OREANDA-NEWS. Dynegy Inc. (NYSE:DYN) has reached an agreement in principle with Illinois Power Generating Company (Genco) and an ad hoc group (Ad Hoc Group) of Genco bondholders to restructure $825 million in unsecured debt at Genco. The economic terms and proposed implementation steps, which are not binding on any party, were included in an 8-K filing pursuant to non-disclosure agreements previously signed by Dynegy Inc. and members of the Ad Hoc Group which required that all material non-public information provided to the Ad Hoc Group as part of restructuring discussions be publicly disclosed on October 3, 2016.

Key terms of the proposed restructuring include:

  • $825 million in existing 2018, 2020 and 2032Genco notes to be exchanged for:
    • $210 million in new 7-year Dynegy Inc. unsecured notes with terms and covenants consistent with existing Dynegy Inc. unsecured bonds. Pricing on the new notes intended to be consistent with the yield on Dynegy’s 2023 unsecured bond at the time of issuance
    • $139 million cash consideration, including the $9 million restructuring support agreement (RSA) payment outlined below, funded with existing Illinois Power Holdings cash balances and collateral synergies
    • 10 million Dynegy Inc. warrants with a 7-year tenor and strike price of $35 per share
  • Simultaneous solicitation of Genco noteholders to effectuate either an out of court restructuring or a prepackaged chapter 11 filing
  • Genco to continue making interest payments on the Genco notes, with payments netted against the proposed cash consideration

Dynegy, Genco and the Ad Hoc Group have agreed that holders of the Genco notes who enter into a restructuring support agreement (RSA) on or before a date to be agreed will be paid their pro rata share of $9 million in cash upon consummation of a transaction. In the interim, Dynegy and the Ad Hoc Group have entered into agreements providing that members of the Ad Hoc Group will not dispose of any of their Genco notes or enter into any swap or other transaction that transfers the economics of their Genco notes prior to the earlier of the execution of the RSA and October 14, 2016. The lock-up agreements are to allow the parties to continue to work on finalizing the terms of a transaction.

ABOUT DYNEGY

At Dynegy, we generate more than just power for our customers. We are committed to being a leader in the electricity sector. Throughout the Midwest and Northeast, Dynegy operates power generating facilities capable of producing nearly 26,000 megawatts of electricity—or enough energy to power about 21 million American homes. We’re proud of what we do, but it’s about much more than just output. We’re always striving to generate power safely and responsibly for our wholesale and retail electricity customers who depend on that energy to grow and thrive.