Ameren Illinois Announces Pricing of Senior Secured Notes Offering and Early Tender Offer Results

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Aug 13, 2012, 05:20 ET

ST. LOUIS, Aug. 13, 2012 /PRNewswire/ -- Ameren Illinois Company, a subsidiary of Ameren Corporation (NYSE: AEE), announced today that it is offering $400 million in principal amount of its 2.70% Senior Secured Notes due 2022 (the "New Notes"). The offering is expected to close on August 20, 2012.

Ameren Illinois intends to use the net proceeds from the offering of the New Notes, together with other available cash, to provide the total amount of funds required to complete its previously announced tender offer (the "Tender Offer") to repurchase for cash its outstanding 9.75% Senior Secured Notes due 2018 (the "9.75% Notes") and 6.25% Senior Secured Notes due 2018 (the "6.25% Notes," and together with the 9.75% Notes, the "Tender Offer Notes"), including the payment of interest on the Tender Offer Notes purchased thereunder and all related fees and expenses. The maximum aggregate purchase price (including principal and premium) for the Tender Offer Notes will be $450 million. Ameren Illinois also expects to use the net proceeds from the offering of the New Notes to redeem, at par value, all or a portion of $51.1 million aggregate principal amount of 5.50% debt maturing in 2014.

The joint book-running managers for the offering of the New Notes are Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, UBS Securities LLC, RBS Securities Inc. and Scotia Capital (USA) Inc.

Early Tender Results

Ameren Illinois also announced today the early tender results of the Tender Offer. As of 5:00 p.m., New York City time, on August 10, 2012 (the "Early Tender Date"), approximately $87 million in aggregate principal amount of the 9.75% Notes and approximately $193 million in aggregate principal amount of the 6.25% Notes had been validly tendered and not validly withdrawn.

The amount of each series of the Tender Offer Notes that will be purchased in the Tender Offer will be based on the maximum aggregate purchase price of $450 million and the order of priority for such series of Tender Offer Notes in accordance with the acceptance priority level set forth in the Offer to Purchase, as described below. As more fully described in the Offer to Purchase, because the 9.75% Notes have a higher acceptance priority level than the 6.25% Notes, all 9.75% Notes validly tendered and not validly withdrawn in the Tender Offer will be accepted for purchase up to the maximum aggregate purchase price of $450 million before any validly tendered and not validly withdrawn 6.25% Notes are accepted for purchase, up to the maximum aggregate purchase price of $450 million for all the Tender Offer Notes in the aggregate.

Holders who validly tendered (and did not subsequently withdraw) their Tender Offer Notes prior to the Early Tender Date, and whose Tender Offer Notes are accepted for purchase pursuant to the Tender Offer, will receive total consideration equal to $1,384.06 per $1,000 principal amount of 9.75% Notes and $1,218.36 per $1,000 principal amount of 6.25% Notes, in each case which includes an early tender premium of $30.00 per $1,000 principal amount of such Tender Offer Notes, plus any accrued and unpaid interest from the last interest payment date applicable to the relevant series of Tender Offer Notes up to, but not including, the settlement date for such Tender Offer Notes accepted for purchase. Holders of Tender Offer Notes that are validly tendered after the Early Tender Date but at or prior to the Expiration Date (as defined below) will receive $1,354.06 per $1,000 principal amount of 9.75% Notes and $1,188.36 per $1,000 principal amount of 6.25% Notes, plus any accrued and unpaid interest from the last interest payment date applicable to the relevant series of Tender Offer Notes up to, but not including, the settlement date for such Tender Offer Notes accepted for purchase. Withdrawal rights expired at 5:00 p.m., New York City time, on August 10, 2012.

Ameren Illinois' obligation to accept for payment and to pay for the 9.75% Notes and the 6.25% Notes in the Tender Offer is subject to the satisfaction or waiver of a number of general conditions described in the Offer to Purchase and to the successful completion of the offering of the New Notes.

The tender offer is being made upon and is subject to the terms and conditions set forth in the Offer to Purchase, dated July 30, 2012 (the "Offer to Purchase"), and the related Letter of Transmittal.

The tender offer will expire at midnight, New York City time, on August 24, 2012, unless extended or earlier terminated (the "Expiration Date").

This press release does not constitute an offer to purchase nor a solicitation of an offer to sell any securities. Ameren Illinois is making an offer to repurchase the Tender Offer Notes only by, and pursuant to the terms of, the Offer to Purchase. J.P. Morgan Securities LLC is acting as the dealer manager for the tender offer. The depositary and information agent is Global Bondholder Services Corporation. Copies of the Offer to Purchase, the Letter of Transmittal and related offering materials are available by contacting Global Bondholder Services Corporation at 866.470.3700 (toll-free) or 212.430.3774 (collect). Questions regarding the tender offer should be directed to J.P. Morgan Securities LLC, Liability Management Group, at 866.834.4666 (toll-free) or 212.834.4811 (collect).

This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction to any person to whom it is unlawful to make such offer or solicitation in such jurisdiction. The offering of the New Notes may be made by means of a prospectus and a related prospectus supplement, copies of which may be obtained when available from Deutsche Bank Securities Inc., 60 Wall Street, New York, New York 10005, Attention: Prospectus Group, Phone: 800.503.4611; J.P. Morgan Securities LLC, 383 Madison Avenue, New York, New York 10179, Attention: High Grade Syndicate Desk, Third Floor, Phone: 212.834.4533; or UBS Securities LLC, 299 Park Avenue, New York, New York 10107, Attention: Prospectus Department, Phone: 877.827.6444 ext. 561-3884.

About Ameren Illinois

Ameren Illinois delivers energy to 1.2 million electric and 809,000 natural gas customers in downstate Illinois, and its mission is to meet their energy needs in a safe, reliable, efficient and environmentally responsible manner. Ameren Illinois' service area covers more than 1,200 communities and 43,700 square miles. For more information, visit AmerenIllinois.com.

Forward-looking Statements

Statements made in this release which are not based on historical facts are considered "forward-looking" and, accordingly, involve risks and uncertainties that could cause actual results to differ materially from those discussed. Although such "forward-looking" statements have been made in good faith and are based on reasonable assumptions, there is no assurance that the expected results will be achieved. These statements include, without limitation, statements as to future expectations, beliefs, plans, strategies, objectives, events, conditions, and financial performance. Ameren Illinois is providing this cautionary statement to identify important factors that could cause actual results to differ materially from those anticipated. The following factors, in addition to those discussed under Risk Factors in Ameren Illinois' Annual Report on Form 10-K for the year ended December 31, 2011, and elsewhere in this release and in its other filings with the SEC, could cause actual results to differ materially from management expectations suggested in such "forward-looking" statements:

regulatory, judicial, or legislative actions, including changes in regulatory policies and ratemaking determinations, such as the outcome of Ameren Illinois' electric rate case filed in 2012; the expected Ameren Illinois appeal of a July 2012 Federal Energy Regulatory Commission order requiring a refund to transmission services customers; and future regulatory, judicial, or legislative actions that seek to change regulatory recovery mechanisms, such as the Illinois Energy Infrastructure Modernization Act ("IEIMA"), which provides for formula ratemaking in Illinois;
the effect of Ameren Illinois' participating in a new performance-based formula ratemaking process under the IEIMA, the related financial commitments required by the IEIMA and the resulting uncertain impact on the financial condition, results of operations and liquidity of Ameren Illinois;
the effects of, or changes to, the Illinois power procurement process;
changes in laws and other governmental actions, including monetary, fiscal, and tax policies;
changes in laws or regulations that adversely affect the ability of electric distribution companies, including Ameren Illinois, and other purchasers of wholesale electricity to pay their suppliers;
the effects of increased competition in the future due to, among other things, deregulation of certain aspects of Ameren Illinois' business at both the state and federal levels, and the implementation of deregulation;
the effects on demand for Ameren Illinois' services resulting from technological advances, including advances in energy efficiency and distributed generation sources, which generate electricity at the site of consumption;
increasing capital expenditure and operating expense requirements and Ameren Illinois' ability to recover these costs;
the cost and availability of purchased power and natural gas for distribution;
the effectiveness of Ameren Illinois' risk management strategies and the use of financial and derivative instruments;
the level and volatility of future prices for power in the Midwest;
business and economic conditions, including their impact on interest rates, bad debt expense, and demand for Ameren Illinois' products;
disruptions of the capital markets, deterioration in credit metrics, or other events that make Ameren Illinois' access to necessary capital, including short-term credit and liquidity, impossible, more difficult, or more costly;
Ameren Illinois' assessment of its liquidity;
the impact of the adoption of new accounting guidance and the application of appropriate technical accounting rules and guidance;
actions of credit rating agencies and the effects of such actions;
the impact of weather conditions and other natural phenomena on Ameren Illinois and its customers;
the impact of system outages;
transmission and distribution asset construction, installation, performance, and cost recovery;
the effects of Ameren Illinois' increasing investment in electric transmission projects and uncertainty as to whether it will achieve its expected returns in a timely fashion, if at all;
impairments of long-lived assets, intangible assets, or goodwill;
the effects of strategic initiatives, including mergers, acquisitions and divestitures, and any related tax implications;
the impact of current environmental regulations on utilities and new, more stringent or changing requirements, including those related to energy efficiency, that are enacted over time and that could increase Ameren Illinois' costs, result in an impairment of its assets, reduce its customers' demand for electricity or natural gas, or otherwise have a negative financial effect;
labor disputes, workforce reductions, future wage and employee benefits costs, including changes in discount rates and returns on benefit plan assets;
the inability of Ameren Illinois' counterparties and affiliates to meet their obligations with respect to contracts, credit facilities, and financial instruments;
legal and administrative proceedings; and
acts of sabotage, war, terrorism, cybersecurity attacks or intentionally disruptive acts.

Given these uncertainties, you should not place undue reliance on these forward-looking statements. Except to the extent required by the federal securities laws, Ameren Illinois undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

SOURCE Ameren Corporation