AKRON,
Ohio, June 14, 2022 /PRNewswire/ -- FirstEnergy
Corp. (NYSE: FE) announced today the pricing terms and the
accepted tender amounts of its previously announced cash tender
offer (Tender Offer).
As announced earlier, FirstEnergy offered to purchase for cash
up to a maximum combined aggregate purchase price of $1.1 billion, including principal and premium but
excluding accrued and unpaid interest (Maximum Tender Amount), of
its 7.375% Notes, Series C, due 2031 (2031 Notes) and 4.85% Notes,
Series C, due 2047 (which, pursuant to their terms, accrue interest
at a rate of 5.35% per annum as of the date of this news release)
(2047 Notes and, together with the 2031 Notes, the Notes and, each,
a Series of Notes).
The Tender Offer is being made on the terms and subject to the
conditions set forth in the offer to purchase dated May 25, 2022, as amended and supplemented by
FirstEnergy's news releases issued June 9,
2022 and June 14, 2022,
respectively (as so amended and supplemented, the Offer to
Purchase). Capitalized terms used in this release but not
otherwise defined have the meanings given to them in the Offer to
Purchase.
As the maximum combined aggregate purchase price, including
principal and premium but excluding accrued and unpaid interest, of
the Notes validly tendered and not validly withdrawn at or prior to
5:00 p.m., New York City time, on June 13, 2022 (Early Tender Time), exceeded the
Maximum Tender Amount, FirstEnergy accepts for purchase (i) all the
2031 Notes validly tendered and not validly withdrawn at or prior
to the Early Tender Time and (ii) the 2047 Notes validly tendered
and not validly withdrawn at or prior to the Early Tender Time
using a proration factor of approximately 65.9%, each in accordance
with the terms and subject to the conditions set forth in the Offer
to Purchase. The 2047 Notes that were accepted for purchase
by FirstEnergy were prorated so that the maximum principal amount
of Notes accepted for purchase does not result in the maximum
combined aggregate purchase price, including principal and premium
but excluding accrued and unpaid interest, exceeding the Maximum
Tender Amount. FirstEnergy will not accept for purchase any
Notes tendered after the Early Tender Time.
FirstEnergy will pay holders (Holders) of the Notes that were
validly tendered and not validly withdrawn at or prior to the Early
Tender Time and accepted for purchase the applicable Total
Consideration, inclusive of the applicable Early Tender Premium, as
set forth in the table below. The Total Consideration was
determined in the manner described in the Offer to Purchase by
reference to the Amended Fixed Spread for the Notes specified below
plus the yield based on the bid-side price of the U.S. Treasury
Reference Security specified below, as quoted on the Bloomberg
Reference Page specified below, as of 10:00
a.m., New York City time,
today.
CUSIP No. /
ISIN
|
Title of
Security
|
Aggregate
Principal Amount Outstanding
|
Acceptance Priority
Level
|
Reference
Treasury
Security
|
Bloomberg
Reference
Page
|
Amended
Fixed
Spread (bps)
|
Early Tender
Premium(1)(2)
|
Total
Consideration(1)
|
Principal
Amount Tendered
|
Principal
Amount Accepted
|
337932 AC1 /
US337932AC13
|
7.375% Notes, Series C,
due 2031
|
$1,500,000,000
|
1
|
2.875% U.S. Treasury
due May 15, 2032
|
FIT1
|
+175
|
$50.00
|
$1,168.23
|
$715,225,000
|
$715,225,000
|
337932 AJ6 /
US337932AJ65
|
4.85% Notes, Series C,
due 2047(3)
|
$1,000,000,000
|
2
|
2.250% U.S. Treasury
due February 15, 2052
|
FIT1
|
+250
|
$50.00
|
$932.73
|
$430,146,000
|
$283,525,000
|
________________________
(1)
|
The Total Consideration
for each Series validly tendered prior to or at the Early Tender
Time and accepted for purchase is calculated using the applicable
Amended Fixed Spread and is inclusive of the applicable Early
Tender Premium.
|
(2)
|
Per $1,000 principal
amount of Notes validly tendered and not validly withdrawn at or
prior to the Early Tender Time and accepted for
purchase.
|
(3)
|
Pursuant to their
terms, the 2047 Notes accrue interest at a rate of 5.35% per annum
as of the date of this news release.
|
Settlement for Notes that were validly tendered and not validly
withdrawn at or prior to the Early Tender Time and that are
accepted for purchase, will occur on June
15, 2022 (Early Settlement Date), two business days
following the Early Tender Time.
The Tender Offer will expire at 11:59
p.m. New York City time, on
June 28, 2022, unless extended or
earlier terminated as described in the Offer to Purchase (such time
and date, as they may be extended, Expiration Time). Notes
not accepted for purchase will be promptly returned or credited to
the applicable Holder's account.
FirstEnergy has engaged Barclays Capital Inc. (Barclays) and
Morgan Stanley & Co. LLC (Morgan Stanley) to act as lead dealer
managers (together, the Lead Dealer Managers) and KeyBanc Capital
Markets Inc., SMBC Nikko Securities America, Inc., TD Securities
(USA) LLC and U.S. Bancorp
Investments, Inc. to act as co-dealer managers (collectively, the
Co-Dealer Managers and, together with the Lead Dealer Managers, the
Dealer Managers) in connection with the Tender Offer and has
appointed D.F. King & Co., Inc. to serve as the Tender Agent
and Information Agent for the Tender Offer. Copies of the Offer to
Purchase are available by contacting D.F. King & Co., Inc. via
telephone at (212) 269-5550 (toll free) or (800) 859-8509 (for
banks and brokers) or email: fe@dfking.com. Questions regarding the
terms of the Tender Offer should be directed to Barclays at (800)
438-3242 (toll-free) or (212) 528-7581 (collect) or Morgan Stanley
at (800) 624-1808 (toll-free) or (212) 761-1057 (collect).
None of FirstEnergy, its board of directors, the Dealer
Managers, D.F. King & Co., Inc.,
the trustee for the Notes, or any of their respective affiliates,
is making any recommendation as to whether Holders should tender
any Notes in response to the Tender Offer. Holders must make their
own decision as to whether to tender any of their Notes and, if so,
the principal amounts of Notes to tender.
This news release is for informational purposes only and is not
an offer to purchase, a solicitation of an offer to sell, or a
solicitation of consents with respect to any securities. This news
release does not describe all the material terms of the Tender
Offer, and no decision should be made by any Holder on the basis of
this news release. The terms and conditions of the Tender Offer are
described in the Offer to Purchase, and this news release must be
read in conjunction with the Offer to Purchase. The Offer to
Purchase contains important information that should be read
carefully before any decision is made with respect to the Tender
Offer. The Tender Offer is not being made in any jurisdiction in
which, or to or from any person to or from whom, it is unlawful to
make such offer or solicitation under applicable securities or blue
sky laws. If any Holder is in any doubt as to the contents of this
news release, or the Offer to Purchase, or the action it should
take, the Holder should seek its own financial and legal advice,
including in respect of any tax consequences, immediately from its
stockbroker, bank manager, solicitor, accountant, or other
independent financial, tax, or legal adviser. Any individual or
company whose Notes are held on its behalf by a broker, dealer,
bank, custodian, trust company or other nominee must contact such
entity if it wishes to tender such Notes pursuant to the Tender
Offer.
ABOUT FIRSTENERGY CORP.
FirstEnergy is dedicated to integrity, safety, reliability and
operational excellence. Its 10 electric distribution companies form
one of the nation's largest investor-owned electric systems,
serving customers in Ohio,
Pennsylvania, New Jersey, West
Virginia, Maryland and
New York. FirstEnergy's
transmission subsidiaries operate approximately 24,000 miles of
transmission lines that connect the Midwest and Mid-Atlantic
regions. Follow FirstEnergy on Twitter @FirstEnergyCorp or online
at www.firstenergycorp.com.
Forward-Looking Statements: This news release includes
forward-looking statements based on information currently available
to management. Such statements are subject to certain risks and
uncertainties and readers are cautioned not to place undue reliance
on these forward-looking statements. These statements include
declarations regarding management's intents, beliefs and current
expectations. These statements typically contain, but are not
limited to, the terms "anticipate," "potential," "expect,"
"forecast," "target," "will," "intend," "believe," "project,"
"estimate," "plan" and similar words. Forward-looking statements
involve estimates, assumptions, known and unknown risks,
uncertainties and other factors that may cause actual results,
performance or achievements to be materially different from any
future results, performance or achievements expressed or implied by
such forward-looking statements, which may include the following:
the completion of the Tender Offer; the potential liabilities,
increased costs and unanticipated developments resulting from
government investigations and agreements, including those
associated with compliance with or failure to comply with the
Deferred Prosecution Agreement entered into on July 21, 2021 with the U.S. Attorney's Office for
the Southern District of Ohio; the
risks and uncertainties associated with government investigations
and audits regarding Ohio House Bill 6, as passed by Ohio's 133rd General Assembly (HB 6) and
related matters, including potential adverse impacts on federal or
state regulatory matters, including, but not limited to, matters
relating to rates; the risks and uncertainties associated with
litigation, arbitration, mediation, and similar proceedings,
particularly regarding HB 6 related matters, including risks
associated with obtaining court approval of the definitive
settlement agreement in the derivative shareholder lawsuits;
weather conditions, such as temperature variations and severe
weather conditions, or other natural disasters affecting future
operating results and associated regulatory actions or outcomes in
response to such conditions; legislative and regulatory
developments, including, but not limited to, matters related to
rates, compliance and enforcement activity, cybersecurity, and
climate change; the ability to accomplish or realize anticipated
benefits from our FE Forward initiative and our other strategic and
financial goals, including, but not limited to, overcoming current
uncertainties and challenges associated with the ongoing government
investigations, executing our transmission and distribution
investment plans, greenhouse gas reduction goals, controlling
costs, improving our credit metrics, growing earnings, and
strengthening our balance sheet; the risks associated with
cyber-attacks and other disruptions to our, or our vendors',
information technology system, which may compromise our operations,
and data security breaches of sensitive data, intellectual property
and proprietary or personally identifiable information; mitigating
exposure for remedial activities associated with retired and
formerly owned electric generation assets; the ability to access
the public securities and other capital and credit markets in
accordance with our financial plans, the cost of such capital and
overall condition of the capital and credit markets affecting
FirstEnergy, including the increasing number of financial
institutions evaluating the impact of climate change on their
investment decisions; the extent and duration of the COVID-19
pandemic and the related impacts to our business, operations and
financial condition resulting from the outbreak of COVID-19
including, but not limited to, disruption of businesses in our
territories, supply chain disruptions, additional costs, workforce
impacts and governmental and regulatory responses to the pandemic,
such as moratoriums on utility disconnections and workforce
vaccination mandates; actions that may be taken by credit rating
agencies that could negatively affect either our access to or terms
of financing or our financial condition and liquidity; changes in
assumptions regarding factors such as economic conditions within
our territories, the reliability of our transmission and
distribution system, or the availability of capital or other
resources supporting identified transmission and distribution
investment opportunities; changes in customers' demand for power,
including, but not limited to, economic conditions, the impact of
climate change, or energy efficiency and peak demand reduction
mandates; changes in national and regional economic conditions,
including recession and inflationary pressure, affecting
FirstEnergy and/or its customers and those vendors with which
FirstEnergy does business; the potential of non-compliance with
debt covenants in our credit facilities; the ability to comply with
applicable reliability standards and energy efficiency and peak
demand reduction mandates; changes to environmental laws and
regulations, including, but not limited to, those related to
climate change; changing market conditions affecting the
measurement of certain liabilities and the value of assets held in
our pension trusts, or causing FirstEnergy to make contributions
sooner, or in amounts that are larger, than currently anticipated;
labor disruptions by our unionized workforce; changes to
significant accounting policies; any changes in tax laws or
regulations, or adverse tax audit results or rulings; and the risks
and other factors discussed from time to time in our Securities and
Exchange Commission filings. These forward-looking statements
are also qualified by, and should be read together with, the risk
factors included in FirstEnergy's filings with the SEC, including,
but not limited to, the most recent Annual Report on Form 10-K and
any subsequent Quarterly Reports on Form 10-Q and Current Reports
on Form 8-K. The foregoing review of factors also should not be
construed as exhaustive. New factors emerge from time to time, and
it is not possible for management to predict all such factors, nor
assess the impact of any such factor on FirstEnergy's business or
the extent to which any factor, or combination of factors, may
cause results to differ materially from those contained in any
forward-looking statements. FirstEnergy expressly disclaims any
obligation to update or revise, except as required by law, any
forward-looking statements contained herein or in the information
incorporated by reference as a result of new information, future
events or otherwise.
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SOURCE FirstEnergy Corp.