Item 1.01 Entry into a Material Agreement.
On March 31, 2021, Portland General Electric Company ("PGE" or the "Company")
entered into an unsecured 364-day Credit Agreement (the "Credit Agreement")
among the Company, as Borrower, U.S. Bank National Association, as
Administrative Agent and Lender, and CoBank, ACB, as Syndication Agent and
Lender (collectively, the "Lenders"). Pursuant to the Credit Agreement, on March
31, 2021, PGE obtained a term loan (the "New Term Loan") from the Lenders in the
aggregate principal amount of $200 million. The Company used a portion of the
proceeds of the New Term Loan to repay in full its existing $150 million term
loan from the Lenders that would have matured on April 8, 2021 and to pay
certain administrative expenses related to the transaction. The Company intends
to use the remainder of the proceeds of the New Term Loan for general corporate
purposes. The New Term Loan will become due and payable on March 30, 2022.
Generally, amounts outstanding under the Credit Agreement bear interest at a
periodic rate of interest equal to LIBOR for U.S. Dollar deposits for the
applicable interest period of one, two, three, or six months, plus a margin of
0.70%. The margin will be increased (i) to 0.95%, in the event the Company's
ratings from Standard & Poor's Rating Service ("S&P") and Moody's Investors
Service ("Moody's") for the Company's senior unsecured long-term debt securities
without third-party credit enhancement fall below levels specified in the Credit
Agreement, or (ii) to any higher margin specified in a new credit facility the
Company enters into during the term of the Credit Agreement. The Credit
Agreement also provides for the establishment of an alternative rate of interest
upon the occurrence of certain events related to the phase-out of LIBOR.
The Credit Agreement contains customary covenants, including, without
limitation, covenants regarding the preservation and maintenance of the
Company's corporate existence, the preservation of the Company's property,
payment of taxes, compliance with laws, preservation of loan document
enforceability, insurance, inspection rights, the provision of certain reports
and information, and the requirement to keep the Company's property and revenues
free from certain liens and encumbrances. The Credit Agreement also prohibits
the Company from permitting the aggregate outstanding principal amount of all
consolidated indebtedness to exceed 65% of its total capitalization as of the
end of any fiscal quarter, and places certain restrictions on the Company's
ability to dispose of assets outside the ordinary course of business and to
merge or consolidate with a third party. As of December 31, 2020, the Company's
debt to total capital ratio, if calculated under this agreement, would have been
approximately 56%. Further, upon the occurrence of certain events of default,
the Company's obligations under the Credit Agreement may be accelerated. Such
events of default include payment defaults to lenders under the Credit
Agreement, cross defaults to other credit facilities, covenant defaults, and
other customary defaults.
The disclosure in this Item 1.01 is qualified in its entirety by the provisions
of the Credit Agreement, which is attached hereto as Exhibit 10.1 and 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 in Item 1.01 of this Form 8-K is incorporated herein
by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
10.1 Credit Agreement dated as of March 31, 2021 among Portland General Electric
Company, the Borrower; the Lenders; U.S. Bank National Association, as
Administrative Agent; and CoBank, ACB as Syndication Agent.
104 Cover page information from Portland General Electric Company's Current Report on
Form 8-K filed April 1, 2021, formatted in iXBRL (Inline Extensible Business
Reporting Language).
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