One New Issue Not New Issue Conversion of Outstanding Bonds to Fixed Rate Book Entry Only Vinson & Elkins L.L.P. and Bracewell & Giuliani LLP, Co-Bond Counsel, delivered opinions (the 2012 Bond Opinions ) in connection with the original date of issuance of the Series 2012 Bonds (the 2012 Bonds ) and will deliver opinions in connection with the Series 2012B Bonds (the 2012B Bonds, and together with the 2012 Bonds, the Bonds ), assuming compliance with certain covenants and based on certain representations, that (i) interest on the Bonds is excludable from gross income for federal income tax purposes under existing law, except for any period a Bond is held by a person who, within the meaning of section 147(a) of the Internal Revenue Code of 1986, as amended, is a substantial user or a related person to a substantial user of the facilities financed with the proceeds of the Bonds, and (ii) interest on the Bonds is not subject to the alternative minimum tax imposed on individuals. See TAX MATTERS herein for a discussion of Co-Bond Counsel s opinions, including a description of alternative minimum tax consequences for corporations and other federal tax consequences. The 2012 Bond Opinion for the 2012 Bonds was issued on May 3, 2012, the date of the initial issuance of the 2012 Bonds and will not be reissued in connection with the reoffering of the 2012 Bonds. However, in connection with the reoffering and conversion of the 2012 Bonds, as described herein, Co-Bond Counsel will provide its opinion to the effect that the conversion of the Series 2012 Bonds to the Fixed Rate Mode, in and of itself, does not adversely affect the exclusion of interest on the Series 2012 Bonds from gross income for federal income tax purposes under existing law. $54,000,000 Fort Bend County Industrial Development Corporation Industrial Development Revenue Bonds (NRG Energy, Inc. Project) Series 2012 Due: May 1, 2038 Fixed Rate: 4.75% Interest Accrual Date: October 18, 2012 $73,100,000 Fort Bend County Industrial Development Corporation Industrial Development Revenue Bonds (NRG Energy, Inc. Project) Series 2012B Due: November 1, 2042 Fixed Rate: 4.75% Fort Bend County Industrial Development Corporation (the Issuer ) issued the 2012 Bonds pursuant to a Bond Indenture, dated as of May 1, 2012, and is issuing the 2012B Bonds pursuant to a Bond Indenture, to be dated as of October 1, 2012 (each a Bond Indenture and collectively the Bond Indentures ), in each case between the Issuer and Wells Fargo Bank, National Association, as trustee (the Trustee ). The Bonds of each issue have been or will be, as applicable, issued as qualified Hurricane Ike disaster area bonds pursuant to the Act (as defined herein) and in accordance with Section 704 of the Heartland Disaster Tax Relief Act of 2008. Proceeds of the Bonds of each issue were or will be, as applicable, loaned by the Issuer to NRG Energy, Inc. (the Borrower ) pursuant to separate Loan Agreements, dated as of May 1, 2012 with respect to the 2012 Bonds and to be dated as of October 1, 2012 with respect to the 2012B Bonds, in each case in order to finance a portion of the costs of constructing the applicable Project described herein and to pay certain costs of issuance of the applicable issue of Bonds. During the Fixed Rate Mode, payment obligations of the Borrower under each Loan Agreement will be guaranteed by the Borrower and certain of its subsidiaries (collectively with the Borrower, the NRG Grantors ) under a separate guarantee secured by substantially all of the assets of the NRG Grantors. As of the Interest Accrual Date set forth above, the Bonds of each issue will bear interest at the applicable Fixed Rate set forth above until the applicable maturity date set forth above. During the Fixed Rate Mode, interest on the 2012 Bonds will be payable on each May 1 and November 1, commencing on November 1, 2012, and interest on the 2012B Bonds will be payable on each May 1 and November 1, commencing on November 1, 2012. The Bonds of each issue are or will be, as applicable, issued as fully registered bonds, initially in the name of Cede & Co., as registered owner and nominee for The Depository Trust Company. Purchases of the Bonds of each issue will be made in book entry form only, as described herein. The Bonds of each issue are subject to optional and extraordinary optional redemption prior to maturity, as described herein. THE BONDS ARE LIMITED OBLIGATIONS OF THE ISSUER, PAYABLE SOLELY FROM THE SOURCES OF FUNDS DESCRIBED HEREIN. NEITHER THE STATE OF TEXAS, NOR FORT BEND COUNTY, TEXAS, NOR ANY POLITICAL CORPORATION, SUBDIVISION OR AGENCY OF THE STATE OF TEXAS SHALL BE OBLIGATED TO PAY THE BONDS, AND NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF TEXAS, FORT BEND COUNTY, TEXAS, OR ANY OTHER POLITICAL CORPORATION, SUBDIVISION OR AGENCY THEREOF IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR INTEREST ON THE BONDS. THE ISSUER HAS NO TAXING POWER. Price: 100% This cover page contains certain information for quick reference only. It is not a summary of these issues. Investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision. The 2012B Bonds are offered when, as and if issued to and accepted by the Underwriter, subject to delivery of opinions of the Attorney General of the State of Texas and Vinson & Elkins L.L.P. and Bracewell & Giuliani L.L.P., Co-Bond Counsel, as to the legality of the 2012B Bonds and to certain other conditions. Certain legal matters will be passed upon for the Borrower by Kirkland and Ellis LLP and internal counsel to the Borrower; for the Issuer with respect to the 2012B Bonds by Allen Boone Humphries Robinson LLP; for the Remarketing Agent with respect to the 2012 Bonds by Ballard Spahr LLP; and for the Underwriter with respect to the 2012B Bonds by Ballard Spahr LLP. The Bonds are expected to be delivered in book-entry-only form through the facilities of DTC on or about October 18, 2012. BofA Merrill Lynch The date of this Official Statement is October 11, 2012
TABLE OF CONTENTS INTRODUCTION... 1 THE ISSUER... 3 THE PROJECTS... 3 2012 Project... 4 2012B Project... 4 SOURCES OF PAYMENT AND SECURITY FOR THE BONDS... 4 General... 4 THE BONDS... 5 General... 5 Interest... 6 Redemption of Bonds... 6 Purchase in Lieu of Redemption... 7 Book-Entry System... 8 SECURED GUARANTEES BY THE NRG GRANTORS... 11 NRG Guarantee and Collateral Agreement; NRG Collateral Trust Agreement... 11 Priority... 13 Rights of the Trustee under the NRG Collateral Trust Agreement... 14 Certain Covenants... 15 Amendment of the NRG Guarantee and Collateral Agreement and of the NRG Collateral Trust Agreement... 15 Additional Secured Indebtedness... 16 Termination of the NRG Guarantee and Collateral Agreement and NRG Collateral Trust Agreement... 16 THE LOAN AGREEMENTS... 16 Loan... 16 Indemnification... 16 Tax Covenants of the Borrower... 17 Waivers... 17 Consolidation and Merger; Assignment... 17 Amendment... 18 THE BOND INDENTURES... 19 Pledge and Assignment... 19 Funds Under the Bond Indenture... 19 Investment... 20 Events of Default and Remedies... 20 Supplemental Bond Indentures... 24 Defeasance... 25 The Trustee... 25 CONTINUING DISCLOSURE... 26 Annual Financial Information... 26 Event Notices... 27 Limitations, Disclaimers and Amendments... 28 Compliance with Prior Undertakings... 29 TAX MATTERS... 29 Tax Exemption... 29 Collateral Tax Consequences... 31 Tax Legislative Changes... 31 LITIGATION... 31 The Issuer... 31 The Borrower... 31 PLAN OF DISTRIBUTION... 31 2012 Bonds... 32 2012B Bonds... 32 Certain Relationships... 32 LEGAL MATTERS... 33 RATINGS... 33 MISCELLANEOUS... 34 Appendix A Appendix B Appendix C Certain Information Concerning NRG Energy, Inc. Form of Opinions of Co-Bond Counsel delivered on Original Issue Date with respect to the 2012 Bonds Form of Opinions of Co-Bond Counsel with respect to the 2012B Bonds ADDRESSES OF PRINCIPAL PARTIES Borrower: NRG Energy, Inc. 211 Carnegie Center Princeton, NJ 08540-6213 with a copy to: for the 2012 Bonds: NRG Energy, Inc. NRG Tower at the Houston Pavilions 1201 Fannin St. Houston, TX 77002 Attention: M. Cleve Lancaster, General Counsel to Petra Nova LLC, an NRG Energy Company Facsimile: 832-584-2256 Email: Mitchell.Lancaster@nrgenergy.com for the 2012B Bonds: NRG Energy, Inc. NRG Tower at the Houston Pavilions 1201 Fannin St. Houston, TX 77002 Attention: Timothy Muller, Senior Counsel Facsimile: 832-584-2478 Email: Timothy.Muller@nrgenergy.com -i- Trustee: Wells Fargo Bank, National Association 7000 Central Parkway NE Suite 550 Atlanta, Georgia, 30328 Attention: Corporate Trust Department Telephone: 770-551-5114 Telecopy: 770-551-5118
NOTICE TO INVESTORS No person has been authorized to give any information or make any representations other than those contained in this Official Statement in connection with the offering of the Bonds, and, if made or given, such other information or representations must not be relied upon as having been authorized by the Fort Bend County Industrial Development Corporation (the Issuer ), NRG Energy, Inc. (the Borrower ), Merrill Lynch, Pierce, Fenner & Smith Incorporated (with respect to the 2012B Bonds, the Underwriter, and with respect to the 2012 Bonds, the Remarketing Agent ). The information and expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement nor any sale hereunder shall under any circumstances create any implication that there has been no change in the matters described herein since the date hereof. Neither the delivery of this Official Statement nor any sale hereunder shall under any circumstances create any implication that there has been no change in the affairs of the Issuer or the Borrower or the NRG Grantors since the date hereof. This Official Statement does not constitute an offer to sell or solicitation of an offer to buy in any jurisdiction in which such offer or solicitation is not authorized, or in which the person making such offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make such offer or solicitation. This Official Statement does not constitute a contract among or between the Issuer, the Borrower, the Underwriter, the Remarketing Agent or any purchaser of the Bonds. The information contained herein under the headings THE ISSUER and LITIGATION (as it relates to the Issuer) has been furnished by the Issuer. The Issuer makes no representation as to the accuracy or completeness of any information in this Official Statement and takes no responsibility for its contents, other than the information relating to the Issuer under the headings THE ISSUER and LITIGATION (as it relates to the Issuer). The information set forth herein relating to the business and affairs of the Borrower and the NRG Grantors has been supplied by the Borrower. Such information is not to be construed as a representation by the Issuer, the Underwriter or the Remarketing Agent. The provisions of all documents summarized herein are subject to bankruptcy, insolvency and creditor rights laws and the application of equitable principles. The Underwriter and Remarketing Agent have provided the information under the heading PLAN OF DISTRIBUTION and the following sentence for inclusion in this Official Statement. The Underwriter and the Remarketing Agent have reviewed the information in the Official Statement in accordance with, and as part of, their responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter and the Remarketing Agent do not guarantee the accuracy or completeness of such information. THE BONDS HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION BY REASON OF CERTAIN EXEMPTIONS CONTAINED IN THE SECURITIES ACT OF 1933, AS AMENDED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY, NOR HAS THE SECURITIES AND -ii-
EXCHANGE COMMISSION OR ANY SUCH FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. PROSPECTIVE PURCHASERS SHOULD CONSULT WITH THEIR OWN ADVISORS AS TO LEGAL, TAX, BUSINESS, FINANCIAL AND RELATED ASPECTS OF A PURCHASE OF THE BONDS. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. The reoffering of the 2012 Bonds and the offering of the 2012B Bonds to potential investors is made only by means of this entire Official Statement. No person is authorized to detach any portion of this Official Statement or use any portion without the entire Official Statement. In making an investment decision, investors must rely upon their own examination of the terms of the offering, including the merits and risks involved. CUSIP data herein is provided by Standard & Poor s Financial Services LLC, a subsidiary of The McGraw-Hill Companies, Inc., by an independent company not affiliated with the Issuer, the Underwriter, the Remarketing Agent or the Borrower, and is included solely for the convenience of the holders of the Bonds. Neither the Issuer nor the Underwriter nor the Remarketing Agent nor the Borrower is responsible for the selection or use of CUSIP numbers on the Bonds, and no representation is made as to their correctness. CUSIP numbers are subject to being changed after delivery of the Bonds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part of a maturity of the Bonds of an issue or as a result of the procurement of secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a portion of the Bonds. THIS OFFICIAL STATEMENT ONLY DESCRIBES THE BONDS IN THE FIXED RATE MODE COMMENCING ON OCTOBER 18, 2012. PROSPECTIVE PURCHASERS OF THE BONDS IN ANY OTHER MODE SHOULD NOT RELY ON THIS OFFICIAL STATEMENT. [Remainder of Page Intentionally Left Blank] -iii-
OFFICIAL STATEMENT $54,000,000 Fort Bend County Industrial Development Corporation Industrial Development Revenue Bonds (NRG Energy, Inc. Project) Series 2012 $73,100,000 Fort Bend County Industrial Development Corporation Industrial Development Revenue Bonds (NRG Energy, Inc. Project) Series 2012B INTRODUCTION This Official Statement, including the cover page and appendices, is provided to furnish certain information in connection with the reoffering and offering, respectively, of the following bonds of the Fort Bend County Industrial Development Corporation (the Issuer ): (i) $54,000,000 aggregate principal amount of Industrial Development Revenue Bonds (NRG Energy, Inc. Project) Series 2012 (the 2012 Bonds ), and (ii) $73,100,000 aggregate principal amount of Industrial Development Revenue Bonds (NRG Energy, Inc. Project) Series 2012B (the 2012B Bonds and, collectively with the 2012 Bonds, the Bonds ). The Bonds were or will be, as applicable, issued in accordance with Chapter 501, Texas Local Government Code, as amended (the Act ) and Section 704 of the Heartland Disaster Relief Act of 2008 and pursuant to a separate Bond Indenture, dated as of May 1, 2012 with respect to the 2012 Bonds and to be dated as of October 1, 2012 with respect to the 2012B Bonds (each a Bond Indenture and collectively the Bond Indentures ), between the Issuer and Wells Fargo Bank, National Association, as trustee (the Trustee ). The proceeds of the Bonds of each issue were or will be, as applicable, loaned by the Issuer to NRG Energy, Inc. (the Borrower ) pursuant to the terms of a separate Loan Agreement, dated as of May 1, 2012 with respect to the 2012 Bonds and to be dated as of October 1, 2012 with respect to the 2012B Bonds (each a Loan Agreement and collectively the Loan Agreements ) between the Borrower and the Issuer. Such proceeds were or will be, as applicable, used (i) to finance and reimburse the Borrower for certain costs of the applicable Project described below; and (ii) to pay certain costs of issuance of the applicable issue of Bonds. To evidence its obligation to make when due such loan payments in amounts equal to the principal of and premium, if any, and interest on the Bonds of each issue when due, the Borrower has issued or will issue, as applicable, a separate promissory note (each a Note and collectively the Notes ) to the Issuer relating to the Bonds of each issue. Pursuant to each Bond Indenture, the Issuer has assigned or will assign, as applicable, its rights to receive payments under the related Loan Agreement (except for certain unassigned rights to fees, expenses and indemnities) and the related Note to the Trustee for the benefit of the Bondholders of the related issue of Bonds. The 2012 Bonds were issued on May 3, 2012. When originally issued, the 2012 Bonds were issued in the weekly rate mode and were supported by a direct-pay Irrevocable Transferable Letter of Credit issued by Bank of America, N.A. (the Letter of Credit ) to the Trustee. In connection with the reoffering of the 2012 Bonds upon conversion to the Fixed Rate Mode, the Letter of Credit is being surrendered for cancellation by the Trustee. No Letter of Credit or other Credit Facility will support the 2012 Bonds or the 2012B Bonds. Certain provisions of the Bond Indentures and the Loan Agreements that would be applicable if a Credit Facility were in effect with respect to the applicable issue of Bonds have not been described in this Official Statement.
From the Interest Accrual Date set forth on the cover page hereof, the Bonds of each issue will accrue interest at the applicable Fixed Rate set forth on the cover page hereof until the applicable maturity date set forth on the cover page hereof. The Bonds are subject to optional and extraordinary optional redemption prior to maturity, as described herein. In connection with the reoffering of the 2012 Bonds and the offering of the 2012B Bonds, the Borrower and certain of its subsidiaries (the Borrower and such subsidiaries, collectively the NRG Grantors ) will guarantee to the Trustee for each issue of Bonds full and prompt payment of moneys sufficient to pay the principal, interest and any prepayment or redemption premium on the Bonds of such issue, and any other payments to be made by the Borrower pursuant to the related Loan Agreement and the Note, in each case when and as the same shall become due. Such guarantees will remain in effect during the Fixed Rate Mode and will be secured by substantially all of the assets of the NRG Grantors. The Trustee will receive the benefit of such secured guarantees by executing, with respect to each issue of the Bonds, separate joinders to the existing NRG Guarantee and Collateral Agreement (as defined below under the heading of SECURED GUARANTEES BY THE NRG GRANTORS ) and NRG Collateral Trust Agreement (as defined below under the heading of SECURED GUARANTEES BY THE NRG GRANTORS ), each between the NRG Grantors, Deutsche Bank Trust Company Americas (as trustee under the NRG Collateral Trust Agreement) and the other persons party thereto. See SECURED GUARANTEE BY THE NRG GRANTORS herein. As used herein, Financing Documents means, with respect to each issue of the Bonds, the Bonds of such issue, the related Bond Indenture, the related Loan Agreement, the related Note, the NRG Guarantee and Collateral Agreement, the NRG Collateral Trust Agreement, the Reoffering Agreement among the Borrower and the Remarketing Agent providing for the remarketing of the 2012 Bonds, the Underwriting Agreement among the Issuer, the Borrower and the Underwriter providing for the sale of the 2012B Bonds to the Underwriter, this Official Statement and any other document now or hereafter executed by the Issuer or the Borrower or subsidiaries of the Borrower in favor of the Holders of the Bonds of such issue or the Trustee which affects the rights of the Holders of the Bonds of such issue or the Trustee in or to the related Project, in whole or in part, or which secures or guarantees any sum due under the Bonds of such issue or any other Financing Document, each as amended from time to time, and all documents related thereto and executed in connection therewith. The Bonds are limited obligations of the Issuer, payable solely from the sources of funds described herein. Neither the State of Texas, nor Fort Bend County, Texas, nor any political corporation, subdivision or agency of the State of Texas shall be obligated to pay the Bonds, and neither the faith and credit nor the taxing power of the State of Texas, Fort Bend County, Texas, or any other political corporation, subdivision or agency thereof is pledged to the payment of the principal of or interest on the Bonds. The Issuer has no taxing power. Certain information regarding the Borrower and the NRG Grantors is included in Appendix A. Brief descriptions of the Issuer and the Projects being financed with proceeds of the Bonds, and summaries of certain provisions of the Bonds, the Loan Agreements, the Bond Indentures, the NRG Guarantee and Collateral Agreement and the NRG Collateral Trust Agreement are included in this Official Statement. Such summaries are qualified in their entirety 2
by reference to such documents. Copies or drafts, as applicable, of such documents may be obtained during the initial offering period from the office of Merrill Lynch, Pierce, Fenner & Smith Incorporated at One Bryant Park, 9th Floor, New York, New York 10036, Attention: Timothy Harte, and thereafter copies of final, executed documents may be obtained from the Trustee. Capitalized terms used but not defined herein shall have the meanings assigned to such terms in the Bond Indentures or, if not defined therein, in the Loan Agreements. THE ISSUER The Issuer, a nonprofit industrial development corporation, has been established and created pursuant to the Texas Development Corporation Act, Chapter 501, Texas Local Government Code, as amended (the Act ), as an instrumentality of Fort Bend County, Texas (the County ). The Issuer, on behalf of the County, is empowered pursuant to the Act to finance the costs of projects to promote and develop industrial and manufacturing enterprises, and to promote and encourage employment and the public welfare by the issuance of obligations of the Issuer for projects within the boundaries of the County. The Act provides that the Issuer may undertake a project, the costs of which are eligible to be paid from proceeds of qualified Hurricane Ike disaster area bonds under Section 704 of the Heartland Disaster Relief Act of 2008. The Act further provides that the Issuer is not a political subdivision or a political corporation within the meaning of the Constitution and the laws of the State of Texas. The Issuer does not have the power to tax, nor does it have the power of eminent domain or police powers. The Board of Directors of the Issuer approved the issuance of the 2012 Bonds by resolution adopted on February 3, 2012, and approved the issuance of the 2012B Bonds by resolution adopted on September 28, 2012. In January 2011, Mr. Jarvis Hollingsworth, a partner at Bracewell & Giuliani L.L.P., was appointed to serve on the Issuer s board of directors. Mr. Hollingsworth has not participated in any votes concerning the Bonds or the selection of Bracewell & Giuliani L.L.P. as Co-Bond Counsel. Mr. Hollingsworth will abstain from voting on any matters related to the Bonds. The Bonds of each issue are limited recourse obligations of the Issuer and are payable solely out of the Revenues and other amounts pledged under the related Bond Indenture, including certain revenues derived from or in connection with related Loan Agreement and Note. Neither the State of Texas, Fort Bend County nor any other political corporation, subdivision or agency of the State of Texas is obligated to pay the principal or premium, if any, of or interest on the Bonds. Neither the faith and credit nor the taxing power of the State of Texas, Fort Bend County or any other political corporation, subdivision or agency of the State of Texas is pledged to the payment of the principal or premium, if any, of or interest on the Bonds. THE PROJECTS The 2012 Bonds were, and the 2012B Bonds will be, issued as qualified Hurricane Ike disaster area bonds pursuant to the Act and in accordance with Section 704 of the Heartland Disaster Tax Relief Act of 2008. 3
2012 Project The proceeds of the 2012 Bonds were loaned to the Borrower to be used (a) to finance and/or reimburse the Borrower for costs of construction and improvement of facilities to capture and sequester carbon dioxide (CO2) from a portion of the flue gas produced from one of the coal-fired power generation units at the WA Parish Electric Generating Station located at 2500 Y. U. Jones Road, Thompsons, Fort Bend County, Texas 77469-3558 (the Plant ), the major components of such improvements being a CO2 capture unit, power and steam supply systems, a CO2 compressor, a CO2 pipeline facility, and related equipment and facilities (collectively, the 2012 Project ), (b) to pay capitalized interest on the 2012 Bonds and (c) to pay all or a portion of the costs of issuance of the 2012 Bonds. 2012B Project The proceeds of the 2012 Bonds will be loaned to the Borrower to be used to (a) finance and/or reimburse the Borrower for all or a part of the costs of construction, improvement and equipping of facilities located at the Plant, including the costs of equipping and improvement of a 2,505 megawatt coal-fired power generation unit facility, a 1,160 megawatt gas-fired power generation unit facility and related facilities at the Plant and the costs of construction, equipping and improvement of a warehouse facility and related facilities at the Plant (collectively, the 2012B Project ) and (b) pay all or a portion of the costs of issuance of the Bonds. The 2012 Project and the 2012B Project are individually referred to herein as a Project and collectively as the Projects. General SOURCES OF PAYMENT AND SECURITY FOR THE BONDS The Bonds are limited obligations of the Issuer. The Bonds shall not constitute a debt or obligation of the Issuer, the State of Texas or any political subdivision thereof. Neither the State of Texas, Fort Bend County nor any other political corporation, subdivision or agency of the State of Texas is obligated to pay the principal or premium, if any, of or interest on the Bonds. Neither the faith and credit nor the taxing power of the State of Texas, Fort Bend County or any other political corporation, subdivision or agency of the State of Texas is pledged to the payment of the principal or premium, if any, of or interest on the Bonds. Principal of and premium, if any, and interest on the Bonds of each issue will be paid from loan payments to be made by the Borrower pursuant to the related Loan Agreement and the related Note. The Bonds of each issue are also payable from funds held under the related Bond Indenture (except the Rebate Fund), including income derived from the investment of such funds. The payment obligations of the Borrower under each Loan Agreement will be guaranteed by the NRG Grantors under a separate guarantee secured by substantially all of the assets of the NRG Grantors. The 2012 Bonds and the 2012B Bonds are issued under two separate Bond Indentures. Revenues assigned to the Trustee under each Bond Indenture will secure only the Bonds issued 4
pursuant to such Bond Indenture and will not secure any Bonds issued pursuant to the other Bond Indenture described herein. The Borrower is or will be, as applicable, obligated under each Loan Agreement to make payments which are sufficient to pay when due the principal of, and premium, if any, and interest on, the related issue of Bonds. The Borrower s obligations to make such payments pursuant to each Loan Agreement are or will be, as applicable, absolute and unconditional. The Issuer has assigned or will assign, as applicable, to the Trustee, for the benefit of the Bondholders as security for the Bonds of each issue, its interest in the related Loan Agreement (except for certain rights to fees, expenses and rights to indemnification) and the related Note. THE BONDS The 2012 Bonds and the 2012B Bonds are entirely separate issues and are issued under separate Bond Indentures, although each Bond Indenture contains substantially the same terms and provisions except where otherwise provided below. The occurrence of an event of default with respect to one issue of the Bonds will not, in and of itself, constitute an event of default with respect to the other issue of the Bonds. Redemption of one issue of the Bonds may be made in the manner described below without the redemption of the Bonds of the other issue. Except as otherwise provided, in the following summary of the terms of the Bonds, references to the Bonds, the Bond Indenture, the Loan Agreement, the Project and other defined terms should be read as separately referring to each issue of the Bonds and the related Bond Indenture, Loan Agreement, Project and other defined terms. The following summary describes the terms of the Bonds only while the Bonds bear interest in the Fixed Rate Mode commencing on October 18, 2012. Prospective purchasers of the Bonds in any other Mode should not rely on this Official Statement. General The Bonds of each issue have been or will be issued in the applicable aggregate principal amount set forth on the cover page hereof, will mature on the applicable maturity date set forth on the cover page hereof, and will bear interest from the Interest Accrual Date set forth on the cover page hereof at the Fixed Rate set forth on the cover page hereof until maturity. The Bonds are or will be, as applicable, issuable in fully registered form only, without coupons, in denominations of $5,000 and any integral multiple thereof. The principal of and premium, if any, on the Bonds are payable to the registered owners thereof, and interest due on Bonds on each interest payment date therefor will be paid to the person who is the registered owner thereof at close of business on the relevant record date. Such payments will be made to Cede & Co., as nominee for The Depository Trust Company, New York, NY ( DTC ), while it acts as securities depository for the Bonds. See Book-Entry System below. The Bond Indenture defines Business Day for the Bonds as any day other than (1) a Saturday or a Sunday, (2) a legal holiday on which banking institutions generally are authorized or required to close in the State of New York, the State of Texas or any state in which is located 5
the office of the Trustee is located are authorized to remain closed, or (3) a day on which the New York Stock Exchange is closed. Interest General. Interest on the Bonds will be computed on the basis of a 360-day year consisting of twelve 30-day months. Interest accrued on the 2012 Bonds will be payable on each May 1 and November 1, commencing November 1, 2012. Interest accrued on the 2012B Bonds will be payable of each May 1 and November 1, commencing November 1, 2012. Notices to Bondholders. While Bonds are registered in the name of Cede & Co., as nominee for DTC, the foregoing notices will be given to Cede & Co. only, which alone shall be responsible for providing such notices to the beneficial owners. See Book-Entry System below. Redemption of Bonds Optional Redemption. The Bonds are subject to redemption prior to their respective stated maturity dates, at the option of the Borrower, in whole or in part, on any date on or after November 1, 2022 at a redemption price equal to 100% of the principal amount thereof without premium, plus accrued interest thereon to but not including the redemption date. Extraordinary Optional Redemption. In addition to possible redemption as described above, the Bonds are subject to redemption prior to their stated maturity as a whole or in part at the option of the Borrower at a redemption price equal to 100% of the principal amount thereof without premium, plus accrued interest to but not including the redemption date, if: (1) Loss of Financed Facilities: title to or temporary use of any facilities financed by the Bonds is taken under the power of eminent domain, or any portion thereof is damaged or deemed destroyed, or (2) Change in Law. as a result of (a) any changes in the Constitution of the United States of America or the Act, (b) other legislative or administrative action (federal or local), or (c) a final decree, judgment or order of any court or administrative body (federal or local), entered after any contest which may be undertaken at the option of the Borrower in good faith, the Loan Agreement becomes void or unenforceable or impossible of performance in accordance with the intent and purpose of the parties as expressed in the Loan Agreement, or unreasonable burdens or excessive liabilities are imposed on the Borrower because the Borrower is a party to the Loan Agreement, including, without limitation, the imposition of federal, state or other taxes not imposed on the date of the Loan Agreement which, in the judgment of the Borrower, render the continued operation of the facilities financed or refinanced with the proceeds of the Bonds uneconomic or impossible to perform in accordance with the intent and purpose of the parties as expressed in the Loan Agreement. (3) Tax Status. (a) Delivery of a final determination by the Internal Revenue Service or a court of competent jurisdiction as a result of a proceeding in which the Borrower participates to the degree it deems sufficient, which determination the 6
Borrower in its discretion, does not contest by an appropriate proceeding, that the interest payable on the Bonds or any of them is not tax-exempt, (b) delivery of an opinion of Co- Bond Counsel delivered at the request of the Borrower, to the effect that due to Internal Revenue Service action or other events, Co-Bond Counsel is not able on the date of such opinion to deliver its opinion to deliver its opinion that, under present law, the interest payable on the Bonds or any of them is tax-exempt, or (c) delivery of an opinion of Co- Bond Counsel delivered at the request of the Borrower, to the effect that due to Internal Revenue Service action or other events, Co-Bond Counsel would not be able to deliver its opinion to the effect that their interest payable on the Bonds or any of them is tax-exempt without a redemption of all or a portion of the Bonds. The Bonds will be redeemed as provided in this paragraph, if, in the opinion of Co-Bond Counsel, the redemption of a specified portion of the outstanding Bonds would have the result that interest payable on the Bonds remaining outstanding after such redemption would be tax-exempt. Such partial redemption will be in such amount and in such manner as Co-Bond Counsel in such opinion determines is necessary to accomplish such result. Redemption Procedures. Notice of each redemption of Bonds is required to be mailed not less than 30 days nor more than 60 days prior to the redemption date to each registered owner of Bonds to be redeemed at the address of such owner recorded in the bond register. The Borrower may revoke any notice of optional redemption prior to the redemption and no later than the date specified for redemption. If notice of redemption of any Bond is so given and if funds sufficient and available to pay the redemption price therefor are deposited with the Trustee on the redemption date, such Bond will be due and payable on the redemption date (unless, in the case of an optional redemption, the Borrower revokes its option to redeem or any condition to the redemption that is not satisfied) and will cease to bear interest after such date. While the Bonds are registered in the name of DTC or its nominee, as nominee for the beneficial owners, the foregoing notice will be given to DTC or such nominee only, which shall alone be responsible for providing such notice to the beneficial owners. See -Book-Entry System below. In the event of a redemption of less than all of the Bonds of a particular series, the Bonds within such series to be redeemed will be selected by the Trustee by lot, by such method as the Trustee deems fair and appropriate. Purchase in Lieu of Redemption On any date when the Bonds are otherwise subject to redemption, they may instead be purchased at the option of the Borrower at a purchase price equal to the applicable redemption price plus interest accrued thereon to (but not including) the redemption date. The Borrower will give written notice to the Trustee of any Bonds to be so purchased, and the Trustee is required under the Indenture to give notice of the purchase of such Bonds at the times and in the manner provided for a notice of redemption. All such purchases may be subject to conditions to the Borrower s obligation to purchase such Bonds and shall be subject to the condition that money for the payment of the purchase price therefor is available on the date set for such purchase. Payment of the purchase price of such Bonds shall be made, upon the request of the Holder of $1,000,000 or more in principal amount of Bonds to be so purchased, by wire transfer to such Holder at the wire transfer address in the continental United States to which such Holder has 7
prior to the purchase date directed in writing the Trustee to wire such purchase price. No purchased Bond shall be considered to be no longer Outstanding by virtue of its purchase, and each such purchased Bond that is not a Book-Entry Bond shall be registered in the name or at the direction of the Borrower. Following any such purchase by the Borrower of all of the outstanding Bonds of a particular series, the Bonds of such series may be remarketed in any available Mode under the Indenture, subject to the terms and conditions contained in the Indenture. Book-Entry System DTC will act as securities depository for the Bonds. The Bonds are or will be, as applicable, issued as fully-registered securities registered in the name of Cede & Co. (DTC s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Bond certificate will be issued for each issue of the Bonds, in the aggregate principal amount of such issue, and will be deposited with DTC. DTC, the world s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a banking organization within the meaning of the New York Banking Law, a member of the Federal Reserve System, a clearing corporation within the meaning of the New York Uniform Commercial Code, and a clearing agency registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-u.s. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC s participants ( Direct Participants ) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-u.s. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ( DTCC ). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-u.s. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ( Indirect Participants ). DTC has a Standard & Poor s rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com and www.dtc.org. Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC s records. The ownership interest of each actual purchaser of each Bond ( Beneficial Owner ) is in turn to be recorded on the Direct and Indirect Participants records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries 8
made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Bonds, except in the event that use of the book-entry system for the Bonds is discontinued. To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC s records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as redemptions, defaults, and proposed amendments to the Bond documents. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them. Redemption notices shall be sent to DTC. If less than all of the Bonds are being redeemed, DTC s practice is to determine by lot the amount of the interest of each Direct Participant in the Bonds to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Bonds unless authorized by a Direct Participant in accordance with DTC s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co. s consenting or voting rights to those Direct Participants to whose accounts Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Redemption proceeds, distributions, and dividend payments on the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC s practice is to credit Direct Participants accounts upon DTC s receipt of funds and corresponding detail information from the Issuer or the Trustee, on payable date in accordance with their respective holdings shown on DTC s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in street name, and will be the responsibility of such Participant and not of DTC, the Trustee, or the Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the 9
Issuer or the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to Issuer or the Trustee. Under such circumstances, in the event that a successor depository is not obtained, Bond certificates are required to be printed and delivered. The Issuer may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Bond certificates will be printed and delivered to DTC. The information in this section concerning DTC and DTC s book-entry system has been obtained from sources that the Issuer believes to be reliable, but none of the Issuer, the Borrower, the Underwriter or the Remarketing Agent takes any responsibility for the accuracy thereof. THE ISSUER, THE TRUSTEE, THE BORROWER, THE REMARKETING AGENT, AND THE UNDERWRITER SHALL NOT HAVE ANY RESPONSIBILITY OR OBLIGATION TO ANY DIRECT OR INDIRECT PARTICIPANT, ANY BENEFICIAL OWNER OR ANY OTHER PERSON CLAIMING A BENEFICIAL OWNERSHIP INTEREST IN THE BONDS UNDER OR THROUGH DTC OR ANY DTC PARTICIPANT, OR ANY OTHER PERSON WHICH IS NOT SHOWN ON THE REGISTRATION BOOKS OF THE TRUSTEE AS BEING A HOLDER, WITH RESPECT TO THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY DIRECT OR INDIRECT PARTICIPANT; THE PAYMENT BY DTC OR ANY DIRECT OR INDIRECT PARTICIPANT OF ANY AMOUNT IN RESPECT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON THE BONDS; ANY NOTICE WHICH IS PERMITTED OR REQUIRED TO BE GIVEN TO OWNERS UNDER THE BOND INDENTURE; THE SELECTION BY DTC OR ANY DIRECT OR INDIRECT PARTICIPANT OF ANY PERSON TO RECEIVE PAYMENT IN THE EVENT OF A PARTIAL REDEMPTION OF THE BONDS; ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC AS AN OWNER; OR ANY OTHER PROCEDURES OR OBLIGATIONS OF DTC UNDER THE BOOK-ENTRY SYSTEM. SO LONG AS CEDE & CO. (OR SUCH OTHER NOMINEE AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) IS THE REGISTERED OWNER OF THE BONDS, AS NOMINEE OF DTC, REFERENCES HEREIN TO THE HOLDERS OR OWNERS OR REGISTERED HOLDERS OR REGISTERED OWNERS OF THE BONDS MEANS CEDE & CO., AS AFORESAID, AND DOES NOT MEAN THE BENEFICIAL OWNERS OF THE BONDS. The foregoing description of the procedures and record keeping with respect to beneficial ownership interests in the Bonds, payment of principal, interest and other payments on the Bonds to Direct and Indirect Participants or Beneficial Owners, confirmation and transfer of beneficial ownership interest in such Bonds and other related transactions by and between DTC, the Direct and Indirect Participants and the Beneficial Owners is based solely on information provided by DTC. Accordingly, no representations can be made concerning these matters, and neither the 10
Direct nor Indirect Participants nor the Beneficial Owners should rely on the foregoing information with respect to such matters, but should instead confirm the same with DTC. SECURED GUARANTEES BY THE NRG GRANTORS The following is a brief description of the secured guarantees by the NRG Grantors. Copies of the documents related thereto are available at the Designated Office of the Trustee and also electronically on the EDGAR system of the Securities and Exchange Commission. Reference is made to such documents for the detailed provisions thereof. With respect to each issue of the Bonds, the Trustee is executing joinders to the NRG Guarantee and Collateral Agreement and the NRG Collateral Trust Agreement pursuant to the Reoffering Agreement for the 2012 Bonds and Section 511 of the Bond Indenture for the 2012B Bonds. The resulting secured guarantees is not a Credit Facility, as such term is defined in the related Bond Indenture. NRG Guarantee and Collateral Agreement; NRG Collateral Trust Agreement NRG and all subsidiaries thereof that are guarantors of obligations from time to time under NRG s Amended and Restated Credit Agreement dated as of July 1, 2011 (as in effect from time to time, the NRG Credit Agreement ) (collectively, the NRG Grantors ) are parties to the Amended and Restated Guarantee and Collateral Agreement dated as of July 1, 2011 (as in effect from time to time, the NRG Guarantee and Collateral Agreement ) between the NRG Grantors, Deutsche Bank Trust Company Americas (in its capacity as trustee (the NRG Collateral Trustee ) under the NRG Second Amended and Restated Collateral Trust Agreement dated as of July 1, 2011 between the NRG Grantors, the NRG Collateral Trustee and the other persons party thereto (as in effect from time to time, the NRG Collateral Trust Agreement ). Pursuant to the NRG Guarantee and Collateral Agreement and the NRG Collateral Trust Agreement, the NRG Grantors will provide a guarantee to the Trustee for the benefit of the Bondholders of each issue of the Bonds as described below, and will grant liens in the collateral set forth in the NRG Guarantee and Collateral Agreement to secure such guarantee. With respect to each issue of the Bonds, such secured guarantee will secure the full and prompt payment of moneys sufficient to pay the principal, interest and any prepayment or redemption premium on the Bonds of such issue, and any other payments to be made by the Borrower pursuant to the related Loan Agreement and the Note, in each case when and as the same shall become due. As discussed above, the NRG Grantors consist of the Borrower and all of its subsidiaries that are guarantors from time to time of the NRG Credit Agreement pursuant to its terms. The NRG Credit Agreement provides that the Borrower and all of its existing and future subsidiaries are to be guarantors of the obligations under the NRG Credit Agreement (and consequently, NRG Grantors), with certain exceptions, including but not limited to (i) certain subsidiaries that are organized under the laws of non-u.s. jurisdictions; (ii) subsidiaries that are liable for certain indebtedness that is generally nonrecourse to the NRG Grantors (and subject to the additional requirements set forth in the NRG Credit Agreement); (iii) subsidiaries that are excluded from being NRG Grantors at the Borrower s election, subject to the fair market value of the investments of the NRG Grantors therein being allocated to certain limited baskets contemplated in the NRG Credit Agreement for investments and/or assets to be excluded from 11