Item 1.01 Entry into a Material Definitive Agreement
On May 25, 2016, The AES Corporation (the Company or AES) completed its previously announced offering of $500,000,000 aggregate
principal amount of its 6.000% Senior Notes due 2026 (the Notes). Morgan Stanley & Co. LLC and Barclays Capital Inc. acted as joint book-running managers for the offering of the Notes.
The public offering price of the Notes was 100.00% of the principal amount. AES received net proceeds of approximately $494.3 million, after deducting
underwriting discounts and estimated offering expenses payable by the Company. AES intends to use the net proceeds from the offering of the Notes to repay or redeem certain of its outstanding debt, including a portion of its senior unsecured
floating rates notes due 2019, and to pay applicable premiums and related fees and expenses. Any remaining proceeds will be used for general corporate purposes.
The Notes were offered and sold pursuant to an Underwriting Agreement (the Underwriting Agreement), dated May 11, 2016, among AES and Morgan
Stanley & Co. LLC and Barclays Capital Inc., under AESs automatic shelf registration statement (the Registration Statement) on Form S-3 (Registration No. 333-209671), filed with the Securities and Exchange Commission
(the SEC) on February 23, 2016. AES has filed with the SEC a prospectus supplement, dated May 11, 2016, together with the accompanying prospectus, dated February 23, 2016, relating to the offer and sale of the Notes.
The Notes were issued on May 25, 2016 pursuant to a Senior Indenture, dated as of December 8, 1998 (the Base Indenture), as amended
and supplemented by a ninth supplemental indenture, dated as of April 3, 2003 (the Ninth Supplemental Indenture) and the twentieth supplemental indenture, dated as of May 25, 2016 (the Twentieth Supplemental
Indenture, and together with the Base Indenture and the Ninth Supplemental Indenture, the Indenture), between AES and Wells Fargo Bank, N.A., as successor to Bank One, National Association (formerly known as The First National Bank
of Chicago), as Trustee.
Interest on the Notes accrues at a rate of 6.000% per annum, and interest is payable on May 15 and November 15 of
each year, beginning November 15, 2015. The Notes will mature on May 15, 2026. The Company may redeem all or a part of the Notes on or after May 15, 2021, on any one or more occasions, as described in the Indenture. In addition, at
any time prior to May 15, 2021, the Company may redeem all or a part of the Notes, on any one or more occasions, at a redemption price equal to 100.00% of the principal amount of the Notes to be redeemed plus a make-whole premium as
of, and accrued and unpaid interest, if any, to, but not including, the date of redemption, as described in the Indenture. In addition, at any time and on one or more occasions, on or prior to May 15, 2019, the Company may redeem, in the
aggregate for all such redemptions, up to 35% of the aggregate principal amount of the notes with the net cash proceeds from certain equity offerings at a redemption price equal to 106.00% of the principal amount of the notes to be redeemed, plus
accrued and unpaid interest, if any, to, but not including, the date of redemption, as described in the Indenture.
Upon the occurrence of a Change of
Control Triggering Event (as defined in the Indenture), the Company must offer to repurchase the Notes at a price equal to 101.00% of their principal amount, plus accrued and unpaid interest, if any, to, but not including, the date of repurchase.
The Indenture also contains covenants, subject to certain exceptions, restricting the ability of the Company to incur debt secured by any Principal Property (as defined in the Indenture) or by the debt or capital stock of any subsidiary held by the
Company; to enter into any sale-lease back transactions involving any Principal Property; or to consolidate, merge, convey or transfer substantially all of its assets; as well as other covenants that are customary for debt securities like the Notes.
In addition, the Indenture contains customary events of default.
The above description of the Underwriting Agreement, the Indenture and the Notes is qualified in its entirety by
reference to the Underwriting Agreement, the Indenture and the form of Notes. The Base Indenture has been incorporated by reference as Exhibit 4.3 to the Registration Statement and the Underwriting Agreement has been incorporated by reference
as Exhibit 1.1 to AESs Current Report on Form 8-K filed with the SEC on May 12, 2016. The Twentieth Supplemental Indenture and form of Notes are attached to this Current Report on Form 8-K as Exhibit 4.1 and Exhibit 4.2, respectively, and
are incorporated by reference into the Registration Statement. An opinion regarding the legality of the Notes is incorporated by reference into the Registration Statement and is attached to this Current Report on Form 8-K as Exhibit 5.1.