AES Panama Announces Commencement of Consent Solicitation

PANAMA CITY, Aug. 5, 2014 /PRNewswire/ -- AES Panama, S.A. (the "Company") announced today that it has commenced a solicitation (the "Solicitation") of consents (the "Consents") upon the terms and subject to the conditions set forth in a Notice of Consent Solicitation (as it may be amended or supplemented from time to time, the "Notice"), dated as of August 5, 2014, to a proposed waiver (the "Proposed Waiver") of a provision of the Indenture, dated as of December 13, 2006 (as amended or supplemented, the "Indenture"), among the Company, HSBC Bank USA, National Association, as Indenture trustee (the "Trustee"), registrar, principal paying agent, transfer agent and calculation agent, HSBC Bank USA, National Association, as bank and securities intermediary and HSBC Bank USA, National Association, as collateral agent, governing its 6.35% Senior Notes due 2016 (the "Notes") (CUSIP Nos. 00105R AA 2 (Rule 144A Global Note); ISIN Nos. US00105RAA23 (Rule 144A Global Note, or "DTC Note") and XS0273345982 (Regulation S Global Note, or "Euronote"); Common Code: 027946461 (Rule 144A Global Note) and 027334598 (Regulation S Global Note)).

The Company is soliciting Consents from the holders of the Notes to waive the covenant contained in Section 905 of the Indenture, "Limitation on Indebtedness," so as to permit the Company to incur up to US$57.3 million in principal amount of new Indebtedness (as defined in the Indenture), which is expected to be incurred on or before December 1, 2014, to acquire, purchase, install and commission (and pay fees and expenses related thereto) the Estrella del Mar Barge I, a mobile thermo power generation barge that operates on fuel oil No. 6 (the "Estrella del Mar").  If the covenant in Section 905 of the Indenture is not waived as set forth in the Notice, the financial test set forth in the Indenture would not be satisfied in connection with the new Indebtedness and the new Indebtedness would not be Permitted Indebtedness (as defined in the Indenture).

The Solicitation will expire at 5:00 p.m., New York City time, on August 19, 2014, or such later time and date to which the Solicitation is extended (such time and date, the "Expiration Time"), unless earlier terminated.  The Solicitation is subject to customary conditions, including, among other things, the receipt of valid Consents with respect to a majority in aggregate principal amount of the outstanding Notes (the "Requisite Consents") prior to the Expiration Time (which Consents have not been validly revoked prior to the earlier of the execution of the supplemental indenture (the "Supplemental Indenture") giving effect to the Proposed Waiver and the Expiration Time).

In the event that each of the conditions to the Solicitation described in the Notice are satisfied, including, but not limited to, the receipt of the Requisite Consents and the satisfaction of the Financing Condition, the Company will pay to each person who is the holder of Notes (each such holder, a "Holder"), who has delivered a valid Consent in respect of such Notes prior to the Expiration Time (and has not validly revoked its Consent prior to the earlier of the execution of the Supplemental Indenture and the Expiration Time), US$2.50 in cash for each US$1,000 principal amount of such Notes in respect of which a valid Consent was so delivered (and was not validly revoked) (the "Consent Fee").  The Company will pay the Consent Fee at such time as all of the conditions enumerated in the Notice have been satisfied or waived by the Company.  Holders of Notes who deliver Consents but validly revoke their Consent in accordance with the Notice prior to the earlier of the execution of the Supplemental Indenture and the Expiration Time, or who deliver Consents after the Expiration Time, will not receive a Consent Fee.  Subject to applicable law, the Solicitation may be abandoned or terminated for any reason at any time, including after the Expiration Time and prior to the Proposed Waiver becoming operative, as described below, whether or not the Requisite Consents have been received, in which case any Consents received will be voided and no Consent Fee will be paid to any Holders.

If the Requisite Consents are received prior to the Expiration Time (which Consents have not been validly revoked prior to the earlier of the execution of the Supplemental Indenture and the Expiration Time), the Company intends to execute the Supplemental Indenture promptly following the receipt of the Requisite Consents, which may be before the Expiration Time. If the Supplemental Indenture is entered into by the Company and the Trustee and all of the other conditions to the Solicitation are satisfied or waived by the Company, the Proposed Waiver will become operative and will bind all Holders of the Notes, including those that did not give their Consent.  If the Requisite Consents are not received prior to the Expiration Time, the Supplemental Indenture will not be executed, the Proposed Waiver will not become operative and the Consent Fee will not be paid.

The Company has engaged Scotia Capital (USA) Inc. to act as Solicitation Agent and D.F. King & Co., Inc. to act as Information and Tabulation Agent for the Solicitation.  Questions regarding the Solicitation may be directed to Scotia Capital (USA) Inc. at 250 Vesey Street, New York, NY 10281 or at +1 (212) 225-5714.  Requests for documents relating to the Solicitation may be directed to D.F. King & Co., Inc. at +44 207 920 9700, +1 (800) 967-4612 (toll-free), +1 (212) 269-5550 (banks and brokers) or by email to [email protected].

This press release is for informational purposes only and the Solicitation is only being made pursuant to the terms of, and subject to the conditions specified in, the Notice.  The Solicitation is not being made to, and Consents are not being solicited from, Holders of Notes in any jurisdiction in which it is unlawful to make such Solicitation or grant such Consent.  None of the Company, the Trustee, the Solicitation Agent or the Information and Tabulation Agent makes any recommendation as to whether or not Holders should deliver Consents.  Each Holder must make its own decision as to whether or not to deliver Consents.  This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities.

About AES Panama S.A.

The Company is the largest electricity generation company in Panama both in terms of installed capacity and average energy dispatched, as well as the largest hydro privately controlled generation company in Central America, based on information provided by the National Dispatch Center (Centro Nacional de Despacho), a dependency of the Electricity Transmission Company (Empresa de Transmision Electrica).

Forward-Looking Statements

This press release may contain forward-looking information and statements regarding the Company and the Solicitation. Any statements included in this press release that address activities, events or developments that the Company will or may occur in the future are forward looking statements, these include among others, statements as to: (i) the Proposed Waiver, (ii) the expected payment of the Consent Fee, and (iii) the anticipated incurrence of new Indebtedness.  Actual results may differ materially due to a variety of important factors, such factors might include: changed market conditions, changes in the exchange rate of the Panamanian balboa against the U.S. dollar, the participation of and level of participation by the Holders in the Solicitation and other factors listed in the Notice under "Statement Regarding Forward Looking Statements." Except as required by law, the Company undertakes no obligation to update forward-looking information if circumstances or management's estimates or opinions should change.  Do not place undue reliance on forward-looking information.

SOURCE AES Panama, S.A.