AES Corp (AES) to Offer 10M Equity Units

The AES Corporation (NYSE: AES) announced today its intention to offer to sell, subject to market and other conditions, 10,000,000 Equity Units, each with a stated amount of $100. The Company expects the Units will initially consist of an aggregate of 1,000,000 shares of Series A Cumulative Perpetual Convertible Preferred Stock, with an aggregate liquidation preference of $1.0 billion, and contracts to purchase, for an aggregate of $1.0 billion, shares of the Company's common stock. The Company expects to grant to the underwriters an option to purchase up to an additional 1,500,000 Units, solely to cover over-allotments. The offering will be made pursuant to an effective registration statement filed with the Securities and Exchange Commission (the "SEC").

The Company expects to pay, quarterly in arrears, contract adjustment payments on the stated amount of each Unit and cumulative dividends, when, as and if declared by the Company's board of directors, on the $1,000 liquidation preference per share of Convertible Preferred Stock, in each case, at a rate to be determined in connection with the offering. The Company may pay such contract adjustment payments and dividends in cash, shares of Common Stock or a combination of cash and shares of Common Stock, at the Company's election, unless the Company has previously irrevocably elected a contract adjustment payment method or dividend payment method, as the case may be, to apply. The Company may also, in its discretion, defer contract adjustment payments on the Units.

Each share of Convertible Preferred Stock may be converted only after being separated from the Units and, prior to February 15, 2024, only upon the occurrence of certain fundamental change events if such fundamental change event occurs prior to a successful remarketing of the Convertible Preferred Stock. Upon any such conversion, the Company will deliver in respect of each $1,000 liquidation preference of the Convertible Preferred Stock being converted (i) one share of the Company's Series B Preferred Stock or, solely with respect to conversions in connection with a redemption, up to $1,000 in cash and (ii) shares of Common Stock, if any, in respect of any conversion value in excess of the liquidation preference of the Convertible Preferred Stock being converted.

The Convertible Preferred Stock is expected to be remarketed during either an optional remarketing period beginning on, and including, November 15, 2023 and ending on, and including, February 1, 2024 or a final remarketing period beginning on, and including, February 7, 2024 and ending on, and including, February 13, 2024. Upon any successful remarketing, the conversion rate and/or the dividend rate of the Convertible Preferred Stock may be increased, and the earliest redemption date for the Convertible Preferred Stock may be changed to a later date that is on or prior to March 21, 2025.

The Convertible Preferred Stock is perpetual, but the Company may redeem all or any portion of the outstanding Convertible Preferred Stock from and after March 22, 2024 (which date may be changed to a later date as described above), at a redemption price equal to 100% of the liquidation preference thereof, plus any accumulated and unpaid dividends.

The Company intends to use the net proceeds from the offering to develop its renewables business, U.S. utility businesses, LNG infrastructure and for other developments determined by management.

Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, BofA Securities and Morgan Stanley & Co. LLC are acting as joint book-running managers of this offering.

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