Ameren Illinois sets pricing in tender offer for 9.75%, 6.25% notes

By Jennifer Chiou

New York, Aug. 13 - Ameren Corp. subsidiary Ameren Illinois Co. announced the early results and pricing terms in the tender offer for its $400 million of 9.75% senior secured notes due 2018 and $337 million of 6.25% senior secured notes due 2018.

As announced, the total purchase price is capped at $450 million, excluding interest. The acceptance priority level is one for the 9.75% notes and two for the 6.25% notes.

As of 5 p.m. ET on Aug. 10, the early deadline, holders tendered about $87 million of the 9.75% notes and $193 million of the 6.25% notes.

For each $1,000 principal amount, Ameren Illinois will pay $1,384.06 for the 9.75% notes and $1,218.36 for the 6.25% notes.

The prices include an early tender premium of $30.00 per $1,000 principal amount of notes tendered by the early tender date.

The company set the purchase prices at 2 p.m. ET on Aug. 13 by reference to the 0.5% Treasury note due July 31, 2017 plus a spread of 225 basis points for the 9.75% notes and 140 bps for the 6.25% notes.

Holders will also receive accrued interest up to but excluding the settlement date, which is expected to be Aug. 27.

The tender offer will expire at midnight ET on Aug. 24.

The company will fund the tender offer with the proceeds of an offering of senior secured debt securities. The tender offer is subject to the completion of the debt offering, and Ameren Illinois announced the pricing of $400 million of 2.7% senior secured notes due 2022 expected to close on Aug. 20.

Remaining proceeds are slated for the redemption of all or a portion of $51.1 million aggregate principal amount of 5.5% debt maturing in 2014.

Ameren Illinois previously said the tender offer and debt offering are meant to reduce the weighted average interest rate and enhance the maturity profile of its debt.

The dealer manager for the tender offer is J.P. Morgan Securities LLC (866 834-4666 or 212 834-4811). The depositary and information agent is Global Bondholder Services Corp. (866 470-3700 or 212 430-3774).

Ameren is a public utility holding company based in St. Louis. Ameren Illinois supplies electricity and natural gas to customers in Illinois and is based in Peoria, Ill.

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