| Item 1.01 | Entry into a Material Definitive Agreement. |
Supplemental Indenture
On March 17, 2022, Puget Energy, Inc. (the “Company”) entered into a Seventh Supplemental Indenture (the “Supplemental Indenture”) to the Indenture dated as of December 6, 2010 (the “Base Indenture” and together with the Supplemental Indenture the “Indenture”), with Computershare Trust Company, National Association, as successor trustee to Wells Fargo Bank, National Association, pursuant to which the Company issued $450 million principal amount of 4.224% senior secured notes due 2032 (the “Notes”). The Company intends to use the proceeds from this offering to repay at maturity $450 million in aggregate principal amount of the Company’s 5.625% senior secured notes due July 15, 2022 and for general corporate purposes. The Notes mature on March 15, 2032, and accrue interest at 4.224% per annum, payable semiannually in arrears on March 15 and September 15 of each year, commencing on September 15, 2022.
The Notes are secured by substantially all of the Company’s assets, which consists primarily of the equity interests it holds in its wholly owned subsidiary, Puget Sound Energy, Inc., and will rank pari passu in right of payment, to the extent of the value of the collateral securing the Notes, with all of the Company’s existing and future senior secured indebtedness.
At any time prior to December15, 2031, the Company may redeem the Notes at its option, in whole or in part, at any time at a redemption price equal to the greater of (i) 100% of the principal amount of the Notes redeemed and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the Notes being redeemed, discounted to the redemption date on a semiannual basis at the Treasury Rate plus 35 basis points. At any time on or after December 15, 2031, the Company may redeem the Notes at its option, in whole or in part, at any time at a redemption price equal to 100% of the principal amount being redeemed plus accrued and unpaid interest on the principal amount of the Notes to be redeemed to, but excluding, such redemption date.
Upon the occurrence of a change of control repurchase event (as defined in the Indenture), each holder of Notes will have the right to require the Company to repurchase such holder’s Notes, in whole or in part, at a purchase price equal to 101% of the principal amount thereof, plus any accrued and unpaid interest to the date of purchase.
The Indenture contains covenants limiting the Company’s ability and the Company’s subsidiaries’ ability to create certain liens, enter into sale and lease-back transactions, and consolidate or merge with, or convey, transfer or lease all or substantially all the Company’s assets to, another person. However, each of these covenants is subject to certain exceptions.
The Notes were registered pursuant to a registration statement (Registration No. 333-263015) on Form S-3 under the Securities Act of 1933 that the Company filed on February 25, 2022 and was declared effective on March 10, 2022 (the “Registration Statement”). The Registration Statement was supplemented by a Prospectus Supplement setting forth the terms of the Notes that the Company filed with the Commission on March 14, 2022.
