| Item 1.01. | Entry into a Material Definitive Agreement. |
| Item 2.03. | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
On July 15, 2022, Northern States Power Company, a Wisconsin corporation (“NSP-Wisconsin”), entered into a Bond Purchase Agreement (the “Bond Purchase Agreement”) with certain institutional investors for the offer and sale of $100 million in aggregate principal amount of 4.86% First Mortgage Bonds, Series due September 15, 2052 (the “Bonds”). The Bond Purchase Agreement is filed herewith as Exhibit 1.01. Upon closing, NSP-Wisconsin will receive net proceeds of approximately $99.1 million. NSP-Wisconsin intends to use the net proceeds from the sale of the Bonds for general corporate purposes, including meeting its working capital requirements, funding capital expenditures, and repaying short-term debt. The closing of the sale of the Bonds is expected to occur on September 12, 2022.
The Bond Purchase Agreement contains customary representations and warranties, covenants and events of default for a transaction of this type.
The Bonds will be governed by NSP-Wisconsin’s Trust Indenture, dated April 1, 1947, as amended, supplemented and restated, by and between NSP-Wisconsin and U.S. Bank Trust Company, National Association, as successor trustee (the “Indenture”), and the Supplemental Trust Indenture, dated as of July 15, 2022 (the “Supplemental Indenture”), establishing the terms of the Bonds. Subject to limited exceptions, the Bonds will be secured by a first mortgage lien on substantially all of NSP-Wisconsin’s real and fixed properties. A copy of the Supplemental Indenture is filed herewith as Exhibit 4.01. The Bonds are subject to acceleration upon the occurrence of an event of default, including, among other things, default in the payment of the principal of or premium on, the Bonds, default continued for 30 days in the payment of any interest upon the Bonds, default continued for 60 days in any sinking fund payment, bankruptcy events, and default continued for 60 days after notice to NSP-Wisconsin from the trustee in the performance of any other covenant, agreement or condition contained in the Indenture.
NSP-Wisconsin may redeem all or any portion of the Bonds at its option, at any time prior to their maturity, at the redemption price described below. If NSP-Wisconsin redeems all or any part of the Bonds prior to March 15, 2052, NSP-Wisconsin will pay a redemption price equal to the greater of (i) 100% of the principal amount of the Bonds being redeemed and (ii) a make-whole amount as set forth in the Supplemental Indenture plus, in either case, accrued and unpaid interest on such Bonds to, but excluding, the redemption date. If NSP-Wisconsin redeems all or any part of the Bonds on or after March 15, 2052, NSP-Wisconsin will pay a redemption price equal to 100% of the principal amount of the Bonds being redeemed plus accrued and unpaid interest thereon to, but excluding, the redemption date.
KeyBanc Capital Markets Inc. (“KeyBanc”) acted as the sole placement agent in connection with the offer and sale of the Bonds.
In the ordinary course of business, KeyBanc and its affiliates have engaged, and may in the future engage, in other investment banking or commercial banking transactions with NSP-Wisconsin and its affiliates, including acting as lenders under NSP-Wisconsin’s loan facilities and those of some of its affiliates. They have received or will receive customary fees and commissions for these transactions.
The Bonds have been offered and will be sold in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). The Bonds have not been and will not be registered under the Securities Act, or the securities laws of any state, and may not be offered or sold in the United States absent registration or an exemption from the registration requirements of the Securities Act and applicable state securities laws.
