Dynegy issues $5.1 billion unsecured bonds to finance acquisition of power plants

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Dynegy has issued US$5.1 billion unsecured bonds to finance the acquisition of several power plants in a transaction announced several months ago.

Specifically the firm has issued:

  • US$2.1 billion in aggregate principal amount of units due 2019,
  • US$1.75 billion in aggregate principal amount of units due 2022, and
  • US$1.25 billion in aggregate principal amount of units due 2024.

The gross proceeds from the offerings, less initial purchasers’ discounts and expenses, will be placed into escrow pending the consummation of Dynegy’s previously announced acquisitions including the payment of US$2.8 billion in cash for 11 power plants in the Midwest and a retail business owned by Duke Energy. These include Killen, Stuart, Conesville, Miami Fort, Zimmer, Hanging Rock, Washington, Fayette, Lee and Dicks Creek.

The company is also buying ownership interests in plants in New England, Pennsylvania and the Midwest from Energy Capital Partners for US$3.45 billion in cash as well as stock. The ECP assets include these generating facilities: Milford, Lake Road, Dighton, Masspower, Liberty, Elwood, Richland, Stryker, Kincaid and Brayton Point.

Upon consummation of the acquisitions and certain other conditions, Dynegy intends to use the net proceeds from the offerings to pay a portion of the cash consideration in the Duke Midwest Assets Acquisition and the EquiPower Acquisition and to pay related fees and expenses. The offerings are expected to close into escrow on October 27, 2014.

The units and notes are being offered in private placement transactions to qualified institutional buyers.

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