AES Gener Announces Exchange and Tender Offer and Solicitation of Consents for Any and All of Its Outstanding 7.50% Senior Notes Due 2014

SANTIAGO, Chile, July 14, 2011 /PRNewswire/ -- AES Gener S.A. (the "Company") announced today that it has commenced an offer to exchange any and all outstanding U.S.$400 million 7.50% Senior Notes due 2014 (CUSIP Nos. 00105DAB1 and P0607JAA6 (Reg S) and ISIN Nos. US00105DAB10 and USP0607JAA62 (Reg S)) (the "Existing Notes") held by Eligible Holders (as defined below) for newly issued U.S.dollar-denominated 5.25% Senior Notes due 2021 (the "New Notes"), plus cash (the "Exchange Offer"), an offer to purchase for cash any and all outstanding Existing Notes (the "Tender Offer") and a solicitation of consents to proposed amendments to the indenture for the Existing Notes (collectively, the "Tender and Exchange Offer and Consent Solicitation").  The New Notes will be senior unsecured indebtedness and will rank equally with all of the Company's other existing and future senior unsecured indebtedness.  In addition, the Company is conducting an offer in the local Chilean market to purchase for cash, subject to certain conditions, outstanding 8.00% Series Q Notes due 2019 (the "2019 Notes Tender Offer").  The Company has also announced an offering of Additional New Notes (as defined below) for cash (the "Concurrent Offering").  The proceeds of the Concurrent Offering will be used to fund the cash payments under, and pay fees and expenses relating to, the Tender and Exchange Offer and Consent Solicitation and the 2019 Notes Tender Offer.  The purpose of the Tender and Exchange Offer and Consent Solicitation is to extend the maturity profile of the Company's existing debt and to substantially eliminate the restrictive covenants applicable to the Existing Notes.

The Tender Offer will expire at 5:00 PM, New York City time, on July 27, 2011, unless extended (such time and date, as the same may be extended, the "Tender Expiration Date").  Eligible Holders who validly tender Existing Notes in the Tender Offer by the Tender Expiration Date will be entitled to the Tender Consideration (as described below).  The Exchange Offer will expire at 11:59 PM, New York City time, on August 10, 2011, unless extended (such time and date, as the same may be extended, the "Exchange Expiration Date").  Eligible Holders who validly tender Existing Notes for exchange by 5:00 PM, New York City time, on July 27, 2011, unless extended (such time and date, as the same may be extended, the "Early Exchange Date"), will receive the Total Exchange Consideration (as described below).  Eligible Holders who validly tender Existing Notes for exchange after the Early Exchange Date, but on or prior to the Exchange Expiration Date, will receive the Exchange Consideration (as described below).  Existing Notes tendered in the Tender Offer or the Exchange Offer and delivered Consents (as defined below) may be withdrawn prior to 5:00 PM, New York City time, on July 27, 2011 (such time and date, as the same may be extended, the "Withdrawal Deadline").  Holders may withdraw tendered Existing Notes and revoke their Consents at any time prior to the Withdrawal Deadline, but holders may not withdraw their tendered Existing Notes or revoke their Consents on or after the Withdrawal Deadline except as required by applicable law.  

Eligible Holders of Existing Notes who validly tender Existing Notes in the Exchange Offer, and whose tender is accepted by the Company, will receive, in exchange for each U.S.$1,000 principal amount of Existing Notes exchanged:

• in the case of Existing Notes tendered by the Early Exchange Date, U.S.$1,000 principal amount of New Notes plus a cash payment of U.S.$150.00 (the "Total Exchange Consideration"). The Total Exchange Consideration includes an early exchange payment (the "Early Exchange Payment") equal to U.S.$40.00 in cash; and

• in the case of Existing Notes tendered after the Early Exchange Date, but on or prior to the Exchange Expiration Date, U.S.$1,000 principal amount of New Notes plus a cash payment of U.S.$110.00 (the "Exchange Consideration").  The Exchange Consideration is an amount equal to the Total Exchange Consideration less the Early Exchange Payment.

Eligible Holders of Existing Notes who validly tender Existing Notes in the Tender Offer, and whose tender is accepted by the Company, will receive, for each U.S. $1,000 principal amount of Existing Notes tendered for cash on or prior to the Tender Expiration Date, an amount in cash in U.S. dollars equal to U.S.$1,130.00 (the "Tender Consideration").

Eligible Holders of Existing Notes properly tendered in either the Tender Offer or the Exchange Offer (and not validly withdrawn) will be entitled to receive in cash accrued and unpaid interest on their tendered or exchanged Existing Notes, as the case may be, up to, but not including, the Cash Tender Settlement Date, the Early Exchange Settlement Date or the Final Settlement Date, as the case may be (all as defined below), in addition to the consideration that such holder would receive in the Tender and Exchange Offer and Consent Solicitation.  Notwithstanding the foregoing, holders of Existing Notes who exchange Existing Notes after the Early Exchange Date but before the Exchange Expiration Date will be entitled to receive accrued and unpaid interest in cash on such Existing Notes up to, but not including, the Final Settlement Date less interest accrued on the New Notes from the Concurrent Offering Settlement Date (as defined below) to, but not including, the Final Settlement Date.

The Tender and Exchange Offer and Consent Solicitation is conditioned on (i) there having been validly tendered (and not validly withdrawn), on or prior to the Tender Expiration Date and/or the Early Exchange Date, as the case may be, more than U.S.$200 million aggregate principal amount of Existing Notes in the Tender Offer, the Exchange Offer or both, and (ii) the Company having issued 5.25% Senior Notes due 2021 (the "Additional New Notes") pursuant to the Concurrent Offering in an aggregate principal amount of not less than the sum of: (1) the aggregate dollar amount of the Tender Consideration; (2) the cash payment due to holders of Existing Notes who tender for exchange on or prior to the Early Exchange Date; and (3) the aggregate consideration payable to holders of the Company's 8.00% Series Q Notes due 2019 who participate in a contemporaneous 2019 Notes Tender Offer.  Completion of the Tender and Exchange Offer and Consent Solicitation is also subject to the satisfaction or waiver of a number of general conditions set forth in the Tender and Exchange Offer and Consent Solicitation Statement (as defined below).

In conjunction with the Tender Offer and the Exchange Offer, we are soliciting consents (the "Consents") to certain proposed amendments (the "Proposed Amendments") to the indenture under which the Existing Notes were issued.  The Proposed Amendments would eliminate the Company's obligation to comply with substantially all of the restrictive covenants contained in such indenture (as supplemented by a first supplemental indenture).  Adoption of the Proposed Amendments requires the consent of holders of Existing Notes representing at least a majority in aggregate principal amount of the outstanding Existing Notes held by persons other than the Company and its affiliates.  Holders may not deliver Consents without tendering their Existing Notes and holders may not tender their Existing Notes without delivering Consents.

The terms and conditions of the Tender and Exchange Offer and Consent Solicitation are set forth in a tender and exchange offer and consent solicitation statement dated July 14, 2011 (the "Tender and Exchange Offer and Consent Solicitation Statement") and the related letter of transmittal and consent.  The Company may amend, extend or terminate the Tender and Exchange Offer and Consent Solicitation.

The Tender and Exchange Offer and Consent Solicitation is being made only to holders of Existing Notes who have properly completed, executed and delivered to the information and exchange agent an eligibility letter, whereby such holder has represented to the Company that it is (i) a "qualified institutional buyer," or "QIB," as defined in Rule 144A under the Securities Act of 1933, as amended (the "Securities Act") and under applicable state securities laws; or (ii) a "non-U.S. Person" (as defined in Regulation S under the Securities Act) (the "Eligible Holders").

The Company expects to purchase all Existing Notes accepted by it in the Tender Offer on or about August 2, 2011 (the "Cash Tender Settlement Date").  In addition, at a date after the Early Exchange Date and prior to the Exchange Expiration Date, the Company may elect to accept for exchange all Existing Notes validly tendered prior to the Early Exchange Date (such date, the "Early Exchange Acceptance Date").  Payment for all Existing Notes validly tendered prior to the Early Exchange Date will be made promptly following the Early Acceptance Date, if any (the "Early Exchange Settlement Date").  Promptly following the Exchange Expiration Date, the Company will accept for exchange (the "Final Acceptance Date") any and all validly tendered Existing Notes not previously purchased, subject to the terms and conditions of the Tender and Exchange Offer and Consent Solicitation Statement.  Such payment will be made promptly following the Final Acceptance Date (the "Final Settlement Date").  The Company intends to settle the Concurrent Offering on or about August 2, 2011 (the "Concurrent Offering Settlement Date").

the NEW notes have not been AND WILL NOT BE registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements.  THE NEW NOTES ARE BeING ISSUED ONLY TO ELIGIBLE HOLDERS.

Global Bondholder Services Corporation has been appointed as the information and exchange agent for the Tender and Exchange Offer and Consent Solicitation.  Holders may contact the information and exchange agent to request the eligibility letter toll free at (866) 470-4200 or collect at (212) 430-3774.

This press release is not an offer to sell or a solicitation of an offer to buy any security.  The Tender Offer and the Exchange Offer are being made solely by the Tender and Exchange Offer and Consent Solicitation Statement and the related letter of transmittal and consent, and only to such persons and in such jurisdictions as are permitted under applicable law.

www.aesgener.com

SOURCE AES Gener S.A.