Vistra Corp. (VST, Financial), through its subsidiary Vistra Operations Company LLC, has successfully completed a private offering of senior secured notes totaling $1.25 billion. This strategic financial maneuver includes $500 million of 5.050% senior secured notes due in 2026 and $750 million of 5.700% senior secured notes due in 2034. The offering was conducted privately, targeting qualified institutional buyers and non-U.S. persons under specific regulatory frameworks.
The notes, issued under an indenture agreement with Wilmington Trust, are fully and unconditionally guaranteed by subsidiary guarantors. They are secured by a first-priority interest in collateral that includes a substantial portion of the issuer's assets and rights. Notably, the collateral will be released if the issuer's senior, unsecured long-term debt securities achieve an investment-grade rating from two of the three major rating agencies.
Vistra Corp. plans to utilize the approximately $1.24 billion in net proceeds from this offering for general corporate purposes. This includes refinancing existing debt, funding early payout of purchase price installments to Avenue Capital Management II, L.P., and covering fees and expenses related to the offering.
Interest on the notes will be payable semi-annually starting June 30, 2025. The 2026 notes will mature on December 30, 2026, while the 2034 notes will mature on December 30, 2034. The issuer retains the option to redeem the notes under specific conditions, including a make-whole premium for early redemption.
In the event of a change of control and subsequent downgrade of the notes' rating, Vistra Operations is obligated to offer repurchase of the notes at 101% of their principal amount, plus accrued interest. The indenture also imposes certain covenants and restrictions on the issuer and its subsidiaries, including limitations on creating liens and asset sales.
This financial strategy underscores Vistra Corp.'s commitment to optimizing its capital structure and supporting its long-term corporate objectives.
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