Baker Botts Represents NRG Energy, Inc. in Offerings of Nearly $4 Billion of Senior Notes and Pre-Capitalized Trust Securities, Including First Issuance of Sustainability-Linked Bond by a North American Company
Deal Description: On December 2, 2020, NRG Energy, Inc. ("NRG") completed the sale of (i) $500 million aggregate principal amount of its 2.000% senior secured first lien notes due 2025 and $900 million aggregate principal amount of its 2.450% senior secured first lien notes due 2027 and (ii) $500 million aggregate principal amount of its 3.375% senior unsecured notes due 2029 and $1,030 million aggregate principal amount of its 3.625% senior unsecured notes due 2031.
The senior secured notes due 2027 were issued under NRG’s Sustainability-Linked Bond Framework, a landmark issuance, with NRG pioneering the first Sustainability-Linked Bond (SLB) in North America, and the first issued by any energy company outside of Europe. The SLB links attractive financing to the realization of NRG’s previously announced goals to achieve a 50% reduction of absolute greenhouse gas (GHG) emissions by 2025, and reach net-zero GHG emissions by 2050, from the current 2014 baseline.
NRG intends to use the net proceeds from the notes offerings, together with cash on hand, to fund the purchase price of the previously announced acquisition of Direct Energy, the North American energy supply, services and trading business of Centrica plc, and to pay fees and expenses relating to the acquisition, if consummated.
Concurrently with the sale of the notes, Alexander Funding Trust, a newly-formed Delaware statutory trust, completed its private offering of 900,000 of its pre-capitalized trust securities redeemable 2023 for an aggregate purchase price of $900 million. The trust will initially invest the proceeds from the sale in a portfolio of principal and interest strips of U.S. Treasury securities that will be used to provide collateral to certain financial institutions that will issue letters of credit to support NRG’s existing and future collateral obligations.
Baker Botts represented NRG in each of the offerings.
For more information, please see NRG’s news release by clicking here.
Baker Botts Lawyers/Office Involved:
Corporate: Preston Bernhisel (Partner, Dallas); Jennifer Wu (Senior Associate, Austin); Jacqueline Scioli (Associate, Dallas); Derek Gabriel (Associate, Dallas); Elise Wang (Legal Intern, Dallas)
Finance: Martin Toulouse (Partner, New York); Rachael Lichman (Partner, Houston); Tim Coxon (Special Counsel, New York); Grace Matthews (Associate, Austin); Janice Han (Associate, New York); Rachel Collier (Associate, Houston)
Employee Benefits: Robin Melman (Partner, New York)
Investment Company Act: Terence Rozier-Byrd (Partner, New York)
Tax: Jon Nelsen (Partner, Austin); Michael Bresson (Partner, Houston); Matt Donnelly (Special Counsel, Washington, D.C.); Robert Langley (Special Counsel, New York); Peter Farrell (Senior Associate, Washington, D.C.); Jacob Walley (Associate, Houston); Evan Skeen (Associate, Houston)
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