| Item 1.01 | Entry into a Material Definitive Agreement. |
On June 13, 2024, Avangrid, Inc. (the “Corporation”) entered into an intra-group green loan agreement with Iberdrola Financiación, S.A.U., a wholly-owned subsidiary of Iberdrola, S.A. (the “Lender”), which owns approximately 81.6% of the issued and outstanding shares of common stock of the Corporation (the “Three-Year Intra-Group Green Loan Agreement”). The Three-Year Intra-Group Green Loan Agreement provides the Corporation with an unsecured loan in an aggregate principal amount of $600,000,000 (the “Three-Year Loan”). On June 13, 2024, Avangrid, Inc. (the “Corporation”) also entered into an intra-group green loan agreement with Lender (the “Six-Year Intra-Group Green Loan Agreement” and together with the Three-Year Intra-Group Loan Agreement, the “Loan Agreements”), which provides the Corporation with an unsecured loan in an additional aggregate principal amount of $600,000,000 (the “Six-Year Loan” and together with the Three-Year Loan, the “Loans”). The proceeds of the Loans will be used for the financing and/or refinancing, in whole or in part, Eligible Green Projects (as defined in the Loan Agreements) for the Corporation in accordance with prescribed eligibility criteria set out in the Iberdrola, S.A. framework for green financing and the Corporation’s framework for green financing.
The Three-Year Loan bears interest at a rate per annum equal to 5.476% and interest is payable in arrears in twelve-month periods with the first interest payment date commencing on September 13, 2024, and continuing until September 13, 2027. The Six-Year Loan bears interest at a rate per annum equal to 5.532% and interest is payable in arrears in six-month periods with the first interest payment date commencing on December 13, 2024, and continuing until June 13, 2030.
The Corporation is required to repay the Loans in full upon a change of control of the Corporation. In addition, upon three business days’ notice to the Lender, the Corporation may voluntarily repay the Loans and any accrued and unpaid interest, in whole or in part; provided, that if such pre-payment due to the Corporation’s identification of other financing options the Corporation and the Lender shall negotiate in good faith to enter into an amendment of the applicable Loan Agreement. In the event that no agreements have been reached for such amendment of the applicable Loan Agreement prior to the expiration of the offer period of such other possible financing options, the Corporation shall also pay Break Costs (as defined in the Loan Agreements). The Loan Agreements contains certain customary affirmative and negative covenants and events of default.
The description above is only a summary of the material provisions of the Loan Agreements, and does not purport to be complete and is qualified in its entirety by reference to the provisions in such agreements, copies of which will be filed by the Corporation as an exhibit to its quarterly report on Form 10-Q for the quarterly period ended June 30, 2024.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of the Registrant. |
The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated by reference in this Item 2.03.
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