AES reaches minimum tender amount in exchange offer for '02, '03 notes

The AES Corp. (B3/B+) said late Monday (Dec. 9) that it had reached the minimum tender threshold on both series of existing notes involved in its previously announced offer to exchange a combination of cash and new senior secured securities for up to $500 million of senior notes scheduled to come due in 2002 and 2003.

The company said that the offer, which earlier Monday had been scheduled to expire at 5 p.m. ET on Monday (Dec. 9), would now be extended to 5 p.m. ET on Wednesday (Dec. 11), subject to possible further extension.

It said that it had been informed by the exchange agent for the offer that, as of the old deadline, approximately $240.013 million of its 8¾% senior notes due 2002, or 80% of the outstanding amount, had been tendered (up from the $233.768 million or about 78% reported when the deadline had previously been extended, earlier Monday). That met the previously unfulfilled minimum tender condition of 80% of each series of notes.

AES also said that the 80% threshold had previously been reached for its 7 3/8% remarketable and redeemable securities - ROARS - due 2013, with $172.869 million in aggregate principal amount, or 86% of the outstanding amount, having already been tendered.

AES said that although the minimum tender condition has been satisfied, completion of the exchange offer remains subject to a number of significant conditions, which have not yet been satisfied, including AES' concurrent entry into new senior secured credit facilities to refinance its existing credit facilities.

AS PREVIOUSLY ANNOUNCED, AES, an Arlington, Va.-based global independent power producer said on Oct. 3 that it had begun an offer to exchange the cash and new debt for its $300 million of outstanding 8¾% notes and its $200 million of outstanding 7 3/8% ROARS, which are putable in 2003.

AES said it would exchange $500 in cash and $500 principal amount of a new issue of 10% senior secured notes due 2005 per $1,000 principal amount of the existing 2002 notes( this mix was subsequently altered), and would exchange $1,000 principal amount of the new 10% notes per $1,000 principal amount of the ROARS. It additionally said it would pay an early tender bonus payment of $15 per $1,000 principal amount of the 2002 notes tendered and $5 per $1,000 principal amount of the ROARS tendered to holders who tender their notes prior to the early tender deadline (originally 5 p.m. ET on Oct. 25, which was subsequently first extended, then waived, then restored, then waived again) and who do not subsequently withdraw such securities, assuming the exchange offer is consummated.

It said the exchange offer would expire at 5 p.m. ET on Nov. 8 (this deadline was subsequently extended). Tenders of the 2002 notes and the ROARs could be withdrawn at any time prior to the later of the early tender deadline and the time that AES announces that it has received valid and unwithdrawn tenders representing at least 75% in aggregate principal amount of the 2002 notes and the ROARS on a combined basis (the minimum participation percentages were later changed). In no event shall the latter time be later than the announced expiration date.

The company said that consummation of the exchange offer would be subject to a number of significant conditions, including (but not limited to) that valid and unwithdrawn tenders are received representing at least 75% in aggregate outstanding principal amount of the 2002 Notes and the ROARs on a combined basis; AES' concurrent entry into a new senior secured credit facility; the valid amendment of certain documentation executed in connection with the issuance of the ROARS in order to permit the completion of the exchange offer; and the absence of certain adverse legal and market developments.

AES said that the new senior secured notes being offered to the holders of the 2002 notes and the ROARS would be secured equally and ratably with all debt outstanding under the new senior secured credit facilities, by first-priority liens, subject to certain exceptions and permitted liens, on all of the capital stock of domestic subsidiaries owned directly by AES and 65% of the capital stock of certain foreign subsidiaries owned directly by AES and on certain inter-company receivables, inter-company notes and inter-company tax sharing agreements owed to AES by its subsidiaries. In addition, the new senior secured notes will be subject to a mandatory offer to repurchase with a portion of the net cash proceeds received from certain asset sales by AES.

The offering of the new senior secured notes in the exchange offer is being made only to "qualified institutional buyers" and "persons other than a U.S. person" located outside the United States under the definitions contained in Rule 144A and Regulation S of the Securities Act of 1933, as amended.

AES further said that concurrently it was also launching a new multi-tranche $1.6 billion senior secured credit facility, which would be secured equally and ratably with the new senior secured notes. Consummation of the new senior secured facility would be subject to a number of conditions, including the completion of the exchange offer for the bonds and participation of all of its existing lenders.

On Oct. 28, AES said that it was extending the early tender deadline on its offer to 5 p.m. ET on Oct. 30, subject to possible further extension, from the original Oct. 25 deadline. On Oct. 31, AES said that it had again extended the early tender deadline to 5 p.m. ET on Nov. 1, subject to possible further extension, from the prior Oct. 30 deadline. On Nov. 4, AES said that it had waived the early tender deadline on the exchange offer, so that all holders validly tendering their notes by the Nov. 8 expiration deadline for the offer (which was subsequently extended) would be eligible for the applicable early tender bonus cash payment.

On Nov. 11, AES said that it had extended the exchange offer to 5 p.m. ET on Dec. 3, subject to possible further extension, from the previous Nov. 8 deadline, and had amended certain other terms of the exchange.

AES said that it had been informed by the exchange agent for the offer that, as of the old expiration deadline, approximately $16.863 million of its 2002 notes and $44.494 million of the ROARs had been tendered in the exchange offer, representing approximately 5.6% and 22.2% of the outstanding 2002 notes and ROARs, respectively.

The company modified the consideration it will pay to the holders of its 8 ¾% senior notes due 2002 to a mixture of $650 in cash and $350 in new securities per $1,000 principal amount of the old notes tendered (from $500 in cash and $500 in new notes previously).

The company had originally announced an early tender bonus to be paid in addition to the actual exchange consideration, with a separate, earlier deadline, for holders of the 8 ¾% notes and the 7 3/8% remarketable and redeemable securities ("ROARS") due 2013 that it is tendering for, but subsequently eliminated the earlier deadline, offering the bonus to all tendering holders. The Nov. 11 announcement restored the early tender deadline, setting it at 5 p.m. ET on Nov. 18; AES said that holders could withdraw their note tenders any time until that early deadline.

The previously announced respective early tender bonuses for the 8 ¾% notes and for the ROARS remained the same; however, AES said that holders tendering on or prior to the expiration date and not withdrawing such securities would still receive an incremental cash payment in the amount of $5 for each $1,000 principal amount 8¾% notes tendered and $5 for each $1,000 principal amount of ROARs tendered.

AES further said the consummation of the exchange offer would now be subject to the condition that 80% of the aggregate principal amount of the 8¾% notes and 80% of the aggregate principal amount of the ROARs be received and not withdrawn, a change from its original condition that 75% of the 8¾% notes and the ROARs on a combined aggregate basis be tendered.

On Nov. 19, AES once again waived the early tender deadline of 5 p.m. ET on Nov 18, and said that holders tendering their notes by the scheduled tender offer expiration deadline (5 p.m. ET on Dec. 3) and not withdrawing such securities would all be eligible to receive the previously announced early tender bonus payment, assuming the completion of the exchange offer.

On Nov. 27, AES said that it had been informed by the exchange agent for the exchange offer that as of 5 p.m. ET on Nov. 26, approximately $219.193 million in aggregate principal amount of its outstanding 8¾% notes, or 73% of the outstanding amount, had been tendered under the offer, as had approximately $157.851 million of the ROARs, or 79% of the outstanding amount.

AES indicated that it had not yet satisfied the minimum tender amount condition under the offer (tender of at least 80% of each note series).

On Dec. 4, AES said that it had extended its exchange offer to 5 p.m. ET on Friday (Dec. 6), subject to possible further extension, from the previous Dec. 3 deadline.

It said that it had been informed by the exchange agent for the offer that as of the old deadline, approximately $230.074 million of its 8¾% senior notes due 2002, or about 77% of the notes outstanding, had been tendered, along with approximately $172.859 million in aggregate principal amount of its 7 3/8% remarketable and redeemable securities - ROARS - due 2013, or 86% of the outstanding amount. Holders of the ROARS have thus achieved the 80% minimum tender condition, while the condition had not yet been met for the 2002 notes.

On Monday (Dec. 9) AES said that it had again extended its exchange offer, which had been scheduled to expire at 5 p.m. ET on Friday (Dec. 6), to 5 p.m. ET on Monday (Dec. 9), subject to possible further extension.

It said that it had been informed by the exchange agent for the offer that, as of the old deadline, approximately $233.768 million of its 8¾% notes, or about 78% of the outstanding amount, had been tendered (up from the $230.074 million or about 77% reported when the deadline was extended last week). That still left the 80% minimum tender offer condition for the notes unmet. AES also said that as of the Dec. 6 deadline, $172.869 million in aggregate principal amount of its 7 3/8% ROARS, or 86% of the outstanding amount, had been tendered (up slightly from $172.859 million previously), fulfilling the 80% minimum tender requirement .

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