AES tenders for up to $1.24 billion of 8¾%, 9%, 8¾% second-priority notes

By Jennifer Chiou

New York, Oct. 16 - AES Corp. announced the start of a cash tender offer for up to $1.24 billion of its senior notes.

Affected notes, in order of priority, include the company's $201.81 million of 8¾% senior notes due 2008, $600 million of 9% second-priority senior secured notes due 2015 and $1.2 billion of 8¾% second-priority senior secured notes due 2013.

The offer ends at midnight ET on Nov. 13.

The Arlington, Va.-based owner and operator of electric power generation and distribution businesses said it will determine the payouts using the present value of the notes to the earliest redemption date, June 15, 2008 for the 8¾% notes due 2008, discounted using the 5.125% Treasury due June 30, 2008 and 50 basis points.

For the 9% notes and the 8¾% notes due 2013, the earliest call date is May 15, 2008 and the reference security is the 5.625% Treasury due May 15, 2008 with a fixed spread of 50 bps.

Those who tender by the early deadline of 5 p.m. ET on Oct. 29 will receive the early tender premium of $30.00 per $1,000 principal amount, which is included in the payouts.

The early settlement date for the 8¾% notes due 2008 and the 9% notes will be Oct. 30. The final settlement date for all notes will be Nov. 14.

AES said that it may increase or modify the tender cap.

Citi is the dealer manager (800 558-3745 or call collect 212 723-6106). Global Bondholder Services Corp. is the information agent (866 294-2200).

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