Item 1.01 Entry into a Material Definitive Agreement
As reported on the Form8-K of Unitil Corporation (the “Company” or the “Registrant”) dated August 30, 2018, Unitil Corporation’s New Hampshire based electric utility subsidiary, Unitil Energy Systems, Inc. (“Unitil Energy”), priced $30 million of its 4.18% Series Q First Mortgage Bonds due November 30, 2048 (the “Bonds”) through a private placement marketing process to institutional investors.
On November 30, 2018, Unitil Energy issued and sold $30 million of the Bonds to institutional investors pursuant to:
| | • | | the Bond Purchase Agreement dated November 30, 2018 among the following parties (the “Bond Purchase Agreement”): (a) Unitil Energy; (b) U.S. Bank National Association (as trustee), (c) (i) United of Omaha Life Insurance Company, (ii) Companion Life Insurance Company, (iii) The State Life Insurance Company, (iv) American United Life Insurance Company, and (v) CMFG Life Insurance Company (the persons in this clause (c) are referred to as the “Purchasers”); and |
| | • | | the Fifteenth Supplemental Indenture dated as of November 29, 2018 among the following parties (the “Fifteenth Supplemental Indenture”): (i) Unitil Energy; and (ii) U.S. Bank National Association (as trustee). |
The Bond Purchase Agreement, the Fifteenth Supplemental Indenture and the Bonds (collectively, the “Bond Documents”) collectively contain customary representations and warranties, covenants and events of default for a transaction of this type. The Bonds may or will become immediately due and payable upon an event of default, as described in the Bond Documents. The Bond Documents also contain a “fall-away” structure whereby the collateral securing the Bonds will be released after all other first mortgage bonds of Unitil Energy are paid, subject to certain additional conditions described in the Bond Purchase Agreement.
The foregoing summary of the Bond Documents does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Bond Documents, which are attached or incorporated by reference as exhibits to this Form8-K. Certain of the Purchasers (or their affiliates) are holders of other indebtedness of the Company or its subsidiaries.
Unitil Energy plans to use the net proceeds from the offering to repay short-term debt and for general corporate purposes.
Unitil Energy offered the Bonds principally to institutional investors in an offering made pursuant to the exemption from registration requirements under Section 4(a)(2) of the Securities Act of 1933, as amended (“Act”).
The Bonds offered have not been and will not be registered under the Act, or any state securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Act and applicable state securities laws.
The Company intends this notice to comply with Rule 135c of the Act and, accordingly, this notice does not constitute an offer to sell or the solicitation of an offer to buy any security and shall not constitute an offer, solicitation or sale of any securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
The Bond Documents attached or incorporated by reference as exhibits to this Form8-K provide investors with information regarding their terms. The representations, warranties and covenants contained in the Bond Documents were made only for purposes of the Bond Documents and as of specific dates, were solely for the benefit of the parties to the Bond Purchase Agreement, and are subject to limitations agreed upon by the parties to the Bond Purchase Agreement. Moreover, the representations and warranties contained in the Bond Documents were made for the purpose of allocating contractual risk between the parties to the Bond Purchase Agreement instead of establishing matters as facts, and may be subject to standards of materiality applicable to the parties to the Bond Purchase Agreement that differ from those applicable to investors generally. Investors (other than the parties to the Bond Purchase Agreement) are not third-party beneficiaries under the Bond Documents and should not rely on the representations, warranties and covenants contained therein or any descriptions thereof as characterizations of the actual state of facts or condition of the Company or any of its subsidiaries or affiliates.
