InfraREIT, Inc. (NYSE:HIFR) Files An 8-K Entry into a Material Definitive Agreement
Item1.01.
| Entry into a Material Definitive Agreement. |
On June5, 2017, Sharyland Distribution Transmission Services,
L.L.C. (SDTS), which is a subsidiary of InfraREIT, Inc.
(InfraREIT and, together with its subsidiaries, the
Company), entered into a term loan credit agreement (the
Credit Agreement) with Canadian Imperial Bank of Commerce,
New York Branch (CIBC) and Mizuho Bank, Ltd.
(collectively, the Lenders), as lenders, joint lead
arrangers and joint bookrunners, and CIBC, as administrative
agent, to which, subject to the conditions set forth in the
Credit Agreement, the Lenders committed to provide a senior
secured term loan credit facility in an aggregate principal
amount of $200.0million (the Term Loan Facility). The
Company intends to use the proceeds from the Term Loan Facility
for general corporate purposes and to repay the borrowings
outstanding under SDTSs existing revolving credit facility.
The Term Loan Facility matures on June5, 2020. The interest rate
for the Term Loan Facility is based, at SDTSs option, at a rate
equal to either (1)a base rate, determined as the greatest of
(a)the administrative agents prime rate, (b)the federal funds
effective rate plus 0.5% and (c)LIBOR plus 1.00% per annum, plus
a margin of 0.25% per annum or (2)LIBOR plus a margin of 1.25%
per annum. SDTS is entitled to prepay amounts outstanding under
the Term Loan Facility with no prepayment penalty. The Term Loan
Facility is also subject to required prepayments upon the
occurrence of certain events.
The Term Loan Facility is secured, on the same basis as SDTSs
other secured debt, by substantially all of SDTSs transmission
and distribution assets, its leases, certain accounts and the
equity interests in SDTS held by Transmission and Distribution
Company, L.L.C., which is a subsidiary of InfraREIT. InfraREIT is
not obligated directly or contingently with respect to the Term
Loan Facility.
The Credit Agreement contains customary representations and
warranties of SDTS and also contains customary events of default
and covenants that include (but are not limited to) a debt to
capitalization ratio (calculated on a consolidated basis with
Sharyland Utilities, L.P., the Companys sole tenant
(Sharyland)), a debt service coverage ratio, restrictions
on the ability to sell or otherwise transfer assets or enter into
any line of business other than the business of the transmission
and distribution of electric power and the provision of ancillary
service, as well as certain restrictions on the payment of
dividends. These covenants are subject to various exceptions set
forth in the Credit Agreement. The Credit Agreement also contains
restrictions on the amount of indebtedness that Sharyland may
incur and other restrictions on, and covenants applicable to,
Sharyland.
The foregoing description of the Credit Agreement does not
purport to be complete and is qualified in its entirety by
reference to the complete text of the Credit Agreement, a copy of
which is filed as Exhibit 10.1 to this Current Report on Form 8-K
(this Current Report) and is incorporated herein by
reference.
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| Item2.03. |
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information included, or incorporated by reference, in Item
1.01 of this Current Report is incorporated by reference into
this Item 2.03 of this Current Report.
| Item9.01. | Financial Statements and Exhibits. |
| (d) | Exhibits. |
|
EXHIBIT NUMBER |
DESCRIPTION |
|||
| 10.1 |
Term Loan Credit Agreement, dated as of June5, 2017, among Sharyland Distribution Transmission Services, L.L.C., the several lenders from time to time parties thereto and Canadian Imperial Bank of Commerce, New York Branch, as administrative agent. |
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About InfraREIT, Inc. (NYSE:HIFR)
InfraREIT, Inc. is a real estate investment trust. The Company owns electric transmission and distribution (T&D) assets in Texas. Its segment is rate-regulated electric T&D assets. The Company’s T&D assets are located in the Texas Panhandle near Amarillo; the Permian Basin in and around Stanton, Central Texas; around Brady, Northeast Texas; in and around Celeste, and South Texas near McAllen. Its assets include competitive renewable energy zones (CREZ) assets, which include approximately 300 miles of 350 kilovolts (kV) transmission lines and designated collection stations; S/B/C assets, which include approximately 12,300 miles of overhead distribution lines and underground distribution lines, transmission lines and substations; McAllen assets; Stanton Transmission Loop assets, which include approximately 350 miles of 140 kV transmission lines and connected substations, and Electric Reliability Council of Texas (ERCOT) Transmission assets. It is managed by Hunt Utility Services, LLC.