NRG Energy has right to issue $500 million first-lien notes to trust

By Wendy Van Sickle

Columbus, Ohio, Aug. 29 – NRG Energy Inc. entered into a facility agreement on Tuesday under which it has the right to, from time to time, issue up to $500 million of 7.467% senior secured first-lien notes due 2028 to Alexander Funding Trust II, according to an 8-K filing with the Securities and Exchange Commission.

The notes were issued in connection with the set of $500 million of pre-capitalized trust securities by the trust.

NRG will pay the trust a semiannual facility fee at a rate of 3.13427% per annum on the unexercised portion of the issuance right.

The issuance right will be exercised automatically in full if NRG fails to pay the facility fee when due or any amount due under the trust expense reimbursement agreement or fails to purchase and pay for any eligible treasury assets that are due and not paid on their payment date and such failure is not cured within 30 days, or upon certain bankruptcy events of NRG.

NRG will be required to mandatorily exercise the issuance right if certain mandatory exercise events occur.

If NRG makes this election or redeems notes held by the trust, the trust will redeem a corresponding amount of the pre-capitalized trust securities, and the maximum amount of notes that NRG may thereafter issue and sell to the trust will be reduced by that amount.

NRG Energy is an energy company based in Houston.

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