AES Completes Offering of $500 Million in Junior Subordinated Notes due 2055

On December 6, 2024, The AES Corporation (NYSE:AES) successfully finalized its planned offering of $500,000,000 aggregate principal amount of 6.950% Fixed-to-Fixed Reset Rate Junior Subordinated Notes due 2055. This issuance was carried out in accordance with AES’ automatic shelf registration statement on Form S-3, filed with the Securities and Exchange Commission (SEC) on March 2, 2022. The public offering price for the Notes was set at 99.985% of the principal amount.

The net proceeds generated from this offering are slated to be used by AES for various purposes, including the repayment of existing debts, notably borrowings under the revolving facility of its senior credit facility, and for general corporate needs. To facilitate this transaction, the Company entered into an Underwriting Agreement on December 4, 2024, with J.P. Morgan Securities LLC, Wells Fargo Securities, LLC, Morgan Stanley & Co. LLC, and Credit Agricole Securities (USA) Inc. serving as the representatives of the underwriters listed in the agreement.

The Notes were officially issued on December 6, 2024, under a Subordinated Indenture, consisting of the Base Indenture from May 21, 2024, supplemented by a Second Supplemental Indenture from December 6, 2024. Interest on these Notes will accrue semi-annually in arrears, with the first payment scheduled for July 15, 2025, and the final maturity set for July 15, 2055. The interest rate is structured to be 6.950% per annum until July 15, 2030, with subsequent rates tied to the Five-year U.S. Treasury Rate as of the most recent Reset Interest Determination Date plus a spread of 2.890%.

Under the terms outlined, AES retains the option to defer interest payments on the Notes for specific periods, redeem some or all of the Notes in whole or in part at particular intervals and prices, and may be required to do so under specific circumstances. Detailed agreements, including the Underwriting Agreement, the Indenture, and the form of the Notes, have been submitted as exhibits in the current report.

In compliance with regulatory standards, AES provides forward-looking statements emphasizing that actual outcomes may differ from projected results due to various risks and uncertainties. Factors that could significantly influence results are outlined in the prospectus supplement tied to the offering and AES’ filings with the SEC.

Investors are advised to review AES’ filings for a comprehensive understanding of the risks related to the Company’s operations. AES does not have an obligation to update or revise forward-looking statements unless mandated by law.

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read AES’s 8K filing here.

About AES

The AES Corporation, together with its subsidiaries, operates as a diversified power generation and utility company in the United States and internationally. The company owns and/or operates power plants to generate and sell power to customers, such as utilities, industrial users, and other intermediaries; owns and/or operates utilities to generate or purchase, distribute, transmit, and sell electricity to end-user customers in the residential, commercial, industrial, and governmental sectors; and generates and sells electricity on the wholesale market.