By Abigail W. Adams
Portland, Me., March 5 – AES Corp. priced $1 billion par-of-$100 three-year equity units after the market close on Thursday at the cheap end of talk with a coupon of 6.875% and a threshold appreciation premium of 22.5%, according to an FWP filing with the Securities and Exchange Commission.
Price talk was for a yield of 6.375% to 6.875% and a threshold appreciation premium of 22.5% to 27.5%, according to a market source.
Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, BofA Securities Inc., Morgan Stanley & Co. LLC, Barclays, J.P. Morgan Securities LLC and Mizuho Securities USA LLC were bookrunners for the registered offering, which carries a greenshoe of $150 million.
The units will consist of a 10% interest in one share of $1,000-par 0% series A cumulative perpetual convertible preferred stock and a stock purchase contract.
The purchase contract expires on Feb. 15, 2024; the convertible preferred stock is callable on or after March 22, 2024.
The purchase contracts may be settled early upon a fundamental change.
Net proceeds are expected to be $973 million or will be $1,119,300,000 if the greenshoe is exercised in full.
Proceeds will be used to develop AES’s renewable energy and utility businesses, including its liquid natural gas infrastructure.
AES is an Arlington, Va.-based energy company.
| Issuer: | AES Corp.
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| Securities: | Equity units consisting of a stock purchase contract and a $1,000-par series A cumulative perpetual convertible preferred stock
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| Amount: | $1 billion, or 10 million units
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| Greenshoe: | $150 million, or 1.5 million units
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| Bookrunners: | Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, BofA Securities Inc., Morgan Stanley & Co. LLC, Barclays, J.P. Morgan Securities LLC and Mizuho Securities USA LLC
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| Senior co-managers: | MUFG, Santander Investment Securities Inc. and SMBC Nikko Securities America, Inc.
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| Co-managers: | Credit Agricole Securities (USA) Inc., Scotia Capital (USA) Inc., Societe Generale SA, Seaport Global Securities LLC, WR Securities, LLC and BMO Capital Markets Corp.
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| Pricing date: | March 4
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| Settlement date: | March 11
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| Distribution: | Registered
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| Talk: | Yield of 6.375% to 6.875% and threshold appreciation premium of 22.5% to 27.5%
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| Stock symbol: | NYSE: AES
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| Stock price: | $25.88 at market close March 5
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| Market capitalization: | $17.29 billion
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| Purchase Contract
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| Maturity: | Feb. 15, 2024
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| Dividend: | 6.875%
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| Price: | Par of $100
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| Yield: | 6.875%
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| Settlement rate: | 3.8640
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| Convertible preferreds
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| Coupon: | 0%
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| Price: | Par-of-$1,000
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| Premium: | 22.5%
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| Conversion price: | $31.70
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| Conversion rate: | 31.5428
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| Call option: | On or after March 22, 2024
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| Units listing: | NYSE: AESC
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