AKRON,
Ohio, June 9, 2022 /PRNewswire/ -- FirstEnergy
Corp. (NYSE: FE) announced today that it has amended certain
terms of its previously announced cash tender offer, including the
price and timing as detailed below, and satisfied the tender
offer's financing conditions. FirstEnergy is utilizing this
tender offer to purchase certain outstanding debt and reduce its
leverage, consistent with its plans to reduce debt at the holding
company level. Notes that are accepted in the Tender Offer
will be purchased, retired and cancelled and will no longer remain
outstanding obligations of FirstEnergy.
On May 25, 2022, FirstEnergy
commenced an offer to purchase for cash (Tender Offer) up to the
maximum combined aggregate purchase price of $800 million, including principal and premium but
excluding accrued and unpaid interest (Maximum Tender Amount), of
its 7.375% Notes, Series C, due 2031 (2031 Notes) and 4.85% Notes,
Series C, due 2047 (which, pursuant to their terms, accrue interest
at a rate of 5.35% per annum as of the date of this news release)
(2047 Notes and, together with the 2031 Notes, the Notes and, each,
a Series of Notes). Subject to the Maximum Tender Amount, the
amount of a Series of Notes that is purchased in the Tender Offer
will be based on the Acceptance Priority Levels set forth
below.
The Financing Condition for the Tender Offer has been satisfied
with the completion of the previously announced sale of a minority
interest in FirstEnergy Transmission, LLC to affiliates of
Brookfield Infrastructure Partners on May
31, 2022.
The Tender Offer is being made on the terms and subject to the
conditions set forth in the offer to purchase dated May 25, 2022 (Offer to Purchase), as amended by
this news release. Capitalized terms used in this release but not
otherwise defined have the meanings given to them in the Offer to
Purchase.
FirstEnergy amended the Tender Offer as follows:
- extended the (i) Early Tender Time to 5:00 p.m., New York
City time, on June 13, 2022
(originally 5:00 p.m., New York City time, on June 8, 2022), (ii) Price Determination Date to
10:00 a.m., New York City time, on June 14, 2022 (originally 10:00 a.m., New York
City time, on June 9, 2022),
(iii) expected Early Settlement Date to June
15, 2022 (originally June 10,
2022), (iv) Expiration Time to 11:59
p.m., New York City time,
on June 28, 2022 (originally
11:59 p.m., New York City time, on June 23, 2022) and (v) expected Final Settlement
Date to June 30, 2022 (originally
June 27, 2022); and
- modified the applicable Fixed Spread as set forth in the Offer
to Purchase (Original Fixed Spread) to the applicable amended Fixed
Spread as set forth in the following table (Amended Fixed
Spread):
CUSIP No. /
ISIN
|
Title of
Security
|
Principal Amount
Outstanding
|
Acceptance
Priority Level
|
Reference
Treasury
Security
|
Bloomberg
Reference
Page
|
Original
Fixed
Spread
(bps)
|
Amended
Fixed Spread
(bps)
|
Early Tender
Premium(1)(2)
|
337932 AC1 /
US337932AC13
|
7.375%
Notes, Series C,
due 2031
|
$1,500,000,000
|
1
|
2.875%
U.S.
Treasury
due May
15, 2032
|
FIT1
|
+235
|
+175
|
$50.00
|
337932 AJ6 /
US337932AJ65
|
4.85% Notes,
Series C, due
2047(3)
|
$1,000,000,000
|
2
|
2.250%
U.S.
Treasury
due
February
15, 2052
|
FIT1
|
+300
|
+250
|
$50.00
|
________________________
|
(1)
|
The Total Consideration
for each Series validly tendered prior to or at the Early Tender
Time, as extended hereby, and accepted for
purchase is calculated using the applicable Amended Fixed Spread
and is inclusive of the applicable Early Tender Premium.
|
|
|
(2)
|
Per $1,000 principal
amount of Notes validly tendered at or prior to the Early Tender
Time, as extended hereby, and accepted for
purchase.
|
|
|
(3)
|
Pursuant to their
terms, the 2047 Notes accrue interest at a rate of 5.35% per annum
as of the date of this news release.
|
Except as set forth herein, all other terms and conditions of
the Tender Offer described in the Offer to Purchase remain
unchanged.
The deadline to withdraw Notes tendered in the Tender Offer was
5:00 p.m., New York City time, on June 8, 2022. This deadline has not been
extended (Withdrawal Date). Accordingly, previously tendered
Notes may no longer be withdrawn and Notes validly tendered after
the Withdrawal Date cannot be withdrawn, except where additional
withdrawal rights are required by law. As of the Withdrawal
Date, $48,018,000 aggregate principal
amount of the 2031 Notes had been validly tendered and not validly
withdrawn and $37,742,000 aggregate
principal amount of the 2047 Notes had been validly tendered and
not validly withdrawn. Subject to applicable law, FirstEnergy
has reserved the absolute right, in its sole discretion, to at any
time (i) waive any and all conditions to the Tender Offer, (ii)
extend, terminate or withdraw the Tender Offer, (iii) increase or
waive the Maximum Tender Amount, with or without extending the
Withdrawal Date, or (iv) otherwise amend the Tender Offer in any
respect.
Holders who have validly tendered and did not validly withdraw
their Notes on or prior to the Withdrawal Date and Holders who
validly tender their Notes at or prior to 5:00 p.m., New York
City time, on June 13, 2022,
unless further extended with respect to any Series of Notes or the
Tender Offer is earlier terminated by FirstEnergy, will be eligible
to receive the applicable Total Consideration, which includes the
applicable Early Tender Premium as set forth in the table above.
The applicable Total Consideration for each $1,000 principal amount of Notes validly tendered
and accepted for purchase will be determined in the manner
described in the Offer to Purchase by reference to the applicable
Amended Fixed Spread specified in the table above over the
applicable Reference Yield based on the bid side price of the
applicable Reference Treasury Security specified in the table
above, as calculated by the Dealer Managers (as defined below) at
10:00 a.m., New York City time, on June 14, 2022.
FirstEnergy has engaged Barclays Capital Inc. (Barclays) and
Morgan Stanley & Co. LLC (Morgan Stanley) to act as lead dealer
managers (together, the Lead Dealer Managers) and KeyBanc Capital
Markets Inc., SMBC Nikko Securities America, Inc., TD Securities
(USA) LLC and U.S. Bancorp
Investments, Inc. to act as co-dealer managers (collectively, the
Co-Dealer Managers and, together with the Lead Dealer Managers, the
Dealer Managers) in connection with the Tender Offer and has
appointed D.F. King & Co., Inc. to serve as the Tender Agent
and Information Agent for the Tender Offer. Copies of the Offer to
Purchase are available by contacting D.F. King & Co., Inc. via
telephone at (212) 269-5550 (toll free) or (800) 859-8509 (for
banks and brokers) or email: fe@dfking.com. Questions regarding the
terms of the Tender Offer should be directed to Barclays at (800)
438-3242 (toll-free) or (212) 528-7581 (collect) or Morgan Stanley
at (800) 624-1808 (toll-free) or (212) 761-1057 (collect).
None of FirstEnergy, its board of directors, the Dealer
Managers, D.F. King & Co., Inc.,
the trustee for the Notes, or any of their respective affiliates,
is making any recommendation as to whether Holders should tender
any Notes in response to the Tender Offer. Holders must make their
own decision as to whether to tender any of their Notes and, if so,
the principal amounts of Notes to tender.
This news release is for informational purposes only and is not
an offer to purchase, a solicitation of an offer to sell, or a
solicitation of consents with respect to any securities. This news
release does not describe all the material terms of the Tender
Offer, and no decision should be made by any Holder on the basis of
this news release. The terms and conditions of the Tender Offer are
described in the Offer to Purchase, as amended by this news
release, and this news release must be read in conjunction with the
Offer to Purchase. The Offer to Purchase contains important
information that should be read carefully before any decision is
made with respect to the Tender Offer. The Tender Offer is not
being made in any jurisdiction in which, or to or from any person
to or from whom, it is unlawful to make such offer or solicitation
under applicable securities or blue sky laws. If any Holder is in
any doubt as to the contents of this news release, or the Offer to
Purchase, or the action it should take, the Holder should seek its
own financial and legal advice, including in respect of any tax
consequences, immediately from its stockbroker, bank manager,
solicitor, accountant, or other independent financial, tax, or
legal adviser. Any individual or company whose Notes are held on
its behalf by a broker, dealer, bank, custodian, trust company or
other nominee must contact such entity if it wishes to tender such
Notes pursuant to the Tender Offer.
ABOUT FIRSTENERGY CORP.
FirstEnergy is dedicated to integrity, safety, reliability and
operational excellence. Its 10 electric distribution companies form
one of the nation's largest investor-owned electric systems,
serving customers in Ohio,
Pennsylvania, New Jersey, West
Virginia, Maryland and
New York. The company's
transmission subsidiaries operate approximately 24,000 miles of
transmission lines that connect the Midwest and Mid-Atlantic
regions. Follow FirstEnergy on Twitter @FirstEnergyCorp or online
at www.firstenergycorp.com.
Forward-Looking Statements: This news release includes
forward-looking statements based on information currently available
to management. Such statements are subject to certain risks and
uncertainties and readers are cautioned not to place undue reliance
on these forward-looking statements. These statements include
declarations regarding management's intents, beliefs and current
expectations. These statements typically contain, but are not
limited to, the terms "anticipate," "potential," "expect,"
"forecast," "target," "will," "intend," "believe," "project,"
"estimate," "plan" and similar words. Forward-looking statements
involve estimates, assumptions, known and unknown risks,
uncertainties and other factors that may cause actual results,
performance or achievements to be materially different from any
future results, performance or achievements expressed or implied by
such forward-looking statements, which may include the following:
the completion of the Tender Offer; the potential liabilities,
increased costs and unanticipated developments resulting from
government investigations and agreements, including those
associated with compliance with or failure to comply with the
Deferred Prosecution Agreement entered into on July 21, 2021 with the U.S. Attorney's Office for
the Southern District of Ohio; the
risks and uncertainties associated with government investigations
and audits regarding Ohio House Bill 6, as passed by Ohio's 133rd General Assembly (HB 6) and
related matters, including potential adverse impacts on federal or
state regulatory matters, including, but not limited to, matters
relating to rates; the risks and uncertainties associated with
litigation, arbitration, mediation, and similar proceedings,
particularly regarding HB 6 related matters, including risks
associated with obtaining court approval of the definitive
settlement agreement in the derivative shareholder lawsuits;
weather conditions, such as temperature variations and severe
weather conditions, or other natural disasters affecting future
operating results and associated regulatory actions or outcomes in
response to such conditions; legislative and regulatory
developments, including, but not limited to, matters related to
rates, compliance and enforcement activity, cybersecurity, and
climate change; the ability to accomplish or realize anticipated
benefits from our FE Forward initiative and our other strategic and
financial goals, including, but not limited to, overcoming current
uncertainties and challenges associated with the ongoing government
investigations, executing our transmission and distribution
investment plans, greenhouse gas reduction goals, controlling
costs, improving our credit metrics, growing earnings, and
strengthening our balance sheet; the risks associated with
cyber-attacks and other disruptions to our, or our vendors',
information technology system, which may compromise our operations,
and data security breaches of sensitive data, intellectual property
and proprietary or personally identifiable information; mitigating
exposure for remedial activities associated with retired and
formerly owned electric generation assets; the ability to access
the public securities and other capital and credit markets in
accordance with our financial plans, the cost of such capital and
overall condition of the capital and credit markets affecting
FirstEnergy, including the increasing number of financial
institutions evaluating the impact of climate change on their
investment decisions; the extent and duration of the COVID-19
pandemic and the related impacts to our business, operations and
financial condition resulting from the outbreak of COVID-19
including, but not limited to, disruption of businesses in our
territories, supply chain disruptions, additional costs, workforce
impacts and governmental and regulatory responses to the pandemic,
such as moratoriums on utility disconnections and workforce
vaccination mandates; actions that may be taken by credit rating
agencies that could negatively affect either our access to or terms
of financing or our financial condition and liquidity; changes in
assumptions regarding factors such as economic conditions within
our territories, the reliability of our transmission and
distribution system, or the availability of capital or other
resources supporting identified transmission and distribution
investment opportunities; changes in customers' demand for power,
including, but not limited to, economic conditions, the impact of
climate change, or energy efficiency and peak demand reduction
mandates; changes in national and regional economic conditions,
including recession and inflationary pressure, affecting
FirstEnergy and/or its customers and those vendors with which
FirstEnergy does business; the potential of non-compliance with
debt covenants in our credit facilities; the ability to comply with
applicable reliability standards and energy efficiency and peak
demand reduction mandates; changes to environmental laws and
regulations, including, but not limited to, those related to
climate change; changing market conditions affecting the
measurement of certain liabilities and the value of assets held in
our pension trusts, or causing FirstEnergy to make contributions
sooner, or in amounts that are larger, than currently anticipated;
labor disruptions by our unionized workforce; changes to
significant accounting policies; any changes in tax laws or
regulations, or adverse tax audit results or rulings; and the risks
and other factors discussed from time to time in our Securities and
Exchange Commission filings. These forward-looking statements
are also qualified by, and should be read together with, the risk
factors included in FirstEnergy's filings with the SEC, including,
but not limited to, the most recent Annual Report on Form 10-K and
any subsequent Quarterly Reports on Form 10-Q and Current Reports
on Form 8-K. The foregoing review of factors also should not be
construed as exhaustive. New factors emerge from time to time, and
it is not possible for management to predict all such factors, nor
assess the impact of any such factor on FirstEnergy's business or
the extent to which any factor, or combination of factors, may
cause results to differ materially from those contained in any
forward-looking statements. FirstEnergy expressly disclaims any
obligation to update or revise, except as required by law, any
forward-looking statements contained herein or in the information
incorporated by reference as a result of new information, future
events or otherwise.
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SOURCE FirstEnergy Corp.