FirstEnergy Corp. (NYSE: FE) has announced a proposed offering of $950 million aggregate principal amount of convertible senior notes due 2029 and $850 million aggregate principal amount of convertible senior notes due 2031. The company also intends to grant the initial purchasers of the notes an option to purchase an additional $150 million aggregate principal amount of the 2029 notes and an additional $150 million aggregate principal amount of the 2031 notes within a 13-day period.
The net proceeds from the offering of the notes will be used for various purposes, including the repurchase of all or a portion of the $1.5 billion aggregate principal amount outstanding of its 4.00% convertible senior notes due May 1, 2026, repayment, redemption, or refinancing of existing indebtedness, and general corporate purposes, among others.
The notes will be unsecured and unsubordinated obligations of FirstEnergy, with interest payable semiannually in arrears. The company will settle conversions of the notes by paying cash up to the aggregate principal amount of the convertible notes to be converted and paying or delivering cash, shares of its common stock, or a combination of cash and shares of its common stock in respect of any remainder of its conversion obligation in excess of the aggregate principal amount of the notes being converted.
The offering is being made to qualified institutional buyers pursuant to Rule 144A under the Securities Act and will be conducted through a private offering memorandum.
FirstEnergy Corp. is one of the nation's largest investor-owned electric systems, serving more than 6 million customers in Ohio, Pennsylvania, New Jersey, West Virginia, Maryland, and New York, with its electric distribution companies. The company's transmission subsidiaries operate approximately 24,000 miles of transmission lines connecting the Midwest and Mid-Atlantic regions.
As of the press release, specific details such as the interest rate, initial conversion rate, and other terms of each series of notes are yet to be determined at the pricing of the offering. As a result of these announcements, the company's shares have moved -0.2% on the market, and are now trading at a price of $40.65. Check out the company's full 8-K submission here.
