Item 1.01 Entry into a Material Definitive Agreement.
On March 23, 2021, Southwest Gas Corporation entered into a Term Loan Agreement
(the "Term Loan Agreement") with the lenders, book runners and syndication
agents party thereto and The Bank of New York Mellon, as Administrative Agent
(the "Agent"). The Term Loan Agreement provides for a term loan (the "Term
Loan") of $250 million that matures on March 22, 2022. Southwest Gas Corporation
intends to use the proceeds from the Term Loan to fund the increased cost of
natural gas supply during the month of February 2021 caused by extreme weather
conditions in the central United States.
Interest rates for the Term Loan are calculated at either LIBOR or the
"alternate base rate," plus in each case an applicable margin that is determined
based on Southwest Gas Corporation's senior unsecured long-term debt rating. The
applicable margin ranges from 0.550% to 1.000% for loans bearing interest with
reference to LIBOR. Loans bearing interest with reference to the alternate base
rate have an applicable margin of 0.000%. Upon the occurrence of certain events
providing for a transition away from LIBOR or if LIBOR is no longer a widely
recognized benchmark rate, the Term Loan will bear interest at a rate based on a
replacement benchmark, as further set forth in the Term Loan Agreement.
The Term Loan Agreement contains certain customary representations and
warranties and affirmative and negative covenants. In addition, the Term Loan
Agreement contains a financial covenant requiring Southwest Gas Corporation to
maintain a ratio of funded debt to total capitalization not to exceed 0.70 to
1.00 as of the end of any quarter of any fiscal year.
The description of the Term Loan Agreement does not purport to be complete and
is qualified in its entirety by reference to the Term Loan Agreement, which is
filed as Exhibit 10.1 hereto and incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Sheet Arrangement of a Registrant.
The disclosure set forth under Item 1.01 is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
10.1 Term Loan Agreement, dated as of March 23, 2021, by and among
Southwest Gas Corporation, The Bank of New York Mellon, as
Administrative Agent, and the lenders party, book runners and
syndication agents thereto.
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