Item 1.01 Entry into a Material Definitive Agreement.
Oklahoma Natural Gas Company, a division of ONE Gas, Inc. ("Oklahoma Natural
Gas"), provides natural gas service to approximately 905,000 customers in
Oklahoma.
On August 25, 2022, the Oklahoma Development Finance Authority (the "ODFA"), a
public trust and instrumentality of the State of Oklahoma, completed the
issuance and sale of $1,354,200,000 in ratepayer-backed bonds (the "Bonds") that
were offered for the purpose of allowing Oklahoma Natural Gas to recover the
extraordinary costs it incurred as a result of Winter Storm Uri in February
2021, under and pursuant to a new provision of Oklahoma law, "February 2021
Regulated Utility Consumer Protection Act" (the "Securitization Law"). The Bonds
are limited and special revenue obligations of the ODFA, payable solely from the
securitization bond collateral, created pursuant to the Securitization Law and
an irrevocable financing order issued by the Oklahoma Corporation Commission on
January 25, 2022 (the "Financing Order"). The Supreme Court of Oklahoma held
that the Bonds were properly authorized and constitutional under Oklahoma law in
an opinion issued on May 24, 2022. The Bonds are not an obligation of Oklahoma
Natural Gas or any of its affiliates.
In connection with the transaction described above, the ODFA and Oklahoma
Natural Gas entered into a Securitization Property Purchase and Sale Agreement
(the "Sale Agreement") whereby the ODFA purchased, and Oklahoma Natural Gas
sold, the securitization property created pursuant to the Securitization Law and
the Financing Order. Such securitization property includes the right to assess,
impose, adjust, collect and receive revenues, in the form of the winter event
securitization charge from Oklahoma Natural Gas' existing and future Oklahoma
customers in amounts intended to be sufficient to pay the principal and interest
and financing charges on the Bonds over 25 years. The proceeds received by
Oklahoma Natural Gas for the sale of the securitization property were
approximately $1.34 billion, which represents the amount of Bonds sold less
issuance costs.
The Sale Agreement contains customary representations, warranties, agreements
and indemnification obligations by Oklahoma Natural Gas. The foregoing
description of the Sale Agreement is not complete and is in all respects subject
to the actual provisions of the Sale Agreement, a copy of which is filed as
Exhibit 10.1 to this Current Report on Form 8-K and is incorporated by reference
herein.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit
Number Description
10.1 Securitization Property Purchase and Sale Agreement dated as of
August 25, 2022 by and between the Oklahoma Development Finance
Authority, as Issuer, and Oklahoma Natural Gas Company, a division of
ONE Gas, Inc., as Seller.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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