Oncor Electric Delivery Company LLC Secures $650 Million Term Loan Facility

Strategic Insights -

Oncor Electric Delivery Company LLC has entered into a commitment letter with Sumitomo Mitsui Banking Corporation, U.S. Bank, PNC Bank, and The Toronto-Dominion Bank to provide a delayed draw term loan facility in the amount of up to $650 million. The loan facility is expected to be used for working capital and other general corporate purposes. The commitments under the commitment letter will expire upon the earlier of the effective date of the term loan facility or July 13, 2022. Oncor anticipates the effective date of the term loan facility occurring no earlier than June 1, 2022, and no later than July 13, 2022.

Key Takeaways:

  • Oncor Electric Delivery Company LLC has entered into a commitment letter with multiple financial institutions to secure a $650 million term loan facility.
  • The loan facility is expected to be used for working capital and other general corporate purposes.
  • The commitments under the commitment letter will expire on July 13, 2022.
  • The effective date of the term loan facility is anticipated to occur between June 1, 2022, and July 13, 2022.
  • The term loan agreement provides for three possible loan types: Term SOFR Loan, Daily Simple SOFR Loan, and ABR Loan.
  • The interest rates for each loan type are based on the SOFR rate, with the term SOFR loan bearing interest at an adjusted term SOFR rate plus a spread of 0.60%, the daily simple SOFR loan bearing interest at an adjusted daily simple SOFR rate plus the same spread, and the ABR loan bearing interest at the greatest of the prime rate, the federal funds effective rate plus 0.50%, and daily simple SOFR plus 1.0%.
  • Oncor anticipates the use of proceeds from borrowing under the term loan facility to address working capital requirements and other general corporate purposes.
  • The term loan agreement is subject to customary closing conditions, including the execution and delivery of definitive documentation.

Statistics:

  • Up to $650 million in funding available under the term loan facility.
  • Commitments under the commitment letter expiring on July 13, 2022.
  • Anticipated effective date of the term loan facility between June 1, 2022, and July 13, 2022.

Sources:

  • Oncor Electric Delivery Company LLC, "Form 8-K (Current Report)" filed with the Securities and Exchange Commission on April 18, 2022.