Vistra Energy (VST) Announces Proposed Notes Offering

Vistra Corp. (NYSE: VST) (the "Company" or "Vistra") announced today the launch of senior secured notes due 2026 (the "2026 Notes") and senior secured notes due 2034 (the "2034 Notes", and together with the 2026 Notes, the "Notes") in a private offering (the "Offering") to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), and to certain non-U.S. persons in accordance with Regulation S under the Securities Act. The Notes will be senior, secured obligations of Vistra Operations Company LLC, a Delaware limited liability company and an indirect wholly owned subsidiary of the Company (the "Issuer"). The Notes will be fully and unconditionally guaranteed by certain of the Issuer's current and future subsidiaries that also guarantee the Issuer's Credit Agreement, dated as of October 3, 2016 (as amended, the "Credit Agreement"), by and among the Issuer, as borrower, Vistra Intermediate Company LLC, as parent guarantor, the other guarantors party thereto, Citibank, N.A., as administrative and collateral agent, various lenders and letter of credit issuers party thereto, and the other parties named therein. The Notes will be secured by a first-priority security interest in the same collateral that is pledged for the benefit of the lenders under the Credit Agreement and certain other agreements. The collateral securing the Notes will be released if the Issuer's senior, unsecured long-term debt securities obtain an investment grade rating from two out of the three rating agencies, subject to reversion if such rating agencies withdraw the investment grade rating of the Issuer's senior, unsecured long-term debt securities or downgrade such rating below investment grade.

The Company intends to use the proceeds from the Offering for general corporate purposes, including to refinance outstanding indebtedness, to fund the opportunistic early payout of the purchase price installment payments scheduled to be paid in 2025 and 2026 (the "Vistra Vision purchase installment payments") to Avenue Capital Management II, L.P. ("Avenue") for the previously announced purchase by the Company from Avenue of its equity interest in Vistra Vision LLC ("Vistra Vision"), and to pay fees and expenses related to the Offering.

The 2026 Notes Offering, and the intended associated early extinguishment of the Vistra Vision purchase installment payments to Avenue represents an opportunistic leverage-neutral and NPV-positive transaction for the Company, supported by the lower implied interest rate and favorable timing of payments. It is anticipated that the Vistra Vision purchase installment payments obligation to Avenue (which total approximately $550 million) will be extinguished in exchange for the payment of approximately $506 million to Avenue on December 31, 2024.¹

The Notes will not be registered under the Securities Act or the securities laws of any state or other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy the securities described above, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction.

1. Upon pricing of at least $1.25 billion in the Offering, we intend to enter into an amendment to that certain Class B Unit Purchase Agreement with Avenue, dated as of September 18, 2024, to provide for payment in full at closing for the purchase of Vistra Vision equity interests from Avenue. Together with the originally scheduled payment due at closing of $314 million, the total amount due to Avenue at closing pursuant to the amendment would be approximately $820 million, subject to adjustment based on the difference between $44 million and the amount of dividends paid to Avenue prior to closing.

You May Also Be Interested In

• LeonaBio (LONA) Price Target Cut to $17 by Citizens Amid Pipeline Development
• Rothschild Redburn Upgrades Apple (AAPL) to Buy
• Keefe, Bruyette & Woods Downgrades Crescent BDC (CCAP) to Market Perform