FirstEnergy Announces Expiration of the Any and All Tender Offers of FirstEnergy Solutions and Allegheny Energy Supply and Early Tender Offer Results for FirstEnergy Solutions' Maximum Tender Offer

Mar 14, 2013, 09:07 ET from FirstEnergy Corp.

AKRON, Ohio, March 14, 2013 /PRNewswire/ -- FirstEnergy Corp. (NYSE: FE) today announced that, pursuant to the previously announced cash tender offers for up to $1,080,000,000 in aggregate principal amount of the respective debt securities listed in the table below (the "Notes") of FirstEnergy's subsidiaries, FirstEnergy Solutions Corp. ("FES") and Allegheny Energy Supply Company, LLC ("AE Supply" and together with FES, the "Companies"), as the case may be, $411,153,000 million in aggregate principal amount of Notes subject to the Any and All Offers (as defined below) were validly tendered and not validly withdrawn prior to the expiration of the Any and All Offers at 5:00 p.m. EDT on March 13, 2013 (such time and date, the "Any and All Offer Expiration Date"), and $252,663,000 in aggregate principal amount of Notes subject to the Maximum Tender Offer (as defined below) were validly tendered and not validly withdrawn prior to the early tender date of 5:00 p.m. EDT on March 13, 2013 (such time and date, the "Early Tender Date"), according to the information provided by Bondholder Communications Group, LLC, the information and tender agent for such offers.

The tender offers consist of four separate offers (each an "Offer," and collectively, the "Offers") on the terms set forth in the Offer to Purchase and related Letter of Transmittal, each dated February 28, 2013, with one Offer to purchase any and all outstanding 5.75% Notes due 2019 issued by AE Supply, a second Offer to purchase any and all outstanding 6.75% Notes due 2039 issued by AE Supply, a third Offer to purchase any and all outstanding 6.80% Senior Notes due 2039 issued by FES (each of the foregoing an "Any and All Offer"), and a fourth Offer to purchase up to the Maximum Tender Amount (as defined below) of the 6.05% Senior Notes due 2021 (the "6.05% Notes") issued by FES (the "Maximum Tender Offer").  Each Company is offering to purchase only those Notes issued by it.

The following table indicates, among other things, the principal amount of each series of Notes validly tendered as of the Any and All Offer Expiration Date and the Early Tender Date, as applicable:




Title of Security

Principal Amount Outstanding

Principal Amount Tendered

Percent Tendered of Principal Amount Outstanding

Offers for Notes Listed Below:  Any and All Offers

AE Supply


5.75% Notes due 2019



55.56 %

AE Supply


6.75% Notes due 2039


$ 99,966,000

39.99 %



6.80% Senior Notes due 2039



24.32 %

Offer for Notes Listed Below:  Maximum Tender Offer


33766JAD5/33766JAC7/ U3198TAB5

6.05% Senior Notes due 2021



43.19 %

(1) FES' 6.80% Senior Notes due 2039 and 6.05% Senior Notes due 2021 are guaranteed by its subsidiaries, FirstEnergy Generation, LLC and FirstEnergy Nuclear Generation, LLC, pursuant to certain guaranties entered into in March 2007.

All Notes validly tendered and not validly withdrawn in the Any and All Offers prior to the Any and All Offer Expiration Date have been accepted for purchase.  FES and AE Supply expect to make payment for the applicable Notes in same-day funds today, March 14, 2013.

Since the difference between $1,080,000,000 and the aggregate principal amount of Notes validly tendered and accepted for purchase today in the Any and All Offers (the "Maximum Tender Amount") exceeds $585,000,000, which is the principal amount outstanding of the 6.05% Notes, all 6.05% Notes validly tendered and not validly withdrawn will be accepted for purchase.

Holders of 6.05% Notes subject to the Maximum Tender Offer who validly tendered and did not validly withdraw their 6.05% Notes before the Early Tender Date will receive the total consideration, which includes an early tender premium of $50 per $1,000 principal amount of Notes tendered by such holders that are accepted for purchase, plus accrued and unpaid interest to, but excluding, the date of settlement.  Holders of 6.05% who validly tender and do not validly withdraw their 6.05% Notes after the Early Tender Date and on or before the expiration of the Maximum Tender Offer will receive the tender offer consideration, which is the total consideration less the early tender premium.  Any 6.05% Notes previously tendered, or to be tendered prior to the expiration of the Maximum Tender Offer, may not be withdrawn.

The Maximum Tender Offer will expire at 11:59 p.m. EDT on March 27, 2013, unless extended or earlier terminated.  FES expects to make payment for the 6.05% Notes validly tendered and not validly withdrawn in same-day funds on the settlement date for the Maximum Tender Offer which is expected to be March 28, 2013.

Information Relating to the Offers

FirstEnergy has retained Goldman Sachs & Co. and Morgan Stanley & Co. LLC to serve as Lead Dealer Managers for the Offers and BNP Paribas Securities Corp., KeyBanc Capital Markets Inc., Santander Investment Securities Inc. and Scotia Capital (USA) Inc. to serve as Co-Dealer Managers for the Offers.  Bondholder Communications Group, LLC has been retained to serve as the Information and Tender Agent for the Offers.

For additional information regarding the terms of the Maximum Tender Offer, please contact:  Goldman Sachs at 800-828-3182 (toll free) or 212-902-5183 (collect) or Morgan Stanley at 800-624-1808 (toll free) or 212-761-1057 (collect).  Requests for documents and questions regarding the tender of Notes may be directed to the Information and Tender Agent at 888-385-2663 (toll free) or 212-809-2663 (collect).

The respective obligations of FES and AE Supply to accept any Notes tendered and to pay the applicable consideration for such Notes are set forth solely in the Offer to Purchase and related Letter of Transmittal.  None of the Companies, FirstEnergy, the Dealer Managers or the Information and Tender Agent is making any recommendations to holders of Notes as to whether to tender or refrain from tendering their Notes in the Maximum Tender Offer.  Holders of Notes eligible to be tendered in the Maximum Tender Offer must decide how many Notes they will tender, if any.

This news release is not an offer to purchase or a solicitation of an offer to sell any securities.  FES may, subject to applicable law, amend, extend or terminate the Maximum Tender Offer.  The Maximum Tender Offer is being made only pursuant to the Offer to Purchase and related Letter of Transmittal that the Companies have distributed to holders of the 6.05% Notes.  The Maximum Tender Offer is not being made in any jurisdiction in which such Offer, solicitation or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction.  In any jurisdiction in which the Maximum Tender Offer is required to be made by a licensed broker or dealer, it shall be deemed to be made by the Dealer Managers on behalf of FES.

FirstEnergy is a diversified energy company dedicated to safety, reliability and operational excellence.  Its 10 electric distribution companies form one of the nation's largest investor-owned electric systems, serving customers in Ohio, Pennsylvania, New Jersey, West Virginia, Maryland and New York.  Its generation subsidiaries control more than 20,000 megawatts of capacity from a diversified mix of scrubbed coal, non-emitting nuclear, natural gas, hydro, pumped-storage hydro and other renewables.  Follow FirstEnergy on Twitter @FirstEnergyCorp.  

Forward-Looking Statements: This news release includes forward-looking statements based on information currently available to management. Such statements are subject to certain risks and uncertainties.  These statements include declarations regarding management's intents, beliefs and current expectations.  These statements typically contain, but are not limited to, the terms "anticipate," "potential," "expect," "believe," "estimate" and similar words.  Forward-looking statements involve estimates, assumptions, known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.   Actual results may differ materially due to: the speed and nature of increased competition in the electric utility industry, in general, and the retail sales market in particular, the impact of the regulatory process on the pending matters before FERC and in the various states in which we do business including, but not limited to, matters related to rates and pending rate cases, the uncertainties of various cost recovery and cost allocation issues resulting from ATSI's realignment into PJM, economic or weather conditions affecting future sales and margins, regulatory outcomes associated with Hurricane Sandy, changing energy, capacity and commodity market prices including, but not limited to, coal, natural gas and oil, and availability and their impact on retail margins, financial derivative reforms that could increase our liquidity needs and collateral costs, the continued ability of our regulated utilities to collect transition and other costs, operation and maintenance costs being higher than anticipated, other legislative and regulatory changes, and revised environmental requirements, including possible GHG emission, water discharge, water intake and coal combustion residual regulations, the potential impacts of CAIR, and any laws, rules or regulations that ultimately replace CAIR, and the effects of the EPA's MATS rules including our estimated costs of compliance, the uncertainty of the timing and amounts of the capital expenditures that may arise in connection with any litigation, including NSR litigation or potential regulatory initiatives or rulemakings (including that such expenditures could result in our decision to deactivate or idle certain generating units), the uncertainties associated with the deactivation of certain older unscrubbed regulated and competitive fossil units, including the impact on vendor commitments, and the timing thereof as they relate to, among other things, the RMR arrangements and the reliability of the transmission grid, adverse regulatory or legal decisions and outcomes with respect to our nuclear operations (including, but not limited to the revocation or non-renewal of necessary licenses, approvals or operating permits by the NRC or as a result of the incident at Japan's Fukushima Daiichi Nuclear Plant), adverse legal decisions and outcomes related to ME's and PN's ability to recover certain transmission costs through their TSC riders, the impact of future changes to the operational status or availability of our generating units, the risks and uncertainties associated with litigation, arbitration, mediation and like proceedings, including, but not limited to, any such proceedings related to vendor commitments, replacement power costs being higher than anticipated or inadequately hedged, the ability to comply with applicable state and federal reliability standards and energy efficiency and peak demand reduction mandates, changes in customers' demand for power, including but not limited to, changes resulting from the implementation of state and federal energy efficiency and peak demand reduction mandates, the ability to accomplish or realize anticipated benefits from strategic and financial goals including, but not limited to, the ability to successfully complete the proposed West Virginia asset transfer and to improve our credit metrics, our ability to improve electric commodity margins and the impact of, among other factors, the increased cost of fuel and fuel transportation on such margins, the ability to experience growth in the Regulated Distribution segment and to continue to successfully implement our direct retail sales strategy in the Competitive Energy Services segment, changing market conditions that could affect the measurement of liabilities and the value of assets held in our NDTs, pension trusts and other trust funds, and cause us and our subsidiaries to make additional contributions sooner, or in amounts that are larger than currently anticipated, the impact of changes to material accounting policies, the ability to access the public securities and other capital and credit markets in accordance with our financing plans, the cost of such capital and overall condition of the capital and credit markets affecting us and our subsidiaries, actions that may be taken by credit rating agencies that could negatively affect us and our subsidiaries' access to financing, increase the costs thereof, and increase requirements to post additional collateral to support outstanding commodity positions, LOCs and other financial guarantees, changes in national and regional economic conditions affecting us, our subsidiaries and our major industrial and commercial customers, and other counterparties including fuel suppliers, with which we do business, issues concerning the stability of domestic and foreign financial institutions and counterparties with which we do business, the risks and other factors discussed from time to time in our SEC filings, and other similar factors.  The foregoing review of factors should not be construed as exhaustive.  New factors emerge from time to time, and it is not possible for management to predict all such factors, nor assess the impact of any such factor on the business of FirstEnergy or the Companies or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statements.  FirstEnergy and the Companies expressly disclaim any current intention to update, except as required by law, any forward-looking statements contained herein as a result of new information, future events or otherwise.

SOURCE FirstEnergy Corp.