Item 1.01 Entry into a Material Definitive Agreement.
Public Service Company of New Mexico ("PNM") 2021 Senior Unsecured Notes
On July 14, 2021, PNM entered into a Note Purchase Agreement (the "PNM Note
Purchase Agreement") with the institutional investors party thereto for the sale
of $160.0 million aggregate principal amount of senior unsecured notes in the
following series and denominations: (i) $80.0 million aggregate principal amount
of its 2.59% Senior Unsecured Notes, Series A, due July 15, 2033, and (ii) $80.0
million aggregate principal amount of its 3.14% Senior Unsecured Notes, Series
B, due July 15, 2041 (the "PNM 2021 SUNs"). The PNM 2021 SUNs were issued on
July 14, 2021 in a private placement transaction in reliance on an exemption
from registration under the Securities Act of 1933, as amended (the "Securities
Act"). Interest on the PNM 2021 SUNs is payable semiannually on January 15 and
July 15 of each year, commencing on January 15, 2022.
PNM will use the gross proceeds from the PNM 2021 SUNs to prepay without penalty
on July 15, 2021, $160.0 million of PNM's 5.35% Senior Unsecured Notes that were
scheduled to mature on October 1, 2021.
The terms of the PNM Note Purchase Agreement, which continue to apply so long as
any of the PNM 2021 SUNs are outstanding, include customary covenants, including
a covenant that requires PNM to maintain a debt-to-capitalization ratio of less
than or equal to 65%, customary events of default, including a cross-default
provision, and covenants regarding parity of financial covenants, liens and
guarantees with respect to PNM's material credit facilities. In the event of a
change of control (as defined in the PNM Note Purchase Agreement, which
definition would not include the pending merger between PNM Resources, Inc. and
Avangrid), PNM will be required to offer to prepay the PNM 2021 SUNs at par. PNM
has the right to redeem any or all of the PNM 2021 SUNs prior to their
maturities, subject to payment of a customary make-whole premium.
The foregoing description is qualified in its entirety by the PNM Note Purchase
Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and
is incorporated herein by reference.
Texas-New Mexico Power Company ("TNMP") 2021 Bond Purchase Agreement
On July 14, 2021, TNMP entered into a Bond Purchase Agreement (the "TNMP Bond
Purchase Agreement") with the institutional investors party thereto for the sale
of $65.0 million aggregate principal amount of TNMP first mortgage bonds (the
"TNMP 2021 Bonds") offered in a private placement transaction. Under the TNMP
Bond Purchase Agreement, TNMP has agreed to issue, on or about August 16, 2021,
$65.0 million aggregate principal amount of its 2.44% First Mortgage Bonds, due
August 15, 2035. The issuance of the TNMP 2021 Bonds is subject to the
satisfaction of customary conditions, including continuing compliance with the
representations, warranties and covenants of the TNMP 2021 Bond Purchase
Agreement. TNMP will use the proceeds from the TNMP 2021 Bonds for the repayment
of existing debt and other general corporate purposes.
The TNMP 2021 Bonds will be secured by a first mortgage on substantially all of
TNMP's property, subject to excepted encumbrances, reservations, contracts, and
other exceptions. The TNMP 2021 Bonds will be issued pursuant to TNMP's First
Mortgage Indenture dated as of March 23, 2009 (the "First Mortgage Indenture"),
between TNMP and U.S. Bank, N.A. (as ultimate successor to The Bank of New York
Mellon Trust Company, N.A.), as Trustee, as previously supplemented and amended
and as to be further supplemented by a fourteenth supplemental indenture to be
dated on or about August 16, 2021 (providing for the issuance of $65.0 million
of TNMP 2021 Bonds). A copy of the First Mortgage Indenture was filed by TNMP as
an exhibit to its Current Report on Form 8-K filed on March 27, 2009. A copy of
the form of the fourteenth supplemental indenture pursuant to which the TNMP
2021 Bonds will be issued is included as a schedule to the TNMP Bond Purchase
Agreement.
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The terms of the TNMP 2021 Bonds will include customary covenants, including a
covenant that requires the maintenance of a debt-to-capitalization ratio of less
than or equal to 65%, customary events of default, a cross-default provision,
and a change-of-control provision. In the event of a change of control (as
defined in the fourteenth supplemental indenture, other than in connection with
the pending merger between PNM Resources, Inc. and Avangrid), TNMP will be
required to offer to prepay the TNMP 2021 Bonds at par. TNMP will have the right
to redeem any or all of the TNMP 2021 Bonds prior to their respective
maturities, subject to payment of a customary make-whole premium.
The foregoing description is qualified in its entirety by the TNMP Bond Purchase
Agreement, which is filed as Exhibit 10.2 to this Current Report on Form 8-K and
is incorporated herein by reference.
The TNMP 2021 Bonds are not registered under the Securities Act and may not be
offered or sold in the United States absent registration or an applicable
exemption from registration requirements and applicable state laws. This Current
Report on Form 8-K does not constitute an offer to sell nor a solicitation of an
offer to purchase the TNMP 2021 Bonds or any other securities, and shall not
constitute an offer, solicitation or sale in any state or jurisdiction in which
such an offer, solicitation or sale would be unlawful.
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 9.01 Financial Statements and Exhibits.
(d) Exhibits:
Exhibit Number Description
10.1 Note Purchase Agreement, dated July 14, 2021, between Public Service
Company of New Mexico and the purchasers named therein.
10.2 Bond Purchase Agreement, date d July 14, 2021, between Texas-New
Mexico Power Company and the purchasers named therein.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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