due October 2037 and ₯20 billion reverse dual currency notes due February 2040.

The new notes will have substantially the same conditions as those of the notes exchanged, including maturity date.

The exchange offer will end at 10 a.m. ET on Dec. 12, and settlement is expected to occur Dec. 21.

Citigroup Global Markets Ltd. (44 20 7986 8969 or liabilitymanagement.europe@citi.com) and Royal Bank of Scotland plc (44 20 7085 6124 or liabilitymanagement@rbs.com) are acting as solicitation agents for the consent solicitations and dealer managers for the exchange offer. Lucid Issuer Services Ltd. (44 20 7704 0880 or innogy@lucid-is.com) is acting as the tabulation and voting agent for the consent solicitations and the exchange agent for the exchange offer.

RWE is an electric utility. Both RWE and innogy are based in Essen, Germany.

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