AES Argentina updates, extends offer for 7¾% notes due 2024

By Mary-Katherine Stinson

Lexington, Ky., Aug. 18 – Argentina’s AES Argentina Generacion SA reported the results as of the extended expiration date of its exchange offer for any and all of its 7¾% senior notes due 2024 (Cusips: 00107VAA1, P1000CAA2) and subsequently extended the early exchange consideration and the expiration date of the offer for a second time, according to a notice.

The exchange offer will now expire at 5 p.m. ET on Aug. 21, pushed out from Aug. 17. The original expiration date was 5 p.m. ET on Aug. 10.

As previously reported, on July 26, AES Argentina decided to extend the early participation deadline to the expiration date of the offer itself, which will continue to be applied to the second extended expiration date.

The withdrawal date expired on July 26 and has not been extended. Any notes validly tendered under the offer may no longer be withdrawn.

The offer is now expected to settle on Aug. 25, due to the further extension.

Extended deadline results

As of the first extended expiration date of Aug. 17, AES Argentina received tenders totaling $139,854,000 under the two tender options, representing about 50.95% of the outstanding principal amount of old notes.

Of the tendered notes, $40,729,000 were tendered for exchange under option A, representing 14.84% of the outstanding notes. Under option B, $99,125,000 aggregate principal were tendered for exchange, representing 36.11% of the aggregate principal outstanding.

Based on the aggregate principal amount tendered as of the extended expiration date, eligible holders that tendered under option A would receive (assuming no additional participation) an early A consideration of about $686.7539 in cash and $319 of new notes per $1,000 of principal amount of tendered and accepted old notes.

The exchange consideration will be determined following the offer expiration.

Original expiration results

As of the original Aug. 10 expiration date, AES Argentina received tenders totaling $135,009,000 under the two tender options, representing about 49.18% of the outstanding principal amount of old notes.

Of the tendered notes, $36,534,000 were tendered for exchange under option A, representing 13.31% of the outstanding notes. Under option B, $98,475,000 aggregate principal were tendered for exchange, representing 35.87% of the aggregate principal outstanding.

Based on the aggregate principal amount tendered as of Aug. 10, eligible holders that tendered under option A would have received (assuming no additional participation) an early A consideration of $739.0869 in cash and $266 of new notes per $1,000 of principal amount of tendered and accepted old notes.

Options

As previously reported, company is offering a new series of 9½% notes due 2027 and a cash consideration for the old notes.

Under the terms of the offer, holders whose notes are tendered and accepted will receive one of two payment options, plus accrued interest, in exchange for the old notes.

Under option A, holders will receive a combination of the early A cash consideration and the applicable early A new notes consideration or, solely, the early A cash consideration, depending on the amount of old notes tendered by the early participation date, 5 p.m. ET on July 26.

The total early A cash consideration will be an amount in cash equal to the lesser of $30.5 million, 20% of the total amount of old notes tendered and accepted, up to a maximum amount of $30.5 million, and the total amount of old notes tendered and accepted under option A prior to the early participation date.

The early A new notes consideration for each holder whose notes are accepted under option A at or prior to the early participation date will be an amount of new notes equal to a principal amount resulting from multiplying the difference between $1,000 and the early A cash consideration by 1.02.

Under option B, holders will receive $1,050 of new notes per $1,000 of old notes tendered and accepted.

If less than 20% of old notes are tendered under option A before the early participation date, the difference between the $30.5 million total cash consideration and the aggregate early A cash consideration will be paid to holders who tender under option B before the early participation date.

Early results

As of the initial July 26 early participation date, AES Argentina received tenders totaling $129,099,000 under both options, representing 47.03% of the outstanding aggregate principal amount.

Of the tendered notes, $35,184,000 were tendered for exchange under option A, representing 12.82% of the outstanding notes. $93,915,000 aggregate principal were tendered for exchange, representing 34.21% of the aggregate principal outstanding, under option B.

Based on the aggregate principal amount tendered as of the original early participation date, eligible holders that tendered under option A would have received (assuming no additional participation) about 73% and 27% of the option A early consideration in cash and new notes, respectively.

As previously reported, consummation of the exchange offer is conditioned upon at least $192.15 million of the notes being tendered for exchange. The purpose of the exchange offer is to extend the maturity of the company’s debt.

Details

AES Argentina will pay a processing fee of 0.25% of the principal amount of tendered and accepted old notes to brokers in Argentina acting on behalf of certain eligible holders. In Argentina, the processing fee will be payable to direct participants who are individuals tendering, through Caja de Valores SA’s depository system, old notes for exchange of up to $250,000. This processing fee will be payable in Argentine pesos at the Communication “A” 3500 exchange rate published by the BCRA on the Argentine business day prior to the settlement date. No fee will be paid to brokers outside of Argentina.

Morrow Sodali International LLC (203 609-4910, +44 20 4513 6933 or AES@investor.morrowsodali.com) is the information and exchange agent.

Citigroup Global Markets Inc. (212 723-6106 or 800 558-3745), HSBC Securities (USA) Inc. (888 HSBC-4LM or 212 525-5552), J.P. Morgan Securities LLC (866 846-2874 or 212 834-7279) and Santander US Capital Markets LLC (212 940-1442 or 855 404-3636) are the dealer managers.

The electricity provider is based in Buenos Aires.

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