HOUSTON, May 23 /PRNewswire-FirstCall/ -- Reliant Energy, Inc. today
announced a comprehensive refinancing program that, upon completion, will
result in reduced interest expense and lower debt levels in addition to a
significant improvement in the company's ability to reinvest in the
business and return cash to shareholders through dividends and share
repurchases.
"A key element of our new strategy is having the flexibility to direct
free cash flow and additional capital to the alternatives that create the
highest value for shareholders," said Mark Jacobs, Reliant Energy, chief
executive officer. "This plan was developed to achieve a capital structure
that supports that strategy."
As part of the initial phase of this program, today the company
launched a tender offer and consent solicitation for its 9.25 percent and
9.50 percent senior secured notes totaling $1.1 billion. In the near
future, the company expects to issue $1.25 billion of senior unsecured
notes with 7- and 10-year maturities to fund the tender offer and consent
solicitation and retire a portion of its $400 million term loan. Cash on
hand will be used to retire the remainder of the term loan. In addition,
the company plans to replace its existing revolving credit facility and
pre-funded letter of credit facilities with a new $500 million revolving
credit facility and $250 million pre-funded letter of credit facility. The
company expects to close these transactions in June 2007, subject to market
conditions.
In the second phase of the program, the company will address
restrictions remaining in $750 million of its 6.75 percent senior secured
notes and $500 million of tax-exempt bonds. The company is evaluating
various alternatives, including the retirement or defeasance of some or all
of this debt with proceeds from potential asset sales.
The company has filed a registration statement (including a prospectus)
with the SEC for the offering to which this communication relates. Before
you invest, you should read the prospectus in that registration statement
and other documents the company has filed with the SEC for more complete
information about the company and this offering. You may get these
documents for free by visiting EDGAR on the SEC Web site at
http://www.sec.gov. Alternatively, the company, any underwriter or any
dealer participating in the offering will arrange to send you the
prospectus if you request it by calling toll-free 1-866-624-5774, extension
73042.
Reliant Energy, Inc. (NYSE: RRI) based in Houston, Texas, provides
electricity and energy services to retail and wholesale customers in the
United States. In Texas, the company provides service to nearly 1.9 million
retail electricity customers, including residential and small business
customers and commercial, industrial, governmental and institutional
customers. Reliant also serves commercial, industrial, governmental and
institutional customers in the PJM (Pennsylvania, New Jersey and Maryland)
market.
The company is one of the largest independent power producers in the
nation with approximately 16,000 megawatts of power generation capacity
across the United States. These strategically located generating assets
utilize natural gas, fuel oil and coal.
This press release contains "forward-looking statements."
Forward-looking statements are statements that contain projections,
estimates or assumptions about our revenues, income and other financial
items, our plans and objectives for future operations or about future
economic performance, transactions and dispositions and financings related
thereto. In many cases you can identify forward-looking statements by
terminology such as "anticipate," "estimate," "believe," "continue,"
"could," "intend," "may," "plan," "potential," "predict," "should," "will,"
"expect," "objective," "projection," "forecast," "goal," "guidance,"
"outlook," "effort," "target" and other similar words. However, the absence
of these words does not mean that the statements are not forward-looking.
Actual results may differ materially from those expressed or implied by
forward-looking statements as a result of many factors or events, including
but not limited to access to capital, legislative and regulatory
developments, the effects of competition, financial market conditions, the
timing and extent of changes in commodity prices and interest rates,
weather conditions, changes in our business plan and other factors we
discuss or reference to in the "Risk Factors" section of our filings with
the Securities and Exchange Commission.
Each forward-looking statement speaks only as of the date of the
particular statement and we undertake no obligation to update or revise any
forward-looking statement, whether as a result of new information, future
events or otherwise.
SOURCE Reliant Energy, Inc.
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Related links:
http://www.reliant.com
http://www.sec.gov
CONTACT:
media, Pat Hammond, +1-713-497-7723, or
investors, Dennis Barber, +1-713-497-3042, both of Reliant
Energy, Inc.
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