AES begins tender offer for $250 million of notes from four series

By Marisa Wong

Morgantown, W.Va., Dec. 29 – AES Corp. began a tender offer on Dec. 28 to purchase for cash up to a total of $250 million of four series of its outstanding notes, according to a press release.

The company is tendering for the following notes, listed in order of acceptance priority level:

• $750 million outstanding 4.875% senior notes due 2023;

• $575 million outstanding 5.5% senior notes due 2025;

• $750 million outstanding 5.5% senior notes due 2024; and

• $1 billion outstanding 7.375% senior notes due 2021.

The tender offers are scheduled to expire at 11:59 p.m. ET on Jan. 26.

The total consideration payable for each $1,000 principal amount of notes tendered at or prior to 5 p.m. ET on Jan. 11, the early tender date, and accepted for purchase will be $870 for the 4.875% notes, $880 for the 5.5% notes due 2025, $890 for the 5.5% notes due 2024 and $1,015 for the 7.375% notes. The total consideration includes a $30 early tender premium.

Holders tendering after the early deadline will only be eligible to receive the tender offer consideration, which is the total consideration less the early tender premium.

Holders will also receive accrued interest up to, but not including, the applicable settlement date.

AES may choose to accept for purchase notes tendered by the early tender date before the expiration of the offer. The early settlement date is expected to be Jan. 12.

The final settlement date is expected to be Jan. 27.

Tenders may be withdrawn at or prior to 5 p.m. ET on Jan. 11.

The company intends to accept for payment all notes tendered by the expiration of the offer and will only prorate the notes if the aggregate amount of notes of all series tendered by the early deadline or the expiration date exceeds the tender cap.

Tendered notes having a higher acceptance priority level will be accepted before any tendered notes having a lower acceptance priority level are accepted in the offer. If the total principal amount of any notes of a series tendered in the offer exceeds the amount of the tender cap remaining available, then the company will accept those notes on a pro rata basis. If notes with a certain acceptance priority level are accepted on a pro rata basis, no series of notes with a lower acceptance priority level will be accepted for payment.

If the offers are not fully subscribed as of the early tender date and the company chooses to have an early settlement date, holders tendering after the early deadline may be subject to proration, whereas holders who tender their notes before the early deadline will not be subject to proration.

In addition, if the total amount of notes of all series tendered by the early tender date exceeds the tender cap and there is an early settlement date, holders tendering after the early deadline will not have any of their notes accepted for payment. However, if there is no early settlement date and the total amount tendered by the final settlement date exceeds the tender cap, all holders who tender their notes will be subject to proration, subject to application of the acceptance priority levels.

The company said it may choose to increase the tender cap amount.

J.P. Morgan Securities LLC (attn.: liability management group, 866 834-4666, 212 834-3424) is the dealer manager for the tender offers. Global Bondholder Services Corp. (attn.: corporate actions, 212 430-3774 for banks and brokers or 866 470-4200 for all others) is the information and depositary agent.

AES is a power company based in Arlington, Va.

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