| Item 1.01. | Entry into a Material Definitive Agreement. |
On December 11, 2023, Vistra Operations Company LLC (“Vistra Operations” or the “Issuer”), an indirect wholly owned subsidiary of Vistra Corp. (the “Company”), entered into purchase agreements (together, the “Purchase Agreements”) by and among the Issuer, certain subsidiaries of the Issuer that are guarantors under the Credit Agreement (as defined below) (together with such other subsidiaries that become guarantors from time to time, the “Subsidiary Guarantors”), and Citigroup Global Markets Inc., as representative of the several initial purchasers named in Schedules I thereto (the “Initial Purchasers”), in connection with the offer and sale by the Issuer, and the purchase by the Initial Purchasers, of $400 million aggregate principal amount of the Issuer’s 6.950% senior secured notes due 2033 (the “Secured Notes”), which form a part of the same series of the Issuer’s outstanding 6.950% Senior Secured Notes due 2033 issued on September 26, 2023 in a private offering (the “Secured Offering”) and $350 million aggregate principal amount of the Issuer’s 7.750% senior unsecured notes due 2031 (the “Unsecured Notes” and, together with the Secured Notes, the “Notes”), which form a part of the same series of the Issuer’s outstanding 7.750% Senior Notes due 2031 issued on September 26, 2023, in a concurrent private offering (the “Unsecured Offering” and, together with the Secured Offering, the “Offerings”). The Secured Notes will be senior, secured obligations of the Issuer and will be fully and unconditionally guaranteed by the Subsidiary Guarantors. The Unsecured Notes will be senior, unsecured obligations of the Issuer and will be fully and unconditionally guaranteed by the Subsidiary Guarantors.
The Offerings are expected to close on or about December 22, 2023, subject to customary closing conditions. The consummation of the Secured Offering is not conditioned upon the consummation of the Unsecured Offering, and the consummation of the Unsecured Offering is not conditioned upon the consummation of the Secured Offering.
The sale of the Notes will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), and the Notes will be sold on a private placement basis to persons reasonably believed to be qualified institutional buyers under Rule 144A under the Securities Act and outside the United States to non-U.S. persons in compliance with Regulation S under the Securities Act.
The Purchase Agreements contain customary representations, warranties, covenants and agreements by Vistra Operations, the Subsidiary Guarantors and the Initial Purchasers, including indemnification for certain liabilities under the Securities Act, other obligations of the parties and termination provisions. The representations, warranties and covenants contained in each Purchase Agreement were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to such agreement, and may be subject to limitations agreed upon by the contracting parties.
The foregoing is only a brief description of the material terms of the Purchase Agreements and does not purport to be a complete description of the rights and obligations of the parties thereunder. Such description is qualified in its entirety by reference to the Purchase Agreements, which are attached to this Current Report on Form 8-K (the “Current Report”) as Exhibits 10.1 and 10.2, and are incorporated by reference into this Item 1.01.
The Company intends to use the proceeds from the Offerings together with cash on hand to (i) fund cash tender offers (the “Tender Offers”) to purchase up to an aggregate principal amount that will not result in an aggregate purchase price that exceeds $750,000,000 (subject to increase or decrease by the Issuer) of the Issuer’s outstanding 3.55% Senior Secured Notes due 2024 (“3.55% 2024 Notes”), 4.875% Senior Secured Notes due 2024 (“4.875% 2024 Notes”), and 5.125% Senior Secured Notes due 2025 (“5.125% 2025 Notes”, and together with 3.55% 2024 Notes and 4.875% 2024 Notes, the “Tender Offer Notes”), subject to the terms and conditions set forth in the Offer to Purchase dated December 11, 2023 related to the Tender Offers, (ii) pay any fees and expenses related to the Offerings and the Tender Offers, and (iii) the remainder, if any, for general corporate purposes. The Company has retained one of the Initial Purchasers to act as lead dealer manager and certain of the other Initial Purchasers to act as co-dealer managers in connection with the Tender Offers and has agreed to reimburse them for their reasonable out-of-pocket expenses.
Certain affiliates of the Initial Purchasers from time to time have acted or in the future may continue to act as agents and lenders under credit facilities of the Company, the Issuer, subsidiaries and/or their affiliates, including under the Credit Agreement, dated as of October 3, 2016 (as amended, the “Credit Agreement”), by and among the Issuer, as borrower, Vistra Intermediate Company LLC, the guarantors party thereto, Credit Suisse AG, Cayman Islands Branch (as successor to Deutsche Bank AG New York Branch), as administrative and collateral agent, various lenders and letter of credit issuers party thereto, and the other parties named therein, and other credit facilities of the Issuer, for which they expect to receive customary compensation, and may receive a portion of the net proceeds from the Offerings to the extent such proceeds are used to repay borrowings under the Credit Agreement or such credit facilities. Additionally, certain of the Initial Purchasers or their respective affiliates may be lenders under or hold certain of the outstanding indebtedness, and they may therefore receive a portion of the proceeds from the Offerings to the extent used to refinance such outstanding indebtedness. In addition, certain Initial Purchasers or their respective affiliates are acting as dealer managers in connection with the Tender Offers and such certain Initial Purchasers or their respective affiliates may also receive proceeds from the purchase of the Tender Offer Notes to the extent that such Initial Purchasers or their respective affiliates are holders of the Tender Offer Notes and tender such Tender Offer Notes pursuant to the terms of the Tender Offers. Further, certain of the Initial Purchasers and their affiliates perform commercial banking, investment banking and advisory services for the Company, the Issuer and their affiliates from time to time for which they have received customary fees and commissions, and they expect to provide these services in the future, for which they expect to receive customary fees and commissions. The Initial Purchasers or their affiliates may, from time to time, engage in transactions with and perform services for the Company and the Issuer in the ordinary course of their business for which they may receive customary fees and commissions.
