Item 1.01 Entry into a Material Definitive Agreement.
UGI Utilities Note Purchase Agreement
On June 30, 2022, UGI Utilities, Inc. ("UGI Utilities"), a wholly owned
subsidiary of UGI Corporation (the "Company"), entered into a Note Purchase
Agreement (the "Utilities Note Purchase Agreement") with certain persons (the
"Utilities Note Purchasers") relating to the private placement of $90 million
aggregate principal amount of 4.75% Senior Notes, Series A, with a maturity date
of July 15, 2032 (the "Series A Notes") and $85 million aggregate principal
amount of 4.99% Senior Notes, Series B, with a maturity date of September 15,
2052 (the "Series B Notes," and together with the Series A Notes, the "Utilities
Notes"). The private placement of the Utilities Notes is exempt from
registration under the Securities Act of 1933, as amended. Funding of the Series
A Notes is expected on or before July 15, 2022, and funding of the Series B
Notes is expected on or before September 15, 2022. Interest payments on the
Series A Notes will be payable semiannually on January 15th and July 15th of
each year. Interest payments on the Series B Notes will be payable semiannually
on March 15th and September 15th of each year. The Utilities Notes will be
unsecured and unsubordinated obligations of UGI Utilities, ranking pari passu in
all respects with UGI Utilities' existing and future unsecured and
unsubordinated indebtedness. If any subsidiary guarantees or otherwise becomes
liable for UGI Utilities' obligations under a primary credit facility, the
subsidiary will provide a guaranty of payment of the Utilities Notes and
compliance with the Utilities Note Purchase Agreement. Proceeds from the
Utilities Notes will be used primarily to refinance indebtedness and for general
corporate purposes. The pricing of the Utilities Notes occurred on June 15,
2022.
The Utilities Note Purchase Agreement includes the usual and customary covenants
for note purchase agreements of this type, including, among others, covenants
relating to the maintenance of existence, payment of taxes when due, compliance
with laws, maintenance of properties in good repair, compliance with the Office
of Foreign Assets Control of the United States Department of the Treasury,
maintenance of insurance, maintenance of books and records, pari passu ranking,
merger and consolidation, line of business, antiterrorism and sanctions, and
change in control. The Utilities Note Purchase Agreement also contains
restrictive and financial covenants, specifying, among other things, that the
sale of assets is limited to 15% of consolidated total assets as of the end of
any period of twelve consecutive months subject to safe harbors for debt
prepayment or property reinvestments and specified exclusions, that indebtedness
(excluding certain indebtedness of subsidiaries) plus basket liens will not at
any time exceed 10% of consolidated total assets, and that the ratio of total
debt to total capitalization will not at any time exceed 0.65 to 1.00.
The Utilities Note Purchase Agreement also contains customary events of default,
including, without limitation, failure to pay principal and make whole amount
when due at maturity or otherwise, failure to pay interest within five business
days of the due date, failure to satisfy any financial covenant, failure to
comply with the non-financial covenants within a 30-day grace period, default
beyond the applicable grace period for payments on other borrowings and cross
acceleration for acceleration of other borrowings as a result of non-monetary
defaults provided that either of such defaults relates to indebtedness in an
aggregate principal amount of more than 2% of consolidated total assets, certain
events of bankruptcy or insolvency of UGI Utilities and its principal
subsidiaries, judgment defaults provided such judgment relates to the payment of
money aggregating in excess of 2% of consolidated total assets, and material
ERISA defaults.
The Utilities Notes are callable by UGI Utilities at any time, in whole or in
part, at the make-whole price, which is the greater of (i) par plus accrued
interest or (ii) the present value of the remaining principal and interest
payments due on the Utilities Notes discounted by the yield on the U.S. Treasury
obligation having a final maturity corresponding to the remaining average life
of the Utilities Notes plus 50 basis points. Holders of the Utilities Notes have
a right to require prepayment of the principal amount of the Utilities Notes,
together with interest accrued thereon, if UGI Utilities ceases to be directly
or indirectly majority owned, beneficially and of record, by the Company,
including, without limitation, if the Company ceases to own (beneficially and of
record), directly or indirectly, voting stock of UGI Utilities (or other
securities convertible into such voting stock) representing 51% or more of the
combined voting power of all voting stock of UGI Utilities and 51% or more of
the economic interests in UGI Utilities.
The foregoing description of the Utilities Note Purchase Agreement does not
purport to be complete and is qualified in its entirety by reference to the
Utilities Note Purchase Agreement, which is filed as Exhibit 4.1 to this Current
Report on Form 8-K and is incorporated herein by reference.
Mountaineer Gas Company Note Purchase Agreement
On June 30, 2022, Mountaineer Gas Company ("Mountaineer"), a wholly owned
subsidiary of the Company, entered into a Note Purchase Agreement (the
"Mountaineer Note Purchase Agreement") with certain persons (the "Mountaineer
Note Purchasers") relating to the private placement of $40 million aggregate
principal amount of 4.49% Senior Notes, Series E, with
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a maturity date of August 16, 2052 (the "Series E Notes"). The private placement
of the Series E Notes is exempt from registration under the Securities Act of
1933, as amended. Funding of the Series E Notes is expected on or before August
16, 2022. Interest payments on the Series E Notes will be payable semiannually
on February 16th and August 16th of each year. The Series E Notes will be
unsecured and unsubordinated obligations of Mountaineer, ranking pari passu in
all respects with Mountaineer's existing and future unsecured and unsubordinated
indebtedness. If any subsidiary guarantees or otherwise becomes liable for
Mountaineer's obligations under a material credit facility, the subsidiary will
provide a guaranty of payment of the Series E Notes and compliance with the
Mountaineer Note Purchase Agreement. Proceeds from the Series E Notes will be
used primarily to refinance indebtedness and for general corporate purposes. The
pricing of the Mountaineer Notes occurred on April 5, 2022.
The Mountaineer Note Purchase Agreement includes the usual and customary
covenants for note purchase agreements of this type, including, among others,
covenants relating to the maintenance of existence, payment of taxes when due,
compliance with laws, maintenance of properties in good repair, compliance with
the Office of Foreign Assets Control of the United States Department of the
Treasury, maintenance of insurance, maintenance of books and records, pari passu
ranking, merger and consolidation, line of business, antiterrorism and
sanctions, and change in control. The Mountaineer Note Purchase Agreement also
contains restrictive and financial covenants, specifying, among other things,
that the sale of assets is limited to 15% of consolidated total assets in any
fiscal year subject to safe harbors for debt prepayment or property
reinvestments and specified exclusions, that priority indebtedness (excluding
certain indebtedness of subsidiaries) will not at any time exceed 15% of
consolidated tangible net worth, that the ratio of total debt to total
capitalization will not at any time exceed 0.65 to 1.00, that the ratio of
consolidated EBITDA to consolidated interest expense of Mountaineer shall not be
less than 2.00 to 1.00 and that Mountaineer's consolidated tangible net worth
will not be less than $70 million at any time.
The Mountaineer Note Purchase Agreement also contains customary events of
default, including, without limitation, failure to pay principal and make whole
amount when due at maturity or otherwise, failure to pay interest within five
business days of the due date, failure to satisfy any financial covenant or
negative covenant, failure to comply with the affirmative covenants within a
30-day grace period, default beyond the applicable grace period for payments on
other borrowings and cross acceleration for acceleration of other borrowings as
a result of non-monetary defaults provided that either of such defaults relates
to indebtedness in an aggregate principal amount of $15 million or more, certain
events of bankruptcy or insolvency of Mountaineer and its material subsidiaries,
judgment defaults provided such judgment relates to the payment of money
aggregating in excess of $15 million, and material ERISA defaults.
The Series E Notes are callable by Mountaineer at any time, in whole or in part,
at the make-whole price, which is the amount equal to the excess, if any, of the
present value of the remaining principal and interest payments due on the Series
E Notes discounted by the yield on the U.S. Treasury obligation having a final
maturity corresponding to the remaining average life of the Series E Notes plus
50 basis points over the principal amount of the Series E Notes that are called.
Holders of the Series E Notes have a right to require prepayment of the
principal amount of the Series E Notes, together with interest accrued thereon,
if Mountaineer ceases for any reason to be directly or indirectly majority
. . .
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 in Item 1.01 regarding the Utilities Note
Purchase Agreement and the Mountaineer Note Purchase Agreement is hereby
incorporated into this Item 2.03 by reference. This description is qualified in
its entirety by reference to the full text of Utilities Note Purchase Agreement
and the Mountaineer Note Purchase Agreement, which are filed as Exhibits 4.1 and
4.2, respectively, to this Current Report on Form 8-K and are incorporated
herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
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Exhibit Number Description
4.1 Note Purchase Agreement, dated June 30, 2022, by and among UGI Utilities,
Inc. and the purchasers listed as signatories thereto.
4.2 Note Purchase Agreement, dated June 30, 2022, by and among Mountaineer Gas
Company and the purchasers listed as signatories thereto .
104 Cover Page Interactive Data File (formatted as inline XBRL)
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