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NRG Energy prices $500M convertible note offering

NRG Energy Inc. priced its $500 million offering of 2.75% convertible senior notes due June 1, 2048, and granted the initial purchasers a 30-day option to purchase up to an additional $75 million of the notes.

The notes are convertible into cash, shares of NRG Energy's common stock or a combination both at an initial conversion rate of 20.9479 shares per $1,000 principal amount of notes, representing an initial conversion price of approximately $47.74 per share, according to a May 21 news release.

Interest is payable semiannually in arrears on June 1 and Dec. 1 every year, beginning Dec. 1. The notes will be senior unsecured obligations of NRG Energy and will be guaranteed by certain of its subsidiaries.

In connection with the offering, NRG Energy plans to utilize cash on hand to repurchase shares of its common stock to complete its previously announced $500 million share repurchase program.

NRG Energy said it will use the proceeds and cash on hand to settle part of the outstanding debt and pay other offering related costs. As a result, the offering is expected to be leverage neutral.