CALIFORNIA WATER SERVICE GROUP (NYSE:CWT) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Agreement.
On March29, 2019 (the “Effective Date”), California Water Service Group, a Delaware corporation (the “Registrant”), and California Water Service Company, a California corporation and a wholly-owned subsidiary of the Registrant (“Cal Water”), entered into the Credit Agreements (as defined below), which provide for unsecured revolving credit facilities of up to an initial aggregate amount of $550 million. The Credit Facilities amend, expand and replace the Registrant’s and Cal Water’s existing credit facilities originally entered into on March10, 2015.
Holdco Credit Agreement
On the Effective Date, the Registrant entered into a credit agreement (the “Holdco Credit Agreement”) provided by a syndicate of banks and other financial institutions led by Bank of America, N.A., as administrative agent.
The Holdco Credit Agreement provides for a $150.0 million unsecured revolving credit facility, which may be expanded by an incremental $50.0 million, upon the satisfaction of certain conditions, and which will be used for working capital and other general corporate purposes. The Holdco Credit Agreement also provides that certain subsidiaries of the Registrant may be designated as borrowers thereunder from time to time. No subsidiaries were so designated as of the Effective Date. The Holdco Credit Agreement expires, and all obligations thereunder shall be due and payable, on March29, 2024, unless earlier accelerated upon the occurrence of an event of default. At the Registrant’s option, borrowings under the Holdco Credit Agreement will bear interest annually at a rate equal to (i)the base rate or (ii)the Eurodollar rate, plus an applicable margin of 0.650% to 0.875%, depending on the Registrant and its subsidiaries’ consolidated total capitalization ratio.
The Holdco Credit Agreement contains affirmative and negative covenants and events of default customary for credit facilities of this type, including, among other things, limitations and prohibitions relating to additional indebtedness, liens, mergers, and asset sales by the Registrant and its subsidiaries. The Holdco Credit Agreement also contains financial covenants governing the Registrant and its subsidiaries’ consolidated total capitalization ratio and interest coverage ratio.
Opco Credit Agreement
On the Effective Date, Cal Water entered into a credit agreement (the “Opco Credit Agreement” and, together with the Holdco Credit Agreement, the “Credit Agreements”) provided by a syndicate of banks and other financial institutions led by Bank of America, N.A., as administrative agent.
The Opco Credit Agreement provides for a $400.0 million unsecured revolving credit facility, which may be expanded by an incremental $150.0 million, upon the satisfaction of certain conditions, and which will be used for working capital purposes, including the short-term financing of capital projects. The Opco Credit Agreement expires, and all obligations thereunder shall be due and payable, on March29, 2024, unless earlier accelerated upon the occurrence of an event of default. Cal Water’s obligations under the Opco Credit Agreement are fully and unconditionally guaranteed by the Registrant. Borrowings under the Opco Credit Agreement must be repaid within 12 months unless otherwise authorized by the California Public Utilities Commission. At Cal Water’s option, borrowings under the Opco Credit Agreement will bear interest annually at a rate equal to (i)the base rate or (ii)the Eurodollar rate, plus an applicable margin of 0.650% to 0.875%, depending on the Registrant and its subsidiaries’ consolidated total capitalization ratio.
The Opco Credit Agreement contains affirmative and negative covenants and events of default customary for credit facilities of this type, including, among other things, limitations and prohibitions relating to additional indebtedness, liens, mergers, and asset sales. The Opco Credit Agreement also contains financial covenants governing the Registrant and its subsidiaries’ consolidated total capitalization ratio and interest coverage ratio.
The foregoing descriptions of the Credit Agreements are qualified in their entirety by reference to the full terms and conditions of the Credit Agreements, which are filed as Exhibit10.1 and Exhibit10.2 hereto and incorporated by reference.
Item 1.01. Termination of a Material Definitive Agreement.
The disclosure required by this item is included in Item 1.01 and is incorporated herein by reference.
Item 1.01. Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant.
The disclosure required by this item is included in Item 1.01 and is incorporated herein by reference.
Item 1.01. Other Events.
On April1, 2019, the Registrant issued a press release announcing the transactions described herein, a copy of which is attached hereto as Exhibit99.1.
Item 1.01. Financial Statements and Exhibits.
We hereby furnish the following exhibits, which shall not be deemed “filed” for the purposes of Section18 of the Exchange Act, with this report:
|
ExhibitNo. |
Description |
|
10.1 |
Credit Agreement dated as of March29, 2019 among California Water Service Group and certain of its subsidiaries from time to time party thereto, as borrowers, Bank of America, N.A., as administrative agent, swing line lender and letter of credit issuer, Merrill Lynch, Pierce, Fenner & Smith Incorporated, as sole lead arranger and sole bookrunner, CoBank, ACB, and U.S. Bank National Association as co-syndication agents, Bank of China, Los Angeles Branch and Wells Fargo Bank, National Association as co-documentation agents, and the other lender parties thereto. |
|
10.2 |
Credit Agreement dated as of March29, 2019 among California Water Service Company as borrower, Bank of America, N.A., as administrative agent, swing line lender and letter of credit issuer, Merrill Lynch, Pierce, Fenner& Smith Incorporated, as sole lead arranger and sole bookrunner, CoBank, ACB, and U.S. Bank National Association as co-syndication agents, Bank of China, Los Angeles Branch and Wells Fargo Bank, National Association as co-documentation agents, and the other lender parties thereto. |
|
99.1 |
Press Release issued April1, 2019 |
CALIFORNIA WATER SERVICE GROUP Exhibit
EX-10.1 2 a19-7797_1ex10d1.htm EX-10.1 Exhibit 10.1 Published CUSIP Number: 13083LAE6 Revolver CUSIP Number: 13083LAF3 CREDIT AGREEMENT Dated as of March 29,…
To view the full exhibit click here
About CALIFORNIA WATER SERVICE GROUP (NYSE:CWT)
California Water Service Group is a holding company that provides water utility and other related services in California, Washington, New Mexico and Hawaii through its subsidiaries. It operates through supply and distribution of water, and providing water-related utility services segment. Its business comprises the production, purchase, storage, treatment, testing, distribution and sale of water for domestic, industrial, public and irrigation uses, and for fire protection. It provides non-regulated water-related services under agreements with municipalities and other private companies. The non-regulated services include water system operation, billing and meter reading services. Non-regulated operations also include the lease of communication antenna sites and lab services. Its subsidiaries include California Water Service Company, New Mexico Water Service Company, Washington Water Service Company, Hawaii Water Service Company, Inc., CWS Utility Services and HWS Utility Services LLC.
