NRG Energy, Inc. Announces Offerings of Senior Secured First Lien Notes due 2033 and Series A Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Stock

Rhea-AI Summary

NRG Energy, Inc. (NYSE:NRG) has initiated an offering of $740 million in senior secured first lien notes due 2033 and 650,000 shares of Series A Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Stock. The proceeds will primarily fund the acquisition of Vivint Smart Home, Inc. as per a merger agreement dated December 6, 2022. The notes will be secured by NRG's current and future subsidiaries, while the preferred shares will have a liquidation preference of $1,000 each and will not carry guarantees. The offerings are only available to qualified institutional buyers under Rule 144A and outside the U.S. NRG maintains that it will not register these securities with the SEC.

Positive

• Initiating a $740 million senior secured notes offering indicates strong capital-raising efforts.
• The acquisition of Vivint can enhance NRG's market position and product offerings.

Negative

• Dependence on capital markets raises concerns about potential risks and uncertainties.
• No guarantees on the preferred shares may deter some investors.

HOUSTON--(BUSINESS WIRE)-- NRG Energy, Inc. (NYSE:NRG) announced the commencement of an offering of (i) $740.0 million aggregate principal amount of senior secured first lien notes due 2033 (the “Notes”) and (ii) 650,000 shares of Series A Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Stock (the “Preferred Shares”). The Notes will be senior secured first lien obligations of NRG and will be guaranteed by each of NRG’s current and future subsidiaries that guarantee indebtedness under NRG’s credit agreement. The Preferred Shares will have a $1,000 liquidation preference per share and will not be guaranteed by NRG’s current and future subsidiaries.

NRG intends to use the net proceeds from these offerings to partially fund the purchase price of its previously announced acquisition (the “Acquisition”) of Vivint Smart Home, Inc. (“Vivint”), pursuant to the previously disclosed Agreement and Plan of Merger, dated December 6, 2022, by and among NRG, a subsidiary of NRG and Vivint, and to pay fees and expenses relating to the Acquisition.

The Notes, related guarantees and the Preferred Shares are being offered only to qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and, outside the United States, to persons other than “U.S. persons” in compliance with Regulation S under the Securities Act. The Notes, related guarantees and the Preferred Shares have not been registered under the Securities Act or the securities laws of any other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This press release does not constitute an offer to sell any security, including the Notes and the Preferred Shares, nor a solicitation for an offer to purchase any security, including the Notes and the Preferred Shares. NRG does not intend to file a registration statement for the resale of the Notes or the Preferred Shares.

About NRG

NRG Energy is a leading energy and home services company powered by people and our passion for a smarter, cleaner, and more connected future. A Fortune 500 company operating in the United States and Canada, NRG delivers innovative solutions that help people, organizations, and businesses achieve their goals while also advocating for competitive energy markets and customer choice.

Forward-Looking Statements

This communication contains forward-looking statements that may state NRG’s or its management’s intentions, beliefs, expectations or predictions for the future. Such forward-looking statements are subject to certain risks, uncertainties and assumptions, and typically can be identified by the use of words such as “will,” “expect,” “estimate,” “anticipate,” “forecast,” “plan,” “believe” and similar terms. Although NRG believes that its expectations are reasonable, it can give no assurance that these expectations will prove to have been correct, and actual results may vary materially. Factors that could cause actual results to differ materially from those contemplated above include, among others, risks and uncertainties related to the capital markets generally and whether NRG will offer the Notes and Series A Preferred Shares or consummate the offering, the anticipated terms of the Notes and Series A Preferred Shares and the anticipated use of proceeds.

The foregoing review of factors that could cause NRG’s actual results to differ materially from those contemplated in the forward-looking statements included herein should be considered in connection with information regarding risks and uncertainties that may affect NRG’s future results included in NRG’s filings with the SEC at www.sec.gov.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230301005688/en/

Investors:

Kevin L. Cole, CFA

609.524.4526

investor.relations@nrg.com

Media:

Laura Avant

713.537.5437

laura.avant@nrg.com

Source: NRG Energy, Inc.

FAQ

What is the purpose of NRG's recent $740 million offering?

NRG intends to use the proceeds to partially fund the acquisition of Vivint Smart Home, Inc.

What type of securities is NRG offering?

NRG is offering senior secured first lien notes and Series A Preferred Shares.

When was the merger agreement with Vivint announced?

The merger agreement was announced on December 6, 2022.

What is the liquidation preference for NRG's Preferred Shares?

The Preferred Shares have a liquidation preference of $1,000 per share.

Who can purchase NRG's new offerings?

The offerings are available only to qualified institutional buyers under Rule 144A.