NRG Energy, Inc. Announces Pricing of $500.0 Million of Pre-Capitalized Trust Securities to Replace Maturing Pre-Capitalized Trust Securities
15 Agosto 2023 - 8:26PM
Business Wire
NRG Energy, Inc. (NYSE:NRG) announced that Alexander Funding
Trust II, a newly-formed Delaware statutory trust (the “Trust”),
has priced its private offering of pre-capitalized trust securities
redeemable July 31, 2028 (the “P-Caps”) to certain qualified
institutional buyers for an initial purchase price of $500.0
million. The P-Caps will have a Distribution Rate of 7.467% per
annum, which equals a spread of 3.100% to the five-year US treasury
yield at the time of pricing of 4.367%. The P-Caps are intended to
replace NRG’s existing pre-capitalized trust securities redeemable
2023 issued by Alexander Funding Trust, which mature on November
15, 2023.
The Trust will initially invest the proceeds from the sale of
the P-Caps in a portfolio of principal and/or interest strips of
U.S. Treasury securities (the “Eligible Assets”) and will enter
into a facility agreement with NRG, pursuant to which NRG will pay
a facility fee to the Trust, and NRG will agree to issue 7.467%
senior secured notes due 2028 (the “Secured Notes” and, together
with the P-Caps, the “P-Caps Securities”) to the Trust under
certain circumstances. The Eligible Assets held by the Trust will
be pledged as collateral for the benefit of certain banks that have
agreed to provide letters of credit for NRG’s account to support
NRG’s existing and future collateral obligations. NRG will not
receive any proceeds directly from the offering of the P-Caps. The
offering of the P-Caps is expected to close on August 29, 2023,
subject to customary closing conditions.
Any Secured Notes will be guaranteed on a first-priority basis
by each of NRG’s current and future subsidiaries that guarantee
indebtedness under its credit agreement and will be secured by a
first priority security interest in the same collateral that is
pledged for the benefit of the lenders under NRG’s credit
agreement, which consists of a substantial portion of the property
and assets owned by NRG and the guarantors. The collateral securing
any Secured Notes will be released if NRG obtains an investment
grade rating from two out of the three credit rating agencies,
subject to reversion if such credit rating agencies withdraw NRG’s
investment grade rating or downgrade NRG’s rating below investment
grade.
The P-Caps Securities are being offered only to qualified
institutional buyers in reliance on Rule 144A under the Securities
Act of 1933, as amended (the “Securities Act”), and who are also
“qualified purchasers” as defined in the Investment Company Act of
1940, as amended. The P-Caps Securities have not been registered
under the Securities Act or the securities laws of any other
jurisdiction and 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 any
security, including the P-Caps Securities, nor a solicitation for
an offer to purchase any security, including the P-Caps
Securities.
About NRG
NRG is a leading energy and home services company powered by
people and our passion for a smarter, cleaner, and more connected
future. A Fortune 500 company operating in the United States and
Canada, NRG delivers innovative solutions that help people,
organizations, and businesses achieve their goals while also
advocating for competitive energy markets and customer choice.
Forward-Looking Statements
This communication contains forward-looking statements that may
state NRG’s or its management’s intentions, beliefs, expectations
or predictions for the future. Such forward-looking 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
the offering of P-Caps will be consummated and the anticipated
terms of the P-Caps.
The foregoing review of factors that could cause NRG’s actual
results to differ materially from those contemplated in the
forward-looking statements included herein 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
SEC at www.sec.gov.
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version on businesswire.com: https://www.businesswire.com/news/home/20230815537713/en/
Investors: Brendan Mulhern 609.524.4767
investor.relations@nrg.com
Media: Laura Avant 713.537.5437 laura.avant@nrg.com
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