AES selling $500 million 10-year notes in quickie offering

By Paul Deckelman

New York, Feb. 9 - AES Corp. said Monday that it will sell $500 million of new 10-year unsecured senior notes, using the proceeds to pay a portion of its outstanding term loan debt.

High yield syndicate sources said the public deal - a drawdown of its shelf registration statement previously filed with the Securities and Exchange Commission - will be brought to market via joint book-running managers Citigroup and Deutsche Bank Securities. It is expected that other banks will be co-managers on the deal, but so far, there is no information as to which ones.

The deal is expected to price late Tuesday, following a conference call earlier Tuesday to market the issue to potential investors, a source said.

The notes will be non-callable for the life of the issue.

AES said that it plans to use the net proceeds to repay a portion of its $700 million term loan under its credit facility. The loan is scheduled to mature in July 2007, but could be extended to April 2008 if certain conditions are met.

AES, an Arlington, Va.-based global energy producer, last tapped the credit markets on May 1, 2003 when it sold $1.8 billion of new second priority senior secured notes in two tranches via a syndicate led by bookrunner Citigroup and joint lead manager UBS Warburg. Those notes were rated B2 by Moody's Investors Service and B+ by Standard & Poor's.

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