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Aes Corp. – ‘424B2’ on 3/8/21

On:  Monday, 3/8/21, at 4:32pm ET   ·   Accession #:  1193125-21-73280   ·   File #:  333-229896

Previous ‘424B2’:  ‘424B2’ on 3/2/18   ·   Next:  ‘424B2’ on 5/15/23   ·   Latest:  ‘424B2’ on 5/16/23   ·   7 References:   To:  AES Corp. – ‘DEF 14A’ on 3/3/21 for 4/22/21 To:  AES Corp. – ‘8-K’ on 3/1/21 for 2/25/21 To:  AES Corp. – ‘10-K’ on 2/25/21 for 12/31/20 To:  AES Corp. – ‘8-K’ on 1/15/21 for 1/13/21 To:  AES Corp. – ‘10-K’ on 2/27/19 for 12/31/18 To:  AES Corp. – ‘DEF 14A’ on 3/9/18 for 4/19/18 To:  AES Corp. – ‘8-A12B/A’ on 5/12/00 

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  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 3/08/21  Aes Corp.                         424B2                  1:1.3M                                   Donnelley … Solutions/FA

Document/Exhibit                   Description                      Pages   Size 

 1: 424B2       Prospectus - Primary Offering or Shelf Securities   HTML   1.00M 

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PROSPECTUS SUPPLEMENT

(To Prospectus Dated February 26, 2019)

10,000,000 Equity Units

(Initially Consisting of 10,000,000 Corporate Units)

The AES Corporation

The AES Corporation is offering 10,000,000 Equity Units. Each Equity Unit will have a stated amount of $100 and will initially be a “Corporate Unit” consisting of a purchase contract issued by us and, initially, a 1/10th, or 10%, undivided beneficial ownership in one share of 0% Series A Cumulative Perpetual Convertible Preferred Stock, without par value, with a liquidation preference of $1,000 per share, issued by us, which we refer to as the “convertible preferred stock.”

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We intend to use the net proceeds from this offering to develop our renewables business, U.S. utility businesses, LNG infrastructure, and for other developments determined by management. See “Use of Proceeds.”

Our common stock is listed and traded on the New York Stock Exchange under the symbol “AES.” The reported last sale price of our common stock on the New York Stock Exchange on March 4, 2021 was $25.88 per share. We intend to apply for listing of the Corporate Units on the New York Stock Exchange under the symbol “AESC.” Prior to this offering, there has been no public market for the Corporate Units.

Investing in our Equity Units involves risks. See “Risk Factors” beginning on page S-35.

Neither the Securities and Exchange Commission (the “SEC”) nor any state securities commission has approved or disapproved of these securities or determined if this prospectus supplement or the related prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The public offering price set forth above does not include accrued contract adjustment payments, if any. Contract adjustment payments on the purchase contracts will accrue for purchasers in this offering from March 11, 2021.

The underwriters may purchase up to an additional 1,500,000 Corporate Units at the public offering price less the underwriting discount within a 13-day period beginning on, and including, the issue date of the Equity Units in order to cover over-allotments, if any.

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The underwriters expect to deliver the Corporate Units in book-entry form only through the facilities of The Depository Trust Company against payment in New York, New York on or about March 11, 2021, which is four business days following the date of pricing of the Corporate Units (such settlement cycle being herein referred to as “T+4”). You should note that the trading of the Corporate Units on the date of pricing or the next business day may be affected by the T+4 settlement. See “Underwriting.”

Joint Book-Running Managers

Senior Co-Managers

Co-Managers

March 5, 2021

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We and the underwriters have not authorized anyone to provide any information other than that contained in or incorporated by reference into this prospectus supplement, the accompanying prospectus or any relevant free writing prospectus prepared by or on behalf of us or to which we have referred you. We and the underwriters take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. We are not, and the underwriters are not, making an offer or sale of our Equity Units in any jurisdiction where the offer or sale is not permitted. You should assume that the information contained in or incorporated by reference into this prospectus supplement and the accompanying prospectus is accurate only as of the date appearing on the front cover of this prospectus supplement or the accompanying prospectus, as applicable, or the date of the applicable incorporated document. Our business, financial condition, results of operations and prospects may have changed since that date.

ABOUT THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS

This document consists of two parts. The first part is the prospectus supplement, which describes the specific terms of this offering of Equity Units and also adds to and updates the information contained or incorporated by reference in the accompanying prospectus. The second part is the prospectus, which describes more general information regarding our securities, some of which does not apply to this offering. You should read both this prospectus supplement and the accompanying prospectus, together with additional information described under the headings “Where You Can Find More Information and Incorporation of Information by

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Reference” and “Where You Can Find More Information” in this prospectus supplement and in the accompanying prospectus, respectively.

If the information set forth in this prospectus supplement differs in any way from the information set forth in the accompanying prospectus or the information contained in any document incorporated by reference therein, the information contained in the most recently dated document shall control.

INCORPORATION BY REFERENCE

We have “incorporated by reference” into this prospectus supplement and the accompanying prospectus certain documents that we file with the SEC. This means that we can disclose important information to you by referring you to another document filed separately with the SEC. This information incorporated by reference is a part of this prospectus supplement and the accompanying prospectus, unless we provide you with different information in this prospectus supplement or the information is modified or superseded by a subsequently filed document. Any information referred to in this way is considered part of this prospectus supplement and the accompanying prospectus from the date we file that document.

This prospectus supplement and the accompanying prospectus incorporate the documents listed below that we have previously filed with the SEC (other than, in each case, documents or information deemed to have been furnished and not filed in accordance with the SEC’s rules and regulations), which contain important information about us, our business, our financial condition and various important risks you should consider before investing in our common stock:

Any reports filed by us pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act on or after the date of this prospectus supplement and before the completion of this offering of our common stock will be deemed to be incorporated by reference into this prospectus supplement and the accompanying prospectus and will automatically update, where applicable, and supersede any information contained in this prospectus supplement or the accompanying prospectus or incorporated by reference into this prospectus supplement and the accompanying prospectus. Unless specifically stated to the contrary, none of the information that we disclose under Items 2.02 or 7.01 of any Current Report on Form 8-K that we have furnished or may from time to time furnish with the SEC is or will be incorporated by reference into, or otherwise included in, this prospectus supplement or the accompanying prospectus.

WHERE YOU CAN FIND MORE INFORMATION

We file annual, quarterly and current reports, proxy statements and other information with the SEC. The SEC also maintains an internet site at http://www.sec.gov, from which you can access our filings with the SEC. We maintain an internet site located at http://www.aes.com, which contains information pertaining to us. The website (including the information contained in the website or connected to the website) is not and shall not be deemed incorporated into or a part of this prospectus supplement or the accompanying prospectus.

We have filed a registration statement on Form S-3 with the SEC with respect to the Equity Units offered hereby. This prospectus supplement and the accompanying prospectus do not contain all of the information included in the registration statement, and you should refer to the registration statement and its exhibits for that information.

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Any statement contained in this prospectus supplement, the accompanying prospectus or the documents incorporated by reference herein concerning, describing or summarizing the provisions of any document filed with the SEC is not necessarily complete, and is qualified in its entirety by reference to the full text of the document filed.

You may obtain, at no cost, copies of each of the documents incorporated by reference into this prospectus supplement or the accompanying prospectus (other than an exhibit to a filing unless that exhibit is specifically incorporated by reference in that filing) by writing or telephoning the office of the General Counsel, The AES Corporation, 4300 Wilson Boulevard, Arlington, Virginia, 22203, telephone number (703) 522-1315.

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FORWARD-LOOKING STATEMENTS AND RISK FACTOR SUMMARY

This prospectus supplement includes or incorporates by reference statements concerning our expectations, beliefs, plans, objectives, goals, strategies, and future events or performance. Such statements are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Although we believe that these forward-looking statements and the underlying assumptions are reasonable, we cannot assure you that they will prove to be correct.

Forward-looking statements involve a number of risks and uncertainties, and there are factors that could cause actual results to differ materially from those expressed or implied in our forward-looking statements. In addition to the factors described under “Risk Factors” in this prospectus supplement or the risk factors incorporated by reference into this prospectus supplement, some of these factors include:

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These factors, in addition to others described herein under “Risk Factors,” in our Annual Report and in subsequent securities filings, should not be construed as a comprehensive listing of factors that could cause results to vary from our forward-looking information.

We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. If one or more forward-looking statements are updated, no inference should be drawn that additional updates will be made with respect to those or other forward-looking statements.

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RISK FACTORS

Investing in the Equity Units involves a high degree of risk. You should carefully consider the risks discussed below, together with the financial and other information contained in or incorporated by reference into this prospectus supplement and the accompanying prospectus, before deciding whether to invest in the Equity Units. In addition to the risk factors discussed below, please read “Risk Factors” in our Annual Report, which is incorporated herein by reference, and “Forward-Looking Information and Risk Factor Summary” herein and in our Annual Report, for more information about important risks that you should consider before investing in the Equity Units. The Equity Units are not an appropriate investment for you if you are unsophisticated with respect to the complex terms of the Equity Units or financial matters.

Risk Factors Relating to the Equity Units

Holders of Corporate Units must first separate their shares of convertible preferred stock from the related purchase contracts to convert their convertible preferred stock in connection with a fundamental change that occurs prior to a successful remarketing of the convertible preferred stock, which will require holders to bear related costs and is subject to certain conditions.

Upon the occurrence of a fundamental change that occurs prior to a successful remarketing of the convertible preferred stock (and only upon the occurrence of a fundamental change that occurs prior to a successful remarketing of the convertible preferred stock), the convertible preferred stock will become convertible before the purchase contract settlement date. If a holder of a Corporate Unit desires to convert the convertible preferred stock that is a part of a Corporate Unit, the holder must first separate the convertible preferred stock, which would require the holder to (1) create Treasury Units (at any time other than during a blackout period), (2) settle the related purchase contracts early (at any time other than during a blackout period) or (3) during the period after the date we give notice of a final remarketing, create Cash Settled Units on or prior to the second business day immediately preceding the first day of the final remarketing period. We will not compensate you for the cost of the Treasury security to create a Treasury Unit, the amount of cash to create a Cash Settled Unit or for any financing cost you may bear in making the required cash payment in connection with creation of Cash Settled Units or an early settlement of the purchase contracts upon a fundamental change. In addition, we cannot guarantee that you will be able to purchase the specified Treasury security necessary to create the Treasury Unit, obtain the necessary financing to create a Treasury Unit or Cash Settled Unit or early settle the related purchase contract upon a fundamental change. If you cannot obtain that financing, you will not be able to separate the convertible preferred stock from the purchase contracts and, accordingly, you will not be able to convert the convertible preferred stock. There will be no make-whole amount of shares or increase to the conversion rate for conversions of the convertible preferred stock in connection with a fundamental change, except for the limited case where (x) the “stock price” (as defined under “Description of the Purchase Contracts—Early Settlement Upon a Fundamental Change” below) for such fundamental change is less than $31.70 per share of our common stock (subject to adjustment in certain circumstances), which initially equals the conversion price of the convertible preferred stock (the “conversion price”) and (y) such fundamental change occurs prior to a successful remarketing of the convertible preferred stock.

Further, the ability to separate the convertible preferred stock from the purchase contract by creating Treasury Units or settling early is subject to certain conditions. Holders of Corporate Units may create Treasury Units or Cash Settled Units only in integral multiples of 10 Corporate Units. After a successful remarketing of the convertible preferred stock, holders of Corporate Units may not create Treasury Units, and holders of Treasury Units may not recreate Corporate Units. The ability to create Treasury Units is also subject to certain exceptions and additional blackout periods described in this prospectus supplement. Cash Settled Units may only be created during the period after the date we give notice of a final remarketing and on or prior to the second business day immediately preceding the first day of the final remarketing period. Also, the ability to exercise a fundamental change early settlement right with respect to a holder’s purchase contracts will not be available if a registration statement is required to be effective in connection with the exercise of such right but it is not then

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effective or a blackout period is continuing, all as described more fully under “—Description of the Purchase Contracts—Early Settlement Upon a Fundamental Change.” See also “—The delivery of make-whole shares upon a fundamental change early settlement of the purchase contracts may not adequately compensate you” and “—You may not be able to exercise your right to settle a purchase contract prior to the purchase contract settlement date unless a registration statement under the Securities Act of 1933, as amended (the “Securities Act”) is in effect and a prospectus is available covering the shares of our common stock and other securities, if any, deliverable upon early settlement of a purchase contract” for further restrictions on your ability to exercise a fundamental change early settlement of purchase contracts. Any of the foregoing limitations could prohibit you from separating the convertible preferred stock from the purchase contracts, which would prevent you from being able to convert the convertible preferred stock.

If you do not settle your related purchase contracts with separate cash following a failed final remarketing, you may lose any conversion value of the convertible preferred stock in excess of its liquidation preference and the ability to continue to hold your convertible preferred stock.

If a final remarketing fails for any reason, all ownership interests in the convertible preferred stock held as part of Corporate Units will be delivered to us on the purchase contract settlement date in full satisfaction of the Corporate Unit holders’ obligations to purchase our common stock under the related purchase contracts on the purchase contract settlement date. The ownership interest in convertible preferred stock underlying a Corporate Unit will be automatically delivered to us, thereby satisfying such holder’s obligations to us under the related purchase contracts in full, unless, prior to 5:00 p.m., New York City time, on the second business day immediately prior to the purchase contract settlement date, the holder provides written notice of an intention to settle the related purchase contracts with separate cash and on or prior to the business day immediately preceding the purchase contract settlement date delivers to the securities intermediary $1,000 in cash per 10 purchase contracts. Holders of Corporate Units may settle their purchase contracts with separate cash only in integral multiples of 10 Corporate Units. A holder of Corporate Units that has not so elected to settle with separate cash will lose any value of the convertible preferred stock in excess of the liquidation preference thereof, and will not be able to continue to hold the convertible preferred stock and receive dividends, if any, or convert the convertible preferred stock at a future date.

If you participate in a remarketing that is ultimately successful, you will no longer hold the remarketed convertible preferred stock and the proceeds from the remarketing may not adequately compensate you.

We will remarket the convertible preferred stock as described under “Description of the Purchase Contracts—Remarketing,” “—Optional Remarketing” and “—Final Remarketing” below. If a remarketing is successful, a portion of the proceeds from the remarketing will be applied, in the case of the Corporate Units, to purchase the Treasury portfolio (in the case of an optional remarketing) or against a holder’s obligation to pay the purchase price upon settlement of the related purchase contracts (in the case of a final remarketing). Any remaining proceeds from the remarketing will be remitted to the benefit of the relevant holders. In order to elect not to participate in any remarketing and retain the undivided beneficial ownership interests in shares of convertible preferred stock underlying the convertible preferred stock comprising part of your Corporate Units, you must (1) create Treasury Units (at any time other than during a blackout period), (2) settle the related purchase contracts early (at any time other than during a blackout period) or (3) during the period after the date we give notice of a final remarketing, create Cash Settled Units on or prior to the second business day immediately preceding the first day of the final remarketing period. If you do not do one of the foregoing, the shares of convertible preferred stock underlying the undivided beneficial ownership interests in convertible preferred stock comprising part of your Corporate Units will be remarketed and, if successful, you will no longer have any rights with respect to such convertible preferred stock other than to receive the proceeds of such remarketing in excess of the Treasury portfolio purchase price (in the case of an optional remarketing) or in excess of $100 (in the case of a final remarketing), in each case, per Corporate Unit, as described herein. As a result, you will only receive the proceeds obtained in such remarketing (or, in the case where your convertible preferred stock was held as a part of Corporate Units, the excess thereof over the Treasury portfolio purchase

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price (in the case of an optional remarketing) or in excess of $100 (in the case of a final remarketing), in each case, per Corporate Unit), which may not adequately compensate you for the conversion value of the convertible preferred stock or the lost option time value of your convertible preferred stock or the loss of future dividends, if any, and you will not be able to continue to hold the convertible preferred stock, or sell or convert the convertible preferred stock at a future date.

The trading prices for the Corporate Units, Treasury Units, convertible preferred stock and Series B preferred stock are expected to be affected by, among other things, the trading prices of our common stock, the general level of interest rates and our credit quality.

The trading prices of Corporate Units, which we intend to apply to list on the New York Stock Exchange, and Treasury Units, convertible preferred stock and Series B preferred stock in the secondary market are expected to be affected by, among other things, the trading prices of our common stock, the general level of interest rates and our credit quality. It is impossible to predict whether the price of our common stock or interest rates will rise or fall. The price of our common stock could be subject to wide fluctuations in the future in response to many events or factors, including those discussed in the risk factors herein and in our Annual Report, as may be supplemented by subsequently filed quarterly reports on Form 10-Q, and the factors listed in “Forward-Looking Statements and Risk Factor Summary” in this prospectus supplement, many of which events and factors are beyond our control. Fluctuations in interest rates may give rise to arbitrage opportunities based upon changes in the relative value of the common stock underlying the purchase contracts and of the other components of the Equity Units. Any such arbitrage could, in turn, affect the trading prices of the Corporate Units, Treasury Units, convertible preferred stock, Series B preferred stock and our common stock.

If you hold Corporate Units, Treasury Units or Cash Settled Units, you will not be entitled to any rights with respect to our common stock or Series B preferred stock, but you will be subject to any changes made with respect to our common stock or (in the case of Corporate Units) Series B preferred stock.

If you hold Corporate Units, Treasury Units or Cash Settled Units, you will not be entitled to any rights with respect to our common stock or Series B preferred stock, such as voting rights and rights to receive dividends, if any, or other distributions thereon. However, you will be subject to any changes affecting our common stock and (in the case of the Corporate Units) also to any changes affecting Series B preferred stock. With respect to the purchase contracts that form a part of the Equity Units, you will only be entitled to rights with respect to our common stock if and when we deliver shares of our common stock in exchange for Corporate Units, Treasury Units or Cash Settled Units on the purchase contract settlement date, or on the settlement date for any early settlement, as the case may be, and you will only be deemed a holder of such common stock on the applicable record date, if any, for the exercise of those rights or the receipt of dividends or distributions in respect of such common stock occurring after that date.

With respect to any shares of our common stock (if any) or Series B preferred stock (if any) you receive in connection with a conversion of any share of convertible preferred stock (whether a part of Corporate Units or held separately), you will not be entitled to any rights with respect to our common stock or Series B preferred stock prior to the last trading day of the observation period. For example, if an amendment is proposed to our sixth restated certificate of incorporation or amended and restated by-laws requiring common stockholder approval and the record date for determining the common stockholders of record entitled to vote on the amendment occurs prior to the last trading day of the observation period, such holder will not be entitled to vote on the amendment, although such holder will nevertheless be subject to any changes affecting our common stock.

The Equity Units and convertible preferred stock provide limited anti-dilution adjustments, and an event could occur that adversely affects the value of the Equity Units, the convertible preferred stock or our common stock but that does not result in an anti-dilution adjustment.

The maximum settlement rate of the purchase contracts and the conversion rate of the convertible preferred stock are subject to adjustment in certain circumstances arising from stock splits and combinations, stock

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dividends, certain cash dividends and certain other events. We will not adjust the maximum settlement rate or the conversion rate for other events, including without limitation third party tender or exchange offers for our common stock, issuances and purchases of our common stock in connection with dividend reinvestment plans, employee stock option grants, ordinary dividends below a specified threshold, offerings of common stock by us for cash or in connection with an acquisition, and share issuances pursuant to options and other convertible securities outstanding on the date we issue the Equity Units. See “Description of the Purchase Contracts—Anti-dilution Adjustments” and “Description of the Convertible Preferred Stock—Conversion Rate Adjustments.” There can be no assurance that an event that adversely affects the value of the Equity Units, the convertible preferred stock or our common stock, but does not result in an adjustment to the maximum settlement rate or the conversion rate, will not occur. Further, other than as described under “Underwriting,” we are not restricted from issuing additional common stock during the term of the stock purchase contracts and have no obligation to consider your interests for any reason. If we issue additional shares of our common stock, those issuances may materially and adversely affect the price of our common stock, the convertible preferred stock and, because of the relationship of the number of shares holders are to receive on the purchase contract settlement date to the price of our common stock, those issuances may adversely affect the trading prices of the Equity Units.

Some significant restructuring transactions may not constitute a fundamental change, in which case you would not have the right to any make-whole shares upon an early settlement of the purchase contracts or to convert your convertible preferred stock prior to a successful remarketing of the convertible preferred stock.

Upon the occurrence of a fundamental change, you have the right to (i) exercise your fundamental change early settlement right with respect to your purchase contracts, entitling you to receive additional value in respect of make-whole shares for such purchase contracts in certain circumstances and (ii) if the fundamental change occurs prior to a successful remarketing of the convertible preferred stock, convert your separate shares of convertible preferred stock (although there will be no make-whole amount of shares or increase to the conversion rate for any such conversions except for the limited case where the stock price for such fundamental change is less than the conversion price). However, the fundamental change provisions will not compensate holders of Equity Units (or allow for conversions of shares of convertible preferred stock) in the event of other transactions that could result in lost option time value. For example, transactions such as leveraged recapitalizations, refinancings, restructurings, or acquisitions initiated by us may not constitute a fundamental change. In the event of any such transaction, holders of Equity Units do not have a fundamental change early settlement right with respect to their purchase contracts and holders of convertible preferred stock do not have a right to convert such shares, even though each of these transactions could increase the amount of our indebtedness, or otherwise adversely affect our capital structure or any credit ratings, thereby adversely affecting the holders of Equity Units and convertible preferred stock.

Your rights to the pledged assets underlying the Equity Units will be subject to our security interest and may be affected by a bankruptcy proceeding.

As a holder of Equity Units, you will own the interests in the convertible preferred stock, Treasury portfolio, Treasury securities or cash, as applicable, that are a component of the Equity Units. However, those interests will be pledged to us through the collateral agent to secure your obligations under the related purchase contracts. As a result, your rights to the pledged assets will be subject to our security interest. In addition, notwithstanding the automatic termination of the purchase contracts, in the event that we become the subject of a case under the U.S. Bankruptcy Code, the delivery of the pledged assets to you may be delayed by the imposition of the automatic stay under Section 362 of the Bankruptcy Code, or other relief sought by the collateral agent, the purchase contract agent or another party asserting an interest in the pledged assets. Moreover, claims arising out of the convertible preferred stock will be subject to the equitable jurisdiction and powers of the bankruptcy court.

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The purchase contract and pledge agreement will not be qualified under the Trust Indenture Act and the obligations of the purchase contract agent are limited.

The purchase contract and pledge agreement among us, the purchase contract agent and the collateral agent will not be qualified as an indenture under the Trust Indenture Act of 1939, or the Trust Indenture Act, and the purchase contract agent and collateral agent will not be required to qualify as a trustee under the Trust Indenture Act. Thus, you will not have the benefit of the protection of the Trust Indenture Act with respect to the purchase contract and pledge agreement or the purchase contract agent.

The secondary market for the Equity Units, the convertible preferred stock and the Series B preferred stock may be illiquid.

We are unable to predict how the Equity Units, the convertible preferred stock or the Series B preferred stock will trade in the secondary market or whether that market will be liquid or illiquid. There is currently no secondary market for the Equity Units, the convertible preferred stock or the Series B preferred stock. We intend to apply for listing of the Corporate Units on the New York Stock Exchange, although there is no guarantee that the Corporate Units will be approved for listing. We have no obligation or current intention to apply for any separate listing of the Treasury Units, the Cash Settled Units, the convertible preferred stock or the Series B preferred stock on any stock exchange. We have been advised by the representative that the underwriters presently intend to make a market for the Equity Units, the convertible preferred stock and (if and when issued) the Series B preferred stock. However, they are not obligated to do so and any market making may be discontinued at any time without notice. There can be no assurance as to the liquidity of any market that may develop for the Corporate Units, Treasury Units, Cash Settled Units, convertible preferred stock or Series B preferred stock, your ability to sell such securities or whether a trading market, if it develops, will continue. For example, if only a small number of shares of convertible preferred stock is converted, the Series B preferred stock will be illiquid. In addition, in the event that sufficient numbers of Corporate Units are converted to Treasury Units or Cash Settled Units, the liquidity of Corporate Units could be adversely affected. We cannot provide assurance that the Corporate Units will be accepted by the New York Stock Exchange for listing, that the Corporate Units will not be delisted from the New York Stock Exchange if listed, or that trading in the Corporate Units will not be suspended as a result of elections to create Treasury Units or Cash Settled Units, or recreate Corporate Units through the substitution of collateral that causes the number of these securities to fall below the applicable requirements for listing securities on the New York Stock Exchange.

We may defer contract adjustment payments under the purchase contracts that are a part of the Equity Units, and this may have an adverse effect on the trading prices of the Equity Units.

We may, at our option, defer the payment of all or part of the contract adjustment payments under the purchase contracts through the purchase contract settlement date, as described under “Description of the Purchase Contracts—Contract Adjustment Payments.” If we exercise our right to defer contract adjustment payments, the market price of the Equity Units is likely to be adversely affected. As a result of the existence of our deferral rights, the market price of the Equity Units may be more volatile than the market prices of other securities that are not subject to these optional deferrals. Although we do have the ability to elect to pay all or part of contract adjustment payments in shares of our common stock (unless we have previously elected a different contract payment adjustment method), you will be subject to the risk that we may not be able to pay such deferred contract adjustment payments (including compounded contract adjustment payments thereon) in the future. You will have no claim to any accrued and unpaid contract adjustment payments (including any accrued and unpaid deferred contract adjustment payments and compounded contract adjustment payments thereon) in the event of our bankruptcy or insolvency. Unlike holders of convertible preferred stock and Series B preferred stock who have a right to vote for the election of two additional directors to our board under the circumstances described under “Description of the Convertible Preferred Stock—Limited Voting Rights—Preferred Stock Directors” and “Description of the Series B Preferred Stock—Limited Voting Rights—Preferred Stock Directors”, holders of the Equity Units do not have similar rights in connection with the deferral of

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contract adjustment payments. In addition, if we make such a deferral, and you use the accrual method of accounting for tax purposes, you may be required to continue to recognize income for U.S. federal income tax purposes in respect of the purchase contracts in advance of your receipt of any corresponding cash payments.

The trading price of the Corporate Units or any separate shares of convertible preferred stock or Series B preferred stock may not fully reflect the value of their accumulated but unpaid dividends, if any.

The Corporate Units and any separate shares of convertible preferred stock or Series B preferred stock may trade at a price that does not fully reflect the value of accumulated but unpaid dividends, if any, on the convertible preferred stock or Series B preferred stock, however, such accumulated but unpaid dividends (including compounded dividends thereon), if any, will continue to exist (and such accumulated but unpaid dividends will continue to compound) for so long as such convertible preferred stock or Series B preferred stock remains outstanding, and such dividends will be payable to the holders of such convertible preferred stock or Series B preferred stock, as applicable, as of the close of business on the record date for the payment date on which such dividends are subsequently declared and paid (if ever).

We are both an operating company and a holding company and may require cash from our subsidiaries to make current payments on the Equity Units or dividends, if any, on the convertible preferred stock or Series B preferred stock.

If you own Equity Units in the form of Corporate Units, you are entitled to receive periodic payments representing dividends, if any, on the convertible preferred stock (to the extent declared by our board of directors) and contract adjustment payments on the purchase contracts, subject to our right to defer the contract adjustment payments. The convertible preferred stock, Series B preferred stock and contract adjustment payments are solely the obligations of the Company, and no other entity will have any obligation, contingent or otherwise, to make payments in respect of the purchase contracts, the convertible preferred stock or the Series B preferred stock. We are a holding company for several direct and indirect subsidiaries. Our subsidiaries will have no obligation to make the contract adjustment payments or pay any amount in respect of the convertible preferred stock or Series B preferred stock. Accordingly, we may depend, in part, on dividends and other distributions from our subsidiaries to generate the funds necessary to meet our contract adjustment payment obligations or to pay amounts in respect of the convertible preferred stock or Series B preferred stock. As an equity holder of our subsidiaries, our ability to participate in any distribution of assets of any subsidiary is structurally subordinate to the claims of the creditors of that subsidiary. If we are unable to obtain cash from our subsidiaries, we may be unable to fund required contract adjustment payments or to pay amounts in respect of the convertible preferred stock or Series B preferred stock.

Recent and future regulatory actions and other events may adversely affect the trading price and liquidity of the Equity Units and the convertible preferred stock.

We expect that many investors in, and potential purchasers of, the Equity Units and shares of convertible preferred stock will employ, or seek to employ, an arbitrage strategy with respect to the Equity Units and/or the convertible preferred stock. Investors that employ an arbitrage strategy with respect to equity-linked instruments typically implement that strategy by selling short the common stock underlying the equity-linked instrument and dynamically adjusting their short position while they hold such equity-linked instrument. Investors may also implement this hedging strategy by entering into swaps on our common stock in lieu of or in addition to short selling our common stock.

The SEC and other regulatory and self-regulatory authorities have implemented various rules and taken certain actions, and may adopt additional rules in the future and take other actions, that may affect those engaging in short selling activity involving equity securities (including our common stock). Such rules and actions include Rule 201 of SEC regulation SHO, the adoption by the Financial Industry Regulatory Authority, Inc. and the national securities exchanges of a “Limit Up-Limit Down” program, the imposition of market-wide

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circuit breaker systems that halt trading of securities for certain periods following specific market declines, and the implementation of certain regulatory reforms stemming from the enactment and implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Past regulatory actions, including emergency actions or regulations, have had a significant effect on the trading prices and liquidity of equity-linked instruments. Any governmental or regulatory action that similarly restricts the ability of investors in, or potential purchasers of, the Equity Units or convertible preferred stock to effect short sales of our common stock, borrow our common stock or enter into swaps on our common stock could similarly adversely affect the trading price and the liquidity of the Equity Units and the convertible preferred stock.

Volatility in the market price and trading volume of our common stock could adversely affect the trading price of the Equity Units and the convertible preferred stock.

The stock market in recent years has experienced significant price and volume fluctuations that have often been unrelated to the operating performance of companies. The market price of our common stock could fluctuate significantly for many reasons, including in response to the risks described in this section, elsewhere in this prospectus supplement or the documents we have incorporated by reference in this prospectus supplement or for reasons unrelated to our operations, such as reports by industry analysts, investor perceptions or negative announcements by our customers, competitors or counterparties regarding their own performance, the ongoing COVID-19 pandemic, as well as industry conditions and general financial, economic and political instability. A decrease in the market price of our common stock would likely adversely affect the trading price of the Equity Units and the convertible preferred stock. The market price of our common stock could also be affected by possible sales of our common stock by investors who view the Equity Units or convertible preferred stock as a more attractive means of equity participation in us and by hedging or arbitrage trading activity that we expect to develop involving our common stock. This trading activity could, in turn, affect the trading prices of the Equity Units and the convertible preferred stock.

Our Equity Units and convertible preferred stock may adversely affect the market price of our common stock.

The market price of our common stock is likely to be influenced by our Equity Units and our convertible preferred stock. For example, the market price of our common stock could become more volatile and could be depressed by:

Upon early settlement of the purchase contracts or conversion of the convertible preferred stock, you may receive less valuable consideration than expected because the value of our common stock may decline after you exercise your early settlement right or conversion right but before we settle our related obligation and because the Series B preferred stock may trade at less than its $1,000 liquidation preference.

A holder of Equity Units that elects to settle its purchase contract early and a holder of separate shares of convertible preferred stock that elects to convert such shares, in each case, will be exposed to fluctuations in the value of our common stock and, upon optional conversion of the convertible preferred stock, in the value of the Series B preferred stock during the period from the date such holder exercises such right until the date we settle our related obligation.

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Upon exercise of an early settlement right with respect to any purchase contracts, the amount of consideration you receive upon such settlement will be determined (other than upon the occurrence of certain fundamental changes as described herein) by reference to the volume-weighted average price of our common stock for each trading day in a 20 trading day averaging period. Similarly, upon conversion of the convertible preferred stock, the amount of consideration that you will receive upon conversion of your convertible preferred stock will be determined by reference to the volume-weighted average price of our common stock for each trading day in a 20 trading day observation period. If the price of our common stock decreases during any such period, the amount and/or value of consideration you receive will be adversely affected. In addition, if the market price of our common stock at the end of such period is below the average volume-weighted average price of our common stock during such period, the value of any shares of our common stock that you will receive in satisfaction of our obligation in respect of your purchase contracts or convertible preferred stock, as the case may be, will be less than the value used to determine the number of shares that you will receive.

Additionally, you may receive less valuable consideration than expected upon optional conversion of the convertible preferred stock because the Series B preferred stock may trade at prices below its $1,000 liquidation preference per share. See “—Risk Factors Relating to the Series B Preferred Stock—The trading price of the Series B preferred stock issued upon conversion of the convertible preferred stock may be less than its $1,000 liquidation preference per share.”

Non-U.S. holders may be subject to U.S. federal income tax, including withholding tax, in connection with the sale or other disposition of an Equity Unit, our convertible preferred stock, our Series B preferred stock, our common stock or a purchase contract.

Under the “FIRPTA” tax rules, a non-U.S. holder (as defined in “Material United States Federal Income and Estate Tax Consequences”) who sells or otherwise disposes of a Corporate Unit, our common stock, our convertible preferred stock, our Series B preferred stock or, possibly, a purchase contract, may be subject to U.S. federal income tax, and withholding at a 15% rate on the amount realized, with respect to the sale or other disposition if we are a United States real property holding corporation at any time within the five-year period preceding the sale or other disposition (or the non-U.S. holder’s holding period, if shorter). We have not determined whether or not we are currently a United States real property holding corporation. Even if we are not currently a United States real property holding corporation, our business strategy, which includes increasing our operations in the United States, or fluctuations in the relative values of our assets may cause us to become a United States real property holding corporation in the future. Accordingly, if you acquire Equity Units, there can be no assurance that we will not be a United States real property holding corporation during your ownership of the Equity Units or shares of our convertible preferred stock, common stock, Series B preferred stock or purchase contracts.

Although certain exceptions to the FIRPTA tax rules may apply if our common stock is regularly traded on an established securities market, these exceptions do not apply to large holdings. In particular, if you hold more than 5% of our outstanding common stock (or, if it is regularly traded on an established securities market, our outstanding convertible preferred stock) at any time during the five-year period ending on the date of a redemption or other disposition of the relevant stock, you likely will be subject to U.S. federal income tax upon the disposition and may in some circumstances be subject to withholding at a 15% rate on the amount realized.

The rules applicable to interests in United States real property holding corporations are complex, and there is significant uncertainty about the application of these rules to the Equity Units, convertible preferred stock, Series B preferred stock and purchase contracts. Accordingly, in some circumstances, even if you are eligible for an exemption from such withholding, unless you can demonstrate your eligibility for such an exemption to the satisfaction of the applicable withholding agent you may be subject to withholding and be required to file a U.S. tax return in order to obtain a refund. See “Material United States Federal Income and Estate Tax Consequences—Tax Consequences to Non-U.S. Holders—Sale, Exchange, or Other Taxable Disposition of the Equity Units, Common Stock or Series B Preferred Stock.”

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In certain circumstances, you may be treated as receiving a taxable distribution or be required to recognize income without a corresponding receipt of cash.

We may, at our option, pay dividends, if any, on the convertible preferred stock and the Series B preferred stock wholly or partly in our common stock, as described under “Description of the Convertible Preferred Stock—Dividends,” and “Description of the Series B Preferred Stock—Dividends.” Any such dividends will nonetheless be treated as distributions taxable in the same manner as cash distributions. Likewise, you may be required to recognize ordinary income without a corresponding receipt of cash with respect to any contract adjustment payments paid wholly or partly in our common stock and any contract adjustment payments that are deferred, each as described under “Description of the Purchase Contracts—Contract Adjustment Payments.”

You may also be treated as receiving a dividend from us without a corresponding receipt of cash upon a conversion of convertible preferred stock into common stock and Series B preferred stock as discussed in “Material United States Federal Income and Estate Tax Consequences—Tax Consequences to U.S. Holders—Convertible Preferred Stock—Conversion of Convertible Preferred Stock into Common Stock and Series B Preferred Stock.”

In addition, for U.S. federal income tax purposes, you may be treated as receiving a constructive distribution from us with respect to the convertible preferred stock without a corresponding receipt of cash if (1) the conversion rate of the convertible preferred stock is adjusted (or fails to be adjusted) and, as a result of the adjustment (or failure to adjust), your proportionate interest in our assets or earnings and profits is increased, and (2) the adjustment (or failure to adjust) is not made pursuant to a bona fide, reasonable anti-dilution formula. For example, if the conversion rate is adjusted as a result of a distribution that is taxable to the holders of our common stock, such as an increase in our quarterly cash dividends, you will be deemed to have received a “constructive distribution” for U.S. federal income tax purposes. See “Material United States Federal Income and Estate Tax Consequences—Tax Consequences to U.S. Holders—Convertible Preferred Stock—Constructive Distributions”

Similarly, certain adjustments to the number of shares of common stock that you are entitled to receive on a purchase contract settlement date, or as a result of early settlement of a purchase contract, to account for certain events such as stock splits and combinations, stock dividends, certain cash dividends and certain other actions by us that modify our capital structure, as discussed under “Description of Purchase Contracts—Anti-Dilution Adjustments,” may result in a deemed distribution to you for U.S. federal income tax purposes even though you will not receive any cash payment. For example, if the settlement rate is adjusted as a result of a distribution that is taxable to our common stockholders, such as an increase in our quarterly cash dividends, you might be required to include an amount in income for U.S. federal income tax purposes, notwithstanding the fact that you will not actually receive any distribution. See “Material United States Federal Income and Estate Tax Consequences—Tax Consequences to U.S. Holders—Purchase Contracts—Constructive Distributions”

If you are a non-U.S. holder (as defined in “Material United States Federal Income and Estate Tax Consequences”), any dividends and constructive dividends will generally be subject to U.S. federal withholding tax at a rate of 30% or such lower rate as may be specified by an applicable treaty. Because there would be no cash from which to withhold the tax, the withholding agent may withhold from other payments made to you on the Equity Units. See “Material United States Federal Income and Estate Tax Consequences—Tax Consequences to Non-U.S. Holders—U.S. Federal Income and Withholding Tax.”

Risk Factors Relating to the Convertible Preferred Stock

The convertible preferred stock ranks junior to all of our indebtedness and other liabilities.

In the event of our bankruptcy, liquidation, reorganization or other winding-up, our assets will be available to pay the liquidation preference of the convertible preferred stock only after all of our indebtedness and other liabilities have been paid. In addition, we are a holding company for several direct and indirect subsidiaries and

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the convertible preferred stock will be structurally junior to all existing and future indebtedness and other liabilities (including trade payables) of our subsidiaries and any capital stock of our subsidiaries not held by us. The holders of the convertible preferred stock have no right to participate in the distribution of assets of our subsidiaries (except to the extent that the Company has satisfied all of its liabilities and has recognized claims or interests in the assets of such subsidiaries). Consequently, if we are forced to liquidate our assets to pay our creditors, we may not have sufficient assets remaining to pay the liquidation preference of any or all of the convertible preferred stock then outstanding. We and our subsidiaries may incur substantial amounts of additional debt and other obligations.

We currently have no capital stock outstanding that is senior to or on parity with the convertible preferred stock. If and when issued, any Series B preferred stock will rank on parity with the convertible preferred stock. We own substantially all the capital stock of our subsidiaries. As of December 31, 2020, we had $3,446 million principal amount of outstanding long-term indebtedness, all of which is senior in right of payment to the convertible preferred stock. In addition, the convertible preferred stock will be structurally subordinated to all debt, preferred stock and other liabilities of our subsidiaries, which means that creditors and preferred stockholders of our subsidiaries will be paid from the assets of such subsidiaries before holders of the convertible preferred stock would have any claims to those assets.

Your ability to convert the convertible preferred stock, and therefore your ability to participate in an increase in the price of our common stock, is limited.

Holders of convertible preferred stock that are not a part of Corporate Units may participate in any appreciation of our stock price above the conversion price of $31.70 if they convert their convertible preferred stock as described in this prospectus supplement. This means that you must separate the shares of convertible preferred stock from the purchase contacts, which will cost you money and is subject to limitations. In addition, even if the convertible preferred stock has been separated from the related purchase contract, the ability to convert is limited only to conversions (i) in connection with a fundamental change that occurs prior to a successful remarketing of the convertible preferred stock and (ii) on or after February 15, 2024. Holders do not have the right to convert the convertible preferred stock other than in these circumstances, which will limit the ability to participate in any appreciation of our common stock that could be captured through a conversion.

Dividends, if any, on the convertible preferred stock are only payable if declared by our board of directors and permitted by the Delaware General Corporation Law and such dividends may be restricted by the terms of agreements governing future indebtedness.

Quarterly dividends, if any, on the convertible preferred stock will be paid only if declared by our board of directors. The board of directors is not legally obligated or required to declare quarterly dividends on the convertible preferred stock even if we have funds available for such purposes. In addition, even if our board of directors declares a dividend, we can only make payments of cash in respect of dividends from legally available funds under the Delaware General Corporation Law, as determined by our board of directors, and such funds may not be available to pay cash dividends on the convertible preferred stock. If we do not declare and pay dividends on the convertible preferred stock, the market price of the convertible preferred stock is likely to be adversely affected. As a result of our ability to not pay dividends on the convertible preferred stock, the market price of the convertible preferred stock may be more volatile than the market prices of other securities that are not subject to such a feature.

In addition, the agreements governing any future indebtedness of ours may further limit our ability to pay cash dividends on our capital stock, including the convertible preferred stock. In the event that the agreements governing any such indebtedness restrict our ability to pay dividends in cash on the convertible preferred stock, we may be unable to pay dividends in cash on the convertible preferred stock unless we can refinance the amounts outstanding under such agreements or obtain a consent or amendment under such agreements.

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We may issue additional series of preferred stock that rank equally to the convertible preferred stock as to liquidation preference.

Neither our sixth restated certificate of incorporation nor the certificate of designations establishing the designations, preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions of the convertible preferred stock prohibits us from issuing additional series of preferred stock that would rank on parity with the convertible preferred stock as to liquidation preference, including the Series B preferred stock. Our sixth restated certificate of incorporation provides that we have the authority to issue 50,000,000 shares of preferred stock, including the 1,000,000 shares (or 1,150,000 shares if the underwriters’ over-allotment option is exercised in full) of convertible preferred stock that are a part of the Corporate Units being offered for sale pursuant to this prospectus supplement and the Series B preferred stock into which the convertible preferred stock may convert. The issuances of other series of preferred stock could have the effect of reducing the amounts available to the holders of the convertible preferred stock in the event of our liquidation, dissolution or winding-up.

Upon a successful remarketing of the convertible preferred stock, the terms of your shares of convertible preferred stock may be modified even if you elect not to participate in the remarketing.

When we attempt to remarket the convertible preferred stock, the remarketing agent will agree to use its reasonable best efforts to sell the convertible preferred stock included in the remarketing. In connection with the remarketing, we and the remarketing agent may remarket the convertible preferred stock with different terms prior to the remarketing, including (a) dividends may become payable on the convertible preferred stock, (b) if the closing price on the pricing date for a successful remarketing is less than or equal to the reference price, the conversion rate of the convertible preferred stock may be increased to an amount equal to $1,000, divided by 122.5% of the closing price on such date (rounded to the nearest ten-thousandth of a share) and/or (c) the earliest redemption date for the convertible preferred stock may be changed to a later date that is on or prior to March 21, 2025, each as described under “Description of the Convertible Preferred Stock—Terms of the Remarketed Preferred Stock.” If the remarketing is successful, the modified terms will apply to all the shares of convertible preferred stock, including those shares that were not included in the remarketing. However, holders of shares of convertible preferred stock must elect to participate in the remarketing before knowing what the modified terms of the shares will be. Whenever we remarket the convertible preferred stock, we will notify holders of Corporate Units and separate shares of convertible preferred stock of such remarketing. You may determine that the revised terms are not as favorable to you as you would deem appropriate. However, we will not decrease the conversion rate in connection with a successful remarketing of the convertible preferred stock.

The convertible preferred stock has no maturity or mandatory redemption date.

The convertible preferred stock is a perpetual equity security. The convertible preferred stock has no maturity or mandatory redemption date and is not redeemable at the option of investors. Accordingly, the convertible preferred stock will remain outstanding indefinitely unless a holder of shares of convertible preferred stock decides to convert it or, subject to the conditions described herein, we elect to redeem it.

The convertible preferred stock can only be converted in limited situations.

Prior to the purchase contract settlement date, which is February 15, 2024, the convertible preferred stock can only be converted if the shares of convertible preferred stock have been separated from the related purchase contract, as described herein, and only upon the occurrence of a fundamental change if such fundamental change occurs prior to a successful remarketing of the convertible preferred stock. On and after February 15, 2024, holders of shares of convertible preferred stock that are not a part of Corporate Units, at their option, may, at any time and from time to time, convert some or all of their outstanding shares of convertible preferred stock. If the specific conditions for conversion are not met, you will not be able to convert your convertible preferred stock, and you may not be able to receive the value of the Series B preferred stock (or, in the case of induced conversions, cash) and common stock (if any) into which the convertible preferred stock would otherwise be convertible.

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On or after March 22, 2024, we may redeem any or all of the convertible preferred stock, and upon any redemption of your convertible preferred stock or any conversion of your convertible preferred stock in connection with a redemption, you will not receive any make-whole cash or shares or other compensation for future dividends, if any, or lost time value of your convertible preferred stock.

On or after March 22, 2024 (or such later date that is on or prior to March 21, 2025 as is determined in connection with a successful remarketing of the convertible preferred stock), we may redeem any or all of the shares of convertible preferred stock. If any shares of convertible preferred stock are redeemed, we must also redeem a proportionate number of outstanding shares of Series B preferred stock, if any, on the same redemption date. The redemption price of the convertible preferred stock will equal 100% of the liquidation preference of the shares of convertible preferred stock to be redeemed, plus any accumulated but unpaid dividends (whether or not declared) to, but excluding, the redemption date. If we call any convertible preferred stock for redemption, you may convert your shares of convertible preferred stock at any time until the close of business on the business day preceding the redemption date. Upon any such conversion or redemption, we will not be required to pay any make-whole cash or shares or otherwise compensate you in any way, including for any future dividend payments, if any, that you would have otherwise received or any other lost time value of your convertible preferred stock. In addition, unless the earliest redemption date for the convertible preferred stock is changed to a later date that is on or prior to March 21, 2025, the convertible preferred stock that is purchased in a final remarketing could be redeemed by us as soon as March 22, 2024, which is 25 scheduled trading days after such purchase, meaning purchasers in a remarketing may not have any assurance that the call option embedded in the convertible preferred stock has any meaningful time value, or mechanism for compensation for the loss thereof, or rights to future dividends, if any. Because of these features, it is possible that the remarketing price for the convertible preferred stock in any successful remarketing of the convertible preferred stock is less than that which could be obtained for a convertible security without these features, or that there may not be a successful remarketing of the convertible preferred stock at all.

You will have no right to vote for directors until and unless dividends, if any, on any shares of convertible preferred stock are in arrears and unpaid for the equivalent of six or more dividend periods, whether or not consecutive.

Until and unless dividends, if any, on any shares of convertible preferred stock are in arrears and unpaid for the equivalent of six or more dividend periods, whether or not consecutive, you will have no voting rights with respect to the election of directors. If dividends, if any, on any shares of convertible preferred stock are in arrears and unpaid for the equivalent of six or more dividend periods, whether or not consecutive, the holders of our convertible preferred stock, voting as a single class with all of our other classes or series of preferred stock upon which equivalent voting rights have been conferred (including the Series B preferred stock (if any)) and are exercisable, will have the right to elect two additional directors to our board of directors, as described under “Description of the Convertible Preferred Stock—Limited Voting Rights” in this prospectus supplement. These voting rights and the terms of the directors so elected will only continue until all dividends, if any, on the convertible preferred stock have been paid in full, or declared and a sum or number of shares of our common stock sufficient for such payment is set aside for payment.

There will be no make-whole amount of shares or increase to the conversion rate for conversions of the convertible preferred stock in connection with a fundamental change prior to a successful remarketing of the convertible preferred stock, except in limited circumstances.

There will be no make-whole amount of shares or increase to the conversion rate for conversions of the convertible preferred stock in connection with a fundamental change, except in the limited case where the fundamental change occurs prior to a successful remarketing of the convertible preferred stock and the stock price for such fundamental change is less than the conversion price. Upon any such conversion, we will pay or deliver, as applicable, shares of Series B preferred Stock (or, in the case of induced conversions, cash) and shares of our common stock (if any), based solely on the then-applicable conversion rate.

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You may convert your convertible preferred stock only in limited circumstances.

If a fundamental change occurs on or after a successful remarketing of the convertible preferred stock, holders of the convertible preferred stock (whether or not held as part of an Equity Unit) will not be able to convert their shares upon such fundamental change, which means they must wait until February 15, 2024 to convert their shares of convertible preferred stock. This may adversely affect the value of the convertible preferred stock.

The conversion rights with respect to the convertible preferred stock triggered under certain circumstances by a fundamental change could discourage a potential acquiror.

If a fundamental change occurs prior to a successful remarketing of the convertible preferred stock, a holder may elect to convert separate shares of convertible preferred stock in connection with such fundamental change. If the stock price (as defined in “Description of the Purchase Contracts—Early Settlement Upon a Fundamental Change—Calculation of Make-Whole Shares”) is less than the conversion price, the conversion rate for such conversion may be increased. The conversion rights of the holders of the convertible preferred stock could make it more difficult or more expensive for a third party to acquire us, including potential third parties that seek a transaction with us that would be attractive to you. See “Description of the Convertible Preferred Stock—Conversion Rights.”

Our future credit facilities may limit our ability to pay any cash amount upon the conversion of the convertible preferred stock.

Our future credit facilities may prohibit or otherwise limit us from making any cash payments on the conversion of any shares of convertible preferred stock, including if there is a default under any such facility or, after giving effect to such conversion (and any additional indebtedness incurred in connection with such conversion), we would not be in pro forma compliance with our financial covenants under that facility. Any new credit facility that we may enter into may have similar restrictions.

Risk Factors Relating to the Purchase Contracts

The purchase contract gives you the entire risk of a decline in the price of our common stock without any participation in an increase in the price of our common stock.

The number of shares of our common stock that you will receive upon the settlement of a purchase contract is not fixed but instead will depend on the average of the daily VWAPs per share of our common stock during a 20 consecutive trading day market value averaging period, which we refer to as the applicable market value. The market value per share of our common stock you receive on the purchase contract settlement date will be no greater than the reference price of $25.88 (which is the closing price of our common stock on the New York Stock Exchange on March 4, 2021, the date the Corporate Units are priced). If the applicable market value of our common stock is less than the reference price, you will receive a number of shares of our common stock with a value (based on the applicable market value) of less than $100. Accordingly, you assume the risk that the market value of our common stock may decline, and that the decline could be substantial. If the applicable market value of the common stock is greater than the reference price, you will receive a number of shares of our common stock with a value equal to only $100 (based on the applicable market value). As a result, under the purchase contract, you will never receive shares with a value (based on the applicable market value) in excess of $100, which means you will never participate in any appreciation of our stock price above the reference price.

In addition, because the number of shares delivered to you on the purchase contract settlement date will be based upon the applicable market value, which is in turn calculated on the basis of the average of the daily VWAPs per share of our common stock during the market value averaging period, the shares of our common stock you receive on the purchase contract settlement date may be worth less than the shares of our common stock you would have received had the applicable market value been equal to the daily VWAP per share of our

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common stock on the purchase contract settlement date or the average of the daily VWAPs per share of our common stock over a different period of days.

If you elect to settle your purchase contracts early (other than in connection with a fundamental change), you will receive a number of shares of our common stock per purchase contract equal to 85% of the settlement rate calculated as described above but based on the applicable market value of our common stock for a 20 consecutive trading day averaging period following your election to early settle. In this case, even if the applicable market value of the common stock is greater than the reference price, you will receive a number of shares of our common stock with a value equal to only $85 (based on the applicable market value).

You may not be able to exercise your right to settle a purchase contract prior to the purchase contract settlement date unless a registration statement under the Securities Act is in effect and a prospectus is available covering the shares of our common stock and other securities, if any, deliverable upon early settlement of a purchase contract.

The early settlement right and the fundamental change early settlement right under the purchase contracts are subject to the condition that, if required under the U.S. federal securities laws, we have a registration statement under the Securities Act in effect and an available prospectus covering the shares of our common stock and other securities, if any, deliverable upon settlement of a purchase contract. Although we have agreed to use our commercially reasonable efforts to have such a registration statement in effect and to provide a prospectus if so required under the U.S. federal securities laws, any failure or inability to maintain an effective registration statement or to have available a prospectus covering the shares of our common stock and other securities, if any, deliverable upon early settlement of a purchase contract, including as a result of pending corporate events or announcements that prevent the delivery of a current prospectus, may prevent or delay an early settlement, however, you will not be entitled to any compensation on the account of such occurrence.

The delivery of make-whole shares upon a fundamental change early settlement of the purchase contracts may not adequately compensate you.

If a fundamental change (as defined below under “Description of the Purchase Contracts—Early Settlement Upon a Fundamental Change”) occurs prior to the purchase contract settlement date and you exercise your fundamental change early settlement right with respect to your purchase contracts, you will not be entitled to receive additional value in respect of make-whole shares for such purchase contracts if the stock price (as defined under “Description of the Purchase Contracts—Early Settlement Upon a Fundamental Change” below) is in excess of $80.00 per share (subject to adjustment in certain circumstances). A description of how the number of make-whole shares will be determined is set forth under “Description of the Purchase Contracts—Early Settlement Upon a Fundamental Change—Calculation of Make-Whole Shares.” There is no make-whole amount of shares or increase to the conversion rate for conversions of the convertible preferred stock in connection with a fundamental change, except for the limited case where the fundamental change occurs prior to a successful remarketing of the convertible preferred stock and the stock price for such fundamental change is less than the conversion price, all as described under “Description of the Purchase Contracts—Early Settlement Upon a Fundamental Change” below. Moreover, in no event will the conversion rate per share of convertible preferred stock as a result of this adjustment exceed 77.2798 shares of our common stock, subject to adjustment in certain circumstances in the same manner as the conversion rate for the convertible preferred stock as set forth under “Description of the Convertible Preferred Stock—Conversion Rate Adjustments.” The make-whole shares in respect of the purchase contracts may not adequately compensate you for any lost value of your Equity Units and/or convertible preferred stock as a result of such transaction.

In addition, in the event that a holder seeks to exercise its fundamental change early settlement right in respect of its purchase contracts and a registration statement is required to be effective in connection with the exercise of such right but no such registration statement is then effective or a blackout period is continuing, the holder’s exercise of such right will be void unless and until the registration statement is effective. For so long as

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there is a material business transaction or development that has not yet been publicly disclosed, we will not be required to file such registration statement or provide such a prospectus, and the fundamental change early settlement right will not be available, until we have publicly disclosed such transaction or development, provided that we will use commercially reasonable efforts to make such disclosure as soon as it is commercially reasonable to do so.

Our obligation to pay or deliver the make-whole shares upon exercise of your fundamental change early settlement right with respect to your purchase contracts could be considered a penalty, in which case the enforceability thereof would be subject to general principles of equity.

The fundamental change early settlement rights triggered under certain circumstances by a fundamental change could discourage a potential acquiror.

If a fundamental change occurs prior to the purchase contract settlement date, then, following the fundamental change, each holder of a purchase contract, subject to certain conditions, will have the right to settle the purchase contract early on the fundamental change early settlement date at, in some circumstances, an increased settlement rate, as described under “Description of the Purchase Contracts—Early Settlement Upon a Fundamental Change.” The fundamental change early settlement right with respect to the purchase contracts and the increased settlement rate triggered under certain circumstances by a fundamental change could discourage a potential acquiror, including potential acquirors that otherwise seek a transaction with us that would be attractive to you.

Contract adjustment payments may be treated as ordinary income and, if paid to non-U.S. holders, subject to 30% withholding tax.

The U.S. federal income tax treatment of contract adjustment payments is unclear. These payments may constitute taxable ordinary income to a U.S. holder (as defined in “Material United States Federal Income and Estate Tax Consequences”) when received or accrued, in accordance with the U.S. holder’s regular method of tax accounting and, if paid to a non-U.S. holder (as defined in “Material United States Federal Income and Estate Tax Consequences”), as amounts generally subject to withholding tax at a 30% rate, unless certain conditions are satisfied. See “Material United States Federal Income and Estate Tax Consequences—Tax Consequences to U.S. Holders—Purchase Contracts—Contract Adjustment Payments” and “Material United States Federal Income and Estate Tax Consequences—Tax Consequences to Non-U.S. Holders—U.S. Federal Income and Withholding Tax.” You should consult your tax advisor concerning the tax treatment of contract adjustment payments.

Risk Factors Relating to the Series B Preferred Stock

The Series B preferred stock ranks junior to all of our indebtedness and other liabilities.

In the event of our bankruptcy, liquidation, reorganization or other winding-up, our assets will be available to pay the liquidation preference of the Series B preferred stock only after all of our indebtedness and other liabilities have been paid. In addition, we are a holding company for several direct and indirect subsidiaries and the Series B preferred stock will be structurally junior to all existing and future indebtedness and other liabilities (including trade payables) of our subsidiaries and any capital stock of our subsidiaries not held by us. The holders of the Series B preferred stock have no right to participate in the distribution of assets of our subsidiaries (except to the extent that the Company has satisfied all of its liabilities and has recognized claims or interests in the assets of such subsidiaries). Consequently, if we are forced to liquidate our assets to pay our creditors, we may not have sufficient assets remaining to pay the liquidation preference of any or all of the Series B preferred stock then outstanding. We and our subsidiaries may incur substantial amounts of additional debt and other obligations.

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We currently have no capital stock outstanding that is senior to or on parity with the Series B preferred stock. When issued, our convertible preferred stock will rank on parity with the Series B preferred stock. We own substantially all the capital stock of our subsidiaries. As of December 31, 2020, we had $3,446 million principal amount of outstanding long-term indebtedness, all of which is senior in right of payment to the Series B preferred stock. In addition, the Series B preferred stock will be structurally subordinated to all debt, preferred stock and other liabilities of our subsidiaries, which means that creditors and preferred stockholders of our subsidiaries will be paid from the assets of such subsidiaries before holders of the Series B preferred stock would have any claims to those assets.

Dividends, if any, on the Series B preferred stock are only payable if declared by our board of directors and permitted by the Delaware General Corporation Law and such dividends may be restricted by the terms of agreements governing future indebtedness.

Quarterly dividends, if any, on the Series B preferred stock will be paid only if declared by our board of directors. The board of directors is not legally obligated or required to declare quarterly dividends on the Series B preferred stock even if we have funds available for such purposes. In addition, even if our board of directors declares a dividend, we can only make payments of cash in respect of dividends from legally available funds under the Delaware General Corporation Law, as determined by our board of directors, and such funds may not be available to pay cash dividends on the Series B preferred stock. If we do not declare and pay dividends on the Series B preferred stock, the market price of the Series B preferred stock is likely to be adversely affected. As a result of our ability to not pay dividends on the Series B preferred stock, the market price of the Series B preferred stock may be more volatile than the market prices of other securities that are not subject to such a feature.

In addition, the agreements governing any future indebtedness of ours may further limit our ability to pay cash dividends on our capital stock, including the Series B preferred stock, if any. In the event that the agreements governing any such indebtedness restrict our ability to pay dividends in cash on the Series B preferred stock, we may be unable to pay dividends in cash on the Series B preferred stock unless we can refinance the amounts outstanding under such agreements or obtain a consent or amendment under such agreements.

We may issue additional series of preferred stock that rank equally to the Series B preferred stock as to liquidation preference.

Neither our sixth restated certificate of incorporation nor the certificate of designations establishing the designations, preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions of the Series B preferred stock prohibits us from issuing additional series of preferred stock that would rank on parity with the Series B preferred stock as to liquidation preference, including the convertible preferred stock. Our sixth restated certificate of incorporation provides that we have the authority to issue 50,000,000 shares of preferred stock, including the 1,000,000 shares (or 1,150,000 shares if the underwriters’ over-allotment option is exercised in full) of Series B preferred stock that are issuable upon optional conversion of the convertible preferred stock as described under “Description of the Convertible Preferred Stock—Conversion Rights—Settlement Upon Conversion.” The issuances of other series of preferred stock could have the effect of reducing the amounts available to the holders of the Series B preferred stock in the event of our liquidation, dissolution or winding-up.

The Series B preferred stock has no maturity or mandatory redemption date.

The Series B preferred stock is a perpetual equity security. The Series B preferred stock has no maturity or mandatory redemption date and is not redeemable at the option of investors. Accordingly, the Series B preferred stock will remain outstanding indefinitely unless we elect to redeem it.

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On or after March 22, 2024, we may redeem any or all of the Series B preferred stock, and upon any redemption of your Series B preferred stock, you will not receive any make-whole cash or shares or other compensation for future dividends, if any, or lost time value of your Series B preferred stock.

On or after March 22, 2024, we may redeem any or all of the shares of Series B preferred stock. If any shares of Series B preferred stock are redeemed, we must also redeem a proportionate number of outstanding shares of convertible preferred stock, if any, on the same redemption date. The redemption price of the Series B preferred stock will equal 100% of the liquidation preference of the shares of Series B preferred stock to be redeemed, plus any accumulated but unpaid dividends (whether or not declared) to, but excluding, the redemption date. Upon any such redemption, we will not be required to pay any make-whole cash or shares or otherwise compensate you in any way, including for any future dividend payments that you would have otherwise received.

You will have no right to vote for directors until and unless dividends, if any, on any shares of Series B preferred stock are in arrears and unpaid for the equivalent of six or more dividend periods, whether or not consecutive.

Until and unless dividends, if any, on any shares of Series B preferred stock are in arrears and unpaid for the equivalent of six or more dividend periods, whether or not consecutive, you will have no voting rights with respect to the election of directors. If dividends, if any, on any shares of Series B preferred stock are in arrears and unpaid for the equivalent of six or more dividend periods, whether or not consecutive, the holders of our Series B preferred stock, voting as a single class with all of our other classes or series of preferred stock upon which equivalent voting rights have been conferred (including the convertible preferred stock) and are exercisable, will have the right to elect two additional directors to our board of directors, as described under “Description of the Series B Preferred Stock—Limited Voting Rights” in this prospectus supplement. These voting rights and the terms of the directors so elected will only continue until all dividends, if any, on the Series B preferred stock have been paid in full, or declared and a sum or number of shares of our common stock sufficient for such payment is set aside for payment.

The trading price of the Series B preferred stock issued upon conversion of the convertible preferred stock may be less than its $1,000 liquidation preference per share.

The dividend rate and other terms of the Series B preferred stock may not be the same as the terms of similar securities issued at the time. In addition, there will be no protections in connection with fundamental changes or similar corporate transactions. As a result, the Series B preferred stock may trade at prices below its $1,000 liquidation preference per share. There also may be no liquid market for the Series B preferred stock, especially if holders convert their convertible preferred stock into Series B preferred stock and common stock (if any) at a time when few shares of convertible preferred stock have been or are being converted. In addition, the Series B preferred stock will trade separately from the convertible preferred stock, and it is likely that the Series B preferred stock will trade at a discount to the convertible preferred stock.

The Series B preferred stock will not contain provisions to afford protection to holders of the Series B preferred stock in the event of a fundamental corporate transactions involving us.

The Series B preferred stock will not contain provisions to afford protection to holders of the Series B preferred stock in the event of a fundamental corporate transactions involving us except to the extent described under “Description of the Series B Preferred Stock—Limited Voting Rights—When a Supermajority Vote is Required.” For example, there may be no protection afforded to holders with respect to transactions such as leveraged recapitalizations, refinancings, restructurings, or other acquisitions initiated by us. In the event of any such transaction, we, our capital structure or our credit ratings may be adversely affected.

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If Series B preferred stock is issued in connection with a conversion of convertible preferred stock, you may be treated as participating in a “listed transaction” for U.S. federal income tax purposes.

If the Series B preferred stock received upon conversion of convertible preferred stock is issued (i) with dividends and (ii) (x) with a fair market value in excess of the amount for which it may be redeemed by a de minimis amount or more or (y) in between dividend payment dates such that the first dividend payment on the Series B preferred stock represents a disproportionately large yield per period as compared to later dividend payments, then, under a technical reading of applicable Treasury regulations, the Series B preferred stock may be presumed to be “fast-pay stock.” If the Series B preferred stock constitutes fast-pay stock, then the issuance of the Series B preferred stock will qualify as a “listed transaction” under applicable Treasury regulations, and persons who are then beneficial owners of the Series B preferred stock that are required to file a U.S. federal income tax return will be required to file a disclosure statement on Internal Revenue Service (“IRS”) Form 8886 (or successor form) with their U.S. federal income tax returns identifying their participation in a “reportable transaction” and to mail a copy of the form to the IRS Office of Tax Shelter Analysis. Failure to comply with these disclosure requirements may result in onerous penalties. If, at the time the Series B preferred stock is issued, we believe that the Series B preferred stock could be treated as described in the fast-pay stock regulations, we intend to file a protective disclosure statement on IRS Form 8886 with respect to the Series B preferred stock. See “Material United States Federal Income and Estate Tax Consequences—Tax Consequences to U.S. Holders—Series B Preferred Stock Acquired Upon Conversion—Potential Treatment as Fast-Pay Stock.”

If the Series B preferred stock is treated as “nonqualified preferred stock,” upon conversion of the convertible preferred stock into common stock and Series B preferred stock, you may be treated as recognizing gain or as receiving a taxable dividend even though you do not receive any cash upon conversion.

We expect to treat the Series B preferred stock you receive upon conversion of the convertible preferred stock as “nonqualified preferred stock” within the meaning of Section 351(g) of the Code. Under this treatment, the fair market value of the Series B preferred stock you receive would be treated in the same way as cash and, depending on your particular circumstances, you might either recognize gain (if any) or be treated as receiving a dividend for U.S. federal income tax purposes, as discussed in “Material United States Federal Income and Estate Tax Consequences—Tax Consequences to U.S. Holders—Convertible Preferred Stock—Conversion into Common Stock and Series B Preferred Stock.” If you are a non-U.S. holder (as defined in “Material United States Federal Income and Estate Tax Consequences”) and you recognize gain upon receipt of the Series B preferred stock in a conversion of your convertible preferred stock, you may be subject to U.S. federal income tax and withholding at a 15% rate on the amount realized, if we are a United States real property holding corporation at any time within the five-year period preceding the conversion (or during your holding period, if shorter), as described in “Material United States Federal Income and Estate Tax Consequences—Non-U.S. Holders— Sale, Exchange, Conversion or Other Taxable Disposition of the Equity Units, Convertible Preferred Stock, Common Stock or Series B Preferred Stock.” If you are a non-U.S. holder and you are treated as receiving a dividend, you will generally be subject to U.S. federal withholding tax at a rate of 30% on the dividend amount. See “Material United States Federal Income and Estate Tax Consequences—Tax Consequences to Non-U.S. Holders—U.S. Federal Income and Withholding Tax.”

Risk Factors Relating to our Common Stock

The price of our common stock may fluctuate significantly, which could negatively affect us and holders of our common stock.

The purchase contracts are settled for shares of our common stock and the convertible preferred stock is convertible into our common stock and/or cash, in each case, based on the market price of our common stock. The market price of our common stock may fluctuate significantly in response to many factors, including:

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Holders who receive our common stock upon settlement of their purchase contracts or conversion of their convertible preferred stock will be subject to the risk of volatile and depressed market prices of our common stock. In addition, many of the factors listed above are beyond our control. These factors may cause the market price of our common stock to decline, regardless of the financial condition, results of operations, business or prospects of us and our subsidiaries. It is impossible to assure holders of Equity Units and the convertible preferred stock that the market price of our common stock will not fall in the future.

Future sales of our shares could depress the market price of our common stock.

We are not restricted from selling common stock in the future, including securities that are convertible into or exchangeable for, or that represent the right to receive, common stock. The market price of our common stock could decline as a result of sales of shares of our common stock made after this offering or the perception that such sales could occur, and these sales, or the possibility that these sales may occur, could make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate. In the future, we may issue our common stock in connection with investments or acquisitions. The amount of such common stock issued could constitute a material portion of our then outstanding common stock.

If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our share price and trading volume could decline.

The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business. If few securities or industry analysts cover our company, the trading price for our common shares would be negatively impacted. If one or more of the analysts who covers us downgrades our common stock or publishes inaccurate or unfavorable research about our business, our share price would likely decline. If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, demand for our common stock could decrease, which could cause our share price and trading volume to decline.

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USE OF PROCEEDS

The net proceeds from this offering are estimated to be approximately $973.0 million, after deducting underwriting discounts and commissions and estimated offering expenses payable by us. We intend to use up to $500.0 million of the net proceeds towards our renewables business, up to $300.0 million of the net proceeds towards our U.S. utilities business and the remainder of the net proceeds towards LNG infrastructure and other developments determined by management.

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ACCOUNTING TREATMENT

The proceeds from the sale of the Corporate Units will be allocated between the purchase contracts and the convertible preferred stock based on the fair value of each at the date of the offering. It is expected that the aggregate liquidation preference of the convertible preferred stock will be recorded as equity at inception. The present value of the Corporate Unit contract adjustment payments will be initially charged to shareowners’ equity, with an offsetting credit to liabilities. This liability is accreted over three years by interest charges based on a constant rate calculation. Subsequent contract adjustment payments reduce this liability.

The purchase contracts are forward transactions in our common stock. Upon settlement of each purchase contract, we will receive $100 on the purchase contract and will issue the requisite number of shares of our common stock. The $100 that we receive will be credited to shareowners’ equity.

Before the issuance of our common stock upon settlement of the purchase contracts, the purchase contracts will be reflected in our diluted earnings per share calculations using the treasury stock method. Under this method, the number of shares of our common stock used in calculating diluted earnings per share (based on the settlement formula applied at the end of the reporting period) is deemed to be increased by the excess, if any, of the number of shares that would be issued upon settlement of the purchase contracts over the number of shares that could be purchased by us in the market (at the average market price during the period) using the proceeds receivable upon settlement. Consequently we anticipate there will be no dilutive effect on our earnings per share from the purchase contracts prior to settlement.

Convertible securities factor into the earnings per share calculation using either the “if-converted method” or the “treasury stock method” as appropriate, if dilutive. Such securities are assumed to be converted at the beginning of the period, with the resulting common shares included in the denominator of the diluted earnings per share calculation for the entire period being presented. Diluted earnings per share also includes certain shares that are contingently issuable. Contingent shares are included if such shares would be issuable as of the end of the reporting period assuming the end of the reporting period was the end of the contingency period.

A convertible security (such as convertible preferred stock) that requires the liquidation preference to be settled in another class of nonconvertible preferred stock (or cash in certain circumstances) would apply the treasury stock method of accounting in computing diluted earnings per share. This computation would reflect the dilutive impact of issuing common stock to the extent that the conversion value of the convertible preferred stock exceeds its liquidation preference. The contingent shares issuable for the excess would be included in the denominator of diluted earnings per share during such times.

Before the settlement of the convertible preferred stock, the applicable conversion value feature will be accounted for using the treasury stock method previously described. As a result, we anticipate there will be no dilutive effect on our earnings per share except during periods when the average market price of our common stock is above $31.70.

On August 5, 2020, the Financial Accounting Standards Board issued Accounting Standard Update 2020-06, which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The Company will apply the new standard beginning in January 2022 but does not expect any significant impacts from the implementation of the new standard with respect to the accounting for this transaction.

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DESCRIPTION OF THE EQUITY UNITS

The following is a summary of some of the terms of the Equity Units. This summary, together with the summary of the terms of the purchase contracts, the purchase contract and pledge agreement, the convertible preferred stock, the Series B preferred stock and our common stock set forth under the captions “Description of the Purchase Contracts,” “Certain Provisions of the Purchase Contract and Pledge Agreement,” “Description of the Convertible Preferred Stock” and “Description of the Series B Preferred Stock” and “Description of Common Stock” is a description of the material terms of the Equity Units but does not purport to be complete, and we refer you to the agreements which will govern your rights as holders of the Equity Units and which have been or will be filed or incorporated by reference as exhibits to the registration statement of which this prospectus supplement is a part.

As used in this Description of the Equity Units, “we,” “us,” “our” or “the Company” refer only to The AES Corporation and any successor obligor, and not to any of its subsidiaries.

General

We will issue the Equity Units under the purchase contract and pledge agreement between us and Deutsche Bank Trust Company Americas, as purchase contract agent (in such capacity, the “purchase contract agent”), as collateral agent, custodial agent and securities intermediary (in such capacities, the “collateral agent”). The Equity Units may be Corporate Units, Treasury Units or Cash Settled Units. The Equity Units will initially consist of 10,000,000 Corporate Units (or 11,500,000 Corporate Units if the underwriters exercise their over-allotment option in full), each with a stated amount of $100. Each Corporate Unit offered by us will consist of:

(1) a purchase contract under which:

(2) either:

“Applicable ownership interest” means, with respect to a Corporate Unit and the U.S. Treasury securities in the Treasury portfolio, a 1/10th, or 10%, undivided beneficial ownership interest in $1,000 face amount of U.S. Treasury securities (or principal or interest strips thereof) included in the Treasury portfolio that mature on or prior to the purchase contract settlement date.

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The fair market value of the Corporate Units we issue will be recorded in our financial statements based on an allocation between the purchase contracts and the convertible preferred stock in proportion to their respective fair market values at the time of issuance. Under the purchase contract and pledge agreement, you will be deemed to have agreed to allocate the entire purchase price to your convertible preferred stock as described under “Material United States Federal Income and Estate Tax Consequences—U.S. Holders—Equity Units—Allocation of Purchase Price.”

As long as a unit is in the form of a Corporate Unit, any ownership interest in a share of convertible preferred stock or any applicable ownership interest in the Treasury portfolio forming a part of the Corporate Unit will be pledged to us through the collateral agent to secure your obligation to purchase our common stock under the related purchase contract.

Creating Treasury Units by Substituting a Treasury Security for Convertible Preferred Stock

Each holder of 10 Corporate Units may create, at any time other than (i) if we elect an optional remarketing, during the period from 5:00 p.m., New York City time, on the second business day immediately preceding the first day of any optional remarketing period until the settlement date of such remarketing or the date we announce that no successful optional remarketing has occurred during the optional remarketing period, (ii) following any successful remarketing of the convertible preferred stock and (iii) after 5:00 p.m., New York City time, on the second business day immediately preceding the first day of the final remarketing period (we refer to each such period as a “blackout period”), 10 Treasury Units by substituting for the share of convertible preferred stock that is a component of 10 Corporate Units a zero-coupon U.S. Treasury security with a principal amount of $1,000 that matures on or prior to February 15, 2024 (e.g., CUSIP No. 912820L47), which we refer to as a “Treasury security.” This substitution would create 10 Treasury Units, and the related share of convertible preferred stock would be released to the holder and would be separately tradable from the Treasury Units. Because the convertible preferred stock is issued with a liquidation preference of $1,000 per share, holders of Corporate Units may make this substitution only in integral multiples of 10 Corporate Units.

Each Treasury Unit will consist of:

(1) a purchase contract under which:

(2) a 1/10th undivided beneficial ownership interest in a Treasury security.

The term “business day” means any day other than a Saturday or a Sunday or any other day on which banking institutions and trust companies in New York City, New York are authorized or required by law or executive order to remain closed.

To create 10 Treasury Units, a holder is required to:

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Promptly following receipt of written instructions from the purchase contract agent and receipt of the Treasury security, the collateral agent will release the related share of convertible preferred stock from the pledge and deliver it to the purchase contract agent on behalf of the holder, free and clear of our security interest. The purchase contract agent then will:

The Treasury Unit holder’s beneficial ownership interest in the Treasury security will be pledged to us through the collateral agent to secure the holder’s obligation to purchase our common stock under the related purchase contracts. The share of convertible preferred stock thereafter will trade and be transferable separately from the Treasury Units.

Holders who create Treasury Units or recreate Corporate Units, as discussed below, will be responsible for any fees or expenses (including reasonable fees and expenses of counsel) payable to the collateral agent in connection with substitutions of collateral. See “Certain Provisions of the Purchase Contract and Pledge Agreement—Miscellaneous.”

Recreating Corporate Units from Treasury Units

Each holder of 10 Treasury Units will have the right, at any time other than during a blackout period, to substitute for the related Treasury security held by the collateral agent one share of convertible preferred stock for each such 10 Treasury Units. This substitution would recreate Corporate Units and the applicable Treasury security would be released to the holder. Because the convertible preferred stock is issued with a liquidation preference of $1,000 per share, holders of Treasury Units may make the substitution only in integral multiples of 10 Treasury Units.

To recreate 10 Corporate Units, a holder is required to:

Promptly following receipt of written instructions from the purchase contract agent and receipt of the share of convertible preferred stock, the collateral agent will release the related Treasury security from the pledge and promptly instruct the securities intermediary to transfer such Treasury security to the purchase contract agent on behalf of the holder, free and clear of our security interest. The purchase contract agent then will:

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The share of convertible preferred stock will be substituted for the Treasury security and will be pledged to us through the collateral agent to secure the holder’s obligation to purchase shares of our common stock under the related purchase contracts. The Treasury security thereafter will trade and be transferable separately from the Corporate Units.

No Equity Units may be created or recreated from Series B preferred stock.

Creating Cash Settled Units from Corporate Units

Each holder of 10 Corporate Units may create, only during the period after the date we give notice of the final remarketing period and prior to 5:00 p.m., New York City time, on the second business day immediately preceding the first day of the final remarketing period, Cash Settled Units by substituting for a share of convertible preferred stock that is a component of the Corporate Units $1,000 in cash. This substitution would create 10 Cash Settled Units, and the related share of convertible preferred stock would be released to the holder and would be separately tradable from the Cash Settled Units. Because the convertible preferred stock is issued with a liquidation preference of $1,000 per share, holders of Corporate Units may make this substitution only in integral multiples of 10 Corporate Units. Holders of Cash Settled Units do not have the right to recreate Corporate Units or create Treasury Units.

Each Cash Settled Unit will consist of:

(1) a purchase contract under which:

(2) $100 in cash.

To create 10 Cash Settled Units, a holder is required to:

Promptly following receipt of written instructions from the purchase contract agent and receipt of cash, the collateral agent will release the related share of convertible preferred stock from the pledge and deliver it to the purchase contract agent on behalf of the holder, free and clear of our security interest. The purchase contract agent then will:

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The cash will be substituted for the share of convertible preferred stock and will be pledged to us through the collateral agent to secure the holder’s obligation to purchase shares of our common stock under the related purchase contract. Cash held as a component of the Cash Settled Unit will be held in a non-interest bearing account as set forth in the purchase contract and pledge agreement. The share of convertible preferred stock thereafter will trade separately from the Cash Settled Units.

Holders who create Cash Settled Units, as discussed below, will be responsible for any fees or expenses payable to the collateral agent (including reasonable fees and expenses of counsel) in connection with substitutions of collateral. See “Certain Provisions of Purchase Contract and Pledge Agreement—Miscellaneous.”

No Equity Units may be created or recreated from Series B preferred stock.

Current Payments

Holders of Corporate Units and Treasury Units will receive quarterly contract adjustment payments payable by us at the rate of 6.875% per year on the stated amount of $100 per Equity Unit until the earliest of the purchase contract settlement date, the fundamental change early settlement date (in the case of a fundamental change where the holder has elected to settle its purchase contracts early in connection with such fundamental change as described in “Description of the Purchase Contracts—Early Settlement Upon a Fundamental Change”) and the most recent payment date on or before an early settlement as described in “Description of the Purchase Contracts—Early Settlement.” Holders of Cash Settled Units will receive the final quarterly contract adjustment payment payable by us on the February 15, 2024 payment date. In addition, following any successful remarketing where dividends become payable on the convertible preferred stock, holders of Corporate Units will receive, when, as and if declared by our board of directors, quarterly cash distributions consisting of dividends, if any, on the convertible preferred stock attributable to such Corporate Units equivalent to the dividend rate on the liquidation preference of the convertible preferred stock. Any contract adjustment payments and distributions in respect of dividends, if any, on the convertible preferred stock may be paid in cash, shares of our common stock or a combination thereof, at our election, as described herein, unless we have previously irrevocably elected a dividend payment method or contract adjustment payment method to apply. There will be no distributions in respect of the Treasury securities that are a component of the Treasury Units or the cash that is a component of the Cash Settled Units, but to the extent that such holders of Treasury Units or Cash Settled Units, as the case may be, continue to hold the shares of convertible preferred stock that were released to them when such Treasury Units or Cash Settled Units were created, such holders will continue to receive, when, as and if declared by our board of directors, quarterly dividend payments, if any, on their separate shares of convertible preferred stock for as long as they continue to hold such shares.

We will make all contract adjustment payments quarterly in arrears on each payment date (except where such date is not a business day, in which case contract adjustment payments will be payable as of the next subsequent business day, without adjustment), commencing on May 15, 2021.

We have the right to defer payment of quarterly contract adjustment payments as described under “Description of the Purchase Contracts—Contract Adjustment Payments.” We are not obligated to declare or pay dividends, if any, on the convertible preferred stock, as described under “Description of the Convertible Preferred Stock—Dividends.”

Listing

We intend to apply for listing of the Corporate Units on the New York Stock Exchange under the symbol “AESC.” Unless and until substitution has been made as described above, none of the convertible preferred stock component of a Corporate Unit, the Treasury security component of a Treasury Unit nor the cash component of a Cash Settled Unit will trade separately from Corporate Units, Treasury Units or Cash Settled Units. The

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convertible preferred stock component will trade as a unit with the purchase contract component of the Corporate Units, the Treasury security component will trade as a unit with the purchase contract component of the Treasury Units and the cash component will trade as a unit with the purchase contract component of the Cash Settled Units. In addition, if Treasury Units, Cash Settled Units, shares of convertible preferred stock or shares of Series B preferred stock issued upon conversion of the convertible preferred stock are separately traded to a sufficient extent that the applicable exchange listing requirements are met, we may, but have no obligation to, cause the Treasury Units, Cash Settled Units or convertible preferred stock to be listed on the exchange on which the Corporate Units are then listed, including, if applicable, the New York Stock Exchange.

Voting and Certain Other Rights

Holders of purchase contracts forming part of the Corporate Units, Treasury Units, or Cash Settled Units, in their capacities as such holders, will have no voting or other rights in respect of our common stock. Holders of shares of convertible preferred stock, whether or not part of a Corporate Unit, and holders of shares of Series B preferred stock will have only the limited voting rights described in “Description of the Convertible Preferred Stock—Limited Voting Rights” and “Description of the Series B Preferred Stock—Limited Voting Rights,” respectively.

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DESCRIPTION OF THE PURCHASE CONTRACTS

The following is a summary of certain provisions of the purchase contracts, which will be issued pursuant to the purchase contract and pledge agreement among us, the purchase contract agent and the collateral agent, the custodial agent and the securities intermediary. The following summary does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all of the provisions of the purchase contracts, including the definitions in the purchase contracts of certain terms. Wherever particular sections or defined terms of the purchase contracts are referred to, such sections or defined terms are incorporated into this prospectus supplement by reference.

As used in this Description of the Purchase Contracts, “we,” “us,” “our” or “the Company” refer only to The AES Corporation and any successor obligor, and not to any of its subsidiaries.

Purchase of Common Stock

Each purchase contract that is a part of a Corporate Unit, a Treasury Unit or a Cash Settled Unit will obligate its holder to purchase, and us to sell, on the purchase contract settlement date (unless the purchase contract terminates prior to that date as described under “—Termination” or is settled early at the holder’s option as described under “—Early Settlement” or “—Early Settlement Upon a Fundamental Change”), for $100 in cash, a number of shares of our common stock equal to the settlement rate (together with cash, if applicable, in lieu of any fractional shares of common stock in the manner described below). The number of shares of our common stock issuable upon settlement of each purchase contract on the purchase contract settlement date (which we call the “settlement rate”) will be rounded to the nearest ten-thousandth of a share and determined as follows, subject to adjustment in certain circumstances as described under “—Anti-dilution Adjustments” below:

(1) If the applicable market value of our common stock is less than or equal to $25.88, which we refer to as the “reference price,” the settlement rate will be 3.8640 shares of our common stock (which we refer to as the “maximum settlement rate”).

Accordingly, if the market price for our common stock decreases from the date of this prospectus supplement and during the market value averaging period (described below), the aggregate market value of the shares of our common stock issued upon settlement of each purchase contract will be less than the stated amount of $100, assuming that the market price on the purchase contract settlement date is the same as the applicable market value of the common stock.

(2) If the applicable market value of our common stock is greater than the reference price, the settlement rate will be a number of shares of our common stock equal to $100 divided by that applicable market value.

Accordingly, if the market price for the common stock increases from the date of this prospectus supplement and during the market value averaging period, the aggregate market value of the shares of our common stock issued upon settlement of each purchase contract will be equal to the stated amount of $100, assuming that the market price of the common stock on the purchase contract settlement date is the same as the applicable market value of the common stock.

The reference price initially equals the closing price of our common stock on the New York Stock Exchange on March 4, 2021.

If you elect to settle your purchase contract early in the manner described under “—Early Settlement,” the number of shares of our common stock issuable upon settlement of such purchase contract will be equal to 85% of the settlement rate determined in the manner set forth above but over a 20 consecutive trading day period beginning on the trading day immediately following the day you exercise your early settlement right, which we refer to as the “early settlement averaging period.” If you elect to settle your purchase contract early upon a fundamental change, the number of shares of our common stock issuable upon settlement will be determined as described under “—Early Settlement Upon a Fundamental Change.”

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The “applicable market value” of our common stock means the average of the daily VWAPs of our common stock during the market value averaging period.

The “market value averaging period” means the 20 consecutive trading day period beginning on, and including, the 21st scheduled trading day immediately preceding the purchase contract settlement date.

The “daily VWAP” of our common stock means, for each relevant trading day, the per share volume weighted average price as displayed under the heading Bloomberg VWAP on Bloomberg page “AES <EQUITY> AQR” (or its equivalent successor if such page is not available) in respect of the period from the scheduled open of trading on the relevant trading day until the scheduled close of trading on the relevant trading day (or if such VWAP is unavailable, the market price of one share of our common stock on such trading day determined, using a volume-weighted average method, by a nationally recognized independent investment banking firm retained for this purpose by us).

A “trading day” means (a) a day (i) on which the New York Stock Exchange, or, if our common stock is not then listed on the New York Stock Exchange, the principal exchange or quotation system on which our common stock is listed or admitted for trading, is scheduled to be open for business and (ii) on which there has not occurred or does not exist a market disruption event, or (b) if our common stock is not so listed or admitted for trading, a “trading day” means a business day.

A “market disruption event” means (i) a failure by the primary U.S. national or regional securities exchange or market on which our common stock is listed or admitted for trading to open for trading during its regular trading session or (ii) the occurrence or existence prior to 1:00 p.m., New York City time, on any scheduled trading day for our common stock for more than one half-hour period in the aggregate during regular trading hours of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the relevant stock exchange or otherwise) in our common stock or in any options contracts or futures contracts relating to our common stock.

If a market disruption event occurs on any scheduled trading day during the market value averaging period or any early settlement averaging period, we will notify investors on the calendar day on which such event occurs.

If 20 trading days for our common stock have not occurred during the period from, and including, the first day of the market value averaging period to, and including, the second scheduled trading day immediately prior to the purchase contract settlement date, all remaining trading days in the market value averaging period will be deemed to occur on that second scheduled trading day immediately prior to the purchase contract settlement date, and the daily VWAP of our common stock for each of those remaining trading days will be the daily VWAP of our common stock on that second scheduled trading day or, if such day is not a trading day, the closing price as of such day.

We will not issue any fractional shares of our common stock upon settlement of a purchase contract. Instead of a fractional share, the holder will receive an amount of cash equal to the percentage of a whole share represented by such fractional share multiplied by the closing price of our common stock on the trading day immediately preceding the purchase contract settlement date (or the trading day immediately preceding the relevant date for delivery of shares of our common stock, in the case of early settlement). If, however, a holder surrenders for settlement more than one purchase contract on the same date, then the number of shares of our common stock issuable pursuant to such purchase contracts will be computed based upon the aggregate number of purchase contracts surrendered on such date or, if the Equity Units are held in global book-entry form, based on such other aggregate number of purchase contracts being surrendered by the holder on the same date as DTC may otherwise request.

The “closing price” per share of our common stock means, on any date of determination, the closing sale price (or if no closing sale price is reported, the average of the bid and ask prices or, if more than one in either

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case, the average of the average bid and the average ask prices) on that date as reported in composite transactions for the principal U.S. national or regional securities exchange on which our common stock is traded. If our common stock is not listed for trading on a U.S. national or regional securities exchange on the relevant date, the “closing price” will be the last quoted bid price for our common stock in the over-the-counter market on the relevant date as reported by OTC Markets Group Inc. or a similar organization. If our common stock is not so quoted, the “closing price” will be the average of the mid-point of the last bid and ask prices for our common stock on the relevant date from each of at least three nationally recognized independent investment banking firms selected by us for this purpose.

Unless: