NRG Energy Inc. on May 21 announced plans to issue $500 million of convertible senior notes due 2048.
The initial purchasers also will have a 30-day option to purchase up to an additional $75 million of the notes, which are convertible into cash, shares of NRG's common stock or a combination both at the company's election, according to a news release.
NRG Energy can redeem the notes at any time, on or after June 1, 2025, at a cash redemption price equal to the amount of the notes to be redeemed, plus accrued and unpaid interest. Unless NRG Energy has previously called all outstanding notes for redemption, holders of the notes may require the company to repurchase their notes on each of Sept. 1, 2025; June 1, 2033; and June 1, 2040, at a cash repurchase price equal to the principal amount of the notes.
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.
