AES Announces Public Offering of Senior Notes

Rhea-AI Summary

AES (NYSE: AES) has announced its intention to conduct a registered public offering of senior notes. The company plans to use the proceeds primarily to fund the purchase of its 3.300% Senior Notes due 2025 through a cash tender offer. Any remaining proceeds will be allocated to retire outstanding debt and for general corporate purposes.

The offering will be managed by joint book-running managers including Citigroup Global Markets, BNP Paribas Securities, BofA Securities, MUFG Securities Americas, and Santander US Capital Markets. The offering is being made through a prospectus supplement dated March 12, 2025, and a base prospectus dated March 11, 2025.

Positive

• Debt refinancing initiative shows proactive liability management
• Multiple top-tier financial institutions supporting the offering

Negative

• Increasing debt load through new notes issuance
• Potential impact on interest expenses depending on new notes' terms

Insights

Fixed Income Analyst

AES 's announcement of a senior notes offering represents a proactive debt refinancing strategy to address its upcoming 3.300% notes due in 2025. This is a standard liability management exercise where the company is effectively extending its debt maturity profile while potentially adjusting its interest expense profile.

The company plans to use proceeds primarily for a tender offer to purchase the 2025 notes, with remaining funds allocated to retiring other debt and general corporate purposes. This approach demonstrates prudent financial management by addressing near-term maturities well in advance.

For a capital-intensive utility like AES, with a $8.48 billion market capitalization, maintaining access to debt markets is essential. This transaction affirms the company's ability to tap capital markets, though the actual financial impact will depend on the pricing of these new notes relative to the 3.300% being retired.

While the announcement doesn't specify the size, pricing, or maturity of the new issuance, the involvement of five major financial institutions as joint book-runners suggests this is a substantial offering with broad institutional support. The refinancing should help AES optimize its debt structure and potentially extend its maturity profile, which could enhance financial flexibility without significantly altering the company's overall leverage position.

ARLINGTON, Va., March 12, 2025 /PRNewswire/ -- The AES Corporation (NYSE: AES) ("AES" or the "Company") announced today its intention to offer, subject to market and other conditions, senior notes (the "Notes") in a registered public offering.

AES intends to use the net proceeds from the proposed offering to fund purchases of its 3.300% Senior Notes due 2025 (the "2025 Notes") in the tender offer to purchase for cash any and all of the 2025 Notes (the "Tender Offer") and to pay certain related fees and expenses. The Company intends to use any remaining net proceeds from the proposed offering after completion of the Tender Offer to retire certain of its outstanding indebtedness and for general corporate purposes.

Citigroup Global Markets Inc., BNP Paribas Securities Corp., BofA Securities, Inc., MUFG Securities Americas Inc. and Santander US Capital Markets LLC are acting as joint book-running managers of the proposed offering.

This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities, nor does it constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful. An effective shelf registration statement related to the Notes has previously been filed by AES with the Securities and Exchange Commission (the "SEC"). The offering and sale of the Notes are being made only by means of a prospectus supplement dated March 12, 2025 and an accompanying base prospectus dated March 11, 2025 related to the offering. Before you invest, you should read the prospectus and the preliminary prospectus supplement in that registration statement and other documents AES has filed with the SEC for more complete information about AES and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, copies of the prospectus supplement and related base prospectus related to this offering may be obtained from Citigroup Global Markets Inc., c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717 or by telephone at 1-800-831-9146; BNP Paribas Securities Corp., 787 7th Avenue, New York, New York 10019, Attn: Syndicate Desk, or by calling toll-free at 1-800-854-5674; BofA Securities, Inc., 201 North Tryon Street, NC1-022-02-25, Charlotte, NC 28255-0001, Attn: Prospectus Department, at 1-800-294-1322 (toll-free) or emailing dg.prospectus_requests@bofa.com; MUFG Securities Americas Inc., at 1221 Avenue of the Americas, 6th Floor, New York, NY 10020-1001, Attn: Capital Markets Group, or by telephone at 1-877-649-6848; or from Santander US Capital Markets LLC, at 437 Madison Avenue New York, NY 10022, or emailing DCMAmericas@santander.us, Attn: Debt Capital Markets, or by telephone at 1-855-403-3636.

About AES

The AES Corporation (NYSE: AES) is a Fortune 500 global energy company accelerating the future of energy. Together with our many stakeholders, we're improving lives by delivering the greener, smarter energy solutions the world needs. Our diverse workforce is committed to continuous innovation and operational excellence, while partnering with our customers on their strategic energy transitions and continuing to meet their energy needs today.

Safe Harbor Disclosure

This news release contains forward-looking statements within the meaning of the Securities Act of 1933 and of the Securities Exchange Act of 1934. Forward-looking statements are not intended to be a guarantee of future results, but instead constitute AES' current expectations based on reasonable assumptions. Such forward-looking statements include, but are not limited to, our financing plans, including the offering of the Notes and the details thereof, the proposed use of proceeds therefrom, the Tender Offer and other expected effects of the offering of the Notes, which are subject to risks and uncertainties, such as our ability to market and sell the Notes, our continued eligibility to use the shelf registration statement, general economic conditions and other risks and uncertainties.

Actual results could differ materially from those projected in AES' forward-looking statements due to risks, uncertainties and other factors. Important factors that could affect actual results are discussed in the prospectus supplement related to the offering and AES' filings with the SEC, including, but not limited to, the risks discussed under Item 1A: "Risk Factors" and Item 7: "Management's Discussion & Analysis" in AES' 2024 Annual Report on Form 10-K and in any subsequent reports filed with the SEC. Potential investors are encouraged to read AES' filings to learn more about the risk factors associated with AES' business. AES undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except where required by law. 

Investor Contact: Susan Harcourt, 703-682-1204, susan.harcourt@aes.com
Media Contact: Amy Ackerman, 703-682-6399, amy.ackerman@aes.com

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SOURCE The AES Corporation

FAQ

What is the purpose of AES 's new senior notes offering in March 2025?

AES is offering senior notes to fund the purchase of its 3.300% Senior Notes due 2025 through a tender offer, retire outstanding debt, and for general corporate purposes.

Who are the joint book-running managers for AES's 2025 senior notes offering?

The offering is managed by Citigroup Global Markets, BNP Paribas Securities, BofA Securities, MUFG Securities Americas, and Santander US Capital Markets.

What is the interest rate of the AES notes being targeted for purchase in the tender offer?

The tender offer targets AES's 3.300% Senior Notes due 2025.

How can investors access the prospectus for AES's March 2025 notes offering?

Investors can access the prospectus through the SEC website (www.sec.gov) or request copies from the joint book-running managers.