NRG Energy’s $4 Billion Notes Offering

Baker Botts LLP advised NRG Energy, Inc. on the deal.

NRG Energy, Inc. (“NRG”) completed the sale of (i) $500 million aggregate principal amount of its 2.000% senior secured first lien notes due 2025 and $900 million aggregate principal amount of its 2.450% senior secured first lien notes due 2027 and (ii) $500 million aggregate principal amount of its 3.375% senior unsecured notes due 2029 and $1,030 million aggregate principal amount of its 3.625% senior unsecured notes due 2031.

The senior secured notes due 2027 were issued under NRG’s Sustainability-Linked Bond Framework, a landmark issuance, with NRG pioneering the first Sustainability-Linked Bond (SLB) in North America, and the first issued by any energy company outside of Europe. The SLB links attractive financing to the realization of NRG’s previously announced goals to achieve a 50% reduction of absolute greenhouse gas (GHG) emissions by 2025, and reach net-zero GHG emissions by 2050, from the current 2014 baseline.

NRG intends to use the net proceeds from the notes offerings, together with cash on hand, to fund the purchase price of the previously announced acquisition of Direct Energy, the North American energy supply, services and trading business of Centrica plc, and to pay fees and expenses relating to the acquisition, if consummated.

Concurrently with the sale of the notes, Alexander Funding Trust, a newly-formed Delaware statutory trust, completed its private offering of 900,000 of its pre-capitalized trust securities redeemable 2023 for an aggregate purchase price of $900 million. The trust will initially invest the proceeds from the sale in a portfolio of principal and interest strips of U.S. Treasury securities that will be used to provide collateral to certain financial institutions that will issue letters of credit to support NRG’s existing and future collateral obligations.

The Baker Botts team included Preston Bernhisel (Picture), Jennifer Wu (Senior Associate, Austin), Jacqueline Scioli (Associate, Dallas), Derek Gabriel (Associate, Dallas), Elise Wang (Legal Intern, Dallas), Martin Toulouse (Partner, New York), Rachael Lichman (Partner, Houston), Tim Coxon (Special Counsel, New York), Grace Matthews (Associate, Austin), Janice Han (Associate, New York); Rachel Collier (Associate, Houston), Robin Melman (Partner, New York), Terence Rozier-Byrd (Partner, New York), Jon Nelsen (Partner, Austin), Michael Bresson (Partner, Houston), Matt Donnelly (Special Counsel, Washington, D.C.), Robert Langley (Special Counsel, New York), Peter Farrell (Senior Associate, Washington, D.C.), Jacob Walley (Associate, Houston) and Evan Skeen (Associate, Houston).

Involved fees earner: Preston Bernhisel – Baker Botts; Michael Bresson – Baker Botts; Rachel Collier – Baker Botts; Timothy Coxon – Baker Botts; Matt Donnelly – Baker Botts; Peter Farrell – Baker Botts; Derek Gabriel – Baker Botts; Janice Han – Baker Botts; Rachael Lichman – Baker Botts; Grace Matthews – Baker Botts; Robin Melman – Baker Botts; Jon Nelsen – Baker Botts; Terence Rozier-Byrd – Baker Botts; Jacqueline Scioli – Baker Botts; Evan Skeen – Baker Botts; Martin Toulouse – Baker Botts; Jacob Walley – Baker Botts; Jennifer Wu – Baker Botts;

Law Firms: Baker Botts;

Clients: NRG Energy;

Author: Ambrogio Visconti