AGL launches A$650 million Notes offer to be listed on ASX

AGL Energy Limited (AGL) has today launched an offer of AGL Energy Subordinated Notes (Notes) to raise A$650m with the ability to raise more or less (Offer).

The Offer forms part of AGL's ongoing capital management strategy. AGL intends to use the proceeds to increase its ownership interest in the Loy Yang A power station, and adjacent coal mine, from 32.54 per cent to 100 per cent and for general corporate purposes.

Key features of the Notes are as follows:

• The Notes are dated, subordinated, cumulative and unsecured and will mature on 8 June 2039 unless redeemed before that date
• The Notes entitle Holders to receive floating rate, cumulative interest payments, payable quarterly in arrears unless deferred
• Interest will be calculated quarterly based on the sum of the 3 month Bank Bill Rate plus a Margin (expected to be within the range of 3.40% to 3.60% per annum), to be determined following a bookbuild process
• AGL may redeem the Notes on 8 June 2019 (the First Optional Redemption Date) or on any Interest Payment Date thereafter, and in certain other circumstances. If the Notes are not redeemed on the First Optional Redemption Date, the Margin will increase by 25 basis points (i.e. 0.25%) per annum
• The Notes are expected to be ascribed a High Equity Content classification by Standard and Poor's in its quantitative assessment of the credit profile of AGL
• The Notes are proposed to be quoted on ASX and are expected to trade under the code "AGKHA"
• The Notes are not convertible into ordinary shares or other securities
• The minimum investment is $5,000 (50 Notes)

AGL intends to reserve approximately A$50 million out of the A$650 million for Allocations under the Shareholder Offer and the Customer Offer.

AGL's Chief Financial Officer, Stephen Mikkelsen said, "As AGL continues its successful organic growth strategy in New South Wales and increases its ownership of Loy Yang A power station, the Offer provides Australian shareholders, customers and other investors the opportunity to invest in a security paying a fixed margin over a benchmark interest rate."

The Offer comprises:

• a Broker Firm Offer - an offer to retail clients of Syndicate Brokers
• a Shareholder Offer - an offer to Eligible Shareholders who have an address in Australia;
• a Customer Offer - an offer to Eligible Customers who have an address in Australia; and
• an Institutional Offer - an offer to Institutional Investors who have been invited to participate in the Bookbuild by the Joint Lead Managers.

For more information, see the documents below:

• AGL Energy Subordinated Notes Prospectus
• Full ASX release including key dates

About AGL

AGL is one of Australia's leading integrated renewable energy companies and is taking action toward creating a sustainable energy future for our investors, communities and customers. Drawing on 175 years of experience, AGL operates retail and merchant energy businesses, power generation assets and an upstream gas portfolio. AGL has one of Australia's largest retail energy and dual fuel customer bases. AGL has a diverse power generation portfolio including base, peaking and intermediate generation plants, spread across traditional thermal generation as well as renewable sources including hydro, wind, landfill gas and biomass. AGL is Australia's largest private owner and operator of renewable energy assets and is looking to further expand this position by exploring a suite of low emission and renewable energy generation development opportunities.