ITC HOLDINGS CORP. (NYSE:ITC) Files An 8-K Entry into a Material Definitive Agreement

ITC HOLDINGS CORP. (NYSE:ITC) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry Into a Material Definitive Agreement

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Issuance of METC Senior Secured Notes

On July 10, 2019, Michigan Electric Transmission Company, LLC (“METC”), an indirect wholly-owned subsidiary of ITC Holdings Corp. (the “Company”), issued $50,000,000 aggregate principal amount of its 4.65% Series B Senior Secured Notes due 2049 (the “METC Notes”) in a private placement in reliance on an exemption from registration under the Securities Act of 1933, as amended (the “Securities Act”). On January 15, 2019, as previously disclosed, METC issued $50,000,000 aggregate principal amount of its 4.55% Series A Senior Secured Notes due 2049. The METC Notes were sold by METC to accredited investors (as defined by Rule 501(a) of the Securities Act) to a Purchase Agreement dated January 15, 2019 (the “Purchase Agreement”). METC agreed to sell the METC Notes subject to the satisfaction of certain terms and conditions provided in the Purchase Agreement.

The METC Notes were issued under METC’s first mortgage indenture (the “Mortgage Indenture”), dated as of December 10, 2003, between The Bank of New York Mellon Trust Company, N.A., as successor to JPMorgan Chase Bank, as trustee (the “Trustee”), as supplemented by the ninth supplemental indenture thereto, dated as of November 28, 2018, between METC and the Trustee (the “Ninth Supplemental Indenture” and, together with the Mortgage Indenture, the “METC Indenture”). The METC Notes are secured by a first mortgage lien on substantially all of METC’s real and tangible personal property equally with all other securities theretofore or thereafter issued under the Mortgage Indenture, with such exceptions as described in, and such releases as permitted by, the METC Indenture.

Interest on the METC Notes is payable semi-annually on January 10 and July 10 of each year, commencing on January 10, 2020, at a fixed rate of 4.65% per annum. METC may redeem the METC Notes, in whole or in part, in an amount not less than $5,000,000 in aggregate principal amount in the case of a partial redemption, at any time or from time to time with not less than 10 days and not more than 60 days’ prior notice at a redemption price equal to the sum of (a) 50% of the principal amount of such METC Notes, (b) accrued and unpaid interest thereon to the redemption date and (c) a make-whole amount, if any, determined using a discount rate of treasuries plus 50 basis points. METC may also redeem the METC Notes in whole on or after January 10, 2049 at a redemption price equal to the principal amount of the METC Notes plus accrued and unpaid interest thereon to the redemption date. The principal amount of the METC Notes is payable on July 10, 2049.

The METC Notes and the METC Indenture contain events of default customary for such a transaction, including, without limitation, failure to pay interest on any Security (as defined in the METC Indenture) for five days after becoming due; failure to pay principal on any Security when due; failure to comply with material covenants contained in the METC Indenture, subject to a 30-day cure period; failure to comply with other covenants contained in the METC Indenture and the other financing agreements relating to the offering of the METC Notes, subject to a 60-day cure period; material breaches of representations and warranties; defaults in respect of obligations relating to certain debt; certain unsatisfied judgments; and certain events relating to reorganization, bankruptcy and insolvency of METC. If an “Event of Default” (as defined in the METC Indenture) occurs, any holder of the Securities may accelerate its Securities (rather than all the Securities) to any payment Event of Default; the trustee or holders of 25% (in the case of a payment default) or a majority (in the case of any other default) of the outstanding principal amount of the Securities may accelerate all the Securities to any Event of Default; and all amounts are automatically accelerated to any reorganization, bankruptcy or insolvency Event of Default.

The above description of the METC Indenture does not purport to be a complete statement of the parties’ rights and obligations thereunder. Such description is qualified in its entirety by reference to the Ninth Supplemental Indenture, a copy of which was attached to the Company’s Current Report on Form 8-K filed January 15, 2019 as Exhibit 4.50, and the Mortgage Indenture, a copy of which was attached to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2006 as Exhibit 4.14, each of which is incorporated herein by reference.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant

The information set forth above under Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangement of Certain Officers.

Appointment of Director

On July 10, 2019, the shareholder of the Company appointed Alexander I. Greenbaum as a director of the Company, effective July 10, 2019.

Eiffel Investment Pte Ltd., (“Eiffel”), an indirect shareholder of the Company, has the right to designate one director for appointment to the Board of Directors of the Company (the “Board”) to the Shareholders’ Agreement, dated October 14, 2016 (as amended or modified from time to time), by and among ITC Investment Holdings Inc., the Company, FortisUS Inc., and Eiffel (the “Shareholders’ Agreement”). Mr. Greenbaum is Eiffel’s designation to the Board to the Shareholders’ Agreement. Mr. Greenbaum does not have any family relationship with any director or executive officer of the Company.

In connection with his service as a director, Mr. Greenbaum will be compensated under the Company’s standard non-employee director compensation arrangement described in the Company’s most recent Annual Report on Form 10-K. The Board appointed Mr. Greenbaum to serve on the Audit & Risk, Governance & Human Resources, and Operations committees.

Biographical information for Mr. Greenbaum is set forth below:

Alexander I. Greenbaum, 36. Mr. Greenbaum is a Senior Vice President of Infrastructure for GIC Private Ltd. (“GIC”). Prior to rejoining GIC in May 2015, Mr. Greenbaum was an Executive Director in the Infrastructure group of UBS Investment Bank from July 2005 until May 2015. Mr. Greenbaum currently serves on the board of directors of Arrowhead ST Holdings, a crude oil pipeline operator, and HEP Catalyst InvestCo, a crude oil and natural gas gathering and processing company in the Permian Basin. He previously served on the boards of directors of Starwest Generation, an independent power producer with operations in Arizona, and Texas Transmission Holding Company.

Item 5.07 Submission of Matter to a Vote of Security Holders.

The information set forth above under Item 5.02 of this Current Report on Form 8-K is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits.


ITC Holdings Corp. (ITC Holdings) is a holding company. The Company is engaged in owning, operating, maintaining and investing in transmission infrastructure. The Company’s business consists primarily of the electric transmission operations of its Regulated Operating Subsidiaries. Its Regulated Operating Subsidiaries include International Transmission Company (ITCTransmission), Michigan Electric Transmission Company, LLC (METC), ITC Midwest LLC (ITC Midwest). The operations performed by its Regulated Operating Subsidiaries fall into the various categories, such as asset planning; engineering, design and construction; maintenance, and real time operations. Its customers include investor-owned utilities, municipalities, cooperatives, power marketers and alternative energy suppliers. It owns and operates high-voltage systems in Michigan’s Lower Peninsula and portions of Iowa, Minnesota, Illinois, Missouri, Kansas and Oklahoma.

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