Vistra Announces Secured Bond Issue to Fund Acquisition of Cogentrix
American energy group Vistra has announced a private issuance of secured bonds maturing in 2031 and 2036, according to a statement released on Sunday. This move aims to partially fund the acquisition of Cogentrix Energy, previously announced by the company.
Details of the Bond Issue
The bonds will be issued by Vistra Operations Company LLC, a wholly owned indirect subsidiary of Vistra Corp, the statement indicates. The offering is limited to qualified institutional investors pursuant to Rule 144A of the Securities Act of 1933, as well as certain non-U.S. investors under Regulation S. The securities will be backed by unconditional guarantees from certain issuer subsidiaries that also guarantee the company's credit agreement dated October 3, 2016. The bonds will be secured by a first lien on the same assets pledged to the lenders of the credit agreement, including a substantial portion of the properties, assets, and rights held by the issuer and the guarantor subsidiaries.
Use of Proceeds
Vistra plans to use the proceeds from the issuance to fund part of the acquisition of Cogentrix Energy, according to the group. The funds will also be used for general corporate purposes, including the repayment of existing debt, as well as the payment of fees and expenses related to the transaction. The statement specifies that the guarantees backing the bonds will be released if the issuer's long-term unsecured senior debt securities achieve an investment grade rating from two of the three rating agencies, subject to reinstatement in the event of a withdrawal or downgrade of such rating.
About Vistra
Vistra is an integrated power generation and retail company ranked in the Fortune 500, based in Irving, Texas, according to the statement. The group operates across the United States, from California to Maine, and manages a fleet of power plants including natural gas, nuclear, coal, solar, and battery storage facilities. The company is listed on the New York Stock Exchange under the symbol VST. The statement emphasizes that the bonds will not be registered under the Securities Act and may not be offered or sold in the United States without registration or an applicable exemption.
