Ameren Illinois has commenced a tender offer to purchase for cash its outstanding 9.75% Senior Secured Notes due 2018 (the "9.75% Notes") and its outstanding 6.25% Senior Secured Notes due 2018 (the "6.25% Notes" and, together with the 9.75% Notes, the "Notes") for an aggregate purchase price (including principal and premium) of up to $450 million (the "Maximum Tender Amount").
The tender offer is being made upon and is subject to the terms and conditions set forth in the Offer to Purchase, dated July 30, 2012 (the "Offer to Purchase"), and the related Letter of Transmittal.
The tender offer will expire at midnight, New York City time, on August 24, 2012, unless extended or earlier terminated (the "Expiration Date").
Subject to the terms and conditions set forth in the Offer to Purchase, holders of Notes that are validly tendered and not withdrawn at or prior to 5:00 p.m., New York City time, on August 10, 2012 (the "Early Tender Date") and accepted for purchase will receive the applicable Total Consideration (as defined in the Offer to Purchase) which includes the early tender premium (the "Early Tender Premium") set forth in the table below. Holders of Notes that are validly tendered after the Early Tender Date but at or prior to the Expiration Date will receive the applicable Tender Offer Consideration (as defined in the Offer to Purchase), which is an amount equal to the Total Consideration minus the Early Tender Premium. The Total Consideration and the Tender Offer Consideration will be determined at 2:00 p.m., New York City time, on August 13, 2012 (unless such time is extended by Ameren Illinois).
The amount of each series of Notes that will be purchased in the tender offer will be based on the Maximum Tender Amount and the order of priority for such series of Notes set forth in the table below (the "Acceptance Priority Level"), as more fully described in the Offer to Purchase. Since the 9.75% Notes have a higher Acceptance Priority Level (with "1" being the highest) than the 6.25% Notes, all 9.75% Notes validly tendered and not validly withdrawn in the tender offer will be accepted for purchase up to the Maximum Tender Amount before any validly tendered and not validly withdrawn 6.25% Notes are accepted for purchase, up to the Maximum Tender Amount for all Notes in the aggregate. Ameren Illinois reserves the right, in its sole discretion and subject to applicable law, to increase or decrease the Maximum Tender Amount.
The following table sets forth some of the principal terms of the tender offer:
Title of Security
9.75% Senior Secured Notes due 2018
0.5% U.S. Treasury Notes due 7/31/2017
6.25% Senior Secured Notes due 2018
0.5% U.S. Treasury Notes due 7/31/2017
To fund the purchase of the Notes accepted in the tender offer and to pay all related fees and expenses, Ameren Illinois intends to conduct an underwritten public offering of its senior secured debt securities under its effective shelf registration statement, to be completed prior to the Expiration Date (the "Debt Offering").
Ameren Illinois' obligation to accept for payment and to pay for the 9.75% Notes and the 6.25% Notes in the tender offer is subject to the satisfaction or waiver of a number of general conditions described in the Offer to Purchase and to the successful completion of the Debt Offering. Ameren Illinois has not yet entered into a definitive agreement with respect to the Debt Offering, and no assurance can be given that the Debt Offering will be completed.
Ameren Illinois will pay accrued and unpaid interest from and including the last interest payment date applicable to the relevant series of Notes up to, but not including, the settlement date for such Notes accepted for purchase. The settlement date is expected to be one business day following the Expiration Date, currently expected to be August 27, 2012.
Tenders of Notes may be withdrawn at any time at or prior to 5:00 p.m., New York City time, on August 10, 2012, but may not be withdrawn thereafter unless required by applicable law.
J.P. Morgan Securities LLC is acting as the dealer manager for the tender offer. The depositary and information agent is Global Bondholder Services Corporation. Copies of the Offer to Purchase, the Letter of Transmittal and related offering materials are available by contacting Global Bondholder Services Corporation at 866.470.3700 (toll-free) or 212.430.3774 (collect). Questions regarding the tender offer should be directed to J.P. Morgan Securities LLC, Liability Management Group, at 866.834.4666 (toll-free) or 212.834.4811 (collect).
This news release shall not constitute an offer to sell, a solicitation to buy or an offer to purchase or sell any securities. The tender offer is being made only pursuant to the Offer to Purchase and only in such jurisdictions as is permitted under applicable law. The proposed Debt Offering will be made only by means of a prospectus and related prospectus supplement, which will be filed with the Securities and Exchange Commission. When available, copies of the prospectus supplement and accompanying prospectus for the offering may be obtained by contacting Ameren Corporation Investor Services toll-free at 800.255.2237.
About Ameren Illinois
Ameren Illinois delivers energy to 1.2 million electric and 809,000 natural gas customers in downstate Illinois, and its mission is to meet their energy needs in a safe, reliable, efficient and environmentally responsible manner. Ameren Illinois' service area covers more than 1,200 communities and 43,700 square miles. For more information, visit AmerenIllinois.com.
Statements made in this release which are not based on historical facts are considered "forward-looking" and, accordingly, involve risks and uncertainties that could cause actual results to differ materially from those discussed. Although such "forward-looking" statements have been made in good faith and are based on reasonable assumptions, there is no assurance that the expected results will be achieved. These statements include, without limitation, statements as to future expectations, beliefs, plans, strategies, objectives, events, conditions, and financial performance. Ameren Illinois is providing this cautionary statement to identify important factors that could cause actual results to differ materially from those anticipated. The following factors, in addition to those discussed under Risk Factors in Ameren Illinois' Annual Report on Form 10-K for the year ended December 31, 2011, and elsewhere in this release and in its other filings with the SEC, could cause actual results to differ materially from management expectations suggested in such "forward-looking" statements:
regulatory, judicial, or legislative actions, including changes in regulatory policies and ratemaking determinations, such as the outcome of Ameren Illinois' electric rate case filed in 2012; the expected Ameren Illinois appeal of a July 2012 Federal Energy Regulatory Commission order requiring a refund to transmission services customers; and future regulatory, judicial, or legislative actions that seek to change regulatory recovery mechanisms, such as the Illinois Energy Infrastructure Modernization Act ("IEIMA"), which provides for formula ratemaking in Illinois;
the effect of Ameren Illinois' participating in a new performance-based formula ratemaking process under the IEIMA, the related financial commitments required by the IEIMA and the resulting uncertain impact on the financial condition, results of operations and liquidity of Ameren Illinois;
the effects of, or changes to, the Illinois power procurement process;
changes in laws and other governmental actions, including monetary, fiscal, and tax policies;
changes in laws or regulations that adversely affect the ability of electric distribution companies, including Ameren Illinois, and other purchasers of wholesale electricity to pay their suppliers;
the effects of increased competition in the future due to, among other things, deregulation of certain aspects of Ameren Illinois' business at both the state and federal levels, and the implementation of deregulation;
the effects on demand for Ameren Illinois' services resulting from technological advances, including advances in energy efficiency and distributed generation sources, which generate electricity at the site of consumption;
increasing capital expenditure and operating expense requirements and Ameren Illinois' ability to recover these costs;
the cost and availability of purchased power and natural gas for distribution;
the effectiveness of Ameren Illinois' risk management strategies and the use of financial and derivative instruments;
the level and volatility of future prices for power in the Midwest;
business and economic conditions, including their impact on interest rates, bad debt expense, and demand for Ameren Illinois' products;
disruptions of the capital markets, deterioration in credit metrics, or other events that make Ameren Illinois' access to necessary capital, including short-term credit and liquidity, impossible, more difficult, or more costly;
Ameren Illinois' assessment of its liquidity;
the impact of the adoption of new accounting guidance and the application of appropriate technical accounting rules and guidance;
actions of credit rating agencies and the effects of such actions;
the impact of weather conditions and other natural phenomena on Ameren Illinois and its customers;
the impact of system outages;
transmission and distribution asset construction, installation, performance, and cost recovery;
the effects of Ameren Illinois' increasing investment in electric transmission projects and uncertainty as to whether it will achieve its expected returns in a timely fashion, if at all;
impairments of long-lived assets, intangible assets, or goodwill;
the effects of strategic initiatives, including mergers, acquisitions and divestitures, and any related tax implications;
the impact of current environmental regulations on utilities and new, more stringent or changing requirements, including those related to energy efficiency, that are enacted over time and that could increase Ameren Illinois' costs, result in an impairment of its assets, reduce its customers' demand for electricity or natural gas, or otherwise have a negative financial effect;
labor disputes, workforce reductions, future wage and employee benefits costs, including changes in discount rates and returns on benefit plan assets;
the inability of Ameren Illinois' counterparties and affiliates to meet their obligations with respect to contracts, credit facilities, and financial instruments;
legal and administrative proceedings; and
acts of sabotage, war, terrorism, cybersecurity attacks or intentionally disruptive acts.
Given these uncertainties, you should not place undue reliance on these forward-looking statements. Except to the extent required by the federal securities laws, Ameren Illinois undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.