8-KOther EventsExhibits & Filings

FIRSTENERGY CORP 8-K Report, Corporate Update (Jun 8, 2020)

Filed June 8, 2020For Securities:FE

Summary

FirstEnergy Corp. (FE) announced the issuance of $750 million in senior notes through an underwriting agreement with Mizuho Securities USA LLC, Morgan Stanley & Co. LLC, and Scotia Capital (USA) Inc. The offering comprised two series: $300 million of 1.600% Notes due 2026 and $450 million of 2.250% Notes due 2030. The company received net proceeds of approximately $742.2 million, which were used to repay all outstanding amounts under its term loan credit agreement. This debt issuance, registered under an existing shelf registration statement, extends FirstEnergy's debt maturity profile and provides capital to manage its existing debt obligations. The notes are subject to redemption terms, including a make-whole provision and redemption at par plus accrued interest closer to maturity. Investors should note the specific interest rates, maturity dates, and redemption features associated with each series of notes.

Key Highlights

  • 1FirstEnergy Corp. issued $750 million in aggregate principal amount of senior notes on June 8, 2020.
  • 2The issuance consists of two series: $300 million of 1.600% Notes due 2026 (Series A) and $450 million of 2.250% Notes due 2030 (Series B).
  • 3Net proceeds of approximately $742.2 million were received after deducting underwriters' discount and expenses.
  • 4The proceeds were used to repay all outstanding amounts under the Company's term loan credit agreement.
  • 5The offering was registered under the Company's automatic shelf registration statement on Form S-3.
  • 6The notes are redeemable at the Company's option prior to maturity under specific conditions ('make-whole' price or par plus accrued interest).
  • 7The issuance diversifies FirstEnergy's debt structure and extends its maturity profile.

Frequently Asked Questions

The primary purpose of this debt issuance was to raise capital to repay all outstanding amounts under FirstEnergy Corp.'s term loan credit agreement, thereby managing its existing debt obligations and potentially optimizing its capital structure.

The company issued $300 million of 1.600% Senior Notes, Series A, due January 15, 2026, and $450 million of 2.250% Senior Notes, Series B, due September 1, 2030. Interest payments vary based on the series and maturity date.

This issuance helps to refinance existing debt, potentially lowering interest expenses if the new rates are more favorable than the repaid term loan, and extends the company's debt maturity profile. The net proceeds received will reduce the company's outstanding credit facility balance.

Yes, the notes are redeemable by FirstEnergy at its option. Prior to a specified period before maturity, redemption can occur at a 'make-whole' price. Closer to maturity, they are redeemable at 100% of the principal amount plus accrued interest.