| Item 1.01 | Entry into a Material Definitive Agreement. |
On November 23, 2021, Avangrid, Inc., a New York corporation (the “Company”), New York State Electric & Gas Corporation (“NYSEG”), Rochester Gas and Electric Corporation (“RGE”), Central Maine Power Company (“CMP”), The United Illuminating Company (“UI”), Connecticut Natural Gas Corporation (“CNG”), The Southern Connecticut Gas Company (“SCG”) and The Berkshire Gas Company (“BGC” and together with the Company, NYSEG, RGE, CMP, UI and CNG, the “Borrowers”) entered into a revolving credit facility with a syndicate of banks (the “Credit Facility”), that provides for maximum borrowings of up to $4 billion in the aggregate. Each of Public Service Company of New Mexico (“PNM”) and Texas-New Mexico Power Company (“TNMP”) will join as a Borrower under the Credit Facility following the closing of the merger (the “Merger”) of PNM Resources, Inc. (“PNMR”) and NM Green Holdings, Inc., a wholly-owned subsidiary of the Company (“Merger Sub”) pursuant to the Agreement and Plan of Merger (“Merger Agreement”) among the Company, PNMR and Merger Sub and the satisfaction of certain customary conditions to joinder, including, without limitation, receipt of certain governmental and third party approvals required in connection with the joinder of PNM and TNMP as Borrowers under the Credit Facility and cancellation of certain existing credit facilities.
This Credit Facility replaces and supersedes the prior revolving credit facility entered into by the Borrowers with a syndicate of banks on June 29, 2018 with a maturity date of June 29, 2023, which provided for maximum borrowings of up to $2.5 billion in the aggregate on substantially similar terms as the Credit Facility.
Under the terms of the Credit Facility, each joint borrower has a maximum borrowing entitlement, or sublimit, which can be periodically adjusted to address specific short-term capital funding needs, subject to the maximum limit established by the banks. The Company’s maximum sublimit is $3,575,000,000 (which shall increase to $4,000,000,000 upon the joinder of PNM and TNMP as Borrowers under the Credit Facility) less the aggregate amount of all Sublimits applicable to the other Borrowers as in effect at such time (as more particularly defined and set forth in the Credit Facility). The other Borrowers have the following Maximum Sublimits under the Credit Facility:
| | | | |
Borrower | | Maximum Sublimit | |
NYSEG | | $ | 700,000,000 | |
RGE | | $ | 300,000,000 | |
CMP | | $ | 200,000,000 | |
UI | | $ | 250,000,000 | |
CNG | | $ | 150,000,000 | |
SCG | | $ | 150,000,000 | |
BGC | | $ | 50,000,000 | |
PNM (following the PNM joinder effective date) | | $ | 400,000,000 | |
TNMP (following the TNMP joinder effective date) | | $ | 300,000,000 | |
The Credit Facility contains no rating triggers that would cause default, acceleration or puts but does contain rating sensitive pricing and pricing that is sensitive to the Borrower’s consolidated greenhouse gas emissions intensity. The Credit Facility also contains negative covenants, including one that sets the ratio of maximum allowed consolidated debt to consolidated total capitalization at 0.65 to 1.00, for each Borrower.
Under the Credit Facility, each of the borrowers will pay an annual facility fee that is dependent on their credit rating. The initial facility fees will range from 10 to 22.5 basis points. The maturity date for the Credit Facility is November 22, 2026.
The description above is only a summary of the material provisions of the Credit Facility and does not purport to be complete and is qualified in its entirety by reference to the provisions in such Credit Facility, a copy of which is attached hereto as Exhibit 10.1.
| Item 1.02 | Termination of a Material Definitive Agreement. |
The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated by reference in this Item 1.02.
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