8-KFinancial EventsExhibits & Filings

AMEREN CORP 8-K Report, Financial Obligation (Jun 26, 2017)

Filed June 26, 2017For Securities:AEE

Summary

Ameren Corporation's wholly-owned subsidiary, Ameren Transmission Company of Illinois (ATXI), entered into a Note Purchase Agreement on June 22, 2017, to issue $450 million in aggregate principal amount of 3.43% Senior Notes due 2050. This issuance is structured as a private placement, exempt from registration under the Securities Act of 1933. An initial $150 million was issued on the agreement date, with the remaining $300 million expected on August 31, 2017. The primary purpose of this debt issuance is to repay existing short-term and long-term affiliate debt owed to the parent company, Ameren. The Notes are unsecured and carry covenants that limit ATXI's consolidated debt to 70% of its total capitalization and priority debt to 10% of its total assets. Additionally, restrictive covenants are in place concerning affiliate transactions, asset transfers, and the creation of liens. The agreement includes provisions for early prepayment, including a make-whole premium, and allows holders to demand prepayment in the event of a Change of Control.

Key Highlights

  • 1ATXI, a subsidiary of Ameren, is issuing $450 million in Senior Notes due 2050.
  • 2The Notes carry a coupon rate of 3.43%.
  • 3The issuance is conducted via a private placement, exempt from SEC registration.
  • 4Proceeds will be used to repay existing affiliate debt owed to Ameren.
  • 5The debt is unsecured.
  • 6Financial covenants limit Consolidated Debt to 70% of Consolidated Total Capitalization and Priority Debt to 10% of Consolidated Total Assets.
  • 7The Notes include provisions for prepayment, including a make-whole premium and acceleration upon a Change of Control.

Frequently Asked Questions

The $450 million in Senior Notes is being issued by ATXI to repay existing short-term and long-term affiliate debt that it owes to its parent company, Ameren Corporation. This effectively restructures intercompany debt.

The agreement imposes two main financial covenants: ATXI cannot permit its Consolidated Debt to exceed 70% of its Consolidated Total Capitalization, and its Priority Debt cannot exceed 10% of its Consolidated Total Assets. These are designed to maintain a certain level of financial health for ATXI.

In the event of a Change of Control, as defined in the Note Purchase Agreement, holders of the Senior Notes have the right to require ATXI to prepay the entire unpaid principal amount of their Notes. This prepayment would be at 100% of the principal amount, plus accrued interest, but without any additional make-whole premium.

Yes, the Note Purchase Agreement includes restrictive covenants that limit ATXI's ability to engage in transactions with affiliates, consolidate or merge, transfer or lease substantially all of its assets, and create liens on its assets. These covenants aim to protect the lenders' interests.