Talen Energy Supply, LLC Announces $400 Million Cash Tender Offer to Purchase Certain Outstanding Debt Securities to be Funded by LMBE-MC Subsidiary Project Financing

THE WOODLANDS, Texas, Oct. 30, 2018 /PRNewswire/ -- Talen Energy Supply, LLC (the "Company" or "Talen Energy Supply") announced today that it has commenced tender offers (the "Tender Offers") to purchase for cash upon the terms and subject to the conditions described in the Offer to Purchase (as defined below), its 4.600% Senior Notes due 2021 (the "2021 Notes"), 9.500% Senior Notes due 2022 (the "2022 Notes") and 6.500% Senior Guaranteed Notes due 2024 (the "2024 Notes" and, together with the 2021 Notes and the 2022 Notes, the "Securities"), up to an aggregate purchase price of $400,000,000, excluding unpaid interest from the applicable last interest payment date to, but not including, the applicable settlement date (subject to increase or decrease by the Company in its sole discretion, the "Aggregate Maximum Tender Amount"). The following table sets forth certain terms of the Tender Offers:

Talen Energy Supply concurrently announced today that its wholly owned project subsidiary known as LMBE-MC HoldCo II LLC ("LMBE-MC" or the "Project Borrower") has commenced a $450 million financing in the form of a Senior Secured 7-year Project Term Loan B Facility (the "Project Term Loan"). Net proceeds from the Project Term Loan are anticipated to be $385 million, after funding maintenance reserve accounts of the Project Borrower, fees and expenses, and will be utilized to fund the Tender Offers. 

Talen Energy Supply and LMBE-MC indirectly own 100% of the equity interests in two operating natural gas power generating facilities, Martins Creek ("Martins Creek") and Lower Mount Bethel ("Lower Mount Bethel"), located in the PJM power market with an aggregate capacity of 2.3 GW. Martins Creek is a 1,700 MW dual-fired (natural gas and fuel oil) power generating facility and Lower Mount Bethel is a 600 MW natural gas-fired combined-cycle power generating plant. Each is located in Bangor, Pennsylvania.

The Tender Offers are subject to the satisfaction of the conditions described in the Offer to Purchase, including the completion of the LMBE-MC Project Term Loan financing. Such conditions may be waived by the Company in its sole discretion, subject to applicable law. Any waiver of a condition by the Company will not constitute a waiver of any other condition.

Additionally, the Company will only accept for purchase 2024 Notes up to an aggregate purchase price for such 2024 Notes of $35,000,000, excluding unpaid interest from the applicable last interest payment date to, but not including, the applicable settlement date (subject to increase or decrease by the Company in its sole discretion, the "2024 Cap Amount"). Subject to the Aggregate Maximum Tender Amount, the 2024 Cap Amount and proration, the amount of a series of Securities that is purchased in the Tender Offers will be based on the order of priority (the "Acceptance Priority Level") for such series of Securities set forth in the table above.

This announcement does not contain the full terms and conditions of the Tender Offers, which are contained in the offer to purchase for cash, dated October 30, 2018 (as it may be amended or supplemented, the "Offer to Purchase"). The Company refers investors to the Offer to Purchase for the complete terms and conditions of the Tender Offers.

The Tender Offers will expire at 11:59 p.m., New York City time, on November 28, 2018 (such date and time, as it may be extended, the "Expiration Date"), unless earlier terminated.

The "Total Consideration" for each $1,000 principal amount of Securities validly tendered at or prior to 5:00 p.m., New York City time, on November 13, 2018 (such date and time, as it may be extended, the "Early Tender Date") and accepted for purchase pursuant to the Tender Offers will be the applicable total consideration for such series of Securities set forth in the table above, which is inclusive of an amount in cash equal to the amounts set forth in the table above under the heading "Early Tender Payment" (the "Early Tender Payment"). Holders of Securities (collectively, the "Holders") who validly tender their Securities after the Early Tender Date and at or prior to the Expiration Date will only be eligible to receive an amount equal to the Total Consideration minus the Early Tender Payment (the "Tender Offer Consideration").

Tendered Securities may be withdrawn from the Tender Offers at or prior to, but not after, 5:00 p.m., New York City time, on November 13, 2018.

Subject to the 2024 Cap Amount, Aggregate Maximum Tender Amount and proration, all Securities tendered at or before the Early Tender Date having a higher Acceptance Priority Level will be accepted before any Securities tendered at or before the Early Tender Date having a lower Acceptance Priority Level are accepted, and all Securities validly tendered after the Early Tender Date having a higher Acceptance Priority Level will be accepted before any Securities tendered after the Early Tender Date having a lower Acceptance Priority Level are accepted in the Tender Offers. However, if the Tender Offers are not fully subscribed as of the Early Tender Date, subject to the 2024 Cap Amount and the Aggregate Maximum Tender Amount, Securities tendered at or before the Early Tender Date will be accepted for purchase in priority to Securities tendered after the Early Tender Date, even if such Securities tendered after the Early Tender Date have a higher Acceptance Priority Level than Securities tendered prior to the Early Tender Date. If there are sufficient remaining funds to purchase some, but not all, of the Securities of any series, the amount of Securities purchased in that series may be subject to proration.

Following the completion of the Tender Offers, the Company or its affiliates may purchase additional Securities in the open market, in privately negotiated transactions, through tender or exchange offers, or otherwise, or the applicable issuer may redeem Securities that the issuer is permitted to redeem pursuant to their terms. The Company is not obligated to redeem any Securities that are not tendered and accepted in the Tender Offers.

Information Relating to the Tender Offers

The Offer to Purchase for all of the Securities is being distributed to Holders beginning today. Citigroup Global Markets, Inc. is the Dealer Manager for the Tender Offers. Investors with questions regarding the Tender Offers may contact Citigroup Global Markets, Inc. at (212) 723-6106 (New York) or (800) 558-3745 (U.S. toll free). Global Bondholder Services Corporation is the tender agent for the Tender Offers. Copies of the Offer to Purchase and any related offer documents may be obtained by contacting Global Bondholder Services Corporation by phone at (212) 430-3774 (New York) or (866) 794-2200 (toll-free) or by email at [email protected].

None of the Company, its sole member, their indirect parent company, Talen Energy Corporation, or its affiliates, their respective boards of directors, shareholders and members, the dealer manager, the tender agent or the trustee with respect to the Securities is making any recommendation as to whether Holders should tender any Securities in response to any of the Tender Offers. Holders must make their own decision as to whether to tender any of their Securities, and, if so, the principal amount of Securities to tender.

This press release is for informational purposes only and is not an offer to buy, or the solicitation of an offer to sell, any of the Securities and the Tender Offers do not constitute offers to buy or the solicitation of offers to sell Securities in any jurisdiction or in any circumstances in which such offers or solicitations are unlawful. The full details of the Tender Offers, including complete instructions on how to tender Securities, are included in the Offer to Purchase. Holders are strongly encouraged to read carefully the Offer to Purchase, including materials incorporated by reference therein, because they will contain important information.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company. These risks include, but are not limited to, the Company's ability to complete any of the Tender Offers and reduce its outstanding indebtedness or complete the LMBE-MC Project Term Loan financing. Investors are cautioned that any such statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in the forward-looking statements. The forward-looking statements in this press release are made as of the date hereof, and the Company does not undertake any obligation to update the forward-looking statements as a result of new information, future events or otherwise.

About Talen Energy

Talen Energy Supply is one of the largest competitive energy and power generation companies in North America. The Company owns or controls approximately 15,000 megawatts of generating capacity in well-developed, structured wholesale power markets, principally in the Northeast, Mid-Atlantic and Southwest regions of the United States. For more information, visit www.talenenergy.com.

Investor Contacts

Stacey Peterson
Senior Vice President, Treasurer, and Head of Investor Relations
[email protected]

Ryan Koren
Senior Manager, Investor Relations and FP&A
610-601-0477
[email protected]

SOURCE Talen Energy Supply