8-KOther EventsExhibits & Filings

FIRSTENERGY CORP 8-K Report, Corporate Update (Sep 1, 2009)

Filed September 1, 2009For Securities:FE

Summary

This 8-K filing from FirstEnergy Corp. on September 1, 2009, announces the expiration of its tender offer for its 6.45% Notes, Series B, Due 2011. The offer, which aimed to repurchase up to $1.2 billion in notes, was oversubscribed, with over $1.256 billion tendered. Consequently, FirstEnergy will repurchase the notes on a pro rata basis from tendering holders, settling the transactions on September 1, 2009. As a result of this debt repurchase, FirstEnergy expects to record a significant debt redemption cost of $136 million ($88 million after-tax, or $0.29 per share) in the third quarter of 2009. This action indicates a strategic move by the company to manage its outstanding debt, potentially refinancing or optimizing its capital structure. Investors should note the impact on near-term earnings due to the redemption costs.

Key Highlights

  • 1FirstEnergy's tender offer for its 6.45% Notes, Series B, Due 2011, has expired.
  • 2The tender offer was oversubscribed, with $1,256,369,000 principal amount of notes tendered against a cap of $1,200,000,000.
  • 3Accepted notes will be purchased on a pro rata basis due to oversubscription.
  • 4Settlement for the purchased notes occurred on September 1, 2009.
  • 5FirstEnergy anticipates recognizing $136 million ($88 million after-tax, or $0.29 per share) in debt redemption costs for Q3 2009.
  • 6The filing includes a press release detailing the tender offer results as an exhibit.

Frequently Asked Questions

The tender offer was initiated by FirstEnergy Corp. to repurchase a portion of its outstanding 6.45% Notes, Series B, Due 2011, with a target aggregate principal amount of $1,200,000,000. This is often done to manage debt levels, refinance at potentially lower rates, or optimize the company's capital structure.

No, because the tender offer was oversubscribed (more notes were tendered than the company intended to purchase), FirstEnergy will repurchase the notes on a pro rata basis. This means that tendering holders will have a portion of their tendered notes accepted for repurchase, rather than the full amount.

FirstEnergy expects to incur debt redemption costs of $136 million in the third quarter of 2009. This amounts to $88 million after-tax, or approximately $0.29 per share of common stock. This cost reflects the expense associated with early retirement of the debt.

The settlement for the notes accepted in the tender offer occurred on September 1, 2009, the same day this 8-K filing was made.