VST Vistra Corp

On June 11, 2019 Vistra Operations Company LLC (“Vistra Operations” or the “Issuer”), an indirect, wholly owned subsidiary of Vistra Energy Corp. (the “Company”), issued and sold $1,200,000,000 aggregate principal amount of the Issuer’s 3.55% Senior Secured Notes due 2024 (the “2024 Notes”) and $800,000,000 aggregate principal amount of the Issuer’s 4.30% Senior Secured Notes due 2029 (the “2029 Notes” and together with the 2024 Notes, the “Secured Notes”) in an offering to eligible purchasers under Rule 144A and Regulation S under the Securities Act of 1933, as amended (the “Securities Act”). The Secured Notes were sold pursuant to a purchase agreement (the “Purchase Agreement”) by and among the Issuer, certain direct and indirect subsidiaries of the Issuer (the “Subsidiary Guarantors”), and Citigroup Global Markets Inc., as representative of the several initial purchasers named in Schedule I thereto (the “Initial Purchasers”). A copy of the Purchase Agreement was previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on June 7, 2019.

The Issuer received net proceeds from the sale of the Secured Notes of approximately $1,975,956,000, after deducting the initial purchasers’ discounts and commissions and estimated offering expenses. The Company used the net proceeds, together with cash on hand, to (i) prepay certain amounts outstanding under the senior secured term loan under the credit agreement, dated October 3, 2016 (the “Credit Agreement”), by and among Vistra Operations, as borrower, Vistra Intermediate Company LLC, the guarantors party thereto, the various lenders and letter of credit issuers party thereto, and Credit Suisse AG, Cayman Islands Branch (as successor to Deutsche Bank AG New York Branch), as administrative agent and collateral agent, and (ii) to pay fees and expenses related to the offering of the Secured Notes.

The Secured Notes were issued under an indenture (the “Base Indenture”), dated as of June 11, 2019, by and between the Issuer and Wilmington Trust, National Association (the “Trustee”), as trustee, as supplemented by that certain Supplemental Indenture, dated as of June 11, 2019, by and among the Issuer, the Subsidiary Guarantors and the Trustee (the “Supplemental Indenture” and, together with the Base Indenture, the “Secured Notes Indenture”).

The Secured Notes Indenture provides for the full and unconditional guarantee by the Subsidiary Guarantors of the punctual payment of the principal of, premium, if any, interest on and all other amounts due under the Secured Notes and the Secured Notes Indenture (the “Guarantees”). The Secured Notes Indenture further provides that the Secured Notes will be secured by a first-priority security interest in the same collateral that is pledged for the benefit of the lenders under the Credit Agreement, which consists of a substantial portion of the property, assets and rights owned by Vistra Operations and the subsidiary guarantors, as well as the stock of Vistra Operations. The collateral securing the Secured Notes will be released if the Issuer’s senior, unsecured long-term debt securities obtain an investment grade rating from two out of the three rating agencies, subject to reversion if such rating agencies withdraw the investment grade rating of the Issuer’s senior, unsecured long-term debt securities or downgrade such rating below investment grade.

Interest on the 2024 Notes and the 2029 Notes will accrue from June 11, 2019, at a rate of 3.55% per annum and 4.30% per annum, respectively. Interest on the Secured Notes will be payable by the Issuer on January 15 and July 15 of each year, beginning on January 15, 2020. The 2024 Notes and the 2029 Notes will mature on July 15, 2024 and July 15, 2029, respectively.

Prior to June 15, 2024 (one month prior to their maturity), with respect to the 2024 Notes, or at any time prior to April 15, 2029 (three months prior to their maturity), with respect to the 2029 Notes, the Issuer will have the option to redeem all or any portion of the 2024 Notes or the 2029 Notes, in each case, at a redemption price equal to 100% of the aggregate principal amount of the applicable Secured Notes being redeemed, plus a make-whole premium and accrued and unpaid interest, if any, to, but excluding, the redemption date.

Upon (i) the occurrence of a change of control and (ii) a downgrade by one or more gradations, or the withdrawal, in either case, of the rating of the Secured Notes within 60 days after the change of control by at least two of Moody’s Investors Service, Inc., Standard & Poor’s Financial Services LLC or Fitch Ratings Inc., the Issuer will be required to make an offer to repurchase all or any portion of the outstanding Secured Notes at a price in cash equal to 101% of the aggregate principal amount of the Secured Notes repurchased, plus any accrued and unpaid interest to, but excluding, the repurchase date, subject to the rights of holders thereof on the relevant record date to receive interest due on the relevant interest payment date.

The Secured Notes Indenture contains certain covenants and restrictions, including, among others, restrictions on the ability of the Issuer and its subsidiaries, as applicable, to create certain liens, merge or consolidate with another entity, and sell all or substantially all of their assets.

The foregoing description of the Secured Notes Indenture and the Secured Notes does not purport to be complete and is qualified in its entirety by reference to the Base Indenture, the Supplemental Indenture and the forms of Secured Notes, copies of which are filed as Exhibits 4.1, 4.2, 4.3, 4.4, 4.5 and 4.6, to this Current Report on Form 8-K (this “Current Report”) and are incorporated by reference herein.