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ARLINGTON, Va. - The AES Corporation (NYSE:AES), a global energy company, announced its plan to issue senior notes in a registered public offering, subject to market conditions. With total debt of nearly $30 billion and a debt-to-equity ratio of 8.2x, the company aims to use the net proceeds to fund the repurchase of its existing 3.300% Senior Notes due in 2025 and to cover related fees and expenses. The move is part of a tender offer to buy back any and all of the 2025 Notes for cash. According to InvestingPro analysis, AES currently appears undervalued based on its Fair Value metrics.
Remaining proceeds from the offering, after the tender offer is completed, will be used to retire other outstanding debt and for general corporate purposes. Despite its debt management challenges, AES maintains a notable 5.87% dividend yield and has raised its dividend for 13 consecutive years. Citigroup Global Markets Inc., BNP Paribas Securities Corp., and other financial institutions are serving as joint book-running managers for the offering.
AES has filed an effective shelf registration statement with the Securities and Exchange Commission (SEC) related to the notes. The sale is being conducted through a prospectus supplement and an accompanying base prospectus.
The company cautions that this press release contains forward-looking statements subject to various risks and uncertainties, including the ability to market and sell the notes and general economic conditions. These statements do not guarantee future results but reflect AES’s current expectations.
Investors are encouraged to read AES’s SEC filings, including the prospectus supplement related to the offering and the company’s annual report, for a better understanding of the risks associated with AES’s business. For deeper insights into AES’s financial health, InvestingPro subscribers can access comprehensive analysis, including 10+ additional ProTips and detailed financial metrics through the Pro Research Report, available exclusively on the platform.
This announcement is based on a press release statement and does not constitute an offer to sell or a solicitation of an offer to buy any securities. The offering is only made by means of the prospectus supplement and related base prospectus, which can be obtained from the financial institutions managing the offering.
In other recent news, AES Corporation announced a restatement of its financial results for the second and third quarters of 2024 due to an overstatement of impairment expenses related to its stake in AES Brasil Energia S.A. The restatement, resulting from incomplete data used in asset valuation, does not affect previously reported revenues or net income. In a separate development, AES Corp reported its fourth-quarter 2024 earnings, with earnings per share (EPS) of $0.54 exceeding forecasts, although revenue fell short at $2.96 billion against an expected $3.11 billion. Meanwhile, BofA Securities upgraded AES’s stock rating from Underperform to Neutral, raising the price target to $13, as a result of strategic changes aimed at enhancing financial prospects. Conversely, Seaport Global Securities downgraded AES from Neutral to Sell, with a new price target of $7, citing concerns over meeting 2027 EBITDA targets and operational challenges in the Renewables segment. Mizuho Securities also adjusted its price target for AES, lowering it to $15 from $16, while maintaining an Outperform rating, acknowledging the company’s strategic efforts to cut costs and improve financial outcomes. These developments reflect a mixed outlook for AES Corp, with strategic initiatives aimed at improving financial performance amid challenges.
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