Reliant Energy prices tender for 9¼%, 9½% notes

By Angela McDaniels

Seattle, June 8 - Reliant Energy, Inc. determined the tender consideration it will pay for its $550 million 9¼% senior secured notes due 2010 and its $550 million 9½% senior secured notes due 2013, according to a company news release.

The company will pay $1,048.84 per $1,000 principal amount of 9¼% notes tendered and $1,085.55 per $1,000 principal amount of 9½% notes tendered.

The payouts include a consent payment of $20.00 for those who tendered by 5 p.m. ET on June 5, the consent deadline.

For notes tendered after the consent deadline, the company will pay $1,028.19 per $1,000 principal amount of 9¼% notes and $1,064.81 per $1,000 principal amount of 9½% notes.

Reliant said it will also pay accrued interest to the settlement date, which is expected to be June 13 for notes tendered by the consent deadline and June 21 for notes tendered after the consent deadline.

For the 9¼% notes, the payout was determined using the present value of $1,046.25 - the redemption amount on July 15, 2007, which is the notes' earliest call date - discounted using the yield to maturity of the 3 5/8% Treasury due June 30, 2007 and 50 basis points. The Treasury yield to maturity was 5 1/8%.

For the 9½% notes, the payout was determined using the present value of $1,047.50 - the redemption amount on July 15, 2008, which is the notes' earliest call date - discounted using the yield to maturity of the 5 1/8% Treasury due June 30, 2008 and 50 basis points. The Treasury yield to maturity was 5.076%.

The payouts were determined at 2 p.m. ET on June 8.

The tender offers end at 11:59 p.m. ET on June 20. They began on May 24.

The company announced on June 6 that it entered into a fourth supplemental indenture for each series of notes after receiving tenders from holders of $516.125 million, or 93.84%, of its 9¼% notes and $531.894 million, or 96.71%, of its 9½% notes.

Reliant is soliciting consents for a release of security interests in the collateral securing each series of notes and the elimination of most restrictive covenants and some related events of default contained in the indentures.

Those who tender must deliver consents.

The offers are conditioned on the receipt of sufficient financing from the issuance of a new series of senior unsecured notes, on the company replacing and refinancing its existing credit facilities and on it entering into refinanced credit facilities.

Goldman, Sachs & Co. (212 902-9077 or 800 828-3182), Deutsche Bank Securities (212 250-7772 or 800 553-2826), JPMorgan and (212 270-3994) and Merrill Lynch & Co. (212 449-4914 or 888 654-8637) are the dealer managers and solicitation agents. Global Bondholder Services Corp. (866 470-4200 or 212 430-3774) is the information agent.

Houston-based Reliant Energy provides electricity and energy services.

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