Bank of Communications (New York Branch) reschedules — via a one-year maturity extension in 2023 — its $20 million USD contribution to a $550 million USD syndicated revolving credit facility to OGE Energy Corp. for refinancing, working capital, and general corporate purposes

Project narrative

On March 8, 2017, a syndicate of 13 banks — including the New York Branch of the Bank of Communications (BoComm) — entered into a $450,000,000.00 USD syndicated revolving credit facility (RCF) agreement with OGE Energy Corp. — an Oklahoma-incorporated holding company headquartered in Oklahoma City, Oklahoma and listed on the New York Stock Exchange that owns Oklahoma-incorporated electric utility Oklahoma Gas and Electric Company (OG&E), which serves customers in Oklahoma and Arkansas and at the time of this facility owned natural gas pipeline, plant, and storage company Enable Midstream Partners — for refinancing, working capital, and general corporate purposes. This RCF was unsecured and carried a maturity period of five years and a final maturity date of March 8, 2022, albeit with two one-year extension options subject to each lender's consent. Borrowings under this RCF carried a variable interest rate based on LIBOR or an alternate base rate (the highest of Wells Fargo's prime rate, the Federal Funds Rate plus 0.50%, or one-month LIBOR plus 1%) plus a margin dependent on OGE Energy's senior unsecured credit ratings ranging from 0.69% if greater than or equal to AA-/Aa3/AA- to 1.275% if less than or equal to BBB/Baa2/BBB for LIBOR loans and from 0.0% if greater than or equal to AA-/Aa3/AA- to 0.275% if less than or equal to BBB/Baa2/BBB for base rate loans. The RCF carried a facility (commitment) fee on used and unused commitments dependent on OGE Energy's senior unsecured credit ratings ranging from 0.06% if greater than or equal to AA-/Aa3/AA- to 0.225% if less than or equal to BBB/Baa2/BBB. At the time of signing, the borrower's ratings were A3/BBB+/A-, so the margin was 1.075% for LIBOR loans and 0.075% for base rate loans, while the commitment fee was 0.175%. This RCF carried a $100 million USD letter of credit sublimit. This RCF could be increased by up to $150 million USD for a $600 million USD limit. This RCF carried a financial covenant requiring the borrower to maintain a maximum debt to capitalization ratio of 65%. This RCF also contained covenants restricting the borrowers and certain subsidiaries from mergers and consolidations, sales of all or substantially all assets, incurrence of liens and transactions with affiliates. The proceeds were used by the borrower to refinance existing indebtedness, namely an existing $750 million USD credit agreement dated December 13, 2011, and for working capital and general corporate purposes of it and its subsidiaries, including commercial paper liquidity support, facility letters of credits, acquisitions, and distributions. BoComm committed $10,000,000.00 USD to the RCF. Record ID#107166 captures BoComm's commitment. As of December 31, 2017, $168.4 million USD was outstanding under the RCF. On March 9, 2018, the lending syndicate entered into an amendment agreement with the borrower for the $450 million USD RCF; in the amendment agreement, the lenders extended the maturity period of the $450 million USD syndicated RCF by one year — for a new maturity period of six years — and set March 8, 2023. Record ID#107167 captures BoComm's contribution to the debt rescheduling. As of December 31, 2018, there was no outstanding under the RCF. As of December 31, 2019, $112.0 million USD was outstanding under the RCF. As of December 31, 2020, $95.0 million USD was outstanding under the RCF. On January 12, 2021, the lending syndicate entered into an amendment agreement with the borrower for the $450 million USD RCF; in the amendment agreement, the lenders extended the maturity period of the $450 million USD syndicated RCF by one year — for a new maturity period of seven years — and set March 8, 2024 (National Cooperative Services Corporation with a $50.0 million USD commitment did not extend, so would expire on March 8, 2023). Record ID#107168 captures BoComm's contribution to the debt rescheduling. Then, on December 17, 2021, a syndicate of 14 banks — including the New York Branch of BoComm — entered into a $550 million USD syndicated RCF agreement with OGE Energy Corp. for refinancing, working capital, and general corporate purposes. This RCF was unsecured and carried a maturity period of five years and a final maturity date of December 17, 2026, albeit with two one-year extension options subject to each lender's consent. Borrowings under this RCF carried a variable interest rate based on LIBOR or an alternate base rate (the highest of Wells Fargo's prime rate, the Federal Funds Rate plus 0.50%, one-month LIBOR plus 1%, and 0%) plus a margin dependent on OGE Energy's senior unsecured credit ratings ranging from 0.80% if greater than or equal to A+/A1/A+ to 1.475% if less than or equal to BBB-/Baa3/BBB- for LIBOR loans and from 0.0% if greater than or equal to A+/A1/A+ to 0.475% if less than or equal to BBB-/Baa3/BBB- for base rate loans. The RCF carried a facility (commitment) fee on used and unused commitments dependent on OGE Energy's senior unsecured credit ratings ranging from 0.075% if greater than or equal to A+/A1/A+ to 0.275% if less than or equal to BBB-/Baa3/BBB-. At the time of signing, the borrower's ratings were BBB+/Baa1/BBB+, so the margin was 1.075% for LIBOR loans and 0.075% for base rate loans, while the commitment fee was 0.175%. This RCF contained a sustainability-linked mechanism allowing for a increase or decrease in the applicable margin (4.00 basis points (bps)) and/or facility fees (1 bps) if the borrower met Key Performance Indicators (KPIs) for certain environmental, social and governance (ESG) targets that it would establish with the sustainability structuring agent. This RCF carried a $100 million USD letter of credit sublimit. This RCF could be increased by up to $150 million USD for a $700 million USD limit. This RCF carried a financial covenant requiring the borrower to maintain a maximum debt to capitalization ratio of 65%. This RCF also contained covenants restricting the borrowers and certain subsidiaries from mergers and consolidations, sales of all or substantially all assets, incurrence of liens and transactions with affiliates. The proceeds were used by the borrower to refinance existing indebtedness, namely an existing $450 million USD credit agreement dated March 8, 2017 which the new RCF was an amendment-and-restatement of, and for working capital and general corporate purposes of it and its subsidiaries, including commercial paper liquidity support, facility letters of credits, acquisitions, and distributions. BoComm committed $20,000,000.00 USD to the RCF. Record ID#107151 captures BoComm's commitment. In addition to BoComm, the following lenders contributed the respective amounts to the loan syndicate: Wells Fargo Bank, National Association ($55,000,000.00 USD), JPMorgan Chase Bank, N.A. ($55,000,000.00 USD), Mizuho Bank, Ltd. ($55,000,000.00 USD), MUFG Union Bank, N.A. ($55,000,000.00 USD), Royal Bank of Canada (RBC) ($55,000,000.00 USD), U.S. Bank National Association ($55,000,000.00 USD), Bank of America, N.A. ($32,500,000.00 USD), KeyBank National Association ($32,500,000.00 USD), Morgan Stanley Bank, N.A. ($32,500,000.00 USD), PNC Bank, National Association ($32,500,000.00 USD), The Bank of Nova Scotia (Scotiabank) ($32,500,000.00 USD), BOKF, NA dba Bank of Oklahoma ($25,000,000.00 USD), and BancFirst ($12,500,000.00 USD). Wells Fargo Bank served as agent. Wells Fargo Securities, LLC, JPMorgan Chase Bank, Mizuho Bank, MUFG Union Bank, RBC Capital Markets, and U.S. Bank served as joint lead arrangers and joint bookrunners. JPMorgan Chase Bank and Mizuho Bank served as co-syndication agents. RBC, MUFG Union Bank, and U.S. Bank served as co-documentation agents. Wells Fargo Securities served as sustainability structuring agent. OGE Energy signed an intercompany borrowing agreement with OG&E giving OG&E access to borrow up to $350.0 million USD of OGE Energy's RCF. As of December 31, 2021, $486.9 million USD was outstanding under the RCF, $60.0 million USD of which was intercompany borrowings by OG&E. On December 19, 2022, the lending syndicate entered into an amendment agreement with the borrower for the $550 million USD RCF; in the amendment agreement, the lenders extended the maturity period of the $550 million USD syndicated RCF by one year — for a new maturity period of six years — and set December 17, 2027 as the new final maturity date and increased the permitted leverage ratio (percentage of debt to total capitalization) for OGE Energy from an amount not to exceed 65% to an amount not to exceed 70%. Record ID#107164 captures BoComm's contribution to the debt rescheduling. As of December 31, 2022, there was no outstanding balance under the RCF, $84.1 million USD of which was intercompany borrowings by OG&E. On December 18, 2023, the lending syndicate entered into an amendment agreement with the borrower for the $550 million USD RCF; in the amendment agreement, the lenders extended the maturity period of the $550 million USD syndicated RCF by one year — for a new maturity period of seven years — and set December 18, 2028 as the new final maturity date, as well as replaced LIBOR with SOFR and increased the permitted leverage ratio (percentage of debt to total capitalization) for OGE Energy from an amount not to exceed 65% to an amount not to exceed 70%. Record ID#107165 captures BoComm's contribution to the debt rescheduling. As of December 31, 2023, $499.2 million USD was outstanding under the RCF, $85.1 million USD of which was intercompany borrowings by OG&E.