NRG Energy, Inc. Announces Proposed Offering of $500 Million Convertible Senior Notes
May 21 2018 - 6:24AM
Business Wire
NRG Energy, Inc. (NYSE:NRG) intends to commence an offering of
$500 million in aggregate principal amount of its convertible
senior notes due 2048 (the “Notes”). NRG also expects to grant the
initial purchasers a 30-day option to purchase up to an additional
$75 million in aggregate principal amount of the Notes. The Notes
will be senior unsecured obligations of NRG and will be guaranteed
by certain of its subsidiaries.
The Notes will be convertible, under certain circumstances, into
cash, shares of NRG’s common stock or a combination thereof at
NRG’s election, based on a conversion rate to be determined. NRG
will have the option to redeem the Notes, in whole or in part, at
any time, on or after June 1, 2025, at a cash redemption price
equal to the principal amount of the Notes to be redeemed, plus
accrued and unpaid interest. Unless NRG has previously called all
outstanding Notes for redemption, holders of the Notes may require
NRG to repurchase their Notes on each of September 1, 2025, June 1,
2033 and June 1, 2040, at a cash repurchase price equal to the
principal amount of the Notes to be repurchased, plus accrued and
unpaid interest.
NRG intends to use cash on hand and the proceeds from the
offering, including any proceeds from the exercise of the 30-day
option, to repay a portion of its outstanding indebtedness and to
pay fees and expenses related to the offering and incurred in
connection with its repayment of indebtedness. As a result, the
Notes offering is expected to be leverage neutral.
In connection with the offering of the Notes, NRG intends to use
cash on hand to repurchase shares of its common stock in an
aggregate amount to complete NRG’s previously announced $500
million share repurchase program. The transactions are expected to
be effected (i) by repurchases from purchasers of the Notes in
privately negotiated transactions (the “Private Repurchases”)
concurrently with the closing of the Notes offering and (ii)
through accelerated share repurchase transactions (the “ASRs”) and
possibly open market repurchases. NRG intends to enter into the
ASRs with one or more financial institutions, which may include one
or more of the initial purchasers or an affiliate thereof (the “ASR
Counterparties”), concurrently with the pricing of the Notes. The
ASRs will be conditioned upon the closing of the Notes
offering.
In connection with the ASRs, NRG has been advised that the ASR
Counterparties and/or their affiliates expect to purchase shares of
NRG’s common stock in secondary market transactions, and may
execute other transactions in NRG’s common stock, or in derivative
transactions relating to NRG’s common stock, beginning on the first
trading day immediately following the pricing of the Notes and
during the term of the ASRs (the “ASR Term”).
These activities, including the ASRs and the Private
Repurchases, may increase, or prevent a decrease, in the market
price of NRG’s common stock or the Notes, which could affect the
ability of holders to convert the Notes and, to the extent the
activity occurs during any observation period related to a
conversion of Notes, it could affect the amount and value of the
consideration that holders will receive upon conversion of the
Notes.
NRG expects the purchase price per share of the common stock
repurchased from certain purchasers of Notes in privately
negotiated transactions concurrently with the closing of the
offering of the Notes to equal the closing price per share of NRG’s
common stock on the New York Stock Exchange on the date of the
pricing of the offering of the Notes. The purchase price per share
of the common stock repurchased through the ASRs will generally be
equal to the average volume-weighted average price of NRG’s common
stock during the ASR Term, less a possible discount. The exact
number of shares repurchased pursuant to the ASRs will be
determined based on such purchase price.
The Notes and related guarantees are being offered only to
qualified institutional buyers in reliance on Rule 144A under the
Securities Act of 1933, as amended (the “Securities Act”). The
offer and sale of the Notes, the related guarantees and any shares
of common stock potentially issuable upon conversion of the Notes
have not been registered under the Securities Act or the securities
laws of any other jurisdiction, and those securities may not be
offered or sold in the United States absent registration or an
applicable exemption from the registration requirements. This press
release does not constitute an offer to sell the Notes, nor a
solicitation for an offer to purchase the Notes.
About NRG
At NRG, we’re redefining power by putting customers at the
center of everything we do. We create value by generating
electricity and serving nearly 3 million residential and commercial
customers through our portfolio of retail electricity brands. A
Fortune 500 company, NRG delivers customer-focused solutions for
managing electricity, while enhancing energy choice and working
towards a sustainable energy future.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act and Section 21E of
the Securities Exchange Act of 1934. These statements are subject
to certain risks, uncertainties and assumptions, and typically can
be identified by the use of words such as “will,” “expect,”
“estimate,” “anticipate,” “forecast,” “plan,” “believe” and similar
terms. Although NRG believes that its expectations are reasonable,
it can give no assurance that these expectations will prove to have
been correct, and actual results may vary materially. Factors that
could cause actual results to differ materially from those
contemplated above include, among others, risks and uncertainties
related to the capital markets generally and whether NRG will
consummate the offering, the anticipated terms of the Notes and the
anticipated use of proceeds.
NRG undertakes no obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise. The foregoing review of factors that
could cause NRG’s actual results to differ materially from those
contemplated in the forward-looking statements included in this
news release should be considered in connection with information
regarding risks and uncertainties that may affect NRG’s future
results included in NRG’s filings with the Securities and Exchange
Commission.
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version on businesswire.com: https://www.businesswire.com/news/home/20180521005493/en/
For NRG Energy, Inc.:Media:Marijke Shugrue,
609-524-5262orInvestors:Kevin L. Cole,
609-524-4526CFAorLindsey Puchyr, 609-524-4527
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