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aes corporation accelerates renewable energy commitment with 950m green bond 384

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AES Corporation Accelerates Renewable Energy Commitment with $950M Green Bond

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Robert Tavares

May 16, 2024 - 21:54 pm

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AES Corporation Announces $950 Million Green Bond Offering to Fund Renewable Energy Projects

ARLINGTON, Va., May 16, 2024 – The AES Corporation, a Fortune 500 global energy company, has today set the stage for a significant step towards sustainable financing with the announcement of pricing its $950 million green bond offering. These junior subordinated notes carry a fixed-to-fixed rate reset and have a maturity date set for 2055. The offering's closure is anticipated on May 21, 2024, contingent on the fulfillment of customary closing conditions.

AES, demonstrating a strong commitment to the planet's health and the burgeoning market for environmentally-focused investments, intends to direct an amount equivalent to the net proceeds from this offering towards various eligible green projects. Such initiatives may encompass the development and reinvigoration of renewable energy projects which play a crucial role in transitioning to a less carbon-intensive economy. In the interim period before such allocation, the proceeds are earmarked for general corporate purposes.

Large Financial Institutions Spearhead the Offering

The offering has garnished support from some of the most reputable names in the financial sector. Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Mizuho Securities USA LLC, Morgan Stanley & Co. LLC, and SMBC Nikko Securities America, Inc., are joint book-running managers, steering this environmentally-conscious financial venture.

This announcement is not to be interpreted as an inducement to sell securities, nor a solicitation for offers to purchase any, and under no circumstance constitutes an offer, solicitation, or sale where prohibited by law. AES had previously filed an effective shelf registration statement associated with the Notes with the Securities and Exchange Commission (SEC). The current offering and notes sale occur exclusively through the prospectus supplement dated May 16, 2024, and its accompanying base prospectus dated March 2, 2022.

Potential investors should not miss the opportunity to delve into the prospectus and the preliminary prospectus supplement that are part of the registration statement and other documents AES has filed with the SEC for a more comprehensive understanding of AES and this offering. Interested parties can obtain these vital documents at no cost by navigating the EDGAR system on the SEC website at www.sec.gov.

Furthermore, those wanting physical copies of the prospectus supplement and its related base prospectus can request them from the various managing financial institutions. Citigroup Global Markets Inc. can be reached through Broadridge Financial Solutions located in Edgewood, NY, or by calling 800-831-9146. Goldman Sachs & Co. LLC’s Prospectus Department in New York, NY, is another source for the documents, reachable through phone, fax, or email. Mizuho Securities USA LLC provides access through their Debt Capital Markets Syndicate by phone, whereas Morgan Stanley & Co. LLC offers assistance through their Prospectus Department in New York, NY. Lastly, SMBC Nikko Securities America, Inc. in New York, NY can be also contacted for document requests via phone call.

AES—Pioneering a Greener Future

AES stands at the forefront of the global energy sector, recognized for its ongoing efforts to drive a sustainable future. The company is deeply engaged in improving lives through the delivery of cleaner and more intelligent energy solutions that the world increasingly demands. With a diverse team focused on innovation and operational excellence, AES collaborates with customers to guide their strategic energy transitions while ensuring their current energy requirements are fulfilled.

Cautionary Statement Regarding Forward-Looking Information

The press release includes forward-looking statements protected under the Securities Act of 1933 and the Securities Exchange Act of 1934. These statements do not serve as a warranty of future outcomes but rather represent the company's projections based upon reasonable assumptions. Such forward-looking statements encompass AES's financial strategy including the notes offering and particular details, intended use of the generated proceeds, anticipated allocation to eligible green initiatives, and other expectations related to the notes offering and the application of the company's shelf registration statement.

These statements project scenarios that might deviate substantially from actual future events due to various risks and uncertainties. Important influencing factors include the ongoing eligibility of AES to utilize the shelf registration statement, shifts in economic conditions, and other unforeseen risks. Detailed information concerning these risks is available in the prospectus supplement connected to the offering and AES’s filings with the SEC. Specifically, key risk discussions can be found under Item 1A: "Risk Factors" and Item 7: "Management's Discussion & Analysis" in AES's 2023 Annual Report on Form 10-K, as well as in subsequent SEC filings. Prospective investors are encouraged to consult AES's filings to understand in-depth the risk factors pertinent to the company's business. AES undertakes no obligation to amend or revise forward-looking statements as new information emerges, during future events, or under other conditions, unless mandated by law.

For additional details or inquiries, investors and members of the media are welcome to reach out to the appropriate contact persons. Susan Harcourt is available for investor relations at 703-682-1204, while media contacts should direct their queries to Amy Ackerman at 703-682-6399.

In summary, The AES Corporation's strategic move to issue green bonds reflects an increasing corporate commitment to sustainability and renewable energy investments. With the backing of top-tier financial institutions and operating within the strict compliance frameworks of the SEC, AES is paving the way for a greener future with transformative energy solutions. This offering is a vital step in supporting the company’s ecological projects, consequently promoting environmentally responsible growth and renewable energy development, an endeavor that not only aligns with global sustainability goals but also acknowledges the critical role businesses play in the fight against climate change.

The electrifying journey towards a more sustainable and ecologically sound future continues for AES, a stalwart in the energy industry. This green bond offering is a testament to AES’s commitment to integrated sustainability in its financial operations. It carves a path for the company to further its investment in renewable energy projects that significantly reduce the carbon footprint and support the global call for responsible energy consumption and production. This strategic move is expected to raise awareness and encourage similar ventures by other corporations, indicating a shift towards a cleaner, more sustainable industrial landscape.

As the world observes the unfolding impact of climate change, the significance of AES's venture cannot be overstated. The drive towards eco-friendly corporate practices and green financing sources is a beacon of hope for environmental advocates and investors alike. The successful allocation of such vast sums into green projects will not only stimulate the green economy but will also signify a monumental leap in the energy sector, wherein sustainability becomes intertwined with profitability.

Arriving at the close of this announcement, The AES Corporation stands firmly at the intersection of innovation, sustainability, and corporate responsibility. Their foresight in embracing green bonds signals a directional shift for financial markets where ethical investment options become increasingly prevalent. The impact of such sustainable investment will undoubtedly be far-reaching, influencing not only the recipients of the green bond proceeds but also setting an industry standard that promotes a ripple effect throughout global financial and energy markets.

The AES Corporation, through its decisive and strategic green bond offering, invites investors to take part in a transformative journey towards a sustainable energy future. This financial maneuver not only reaffirms their position as an industry pioneer but also aligns them with international efforts to foster a more sustainable global economy. As AES continues to navigate the complex terrain of energy solutions, investors and stakeholders can look forward to a portfolio of future-focused and environmentally sound projects, heralding a new era of green energy advancements.

In light of this announcement, market analysts, environmentalists, and corporate leaders around the world will be closely monitoring the impact of AES’s green bond offering. The substantial fund allocation towards green projects presents an opportunity for AES to fortify its leadership in renewable energy, cementing its role as an important player in the transition to a low-carbon economy. This gesture of corporate environmental stewardship serves as a model and challenge for others in the sector, underscoring the critical importance of sustainable development in today's business environment.

The introduction of these green bonds by AES heralds a crucial moment for green finance and reflects the broader societal shift towards sustainability. As the world seeks to reconcile economic growth with environmental stewardship, AES's actions signify a powerful commitment to fostering a stable, yet environmentally friendly future. Through this leap forward, AES is poised to continue its trajectory as a company that not only produces energy but also propels the global community towards a greener, more resilient tomorrow.

Forging ahead, AES’s initiative draws a roadmap for others in the industry to follow, showcasing that financial acumen can align with ecological awareness to produce results beneficial to investors, communities, and the planet. The green bond market itself is expected to flourish with this high-profile addition, marking another milestone in an era of conscientious capitalism. As AES leads by example, it calls upon its peers to match its dedication to creating a future where energy is not only powerful and plentiful but also sustainable and responsible.

On the horizon, the realization of AES's green projects funded by this bond offering will likely generate a series of innovative, eco-friendly technologies and energy solutions. It stands to reason that investment in such sustainable initiatives will serve not only the bottom line but also the broader goal of a cleaner, more efficient energy landscape for future generations. As AES undertakes this notable step, it falls upon the entire spectrum of stakeholders—from consumers to policymakers—to support and replicate such forward-thinking endeavors.

In conclusion, the AES Corporation's announcement marks a significant stride forward in the convergence of finance and sustainability. Backed by solid financial establishments and driving towards a significant purpose, AES sets a compelling example of corporate responsibility in the face of global environmental challenges. This green bond offering is an invitation to witness the growth of a pioneering movement where investment in our planet's future becomes an integral part of the corporate creed—a movement certainly worth watching.