Talen Energy Supply Announces Successful Completion of Consent Solicitation for Amendments to 8.625% Senior Secured Notes Due 2030
Rhea-AI Summary
Talen Energy (NASDAQ: TLN) announced that its subsidiary, Talen Energy Supply, has successfully completed its consent solicitation for amendments to its 8.625% Senior Secured Notes due 2030. The company received sufficient consents to modify certain provisions and covenants in the Indenture to align with their credit agreement dated May 17, 2023.
The amendments also include waiving Talen's right to optionally redeem up to 10.0% of the Notes prior to June 1, 2025 at 103.000% of the principal amount. The consent solicitation expired on January 13, 2025, and the company expects to pay the consent fee to participating noteholders on January 14, 2025. RBC Capital Markets acted as lead solicitation agent, with Citigroup Global Markets as co-agent.
Positive
- Successfully secured noteholder approval for indenture amendments
- Alignment of note covenants with existing credit agreement terms, potentially simplifying compliance
Negative
- Waiver of early redemption rights for up to 10% of notes at 103% reduces financial flexibility
- Additional consent fees to be paid to noteholders increase costs
Insights
The successful completion of Talen Energy Supply's consent solicitation for its
The harmonization of debt covenants across different instruments typically indicates a move toward operational flexibility and simplified compliance reporting. By waiving the early redemption option, Talen has effectively removed uncertainty around potential early bond calls, providing clearer visibility into future cash flows for bondholders. This modification suggests the company is prioritizing debt stability over maintaining refinancing optionality.
The high consent participation rate, evidenced by reaching the requisite threshold, demonstrates strong bondholder support and confidence in Talen's financial strategy. The involvement of major financial institutions like RBC Capital Markets and Citigroup as solicitation agents adds credibility to the transaction.
This covenant modification represents a meaningful enhancement to Talen's capital structure flexibility. By aligning the bond indenture terms with the credit agreement, the company reduces administrative complexity and potentially lowers compliance costs. The timing of this amendment, coming less than a year after the original note issuance, suggests proactive balance sheet management.
For investors, the removal of the
The swift execution of the consent solicitation, completed within a week of announcement, reflects efficient market engagement and strong relationship management with institutional investors. This successful amendment could potentially facilitate future capital market activities by demonstrating Talen's ability to effectively manage its stakeholder relationships.
HOUSTON, Jan. 13, 2025 (GLOBE NEWSWIRE) -- Talen Energy Corporation (NASDAQ: TLN) announced today that its wholly owned subsidiary, Talen Energy Supply, LLC (“Talen” or the “Company”), received the requisite consents in its previously announced solicitation of consents (the “Consents”) from holders of its
Talen sought the Proposed Amendments in order to (i) modify certain provisions, including certain covenants and related definitions, in the Indenture in order to substantially conform to the corresponding provisions set forth in the Company’s credit agreement dated May 17, 2023 (as amended, supplemented or otherwise modified prior to the date hereof) and (ii) waive Talen's right to optionally redeem up to
The consent solicitation for the Notes (the “Consent Solicitation”) was made solely on the terms and subject to the conditions set forth in the consent solicitation statement dated January 6, 2025 (the “Consent Solicitation Statement”). The Consent Solicitation expired at 5:00 p.m. (New York City time) on January 13, 2025 (the “Expiration Time”). The Consents received in the Consent Solicitation were sufficient to effect the Proposed Amendments to the indenture governing the Notes.
Accordingly, the Company has entered into the fourth supplemental indenture to the Indenture (the “Fourth Supplemental Indenture”) to effect the Proposed Amendments. The Proposed Amendments will become operative upon the payment of the consent fee to the holders of the Notes who validly delivered Consents, which the Company expects to pay on January 14, 2025.
RBC Capital Markets, LLC acted as lead solicitation agent and Citigroup Global Markets Inc. acted as a solicitation agent in connection with the Consent Solicitation.
Any questions or requests for assistance may be directed to the Information Agent at its telephone numbers or e-mail address set forth below.
The Lead Solicitation Agent for the Consent Solicitation is:
RBC Capital Markets, LLC
Toll-Free: (877) 381-2099
Collect: (212) 618-7843
E-mail: liability.management@rbccm.com
The Information Agent for the Consent Solicitation is:
D.F. King & Co., Inc.
Banks and Brokers call: (212) 269-5550 (collect)
All others call toll-free: (800) 769-4414
E-mail: TLNE@dfking.com
THIS PRESS RELEASE IS NEITHER AN OFFER TO SELL NOR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITY. THIS ANNOUNCEMENT IS ALSO NOT A SOLICITATION OF CONSENTS TO ANY PROPOSED AMENDMENTS.
About Talen
Talen Energy (NASDAQ: TLN) is a leading independent power producer and energy infrastructure company dedicated to powering the future. We own and operate approximately 10.7 gigawatts of power infrastructure in the United States, including 2.2 gigawatts of nuclear power and a significant dispatchable fossil fleet. We produce and sell electricity, capacity, and ancillary services into wholesale U.S. power markets, with our generation fleet principally located in the Mid-Atlantic and Montana. Our team is committed to generating power safely and reliably, delivering the most value per megawatt produced and driving the energy transition. Talen is also powering the digital infrastructure revolution. We are well-positioned to capture this significant growth opportunity, as data centers serving artificial intelligence increasingly demand more reliable, clean power. Talen is headquartered in Houston, Texas.
Investor Relations:
Ellen Liu
Senior Director, Investor Relations
InvestorRelations@talenenergy.com
Media:
Taryne Williams
Director, Corporate Communications
Taryne.Williams@talenenergy.com
Forward-Looking Statements
This communication contains forward-looking statements within the meaning of the federal securities laws, which statements are subject to substantial risks and uncertainties. These forward-looking statements are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this communication, or incorporated by reference into this communication, are forward-looking statements. Throughout this communication, we have attempted to identify forward-looking statements by using words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecasts,” “goal,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “will,” or other forms of these words or similar words or expressions or the negative thereof, although not all forward-looking statements contain these terms. Forward-looking statements address future events and conditions concerning, among other things, capital expenditures, earnings, litigation, regulatory matters, hedging, liquidity and capital resources and accounting matters. Forward-looking statements are subject to substantial risks and uncertainties that could cause our future business, financial condition, results of operations or performance to differ materially from our historical results or those expressed or implied in any forward-looking statement contained in this communication. All of our forward-looking statements include assumptions underlying or relating to such statements that may cause actual results to differ materially from expectations, and are subject to numerous factors that present considerable risks and uncertainties.
FAQ
What changes were made to Talen Energy's (TLN) 8.625% Senior Secured Notes due 2030?
When will Talen Energy (TLN) pay the consent fee for the 2030 Notes amendments?
What is the interest rate on Talen Energy's (TLN) Senior Secured Notes affected by the amendments?
Who were the solicitation agents for Talen Energy's (TLN) consent solicitation?
