AES Gener extends tender for convertibles, notes

New York, Jan. 29 - AES Gener SA said it has extended the expiration dates for its cash tender offers of its 6% U.S. convertible senior notes due 2005, its 6% Chilean convertible bonds due 2005 and its 6½% Yankee notes due 2006.

The offer for the U.S. convertibles and the Yankee notes will now expire at 5 p.m. ET Feb. 20 instead of 5 p.m. ET Jan. 30.

The offer for the Chilean convertibles will expire at 8 a.m. ET Feb. 20 instead of 8 a.m. ET Jan. 28.

As of 5 p.m. ET Jan. 27, $53.1 million principal amount or 71.85% of the U.S. convertibles had been tendered and $143.6 million principal amount or 71.78% of the Yankee notes had been tendered.

Santiago, Chile-based AES Gener also said the tender for the Chilean bonds is being modified so that it will buy the bonds at 104.75% of par instead of 104.72% of par, equivalent to an internal rate of return (IRR) of 6.39% instead of 6.27%.

As previously reported on Dec. 1, AES Gener said it has begun a tender offer for its tranche L convertible bonds due 2005 that were issued in the local Chilean market.

AES Gener will buy the bonds at 104.72% of par, equivalent to an internal rate of return of 6.27%. Holders will also receive accrued interest. Payment will be in Chilean pesos.

The offer initially was scheduled to run through 2 p.m. local time on Dec. 18.

The tender is subject to at least two thirds of the amount outstanding being tendered and to the issuance of new bonds in the international markets sufficient to fund the tender and a tender for the company's U.S. convertible bonds issued in the international markets.

AES Gener said it is also conducting a tender for the tranche M international bonds on similar terms although it did not disclose details.

AES Gener previously said its board has authorized a refinancing plan intended to tackle its 2005 and 2006 maturities.

Under the plan, the Santiago, Chile, company will issue $400 million of bonds in the international capital markets. AES Gener is aiming at a credit rating of at least BBB-.

If the bonds have to be collateralized to achieve investment grade then the company will call a meeting of holders of its existing bonds to authorize amending the indenture. This move will eliminate existing restrictions on collateralization.

Proceeds from the new bonds will be used to fund an offer to prepay the bonds coming due in 2005 and 2006.

AES Gener will also sell a minority interest in the company in the local and international markets.

Standard & Poor's currently rates AES Gener at B, and Fitch rates it at B+.

AES Gener faces two substantial upcoming maturities, $503 million of convertible bonds due in March 2005 and $200 million of Yankee bonds due in January 2006.

Deutsche Bank Securities Inc. is the dealer manager for the tender offers and solicitation agent for the consent solicitation (For the U.S. convertibles and Yankee notes contact Jenny Lie at 866 627-0391 or call collect 212 250-7445, for the Chilean bonds call 562 337-7700). D.F. King & Co. Inc. is the information agent for the U.S. tender offers (888 644-5854 or call collect 212 269-5550).

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