Dynegy launches offers to exchange up to US$1.25B principal amount of outstanding notes, debentures, capital income securities of Dynegy Holdings for Dynegy's new 10% senior secured notes due 2018

HOUSTON , September 16, 2011 (press release) – Dynegy Inc. (NYSE:DYN - News) announced today that it has commenced offers to exchange (the Exchange Offers) up to $1,250,000,000 principal amount of the outstanding notes, debentures and capital income securities (the Old Notes) of Dynegy Holdings, LLC (DH), its direct, wholly-owned subsidiary, for Dynegy’s new 10% Senior Secured Notes due 2018 (the New Notes) and cash as set forth in the table below:

Dynegy Holdings, LLC’s Outstanding Notes  

Dynegy Holdings, LLC’s Outstanding Notes
to be Exchanged
 
CUSIP Nos.
 

Outstanding

Principal

Amount
(in millions)

 

Consideration per $1,000

Principal Amount of Old Notes Tendered
(subject to proration)

 
Acceptance Priority
Level
      Early Tender Payment   Exchange Payment  
           
Cash
 
New Notes
 
Total
 
New Notes
   
7.625% Senior Debentures due 2026  
629121AC8
 
$
175.0
 
$120
 
$480
 
$600
 
$550
 
1
7.750% Senior Unsecured Notes due 2019
 

26816LAW2

26816LAU6

U2676AAG8

 
$
1,100.0
 
$120
 
$565
 
$685
 
$635
 
2
7.125% Senior Debentures due 2018  
629121AF1
 
$
175.0
 
$120
 
$560
 
$680
 
$630
 
2
8.375% Senior Unsecured Notes due 2016  
26816LAT9
 
$
1,046.8
 
$120
 
$580
 
$700
 
$650
 
3
7.50% Senior Unsecured Notes due 2015  

26816LBB7

26816LAX0

 
$
785.0
 
$120
 
$600
 
$720
 
$670
 
3
8.750% Senior Notes due 2012   26816LAG7  
$
88.5   $120   $600  
$720
  $670   4
Series B 8.316% Subordinated
Capital Income Securities
due 2027
 

62912PAC5
 

$


200.0
 


 


$450
 


$450
 


$400
 

5

 

 


Under the terms of the Exchange Offers, Old Notes that are validly tendered (and not validly withdrawn) on or prior to 5:00 p.m., New York City time, on September 28, 2011, unless extended by Dynegy (the Early Tender Date), will receive the applicable Early Tender Payment (see table). Holders that tender their notes after the Early Tender Date and before midnight, New York City time, on October 13, 2011, unless extended or earlier terminated by Dynegy (the Expiration Date), will receive consideration for their Old Notes in the amount of the applicable Exchange Payment (see table). Holders may withdraw tenders of Old Notes prior to 5:00 p.m., New York City time, on September 28, 2011, unless extended by Dynegy (the Withdrawal Time). Holders may not withdraw tendered Old Notes on or after the Withdrawal Time. Participating holders of Old Notes will receive accrued and unpaid interest in cash on their accepted Old Notes, up to, but not including, the Settlement Date (as defined in the Offering Circular).

If more than $1,250,000,000 of Old Notes are validly tendered (and not validly withdrawn) at the Expiration Date, Dynegy will accept tenders of Old Notes based on the acceptance priority levels listed in the table above, with level 1 being the highest priority level, subject to proration as described more fully in the Offering Circular and the related Letter of Transmittal, each dated September 15, 2011.

Completion of the Exchange Offers is subject to the satisfaction or waiver of a number of conditions as described in the Offering Circular. Dynegy has the right to terminate or withdraw any of the Exchange Offers at any time and for any reason. Dynegy has the right to amend any of the Exchange Offers and extend the Expiration Date, Early Tender Date or Withdrawal Date for any of the Exchange Offers.

Dynegy has retained Credit Suisse Securities (USA) LLC to serve as lead dealer manager, and Barclays Capital Inc., Deutsche Bank Securities Inc., Jefferies & Company, Inc. and Lazard Capital Markets LLC to serve as co-dealer managers (collectively, the Dealer Managers) and D.F. King & Co., Inc. to serve as the exchange agent and information agent (the Exchange Agent and Information Agent) for the exchange offers.

Requests for documents, including the Offering Circular and Letter of Transmittal, may be directed to D.F. King & Co., Inc. by telephone at 212-269-5550 (brokers and banks) or 800-697-6975 (all others) or in writing at 48 Wall Street, 22nd Floor, New York, New York 10005. Questions regarding the Exchange Offers may be directed to Credit Suisse Securities (USA) LLC at 800-820-1653 (toll free) or 212-538-2147 (collect).

The New Notes have not been registered under the Securities Act, or any state securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements, and will therefore be subject to substantial restrictions on transfer. Dynegy will enter into a registration rights agreement with respect to the New Notes.

The Exchange Offers are being made, and the New Notes are being offered and issued, only in the United States to holders of Old Notes who are “qualified institutional buyers” (as defined in Rule 144A under the Securities Act of 1933, as amended (the Securities Act)) and outside the United States to holders of Old Notes who are persons other than U.S. persons in reliance upon Regulation S under the Securities Act.

This press release is neither an offer to purchase, nor a solicitation for acceptance of an offer to purchase, nor a solicitation of consents with respect to, any securities. The Exchange Offers are made only by and pursuant to the terms of the Offering Circular. None of Dynegy, DH, the Dealer Managers or the Exchange Agent and Information Agent makes any recommendations as to whether holders should tender their Old Notes in the Exchange Offers. Holders must make their own decisions as to whether to tender Old Notes and, if so, the principal amount of Old Notes to tender.

ABOUT DYNEGY

Dynegy’s subsidiaries produce and sell electric energy, capacity and ancillary services in key U.S. markets. The Dynegy Power, LLC power generation portfolio consists of approximately 6,771 megawatts of primarily natural gas-fired intermediate and peaking power generation facilities. The Dynegy Midwest Generation, LLC portfolio consists of approximately 3,132 megawatts of primarily coal-fired baseload power plants. A separate portfolio consists of approximately 1,570 megawatts from two leased power plants which are primarily natural gas-fired peaking and baseload coal generation facilities.

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