HOUSTON, April 25, 2023 /PRNewswire/ -- Talen Energy Corporation ("TEC") announced today that Talen Energy Supply, LLC ("TES" or the "Company"), a direct wholly owned subsidiary of TEC, is proposing to offer and sell, subject to market and other conditions, $825 million in aggregate principal amount of senior secured notes due 2030 (the "Notes") in a private offering that is exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), pursuant to its Joint Chapter 11 Plan of Reorganization of Talen Energy Supply, LLC and its Affiliated Debtors (the "Plan").
The gross proceeds of the Notes initially will be deposited and held in an escrow account (the "Escrow Account") until such amounts are released following the satisfaction of certain escrow conditions, including relating to the effective date of the Plan and the emergence of TEC and TES from chapter 11 of the Bankruptcy Code (the date upon which all such conditions are satisfied, the "Completion Date"). If the escrow conditions are not satisfied on or prior to the escrow outside date, the Notes will be subject to a special mandatory redemption at a redemption price of 100% of the gross proceeds of the Notes, plus accrued and unpaid interest to, but excluding, the redemption date. Concurrently with the Completion Date, the escrow funds will be released and the Company intends to use the net proceeds from the Notes, together with the anticipated proceeds from (i) concurrently marketed new senior loan facilities and (ii) the previously announced rights offering of TEC common stock, to fund the distributions provided for under the Plan, including the repayment of claims under the Company's Super Priority Senior Secured Debtor-In-Possession Credit Facility and the Company's existing first lien indebtedness, and to pay certain fees, commissions and expenses relating to the foregoing and the Company's emergence from chapter 11 of the Bankruptcy Code and for general corporate purposes, which may include repayment of additional indebtedness.
Prior to the Completion Date, the Notes will be senior secured obligations of the Company secured only by a first priority security interest in the Escrow Account and all amounts on deposit therein, and the Notes will not be guaranteed. From and after the Completion Date, the Notes will be guaranteed on a senior secured basis by the subsidiaries of the Company that also guarantee the obligations of the Company under the Exit Facilities (as defined herein) (collectively, the "Subsidiary Guarantors") and secured on a pari passu basis with the same security that will secure the Exit Facilities.
The Notes and related guarantees will be offered only to persons reasonably believed to be qualified institutional buyers in accordance with Rule 144A under the Securities Act and to non-U.S. Persons in accordance with Regulation S under the Securities Act. The Notes and the related guarantees have not been and will not be registered under the Securities Act or any state securities laws. As a result, they may not be offered or sold in the United States or to any U.S. persons except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws.
This press release does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, nor shall there be any sale of the Notes in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Any offering of securities will be made only by means of the confidential offering memorandum.
This communication contains forward-looking statements within the meaning of the federal securities laws, including statements about our intention to conduct an offering of the Notes and our emergence from the Chapter 11 process, which statements are subject to substantial risks and uncertainties. These forward-looking statements are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this communication, or incorporated by reference into this communication, are forward-looking statements. Throughout this communication, we have attempted to identify forward-looking statements by using words such as "anticipate," "believe," "continue," "could," "estimate," "expect," "forecasts," "goal," "intend," "may," "plan," "potential," "predict," "project," "seek," "should," "will," or other forms of these words or similar words or expressions or the negative thereof, although not all forward-looking statements contain these terms. Forward-looking statements address future events and conditions concerning, among other things, our intention to conduct an offering of the Notes, the Chapter 11 process and our emergence therefrom, capital expenditures, earnings, litigation, regulatory matters, hedging, liquidity and capital resources and accounting matters. Forward-looking statements are subject to substantial risks and uncertainties that could cause our future business, financial condition, results of operations or performance to differ materially from our historical results or those expressed or implied in any forward-looking statement contained in this communication. All of our forward-looking statements include assumptions underlying or relating to such statements that may cause actual results to differ materially from those that we are currently expecting, and are subject to numerous factors that present considerable risks and uncertainties, including, without limitation: our ability to emerge from bankruptcy pursuant to the Plan, our ability to complete the offering of the Notes and other transactions contemplated by the Plan and other agreements in connection with our Chapter 11 process, and the possibility that we may be unable to satisfy the conditions to the the closing of the offering of the Notes or emergence from bankruptcy; our ability to implement the use of proceeds as currently expected, and our ability to achieve the anticipated benefits of such use of proceeds; restrictions under the Plan and Chapter 11 process; and other risks relating to the consummation of the full transactions contemplated by the Plan, including the offering of the Notes, including the risk that any or all of such transactions that have not yet been consummated will not be consummated within the expected time period or at all.
We caution that the foregoing list of important factors that may affect future results is not exhaustive. You should not rely on forward-looking statements as predictions of future events. Except as required by law, we undertake no obligation to publicly update or revise any forward-looking statements or information, whether written or oral, that may be as a result of new information, future events or otherwise.
TEC is one of the largest competitive power generation and infrastructure companies in North America. TEC, through its subsidiary, TES, owns and/or controls approximately 12,400 megawatts of generating capacity in wholesale U.S. power markets, principally in the Mid-Atlantic, Texas, and Montana.
Additionally, through its Cumulus subsidiaries, TEC is developing a large-scale portfolio of renewable energy, battery storage, and digital infrastructure assets across TES' expansive footprint.
Director Corporate Communications
SOURCE Talen Energy Corp.