Narrative
Full Description
Project narrative
On July 1, 2020, a syndicate of 13 banks — including the Los Angeles Branch of the Bank of China (BOC) — entered into a $3,000,000,000.00 syndicated secured term loan agreement with Pacific Gas and Electric Company — a California-incorporated investor-owned natural gas and electricity utility company operating in the northern two-thirds of California wholly-owned by PG&E Corporation, a holding company traded on the New York Stock Exchange — to finance transactions related to its plan of reorganization. This loan was divided into two tranches: a $1,500,000,000.00 USD tranche with a maturity period of 364 days (1 year), a final maturity date of June 30, 2021, and an interest rate of either LIBOR plus an applicable margin of 2.00% or the base rate plus an applicable margin of 1.00%; and a $1,500,000,000.00 USD tranche with a maturity period of 18 months (1.5 years), a final maturity date of January 1, 2022, and an interest rate of either LIBOR plus an applicable margin of 2.25% or the base rate plus an applicable margin of 1.25%. This loan was secured by (i.e. collateralized against) the issuance of a first mortgage bond, issued pursuant to the Fifth Supplemental Indenture to the Mortgage Indenture, and by a first lien on substantially all of Pacific Gas and Electric Company's real property and certain tangible personal property related to its facilities, subject to certain exceptions, and which will rank pari passu with its other first mortgage bonds. The Bank of New York Mellon Trust Company, N.A. acted as trustee. The loan included usual and customary provisions with covenants limiting liens, indebtedness, sale and leaseback transactions, and other fundamental changes and included a requirement that Pacific Gas and Electric Company maintain a ratio of total consolidated debt to consolidated capitalization of at most 65% as of the end of each fiscal quarter. The loan included cross-default provisions related to debt of the borrower or subsidiaries in excess of $200 million USD. The use of the proceeds were to fund transactions in relation to the plan of reorganization for Pacific Gas and Electric Company as part of its concurrent exit from bankruptcy stemming from the California wildfires in 2018. BOC LA Branch contributed $1,666,666.67 USD to the 364-day tranche and $95,000,000.00 USD to the 18-month tranche. Record ID#106388 captures BOC's contribution to the 364-day tranche. Record ID#106389 captures contribution to the 18-month tranche. In addition to BOC, the following lenders contributed the respective amounts: JPMorgan Chase Bank, N.A. ($181,641,025.65 USD to the 364-day tranche; $170,153,846.15 USD to the 18-month tranche), Bank of America, N.A. ($166,504,273.50 USD to the 364-day tranche; $155,974,358.98 USD to the 18-month tranche), Barclays Bank PLC ($166,504,273.50 USD to the 364-day tranche; $155,974,358.98 USD to the 18-month tranche), Citibank, N.A. ($166,504,273.50 USD to the 364-day tranche; $155,974,358.98 USD to the 18-month tranche), Goldman Sachs Bank USA ($166,504,273.50 USD to the 364-day tranche; $155,974,358.98 USD to the 18-month tranche), BNP Paribas S.A. ($115,039,316.24 USD to the 364-day tranche; $107,764,102.56 USD to the 18-month tranche), the New York Branch of Credit Suisse AG ($115,039,316.24 USD to the 364-day tranche; $107,764,102.56 USD to the 18-month tranche), Mizuho Bank, Ltd. ($115,039,316.24 USD to the 364-day tranche; $107,764,102.56 USD to the 18-month tranche), MUFG Union Bank, N.A. ($115,039,316.24 USD to the 364-day tranche; $107,764,102.56 USD to the 18-month tranche), Wells Fargo Bank, National Association ($115,039,316.24 USD to the 364-day tranche; $107,764,102.56 USD to the 18-month tranche), the Chicago Branch of the Bank of Montreal ($52,978,632.48 USD to the 364-day tranche; $49,628,205.13 USD to the 18-month tranche), and The Bank of New York Mellon ($22,500,000.00 USD to the 364-day tranche; $22,500,000.00 USD to the 18-month tranche). JPMorgan Chase Bank served as administrative agent. BofA Securities, Inc., Barclays Bank PLC, Citibank, N.A., and Goldman Sachs Bank USA served as co-syndication agent. BNP Paribas, the New York Branch of Credit Suisse AG, Mizuho Bank, Ltd., MUFG Union Bank, N.A., and Wells Fargo Bank, National Association served as co-documentation agents. JPMorgan Chase Bank, BofA Securities Barclays Bank, Citibank, and Goldman Sachs Bank USA served as joint lead arrangers and joint bookrunners. The lenders issued a term loan facility commitment lender for the loan (then as a $4.5 billion USD 364-day tranche and a $1.5 billion USD 18-month tranche) to Pacific Gas and Electric Company on May 26, 2020 as part of its plan of reorganization. On July 1, 2020, the borrower borrowed the entire amount of both tranches to fund, in part, transactions contemplated under the plan of reorganization. On March 11, 2021, the borrower fully repaid the 364-day tranche. Then, on October 29, 2021, the lending syndicate — still including the LA Branch of the BOC — entered into an amendment agreement with the borrower for the $1.5 billion USD 18-month tranche; in the amendment, the lenders extended the maturity date of the tranche by nine months (0.75 years) — for a new maturity period of 2.25 years — and a final maturity date of October 1, 2022, as well as laid framework for SOFR to replace LIBOR as the reference rate. Record ID#106390 captures BOC's contribution to this debt rescheduling. Then, on December 31, 2021, the lending syndicate — still including the LA Branch of the BOC — entered into an amendment agreement with the borrower for the $1.5 billion USD 18-month tranche; in the amendment, $1,315,735,897.44 USD of the tranche was to mature on October 1, 2022, while $184,264,102.56 USD would mature on January 1, 2022, and any non-consenting lenders would be replaced by consenting ones, and on or around the amendment date, the borrower would prepay $59.26 million USD in principal amount. Then, on February 8, 2022, the lending syndicate — still including the LA Branch of the BOC — entered into an amendment agreement with the borrower for the $1.5 billion USD 18-month tranche; in the amendment, the consenting lenders extended the maturity date of the tranche by three months (0.25 years) — for a new maturity period of 2.50 years — and a final maturity date of January 1, 2023. The debt to the non-consenting lenders, equal to $142.5 million USD, was repaid in full on February 8, 2022; any outstanding debt on April 1, 2022 remaining would lead to a fee to the lenders of it. Record ID#106391 captures BOC's contribution to this debt rescheduling. On March 31, 2022, Pacific Gas and Electric Company prepaid in full the remaining portion of the 18-month tranche loan in a principal amount of $298 million USD, after which the loan was terminated.
Staff comments
The Term Loan Commitment Letter can be accessed in its entirety via https://www.sec.gov/Archives/edgar/data/75488/000119312520152833/d936479dex102.htm. | Stable URL: https://www.dropbox.com/scl/fi/kdh3p1knpxss54hnblmuw/211133.pdf?rlkey=nho0f7yfmuvzcvb3f3fbe9v3r&st=da80snbi&dl=0 1. The Term Loan Commitment Letter can be accessed in its entirety via https://www.sec.gov/Archives/edgar/data/75488/000119312523175133/d461135dex102.htm. 2. The full loan agreement can be accessed in its entirety via https://www.sec.gov/Archives/edgar/data/75488/000119312520185803/d947912dex105.htm 3. The first amendment agreement can be accessed in its entirety via https://www.sec.gov/Archives/edgar/data/75488/000100498021000039/exhibit105-09302021.htm 4. The second amendment agreement can be accessed in its entirety via https://contracts.justia.com/companies/pge-corp-1519/contract/220885/ 5. The third amendment agreement can be accessed in its entirety via https://www.sec.gov/Archives/edgar/data/75488/000100498022000009/exhibit1030-123121.htm 6. The Fifth Supplemental Indenture can be accessed in its entirety via https://www.sec.gov/Archives/edgar/data/75488/000119312520185803/d947912dex47.htm 7. Pacific Gas and Electric Company, incorporated in California in 1905, is one of the largest combination natural gas and electric utilities in the United States. Based in San Francisco, the company is a subsidiary of PG&E Corporation. 8. The precise use of these funds is unclear; Pacific Gas and Electric Company as part of its emergence from Chapter 11 on July 1, 2020 fully repaid a Debtor-in-Possession (DIP) credit agreement dated March 27, 2019 and deposited $5 billion USD into California's Wildfire Fund, among other things (including issuing stock to a trust for wildfire victims). Some of the debt under these loans may have been used for these purposes.