| Item 1.01 | Entry into a Material Definitive Agreement. |
Commercial Paper Program
On August 23, 2022, Quanta Services, Inc., a Delaware corporation (the “Company”), entered into definitive documentation to establish an unsecured commercial paper program (the “CP Program”) under which the Company may issue short-term, unsecured commercial paper notes (the “Notes”) pursuant to an exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), in an amount up to a maximum aggregate face amount of $1.0 billion outstanding at any time. The Company intends to use the net proceeds of the Notes for general corporate purposes.
The Notes will be sold under customary market terms in the U.S. commercial paper market at a discount from par or at par and bear interest at rates determined at the time of issuance. The maturities of the Notes may vary, but may not exceed 397 days from the date of issuance. As of the date of this report, the Company has not issued any Notes.
Initially, three commercial paper dealers will each act as a dealer under the CP Program (each a “Dealer” and, collectively, the “Dealers”) pursuant to the terms and conditions of the commercial paper dealer agreements entered into between the Company and each Dealer (each, a “Dealer Agreement”). A national bank will act as issuing and paying agent under the CP Program.
Each Dealer Agreement provides the terms under which the applicable Dealer may either purchase the Notes from the Company or arrange for the sale by the Company of the Notes to one or more purchasers, in each case pursuant to a private placement exemption from federal and state securities laws. Each Dealer Agreement contains customary representations, warranties, covenants and indemnification provisions. The Dealer Agreements are substantially identical in all material respects except as to the parties thereto.
The Notes have not been and will not be registered under the Securities Act or state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws. The information contained in this Current Report on Form 8-K is neither an offer to sell nor a solicitation of an offer to buy any securities.
The foregoing description of the Dealer Agreement does not purport to be complete and is subject to, and qualified in its entirety by reference to, the full text of the form of Dealer Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
From time to time, one or more of the Dealers and certain of their respective affiliates have provided, and may in the future provide, commercial banking, investment banking and other financial advisory services to the Company and its affiliates for which they have received or will receive customary fees and expense reimbursements.
Amendment to Credit Agreement
On August 23, 2022, the Company entered into the Eleventh Amendment to Fourth Amended and Restated Credit Agreement (the “Amendment”), among the Company, as a borrower and the guarantor, certain of the Company’s subsidiaries, as borrowers, the lenders party thereto, and Bank of America, N.A., as Administrative Agent. The Amendment amended the Fourth Amended and Restated Credit Agreement, dated as of December 18, 2015, as amended (as amended by the Amendment, the “Amended Credit Agreement”). The Amendment, among other things, permits proceeds of revolving borrowings under the Amended Credit Agreement to be used to provide credit support for the CP Program, establishes Term SOFR (as defined in the Amended Credit Agreement) as the benchmark rate, in replacement of LIBOR (as defined therein prior to giving effect to the Amendment), and revises certain other terms and provisions.
The foregoing description of the Amendment and the Amended Credit Agreement does not purport to be complete and is subject to, and qualified in its entirety by reference to, the full text of the Amendment and the Amended Credit Agreement (included as Annex A to the Amendment), a copy of which is filed as Exhibit 10.2 to this Current Report on Form 8-K and is incorporated herein by reference.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated by reference herein in its entirety.
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