| Item 1.01 | Entry into a Material Definitive Agreement. |
On February 26, 2021, CenterPoint Energy Resources Corp. (“CERC”) entered into an Underwriting Agreement (the “Underwriting Agreement”) with J.P. Morgan Securities LLC, MUFG Securities Americas Inc., U.S. Bancorp Investments, Inc. and Wells Fargo Securities, LLC, as representatives of the several Underwriters named in Schedule I to the Underwriting Agreement (the “Underwriters”), relating to the underwritten public offering of $1,000,000,000 aggregate principal amount of CERC’s Floating Rate Senior Notes due 2023 (the “Floating Rate Notes”) and $700,000,000 aggregate principal amount of CERC’s 0.70% Senior Notes due 2023 (the “Fixed Rate Notes”, and together with the Floating Rate Notes, the “Notes”). The offering is being made pursuant to CERC’s registration statement on Form S-3 (Registration No. 333-238617-02).
The Notes are being issued pursuant to the Indenture, dated as of February 1, 1998 (the “Base Indenture”), between CERC (formerly NorAm Energy Corp.) and The Bank of New York Mellon Trust Company, N.A. (successor to JPMorgan Chase Bank, National Association (formerly Chase Bank of Texas, National Association)), as trustee (the “Trustee”), Supplemental Indenture No. 19 to the Base Indenture to be dated as of March 2, 2021 between CERC and the Trustee (“Supplemental Indenture No. 19”) with respect to the Floating Rate Notes and Supplemental Indenture No. 20 to the Base Indenture to be dated as of March 2, 2021 between CERC and the Trustee (“Supplemental Indenture No. 20” and together with Supplemental Indenture No. 19, the “Supplemental Indentures”) with respect to the Fixed Rate Notes. The form, terms and provisions of each series of Notes are further described in the applicable Supplemental Indenture and the prospectus supplement of CERC dated February 26, 2021, together with the related prospectus dated May 22, 2020, as filed with the Securities and Exchange Commission under Rule 424(b)(2) of the Securities Act of 1933, as amended, on March 1, 2021, which description is incorporated herein by reference.
The Underwriters and their affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, investment research, principal investment, hedging, financing and brokerage activities. In the ordinary course of their respective businesses, certain of the Underwriters and/or their affiliates have engaged, and may in the future engage, in commercial banking, investment banking, trust or investment management transactions with CERC and its affiliates for which they have received, and will in the future receive, customary compensation.
A copy of the Underwriting Agreement, the Indenture and the forms of Supplemental Indenture No. 19 and Supplemental Indenture No. 20 (including the forms of each series of Notes) have been filed as Exhibits 1.1, 4.1, 4.2 and 4.3, respectively, to this Current Report on Form 8-K and are incorporated by reference herein.
In connection with the closing of the offering described in Item 1.01 above that is scheduled to close on March 2, 2021, CERC will terminate its previously announced $1.7 billion of financing commitments that it received on February 24, 2021 for a potential 364-day term loan facility to bridge potential working capital needs in connection with the extreme and unprecedented winter weather event that occurred in February 2021 resulting in, among other things, natural gas supply shortages and increased wholesale prices of natural gas in the United States. As previously disclosed, CERC would evaluate whether to execute the 364-day term loan facility or other potential financing alternatives. In lieu of consummating the 364-day term loan facility, CERC will consummate the offering of $1.7 billion of senior notes described in Item 1.01 above, the use of proceeds of which will be for general corporate purposes, including to fund working capital.
