8-KFinancial EventsOther EventsExhibits & Filings

AMEREN CORP 8-K Report, Financial Obligation (Jun 19, 2006)

Filed June 19, 2006For Securities:AEE

Summary

This 8-K filing from Ameren Corporation on June 19, 2006, details significant debt issuance by its subsidiaries, Central Illinois Light Company (AmerenCILCO or CILCO), Illinois Power Company (AmerenIP or IP), and Central Illinois Public Service Company (AmerenCIPS or CIPS). Collectively, these subsidiaries issued approximately $157.5 million in new senior secured notes. CILCO issued $54 million of 6.20% Senior Secured Notes due 2016 and $42 million of 6.70% Senior Secured Notes due 2036. IP issued $75 million of 6.25% Senior Secured Notes due 2016. CIPS issued $61.5 million of 6.70% Senior Secured Notes due 2036. These notes were issued in private placements with registration rights. The primary use of the proceeds from these debt issuances was to repay existing short-term debt. Notably, CILCO also used a portion of its proceeds to redeem $20 million of its 7.73% Senior Secured Notes due 2025. The new notes issued by CILCO and IP are secured by related first mortgage bonds until a specified "release date," which is tied to the retirement of all other outstanding first mortgage bonds under their respective indentures. CIPS's notes were issued under an existing registration statement. The filing also outlines default provisions and remedies under the respective indentures and mortgages.

Key Highlights

  • 1Ameren subsidiaries CILCO, IP, and CIPS collectively issued approximately $157.5 million in new senior secured notes.
  • 2Proceeds from these issuances were primarily used to repay existing short-term debt, strengthening the subsidiaries' balance sheets.
  • 3CILCO redeemed $20 million of its higher-coupon 7.73% Senior Secured Notes due 2025 using proceeds from the new note issuance.
  • 4The new notes issued by CILCO and IP carry interest rates ranging from 6.20% to 6.70%.
  • 5The notes issued by CILCO and IP are secured by underlying mortgage bonds until a defined "release date," providing collateral for the debt.
  • 6The filing includes details on default provisions and acceleration clauses within the various indentures and mortgages governing these debt instruments.
  • 7Registration rights were provided to the initial purchasers, with potential for additional interest payments if compliance obligations are not met.

Frequently Asked Questions

The primary purpose of these debt issuances by Ameren's subsidiaries (CILCO, IP, and CIPS) was to repay existing short-term debt. CILCO also utilized a portion of the proceeds to redeem a portion of its outstanding medium-term notes.

Central Illinois Light Company (CILCO) issued $54 million in 6.20% Senior Secured Notes due 2016 and $42 million in 6.70% Senior Secured Notes due 2036. Illinois Power Company (IP) issued $75 million in 6.25% Senior Secured Notes due 2016. Central Illinois Public Service Company (CIPS) issued $61.5 million in 6.70% Senior Secured Notes due 2036.

The notes issued by CILCO and IP are secured by a pledge of related first mortgage bonds under their respective indentures. This security arrangement remains in place until a 'release date,' which is defined by the full retirement of other outstanding first mortgage bonds related to those indentures.

If CILCO or IP fail to meet certain obligations under their respective registration rights agreements, they will be required to pay additional interest. This additional interest starts at 0.25% per year and can increase to a maximum of 0.50% per year if non-compliance continues for more than 90 days.