FirstEnergy gets total tenders for $252.7 million of 6.05% notes

By Jennifer Chiou

New York, March 28 - FirstEnergy Corp. announced the final tally of tenders for subsidiary FirstEnergy Solutions Corp.'s $585 million of 6.05% senior notes due 2021 at $252,695,000, or 43.2%.

The offer ended at 11:59 p.m. ET on March 27.

Settlement was slated for March 28.

For those who tendered by the close on March 13, they are to receive the total consideration of $1,189.71 per $1,000 principal amount plus accrued interest. Those who tendered after the early deadline will get $1,139.71 per $1,000 principal amount plus accrued interest.

As reported, the company said on Feb. 28 that it was tendering for up to $1.08 billion of notes issued by subsidiaries FirstEnergy Solutions and Allegheny Energy Supply Co., LLC.

The tender breakdown for the any and all offers was as follows:

• $194,468,000, or 55.56%, of Allegheny's $350 million of 5.75% notes due 2019;

• $99,966,000, or 39.99%, of Allegheny's $250 million of 6.75% notes due 2039; and

• $116,719,000, or 24.32%, of FirstEnergy Solutions' $480 million of 6.8% senior notes due 2039.

In the maximum tender offer, the company received early tenders for $252,633,000 of the 6.05% notes.

The any and all offers ended at 5 p.m. ET on March 13.

As noted, because the difference between $1.08 billion and the amount of notes tendered in the any and all offer exceeds $585 million, which was the principal amount of outstanding 6.05% notes, all 6.05% notes tendered in the offer are to be accepted for purchase.

Pricing was set on March 13 using the 0.875% Treasury due Jan. 31, 2018 plus a spread of 225 basis points for the 5.75% notes; the 2.75% Treasury due Nov. 15, 2042 plus 255 bps for the 6.75% notes; the 2.75% Treasury due Nov. 15, 2042 plus 235 bps for the 6.8% notes; and the 2% Treasury due Feb. 15, 2023 plus 140 bps for the 6.05% notes.

The FirstEnergy Solutions notes are guaranteed by its subsidiaries, FirstEnergy Generation, LLC and FirstEnergy Nuclear Generation, LLC.

The offers were contingent on financing. The company priced $1.5 billion of notes in two tranches on March 1, as previously reported by Prospect News.

The withdrawal deadline was 5 p.m. ET on March 13.

Goldman Sachs & Co. (800 828-3182 or 212 902-5183), Morgan Stanley & Co. LLC (800 624-1808 or 212 761-1057), BNP Paribas Securities Corp., KeyBanc Capital Markets Inc., Santander and Scotia Capital (USA) Inc. were the dealer managers.

Bondholder Communications Group, LLC was the information and tender agent (888 385-2663 or call collect 212 809-2663).

The diversified energy holding company is based in Akron, Ohio.

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