Item 1.01 Entry into a Material Definitive Agreement.
On September 23, 2021, Public Service Company of New Mexico ("PNM") entered into
a Note Purchase Agreement (the "PNM Note Purchase Agreement") with the
institutional investors party thereto for the sale of $150.0 million aggregate
principal amount of senior unsecured notes in the following series and
denominations: (i) $50.0 million aggregate principal amount of its 2.29% Senior
Unsecured Notes, Series A, due December 30, 2031, and (ii) $100.0 million
aggregate principal amount of its 2.97% Senior Unsecured Notes, Series B, due
December 30, 2041 (the "PNM 2021 SUNs"). Interest on the PNM 2021 SUNs is
payable semiannually on June 30 and December 30 of each year, commencing on June
Under the PNM Note Purchase Agreement, PNM has agreed to issue the PNM 2021 SUNs
in a private placement transaction in reliance on an exemption from registration
under the Securities Act of 1933, as amended (the "Securities Act") on or before
December 30, 2021. The issuance of the PNM 2021 SUNs is subject to the
satisfaction of customary conditions, including continuing compliance with the
representations, warranties and covenants of the PNM Note Purchase Agreement.
PNM will use the gross proceeds from the PNM 2021 SUNs for funding of capital
expenditures, including funding for the purchase of the Western Spirit
transmission line, refinancing existing short-term debt, and general corporate
The terms of the PNM Note Purchase Agreement, which will 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, Inc.), 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.
The PNM 2021 SUNs 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 PNM 2021 SUNs 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.
Exhibit Number Description
10.1 Note Purchase A greement, dated Se ptember 23, 2021,
between P ublic Service C omp any of New Mexico and the purchasers
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