| ITEM 2.03. | CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER ANOFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT. |
On August 10, 2018, Oncor Electric Delivery Company LLC (“Oncor”) completed a sale of $350 million aggregate principal amount of its 3.70% Senior Secured Notes due 2028 (the “2028 Notes”) and $450 million aggregate principal amount of its 4.10% Senior Secured Notes due 2048 (the “2048 Notes” and, together with the 2028 Notes, the “Notes”). Oncor used the proceeds (net of the initial purchasers’ discount, fees and expenses) of approximately $791.2 million from the sale of the Notes for general corporate purposes, including to pay the amount required for defeasance of Oncor’s $550 million principal amount of 6.80% Senior Secured Notes due 2018, to repay the $131.15 million outstanding under Oncor’s term loan credit agreement, and to repay notes due under Oncor’s commercial paper program.
The Notes were issued pursuant to the provisions of an Indenture dated as of August 1, 2002 between Oncor and The Bank of New York Mellon Trust Company N.A. (as successor to The Bank of New York Mellon, formerly The Bank of New York), as trustee (the “Trustee”) (as amended and supplemented, the “Indenture”) and an Officer’s Certificate dated as of August 10, 2018 (the “Officer’s Certificate”) between Oncor and the Trustee. The Officer’s Certificate establishes the terms of the Notes. The 2028 Notes and the 2048 Notes each constitute a separate series of notes under the Indenture, but will be treated together with Oncor’s other outstanding debt securities issued under the Indenture for amendments and waivers and for taking certain other actions.
Oncor’s obligations under the Notes are secured by a lien on all property acquired or constructed by Oncor for the transmission and distribution of electric energy, mortgaged as described under the Deed of Trust, Security Agreement and Fixture Filing (as amended, the “Deed of Trust”) dated as of May 15, 2008, from Oncor to The Bank of New York Mellon Trust Company N.A. (as successor to The Bank of New York Mellon, formerly The Bank of New York), as collateral agent (the “Collateral Agent”).
The 2028 Notes bear interest at a rate of 3.70% per annum and mature on November 15, 2028. The 2048 Notes bear interest at a rate of 4.10% per annum and mature on November 15, 2048. Interest on the Notes is payable in cash semiannually in arrears on May 15 and November 15 of each year, and the first interest payment is due on November 15, 2018. Prior to August 15, 2028, in the case of the 2028 Notes, and May 15, 2048, in the case of the 2048 Notes, Oncor may redeem such Notes at any time, in whole or in part, at a price equal to 100% of their principal amount, plus accrued and unpaid interest and a “make-whole” premium. On and after August 15, 2028, in the case of the 2028 Notes, and May 15, 2048, in the case of the 2048 Notes, Oncor may redeem such Notes at any time, in whole or in part, at a redemption price equal to 100% of the principal amount of such Notes, plus accrued and unpaid interest. The Notes, the Indenture and the Deed of Trust also contain customary events of default, including failure to pay principal or interest on the Notes when due, among others.
The Notes were sold to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and outside the United States tonon-U.S. persons pursuant to Regulation S under the Securities Act. This current report onForm 8-K shall not constitute an offer to sell or the solicitation of an offer to buy the Notes.
In connection with the completion of the sale of the Notes, on August 10, 2018, Oncor entered into a Registration Rights Agreement with the representatives of the initial purchasers of the Notes (the “Registration Rights Agreement”). Under the Registration Rights Agreement, Oncor agreed, subject to certain exceptions, to file a registration statement with the Securities and Exchange Commission with respect to a registered offer to exchange the Notes for publicly registered notes (the “Exchange Offer Registration Statement”), or under certain circumstances, a shelf registration statement to cover resales of the Notes (the “Shelf Registration Statement”). Oncor agreed to use commercially reasonable efforts to cause the Exchange Offer Registration Statement to be declared effective under the Securities Act no later than 270 days after the issue date of the Notes and to consummate the exchange offer no later than 315 days after the issue date of the Notes. Oncor agreed to use commercially reasonable efforts to cause any Shelf Registration Statement to become or be declared effective within the later of 180 days after such Shelf Registration Statement filing obligation arises and 270 days after the issue date of the Notes.
