HOUSTON, July 26 /PRNewswire-FirstCall/ -- Reliant Energy, Inc. announced today that it is soliciting consents from all holders of:
* Three series of its outstanding Senior Secured Notes (collectively,
the "Notes"):
* 9.25% Senior Secured Notes due 2010 (CUSIP No. 75952BAF2);
* 9.50% Senior Secured Notes due 2013 (CUSIP No. 75952BAJ4); and
* 6.75% Senior Secured Notes due 2014 (CUSIP No. 75952BAM7); and
* Five series of Pennsylvania Economic Development Financing Authority's
outstanding Exempt Facilities Revenue Bonds (Reliant Energy Seward,
LLC Project) (collectively, the "Bonds"):
* Series 2001A (CUSIP No. 708686BJ8);
* Series 2002A (CUSIP No. 708686BM1);
* Series 2002B (CUSIP No. 708686BN9);
* Series 2003A (CUSIP No. 708686BK5); and
* Series 2004A (CUSIP No. 708686BL3).
The consents are being solicited with respect to proposed amendments to the Indentures governing the Notes and the Guarantee Agreements governing Reliant Energy's guarantees of the Bonds.
Reliant Energy is currently negotiating to enter into a new retail credit structure. The primary purpose of the consent solicitation is to amend the Indentures and the Guarantee Agreements to permit Reliant Energy to enter into the new retail credit structure.
The new retail credit structure is intended to substantially eliminate collateral postings and reduce liquidity requirements associated with procuring supply for Reliant Energy's retail energy business. If consummated, the new retail credit structure will include (1) a credit support agreement pursuant to which the credit support provider will agree to provide guarantees on behalf of Reliant Energy's retail energy business and post collateral to counterparties in supply transactions related to the retail energy business, and (2) a credit facility to finance the working capital needs of the retail energy business, each of which will be secured on a first lien basis by the assets of the retail energy business.
The proposed amendments to the Indentures and the Guarantees would:
* amend the restrictions on liens and indebtedness in the Indentures and
the Guarantee Agreements to permit the liens contemplated by the
credit support agreement and the new working capital credit facility
and to permit the indebtedness associated with the new working capital
credit facility;
* amend the restrictions in the Indentures and the Guarantee Agreements
on limitations on distributions by Reliant Energy's subsidiaries to
permit restrictions on the ability of the retail energy business to
upstream money to Reliant Energy; and
* make certain other technical amendments to the Indentures and the
Guarantee Agreements to permit the new retail credit structure.
In addition to amendments relating to the new retail credit structure, the proposed amendments would conform the definition of "Significant Subsidiary" in the Indentures relating to the 9.25% Senior Secured Notes due 2010 and the 9.50% Senior Secured Notes due 2013 to the definition of this term in the Indenture relating to the 6.75% Senior Secured Notes due 2014 and in the Guarantee Agreements.
The Consent Solicitation is being made to all persons in whose name a Note or Bond is registered on July 25, 2006. The solicitation will expire at 5:00 p.m., New York City time, on Thursday, August 3, 2006, unless extended or terminated by Reliant Energy. For the proposed amendments to be approved with respect to any series of Notes or Bonds, holders of record must grant (and not revoke) valid consents in respect of a majority in aggregate principal amount of all outstanding Notes or Bonds of such series. Holders of Notes or Bonds will be able to revoke their consents as to any series of Notes or Bonds until the time and date on which Reliant Energy announces that the requisite consent to approve the amendments has been achieved for such series of Notes or Bonds.
Promptly after the expiration of the consent solicitation and the satisfaction or waiver of all conditions to the consent (as set forth in the consent solicitation statement described below) applicable to a series of Notes or Bonds, the Company will cause to be paid to each holder of Notes or Bonds of such series who has delivered (and has not revoked) a valid consent prior to the expiration of the consent solicitation a cash consent fee of $1.25 for each $1,000 in principal amount of Notes or Bonds in respect of which such consent has been delivered.
The detailed terms and conditions of the consent solicitation are contained in a consent solicitation statement dated July 26, 2006. Goldman, Sachs & Co. will act as Solicitation Agent for the consent solicitation. Global Bondholder Services Corporation will act as the Information Agent. Requests for documents may be directed to Global Bondholder Services Corporation, by telephone at (866) 873-6300 (toll free) or (212) 430-3374. Questions regarding the consent solicitation may be directed to Goldman, Sachs & Co. at (800) 828-3182 (toll-free) or (212) 902-0041.
Reliant Energy, Inc. based in Houston, Texas, provides electricity and energy services to retail and wholesale customers in the United States. In Texas, the company provides service to approximately 1.9 million retail electricity customers, including residential and small business customers and commercial, industrial, governmental and institutional customers. Reliant also serves commercial, industrial, governmental and institutional customers in the PJM (Pennsylvania, New Jersey and Maryland) market.
The company is one of the largest independent power producers in the nation with approximately 16,000 megawatts of power generation capacity in operation across the United States. These strategically located generating assets utilize natural gas, fuel oil and coal. For more information, visit http://www.reliant.com/corporate .
This news release contains "forward-looking statements." Forward-looking statements are statements that contain projections, estimates or assumptions about our revenues, income and other financial items, our plans for the future, future economic performance, transactions and dispositions and financings related thereto. Forward-looking statements relate to future events and anticipated revenues, earnings, business strategies, competitive position or other aspects of our operations or operating results. In many cases you can identify forward-looking statements by terminology such as "anticipate," "estimate," "believe," "continue," "could," "intend," "may," "plan," "potential," "predict," "should," "will," "expect," "objective," "projection," "forecast," "goal," "guidance," "outlook," "effort," "target" and other similar words. However, the absence of these words does not mean that the statements are not forward-looking.
We have based our forward-looking statements on management's beliefs and assumptions based on information available to management at the time the statements are made. Actual results may differ materially from those expressed or implied by forward-looking statements as a result of many factors or events, including the ongoing negotiation of the retail credit structure, legislative and regulatory developments, the effects of competition, financial market conditions, the timing and extent of changes in commodity prices and interest rates, weather conditions, changes in our business plan and other factors we discuss in our filings with the Securities and Exchange Commission.
Each forward-looking statement speaks only as of the date of the particular statement and we undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
