NEWARK, N.J., March 29 /PRNewswire-FirstCall/ -- PSEG Power LLC
("PSEG Power"), a wholly-owned subsidiary of Public Service
Enterprise Group Incorporated (NYSE: PEG), announced today that it
has commenced an offer to eligible holders to exchange up to
$250,000,000 of its outstanding 7.75%
Senior Notes due 2011 (the "old notes") held by them for its
newly-issued 5.125% Senior Notes due 2020 (the "new notes"), fully
and unconditionally guaranteed by PSEG Power's three principal
operating subsidiaries (the "subsidiary guarantees"), plus a cash
payment, the complete terms and conditions of which are set forth
in a confidential offering memorandum dated March 29, 2010 (the "offering memorandum") and
the related letter of transmittal (the "exchange offer"). As
of today, there are $800,000,000
aggregate principal amount of old notes outstanding.
The following is a brief summary of certain key elements of the
exchange offer:
- The exchange offer will expire at midnight, New York City time, on April 26, 2010, unless extended (the "expiration
date").
- Eligible holders who validly tender and who do not validly
withdraw old notes at or prior to 5:00
p.m., New York City time,
on April 12, 2010, unless extended
(the "early participation date"), and whose tenders are accepted
for exchange by PSEG Power, will receive the "total exchange price"
for each $1,000 principal amount of
old notes, which will be payable in the forms of consideration
described below.
- The "total exchange price" for the old notes will be based on a
pricing formula using the bid-side yield on the 0.875% U.S.
Treasury Security due 3/31/2011 plus
a fixed spread of 35 basis points and will be calculated at
2:00 p.m., New York City time, on April 12, 2010 (the "pricing time").
- The total exchange price will be inclusive of an "early
participation payment" of $30.00 per
$1,000 principal amount of old notes
tendered and accepted for exchange by PSEG Power.
- For each $1,000 principal amount
of old notes tendered and accepted for exchange by PSEG Power, the
total exchange price will be payable in the following forms of
consideration:
- cash in an amount equal to 25% of the total exchange price,
plus
- a principal amount of new notes having a value, determined as
set forth below, equal to 75% of the total exchange price.
- The principal amount of new notes to be issued as described
above will equal 75% of the "exchange ratio" multiplied by
$1,000. The "exchange ratio"
will be the ratio determined by dividing the total exchange price
by the "new notes value", which will be based on a pricing formula
using the bid-side yield on the 3.625% U.S. Treasury Security due
2/15/2020 plus a fixed spread of 130
basis points and will be calculated at the pricing time.
- Eligible holders who validly tender old notes after the early
participation date but at or prior to the expiration date, and
whose tenders are accepted for exchange by PSEG Power, will receive
the total exchange price minus the early participation payment,
determined as set forth in the offering memorandum.
- Tenders of old notes in the exchange offer may be validly
withdrawn at any time at or prior to the early participation date
provided that PSEG Power may extend the early participation date
without extending the deadline by which old notes tendered in the
exchange offer may be validly withdrawn, unless required by law.
Old notes tendered after the early participation date may not
be withdrawn, except where additional withdrawal rights are
required by law (as determined by PSEG Power in its sole
discretion).
- The new notes will constitute a further issuance of, and will
form a single series with, the 5.125% Senior Notes due 2020 that we
expect to issue on April 5, 2010 in
the aggregate principal amount of $250,000,000 (the "original 2020 notes").
- The new notes will mature on April 15,
2020 and will bear interest at a fixed rate of 5.125% per
year. Interest on the new notes will accrue from April 5, 2010 and will be payable semi-annually,
in arrears, on April 15 and
October 15 of each year, beginning
October 15, 2010.
- Consummation of the exchange offer is subject to a number of
conditions, including a "qualified reopening condition" as set
forth in the offering memorandum, the issuance of the original 2020
notes and the absence of certain adverse legal and market
developments.
- PSEG Power will not receive any cash proceeds from the exchange
offer.
- If more than $250,000,000
aggregate principal amount of the old notes are validly tendered
and not validly withdrawn, PSEG Power will only accept for exchange
old notes in an aggregate principal amount of up to $250,000,000 on a pro rata basis among the
tendering holders.
If and when issued, the new notes and the subsidiary guarantees
will not have been registered under the Securities Act of 1933 or
any state securities laws. The new notes and subsidiary
guarantees may not be offered or sold in the United States or to any U.S. persons
except pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act of
1933 and applicable state securities laws. PSEG Power will
enter into a registration rights agreement with respect to the new
notes and the original 2020 notes (and the subsidiary
guarantees).
The exchange offer is only made, and copies of the exchange
offer documents will only be made available, to a holder of old
notes who has certified in an eligibility letter certain matters to
PSEG Power, including its status as a "qualified institutional
buyer" as defined in Rule 144A under the Securities Act of 1933 or
that it is a person other than a "U.S. person" as defined in Rule
902 under the Securities Act of 1933.
This press release does not constitute an offer or an invitation
by PSEG Power to participate in the exchange offer in any
jurisdiction in which it is unlawful to make such an offer or
solicitation in such jurisdiction.
FORWARD-LOOKING STATEMENT
Readers are cautioned that statements contained in this press
release about our and our subsidiaries' future performance,
including future revenues, earnings, strategies, prospects and all
other statements that are not purely historical, are
forward-looking statements. Although we believe that our
expectations are based on reasonable assumptions, we can give no
assurance they will be achieved. The results or events
predicted in these statements may differ materially from actual
results or events. Factors which could cause results or
events to differ from current expectations include, but are not
limited to:
- Adverse changes in energy industry, law, policies and
regulation, including market structures and rules, and reliability
standards.
- Changes in federal and state environmental regulations that
could increase our costs or limit operations of our generating
units.
- Changes in nuclear regulation and/or developments in the
nuclear power industry generally, that could limit operations of
our nuclear generating units.
- Actions or activities at one of our nuclear units located on a
multi-unit site that might adversely affect our ability to continue
to operate that unit or other units at the same site.
- Any inability to balance our energy obligations, available
supply and trading risks.
- Any deterioration in our credit quality.
- Availability of capital and credit at commercially reasonable
terms and our ability to meet cash needs.
- Any inability to realize anticipated tax benefits or retain tax
credits.
- Changes in the cost of or interruption in the supply of fuel
and other commodities necessary to the operation of our generating
units.
- Delays or unforeseen cost escalations in our construction and
development activities.
- Increase in competition in energy markets in which we
compete.
- Adverse performance of our decommissioning and defined benefit
plan trust fund investments, and changes in discount rates and
funding requirements.
- Changes in technology and increased customer conservation.
For further information, please refer to our Annual Report on
Form 10-K, including Item 1A. Risk Factors, and subsequent reports
on Form 10-Q and Form 8-K filed with the Securities and Exchange
Commission. These documents address in further detail our
business, industry issues and other factors that could cause actual
results to differ materially from those indicated in this press
release. In addition, any forward-looking statements
included herein represent our estimates only as of today and should
not be relied upon as representing our estimates as of any
subsequent date. While we may elect to update forward-looking
statements from time to time, we specifically disclaim any
obligation to do so, even if our internal estimates change, unless
otherwise required by applicable securities laws.
Public Service Enterprise Group (NYSE: PEG) is a publicly
traded diversified energy company with annual revenues of more than
$12 billion, and three principal
subsidiaries: PSEG Power, Public Service Electric and Gas Company
(PSE&G) and PSEG Energy Holdings.
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SOURCE PSEG Power