Title
Resolution - Approval of Authorization for Increase of and Amendments to Commercial Paper Program and Unsecured Credit Facilities for the Cooperative - R Kruger
Other Info
Submitted By: Randy Kruger
Department: Chief Financial Officer
Financial Impact and Cost/Benefit Considerations: As discussed in Executive Session.
Discussion
To continue to fund its capital improvement budget and operating budget for both its distribution and transmission lines of business, the Cooperative is assessing available financing options in consideration of the financial health of the Cooperative and in the best interests of the Cooperative. In April 2001, the Cooperative established an unsecured credit facility in the aggregate amount of $75,000,000 and in January 2007 increased such short-term unsecured credit facility to the aggregate amount of $100,000,000.
In November 2020, the Cooperative authorized unsecured credit facilities to finance the operations and expenses of the Cooperative in an amount not to exceed $305,000,000, and subsequently authorized the extension and amendment of such facilities in November 2021.
In August 2021 the Cooperative authorized a short-term unsecured credit facility in the aggregate amount of $100,000,000.
The Cooperative wishes to increase by $100,000,000 its unsecured credit facilities to finance the operations and expenses of the Cooperative in an aggregate amount not to exceed $605,000,000, which increase may include a new short-term unsecured credit facility and/or increases of existing short-term unsecured credit facilities and/or a new unsecured 3-year credit facility and/or increases of its 3-year $200,000,000 unsecured credit facility.
The Cooperative further wishes to increase the authorized amount of its commercial paper program from $200,000,000 to $300,000,000 to provide increased flexibility in financing the operations and expenses of the Cooperative and amend its commercial paper program documents to effect necessary amendments for both its distribution and transmission lines of business.
The Cooperative further wishes to extend and amend various credit agreements (including but not limited to its 3-year $200,000,000 unsecured credit facility and its short-term unsecured credit facilities with the other Lenders (as defined herein).
Body
WHEREAS, to continue to fund its capital improvement budget and operating budget for both its distribution and transmission lines of business and in the best interests of the Cooperative, the Cooperative requires an increase of an additional $100,000,000 to its commitments (for unsecured credit facilities from one or more lenders) and an increase in the authorized amount of its commercial paper program from $200,000,000 to $300,000,000; and
WHEREAS, the Cooperative is currently a party to the following short-term unsecured credit agreements in the aggregate amount up to $305,000,000: (i) a 364-Day Credit Agreement, dated as of December 4, 2020 (as heretofore amended), with Bank of America, N.A., CoBank, ACB and JPMorgan Chase Bank, N.A. in the authorized amount up to $105,000,000, (ii) a Second Amended and Restated 364-Day Revolving Credit Agreement with CoBank, ACB, dated October 19, 2023 (as heretofore amended) in the authorized amount up to $100,000,000 and (iii) an Amended and Restated Perpetual Line of Credit Agreement with National Rural Utilities Cooperative Finance Corporation (CFC) dated January 22, 2007 (as heretofore amended) in the authorized amount up to $100,000,000, (all of such lenders collectively, the “Lenders” and all of such short-term unsecured credit agreements, the “Credit Agreements”);
WHEREAS, the Cooperative is currently a party to that certain 3-Year Credit Agreement, dated December 4, 2020 (as heretofore amended) with Bank of America, N.A., CoBank, ACB and JPMorgan Chase Bank, N.A., in an authorized amount up to $200,000,000 (the “3-Year Credit Agreement”);
WHEREAS, the Cooperative is currently a party to that certain Commercial Paper Dealer Agreement 4(A)(2) Program dated as of April 1, 2021 with BofA Securities, Inc. and/or one or more others dealers, the Issuing and Paying Agent Agreement dated as of April 1, 2021 with U.S. Bank National Association, and has issued its commercial paper notes dated as of April 6, 2021 and such commercial paper notes have been offered into the market with the delivery of an offering memorandum issued by the Cooperative and the Cooperative has obtained a rating by a rating agency for such commercial paper program and such other documentation in connection with the commercial paper program (collectively, the “Commercial Paper Program Documents”); and
WHEREAS, the Cooperative wishes to amend the Credit Agreements or 3-Year Credit Agreement in order to increase the aggregate authorized amount by an additional $100,000,000 and to extend the maturities and make other amendments for its distribution and transmission lines of business, and the Cooperative further wishes to authorize the entry into new credit facilities with CFC or any other Lenders or to authorize the replacement of any existing Credit Agreements or 3-Year Credit Agreement, subject to the aggregate authorized amount up to $605,000,000 for such credit facilities, Credit Agreements or 3-Year Credit Agreement; and
WHEREAS, the Cooperative wishes to amend the Commercial Paper Program Documents in order to increase the commercial paper program by an additional $100,000,000;
NOW THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE COOPERATIVE, that the Cooperative authorizes the issuance or incurrence of such credit facilities as described herein, and extension, and/or amendment, of Credit Agreements and/or 3-Year Credit Agreement, all in the aggregate principal amount up to $605,000,000, which may be unsecured; and
BE IT FURTHER RESOLVED BY THE BOARD OF DIRECTORS OF THE COOPERATIVE, that the credit facilities and related Credit Agreements or 3-Year Credit Agreement authorized herein may include extensions, amendments and increases to existing credit facilities and/or one or more new credit facilities with any one or more lenders (including but not limited to any of the existing Lenders) as selected by an Authorized Officer (as defined herein) with all of the terms thereof and such other terms as any Authorized Officer determines necessary or appropriate, such determination to be conclusively evidenced by such execution and delivery by any Authorized Officer; and the Cooperative hereby authorizes the execution, delivery and performance of such credit facilities as described herein, Credit Agreements and/or 3-Year Credit Agreement and any one or more extensions and amendments to any such Credit Agreements and/or 3-Year Credit Agreement; and
BE IT FURTHER RESOLVED BY THE BOARD OF DIRECTORS OF THE COOPERATIVE, that the Cooperative authorizes an increase in the aggregate principal amount of the Commercial Paper Program from $200,000,000 to $300,000,000, and further authorizes the execution, delivery and performance of the amendments to the Commercial Paper Program Documents in connection therewith, and all of the terms thereof and such other terms as any Authorized Officer determines necessary or appropriate, such determination to be conclusively evidenced by such execution and delivery by any Authorized Officer; and
BE IT FURTHER RESOLVED BY THE BOARD OF DIRECTORS OF THE COOPERATIVE, that any of the Authorized Officers are hereby expressly authorized, empowered and directed from time to time to do and perform all acts and things and to execute, acknowledge and deliver, in the name and on behalf of the Cooperative all such documents, certificates, instruments, and notices concerning the documents, whether or not herein mentioned, as the Authorized Officer(s) may determine to be necessary or desirable in order to carry out the terms and provisions of these resolutions and the terms of the credit facilities as described herein, Credit Agreements, the Commercial Paper Program Documents, the 3-Year Credit Agreement, and other related documents, and to perform the obligations of the Cooperative under all instruments executed in connection therewith, such determination to be conclusively evidenced by such execution and delivery.
BE IT FURTHER RESOLVED BY THE BOARD OF DIRECTORS OF THE COOPERATIVE, that the Chief Executive Officer of the Cooperative, the Chief Financial Officer of the Cooperative, or any person designated in writing for such purpose by the Chief Executive Officer (each an “Authorized Officer” and collectively, the “Authorized Officers”), are each hereby authorized (whether acting together or alone) as a duly authorized officer or agent of the Cooperative, for and in the name and on behalf of the Cooperative, to negotiate, execute and deliver or acknowledge, the credit facilities as described herein, extensions and amendments to the Credit Agreements and/or the 3-Year Credit Agreement, the amendments to the Commercial Paper Program Documents, and/or any other agreements that may be required in connection with each transaction, and any other agreements, certificates, consents, affidavits, opinions, and other instruments of any nature necessary or appropriate to give effect to such transactions, in each case in such form and containing such terms and conditions as such Authorized Officer may in her or his reasonable discretion deem necessary, appropriate, or desirable; and
BE IT FURTHER RESOLVED BY THE BOARD OF DIRECTORS OF THE COOPERATIVE, that the Authorized Officers are each hereby authorized as a duly authorized officer or agent of the Cooperative, for and in the name and on behalf of the Cooperative, to do any and all acts deemed by such officer in such officer's judgment to be necessary or appropriate in the best interests of the Cooperative to give effect to the foregoing resolutions.