PPL Completes Final Portion of Permanent Financing Plan for Kentucky Acquisition

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Nov 09, 2010, 10:13 ET

ALLENTOWN, Pa., Nov. 9, 2010 /PRNewswire-FirstCall/ -- PPL Corporation (NYSE: PPL) yesterday (11/8) completed the final component of the permanent financing plan for the acquisition of LG&E and KU Energy LLC, formerly E.ON U.S., the parent company of Louisville Gas and Electric Company (LG&E) and Kentucky Utilities Company (KU). The three Kentucky entities have agreed to sell approximately $2.9 billion aggregate principal amount of debt.

The debt will be used primarily to repay interim financing from PPL to the three Kentucky entities issued in connection with PPL's recent purchase of the companies. PPL financed the acquisition with a combination of cash, credit facility drawings and the proceeds of PPL's June 2010 issuances of approximately $3.5 billion of common stock and equity units.

KU has agreed to sell $1.5 billion of first mortgage bonds consisting of $750 million of 30-year debt with a coupon of 5-1/8 percent, priced to yield 5.2 percent to investors; $500 million of 10-year debt with a coupon of 3-1/4 percent, priced to yield 3.3 percent to investors; and $250 million of 5-year debt with a coupon of 1-5/8 percent, priced to yield 1.7 percent to investors.

LG&E has agreed to sell $535 million of first mortgage bonds consisting of $285 million of 30-year debt with a coupon of 5-1/8 percent, priced to yield 5.2 percent to investors; and $250 million of 5-year debt with a coupon of 1-5/8 percent, priced to yield 1.7 percent to investors.

LG&E and KU Energy has agreed to sell $875 million of senior unsecured debt consisting of $475 million of 10-year senior unsecured debt with a coupon of 3-3/4 percent, priced to yield 3.8 percent to investors; and $400 million of 5-year debt with a coupon of 2-1/8 percent, priced to yield 2.2 percent to investors.

The LG&E and KU Energy sale is expected to close on or about Nov. 12, 2010, and the LG&E and KU sales are expected to close on or about Nov. 16, 2010.

The offerings of the subsidiaries' debt securities described in this news release were made only to qualified institutional buyers in accordance with Rule 144A and outside the United States to non-U.S. persons pursuant to Regulation S under the Securities Act of 1933, as amended.

The debt securities described in this news release have not been registered under the Securities Act of 1933, as amended, or the securities laws of any other jurisdiction and may not be offered or sold absent registration or an applicable exemption from registration requirements.

This news release does not constitute an offer to sell or a solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities law of any such jurisdiction.

PPL Corporation (NYSE: PPL), headquartered in Allentown, Pa., owns or controls about 19,000 megawatts of generating capacity in the United States, sells energy in key U.S. markets, and delivers electricity and natural gas to about 5.2 million customers in the United States and the United Kingdom. More information is available at www.pplweb.com .

Certain statements contained in this news release, including statements with respect to securities offerings, are "forward-looking statements" within the meaning of the federal securities laws. Although PPL Corporation believes that the expectations and assumptions reflected in these forward-looking statements are reasonable, these statements involve a number of risks and uncertainties, and actual results may differ materially from the results discussed in the statements. Any such forward-looking statements should be considered in light of such factors and in conjunction with PPL Corporation's Form 10-K and other reports on file with the Securities and Exchange Commission.

SOURCE PPL Corporation