PPL seeks exchange of Ironwood bonds
A PPL Corp. company is asking holders of the debt used to build a power plant in Lebanon County to exchange their bonds.
PPL subsidiary PPL Energy Supply is offering senior notes paying 4.6 percent and due in 2021 for senior secured bonds, paying 8.857 percent and due in 2025, of PPL Ironwood, a PPL Energy Supply subsidiary.
PPL Energy Supply is offering $1,270 in its bonds for every $1,000 in Ironwood bonds. The offer is contingent on at least half the Ironwood bonds being exchanged, PPL said.
Last spring, PPL completed the acquisition of the natural-gas-fired 705-megawatt Ironwood plant from Virginia-based AES Corp. PPL assumed about $217 million in construction debt as part of the $304 million purchase price.
For the Ironwood bondholders, the exchange will give them bonds backed by a company with many assets and a stronger credit rating, as opposed to one with a single asset, the Ironwood plant, PPL spokesman George Lewis said.
PPL also is seeking bondholders’ consent to eliminate restrictive covenants on the Ironwood bonds.
“We need consent from a majority of the Ironwood bond owners to make those changes, which is why the offer is contingent on owners agreeing to exchange at least 50 percent of the Ironwood bonds,” Lewis said in an email.
The offer expires Feb. 8, though PPL might extend it.