Item 1.01 Entry into a Material Definitive Agreement.
On December 14, 2020, Avangrid, Inc. (the "Corporation") entered into an
intra-group loan agreement with Iberdrola, S.A., which owns 81.5% of the issued
and outstanding shares of common stock of the Corporation (the "Intra-Group Loan
Agreement"). The Intra-Group Loan Agreement provides the Corporation with an
unsecured subordinated loan in an aggregate principal amount of $3,000,000,000
(the "Loan").
The Loan bears interest (i) from the date the Corporation receives the Loan
until June 15, 2021, at a rate per annum equal to 0.20%, which shall increase
one (1) basis point each month following the first month of the term of the
Intra-Group Loan Agreement up to a maximum interest rate of 0.25% per annum, and
(ii) from June 16, 2021 until the Loan and any accrued and unpaid interest is
repaid in its entirety, at the Corporation's equity cost of capital as published
by Bloomberg. Interest is payable on a monthly basis in arrears.
The Corporation is required to repay the Loan in full upon certain equity
issuances by the Corporation in which Iberdrola, S.A participates or a change of
control of the Corporation. In addition, on or after June 15, 2021, upon five
business days' notice to Iberdrola, S.A., the Corporation may voluntarily repay
the Loan and any accrued and unpaid interest, in whole or in part, without
prepayment premium or penalty if there is a change in the Corporation's business
plan and the Corporation determines that the Loan is no longer required. The
Intra-Group Loan Agreement contains certain customary affirmative and negative
covenants and events of default.
The description above is only a summary of the material provisions of the
Intra-Group Loan Agreement and does not purport to be complete and is qualified
in its entirety by reference to the provisions in such Loan Agreement, a copy of
which is attached hereto as Exhibit 10.1.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of the Registrant.
The information set forth in Item 1.01 of this Current Report on Form 8-K is
incorporated by reference in this Item 2.03.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
No. Description
10.1 Intra-Group Loan Agreement, dated December 14, 2020, between
Avangrid, Inc. and Iberdrola, S.A.
104 Cover page Interactive Data File (embedded within the Inline XBRL
document)
2
--------------------------------------------------------------------------------
© Edgar Online, source Glimpses