ELWOOD ENERGY LLC: Solicitation of Consents Relating to the 8.159% Senior Secured Bonds due 2026 (CUSIP No. 290408AB9)

SCHAUMBURG, Ill., Aug. 25, 2017 /PRNewswire/ -- Elwood Energy LLC (the "Issuer"), the owner of a 1,350 MW gas-fired electric generating facility located in Elwood, Illinois (the "Project") and a wholly-owned subsidiary of J-POWER USA Generation, L.P., announced today that it has commenced a solicitation of consents related to its 8.159% Senior Secured Bonds due 2026 (CUSIP No. 290408AB9).  Due to amortization, the amortized principal amount outstanding of the Bonds is $145,612,440 or $362.22 per Bond (reduced from the original principal amount at issuance of $402,000,000 or $1,000 per Bond). Elwood Energy LLC, as issuer of the Bonds, wishes to amend the October 23, 2001 Trust Indenture (as supplemented and amended by the First Supplemental Indenture, dated October 23, 2001, Second Supplemental Indenture, dated as of March 1, 2002 and Third Supplemental Indenture, dated February 14, 2013) to amend the definition of "Permitted PPA" and waive certain Defaults or Events of Default under the Indenture.

When the Issuer originally issued the Bonds in 2001, all or almost all of the electrical capacity and energy from the Project was contracted pursuant to power sales agreements with purchasers which were load-serving entities or affiliates of load-serving entities, which contracted for the electrical capacity and energy from the Project to serve existing retail customers. Today, in geographic areas within markets served by PJM Interconnection, L.L.C. ("PJM"), load-serving entities more typically purchase electrical capacity and energy through the wholesale market operated by PJM or its affiliates. As a result, rather than seeking bilateral power sales agreements with purchasers, the Issuer is bidding into the three year capacity auction operated by PJM or its affiliates, and bidding into the daily energy auctions operated by PJM or its affiliates.

The Issuer expects to continue to bid the Project into the electrical capacity and energy auctions and desires that capacity agreements entered into with PJM or its affiliates will satisfy the definition of Permitted PPA under the Indenture although PJM or its affiliates are rated only by Moody's and not also by S&P.  After giving effect to the Proposed Amendment, an electrical capacity contract obtained pursuant to an electrical capacity auction by PJM, which is rated Aa2 by Moody's, would be a Permitted PPA.

The Consent Solicitation seeks to amend the definition of Permitted PPA to (i) permit a purchaser of electrical capacity and/or energy or a hedge counterparty under a Permitted PPA to satisfy the minimum ratings requirement through a rating by either Moody's or S&P, and (ii) include an accepted bid into the forward electrical capacity auction, or similar sale process, operated by PJM or one of its affiliates. The Proposed Amendment also includes a waiver of any and all Defaults or Events of Default arising out of the Issuer's inclusion of any arrangement of the type described in clause (iii) of the definition of Permitted PPA (after giving effect to the Fourth Supplemental Indenture) as a Permitted PPA prior to the date hereof are hereby waived.

Holders of the Bonds are referred to the Consent Solicitation Statement, dated August 25, 2017, and the related Letter of Consent for the detailed terms and conditions of the Consent Solicitation.  The record date for determining the holders entitled to consent is August 24, 2017.  The Consent Solicitation will expire at 5:00 p.m., New York City time, on August 31, 2017 (the "Expiration Time"), unless extended in Elwood Energy LLC's sole discretion.

Subject to certain conditions, Elwood Energy LLC offers a consent payment equal to $5.00 per $1,000 in amortized principal amount of the Bonds  in cash to holders for which consents are validly delivered and not properly revoked prior to the Expiration Time.

Elwood Energy LLC has engaged MUFG Securities Americas Inc. to act as Solicitation Agent for the Consent Solicitation.  Global Bondholder Services Corporation has been engaged to act as the Information and Tabulation Agent for the Consent Solicitation.  Questions or requests for assistance or additional copies of the Consent Solicitation Statement, the Letter of Consent and related documents may be directed to Global Bondholder Services Corporation at +1 (866) 924-2200 (toll-free) or +1 (212) 430-3774 (for banks and brokers) or at [email protected].  A holder of Bonds may also contact the Solicitation Agent at +1 (212) 405-7481 or +1 (877) 744-4532, or such holder's broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Consent Solicitation.

This press release is for informational purposes only and is not a solicitation of consents.  The Consent Solicitation is only being made pursuant to the Consent Solicitation Statement dated August 25, 2017 and the related Letter of Consent.  The Consent Solicitation is subject to certain conditions and presents certain risks for the holders, as set forth more fully in the Consent Solicitation Statement.  Elwood Energy LLC retains the rights to waive or modify any term of, or to terminate, the Consent Solicitation for any reason prior to the Expiration Time.

SOURCE J-Power USA Development Co., Ltd.