Allegheny Energy Announces Debt Tender Offer

 

GREENSBURG, Pa.--(BUSINESS WIRE)--Allegheny Energy Supply Company, LLC (“AE Supply”), the power generation business of Allegheny Energy, Inc. (NYSE: AYE), announced today an offer to purchase for cash up to $150 million principal amount (the “Maximum Tender Amount”) of the following outstanding
notes (the “Notes”):

CUSIP

Title of

Principal

Maximum

Full Tender

Late Tender

Number

Security

Amount

Tender

Offer

Offer

Outstanding

Amount

Consideration(1)

Consideration(1)

017363AD4

7.80% Notes due 2011

$302,517,000

$150,000,000

$1,083.75

$1,068.75

⁽¹⁾ Per $1,000 principal amount of Notes.

Holders who tender and do not withdraw their Notes on or before 5:00 p.m., New York City time, on October 5, 2009, unless extended (the “Early Tender Date”), will be eligible to receive the Full Tender Offer Consideration described in the table above. Holders who tender Notes after the Early Tender Date and on or before midnight, New York City time, on October 20, 2009, will receive the Full Tender Offer Consideration minus an amount in cash equal to $15 for each $1,000 principal amount of Notes (the “Late Tender Offer Consideration”). In addition to the Full Tender Offer Consideration or the Late Tender Offer Consideration, as the case may be, payable in respect of Notes accepted for purchase, holders of Notes will receive accrued and unpaid interest on their purchased Notes from the last interest payment date to, but not including, the date of payment for purchased Notes.

The offer will expire at midnight, New York City time, on October 20, 2009, unless extended (such date and time, as the same may be extended, the “Expiration Date”).

The tender offer is subject to, and conditioned upon, the satisfaction or waiver of the general conditions described in the offer to purchase. If any of the general conditions are not satisfied or waived, AE Supply is not obligated to accept for payment, purchase, or pay for, and may delay the acceptance for payment of, any tendered Notes, in each event, subject to applicable laws, and may terminate the tender offer.
If the principal amount of the Notes tendered and not withdrawn exceeds the Maximum Tender Amount described in the table above, the principal amount of Notes purchased will be prorated based on the principal amount tendered. If any tendered notes are not accepted for payment, the Notes will be returned without expense to the tendering holder. AE Supply reserves the right, subject to applicable law, to extend, withdraw or terminate the tender offer. Further, AE Supply reserves the right to modify the Maximum Tender Amount provided in the table above with respect to the Notes in its sole discretion.

This release is neither an offer to purchase nor a solicitation of an offer to sell any Notes. The tender offer is being made pursuant to the offer to purchase and the letter of transmittal, copies of which will be delivered to all holders of the Notes. Persons with questions regarding the tender offer should contact the lead dealer manager, Credit Suisse, at (800) 820-1653 (toll free) or (212) 538-1862 (collect), or the Information Agent, Global Bondholder Services Corporation, at (866) 470-3900

Allegheny Energy Supply Issues $600 Million of Senior Unsecured Notes

GREENSBURG, Pa.--(BUSINESS WIRE)--Allegheny Energy, Inc. (NYSE: AYE) announced today that its subsidiary, Allegheny Energy Supply Company, LLC (“AE Supply”), will issue $600 million aggregate principal amount of senior unsecured notes, including $350 million of 5.75% Notes due 2019 and $250 million of 6.75% Notes due 2039.

AE Supply will apply the net proceeds of the notes offering to repay its existing $447 million term loan and to finance the repurchase of up to $150 million of its outstanding 7.80% Notes due 2011. Allegheny expects the offering for the new senior unsecured notes to be completed on or about October 1, 2009.

The bonds have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act.

Allegheny Energy Completes $1 Billion Credit Facility

GREENSBURG, Pa.--(BUSINESS WIRE)--Allegheny Energy, Inc. (NYSE: AYE) today announced that its power generation business, Allegheny Energy Supply Company, LLC, has obtained a new $1 billion senior unsecured revolving credit facility with a three-year maturity. The financing replaces Allegheny Energy Supply’s existing $400 million revolving credit facility, which was scheduled to mature in May 2011.

“We’re pleased to have completed this financing on such attractive terms in a difficult credit environment,” said Paul Evanson, Chairman and Chief Executive Officer. “Through this and other transactions, we’ve significantly strengthened our liquidity position and improved our financial flexibility.”

Loans under the new facility generally will bear interest that is calculated based on the London Interbank Offered Rate (LIBOR), plus a margin based on Allegheny Energy Supply’s senior unsecured credit rating. Currently, the margin on LIBOR-based loans is 3.5%.

The new facility will be used for general corporate purposes and should provide adequate capacity for current plans to hedge unregulated plant output. As a result, Allegheny is not at this time pursuing the first-lien based facility for hedging which was previously under consideration.

Joint lead arrangers and book runners for the financings are Bank of America Merrill Lynch and The Bank of Nova Scotia. Bank of America, N.A. will act as administrative agent. According to these banks, the facility is the first broadly syndicated three-year credit facility completed in the industry in the past year.