El Paso Electric Company (NYSE:EE) Files An 8-K Entry into a Material Definitive Agreement

El Paso Electric Company (NYSE:EE) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01.

Entry into a Material Definitive Agreement.

On September 13, 2018, El Paso Electric Company (the “Company”) and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”) of the Rio Grande Resources Trust II (the “Trust”), entered into a third amended and restated credit agreement (the “Agreement”) with MUFG Union Bank, N.A., as administrative agent (the “Administrative Agent”) and as syndication agent, various issuing banks party thereto and various lending banks party thereto. Under the terms of the Agreement, the Company has available a $350 million revolving credit facility (the "Facility"), with a $50 million subfacility for the issuance of letters of credit, for a term ending September 13, 2023 (the “Maturity Date”). The Company may increase the Facility by up to $50 million (to a total of up to $400 million) during the term of the Agreement, upon the satisfaction of certain conditions more fully set forth in the Agreement, including obtaining commitments from lenders or third party financial institutions. In addition, the Company may extend the Maturity Date up to two times, in each case for an additional one-year period, upon the satisfaction of certain conditions more fully set forth in the Agreement (each, a “Maturity Extension”), including requisite lender approval.

The Agreement provides that amounts borrowed under the Facility by the Company may be used for, among other things, working capital and general corporate purposes. Any amounts borrowed by the Trustee may be used, among other things, to finance the acquisition and cost to process nuclear fuel, which is accomplished through the Trust. Amounts borrowed by the Trustee are guaranteed by the Company. Revolving borrowings under the Facility bear interest, at the Company’s option, at either (a) the sum of Adjusted LIBOR (as defined in the Agreement), plus a margin ranging between 0.875% to 1.750%, depending on the credit rating of the Company, or (b) the sum of the Alternate Base Rate (as defined in the Agreement), plus a margin ranging between 0.0875% to 0.750%, depending on the Company’s credit rating. The Facility is unsecured. The Agreement requires compliance with certain covenants, including a total debt to capitalization ratio of 0.65 to 1.00.

In addition, the Agreement extended the term of the Company's existing $350 million second amended and restated revolving credit agreement dated January 14, 2014 (the “Previous Credit Agreement”) from January 14, 2020 to the Maturity Date.

The foregoing summary is qualified in its entirety by reference to the text of the Agreement, a copy of which is filed as an exhibit hereto and is incorporated herein by reference.

Item 1.02.

Termination of a Material Definitive Agreement.

In connection with the entry into the Agreement, the Previous Credit Agreement was terminated on September 13, 2018.

Item 2.03.

Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The description of the Agreement and the Facility in Item 1.01 is incorporated herein by reference.

Item 9.01

Financial Statements and Exhibits.

Description

Third Amended and Restated Credit Agreement, dated as of September 13, 2018, by and among El Paso Electric Company, The Bank of New York Mellon Trust Company, N.A., as trustee of the Rio Grande Resources Trust II, various issuing banks party thereto and various lending banks party thereto and MUFG Union Bank, N.A., as administrative agent and as syndication agent.


EL PASO ELECTRIC CO /TX/ Exhibit
EX-10.1 2 ex10_1.htm EXHIBIT 10.1 Exhibit 10.1   EXECUTION VERSION $350,…
To view the full exhibit click here

About El Paso Electric Company (NYSE:EE)

El Paso Electric Company is engaged in the generation, transmission and distribution of electricity in an area of approximately 10,000 square miles in west Texas and southern New Mexico. The Company owns or has ownership interests in several electrical generating facilities providing it with a generating capability of over 2,055 Megawatts. The Company’s energy sources consists of approximately 47% nuclear fuel, 34% natural gas, 6% coal, 13% purchased power and 1% generated by Company-owned solar photovoltaic panels and wind turbines. The Company has power purchase agreements for over 107 Megawatts from solar photovoltaic generation facilities. The Company serves approximately 404,500 residential, commercial, industrial, public authority and wholesale customers. The Company distributes electricity to retail customers principally in El Paso, Texas and Las Cruces, New Mexico. In addition, its wholesale sales include sales for resale to other electric utilities and power marketers.

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