AES Subsidiary To Issue Notes - Analyst Blog
28 Setembro 2011 - 10:00AM
Zacks
The AES Corporation (AES) announced that it
would issue $1.25 billion worth of senior notes in a private
offering by its newly formed, wholly-owned special purpose indirect
subsidiary, Dolphin Subsidiary II, Inc.
The private offering of senior notes consists of $450 million in
aggregate principal amount with a coupon rate of 6.50% due 2016 and
senior notes worth $800 million in aggregate principal amount with
a coupon rate of 7.25% due 2021. The offering is expected to close
on October 3, 2011.
AES will use the proceeds from the offering to finance the
pending acquisition of DPL Inc. (DPL). Earlier, in
April 2011, the companies announced that AES will acquire DPL in a
transaction valued at $4.7 billion. AES will acquire all of the
outstanding shares of DPL for approximately $3.5 billion in cash,
or $30 per share, representing an 8.7% premium over DPL’s closing
share price on April 19, 2011. AES will also assume DPL's net debt
of $1.2 billion.
Dolphin has been created by AES for the sole purpose of raising
acquisition financing for the DPL transaction. Subject to and upon
the consummation of the merger, Dolphin will merge with DPL, with
the latter continuing as the surviving company and obligor under
the notes.
Upon closure of the transaction, DPL will become a wholly-owned
subsidiary of AES. The parties expect to complete the merger in the
fourth quarter of 2011 or first quarter of 2012. Completion of the
merger transaction is however dependant upon pending regulatory
approvals from the Federal Energy Regulatory Commission and the
Public Utilities Commission of Ohio.
Upon completion of the transaction, DPL’s common stock will
cease to trade publicly, and each outstanding share of DPL’s common
stock will be converted into a right to receive a cash amount of
$30 per share, without interest. AES estimates post-acquisition its
adjusted earnings per share for fiscal year 2011 to be in the range
of $0.97–$1.03.
AES Corporation currently retains a Zacks #2 Rank, which
translates into a short-term 'Buy' rating. This is in sync with its
peers like Ameren Corporation (AEE) and
Dominion Resources Inc. (D).
Based in Arlington, Virginia, AES Corporation operates globally
and is involved in the generation, distribution, transmission, and
sale of electricity to end-users in the residential, commercial,
industrial, and governmental sectors.
AMEREN CORP (AEE): Free Stock Analysis Report
AES CORP (AES): Free Stock Analysis Report
DOMINION RES VA (D): Free Stock Analysis Report
DPL INC (DPL): Free Stock Analysis Report
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