Title
Resolution - Approval of Unsecured Debt Issuance - 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, Pedernales Electric Cooperative, Inc. (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 November 2024 (2024-332), the Cooperative authorized the increase of its unsecured credit facilities by $100,000,000 in the aggregate amount not to exceed $605,000,000, the increase of its commercial paper program from $200,000,000 to $300,000,000, and the extension and amendment to various credit agreements.
The Cooperative wishes to establish a new credit facility of $300,000,000, and in an aggregate amount not to exceed $905,000,000 for its unsecured credit facilities to continue to provide increased flexibility in financing the operations and expenses of the Cooperative.
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 a $300,000,000 commitment (for an unsecured credit facility from one or more lenders);
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”);
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 and that certain Revolving Line of Credit Agreement with CFC dated November 26, 2024, in the authorized amount up to $100,000,000;
WHEREAS, the Cooperative further wishes to authorize the entry into an up to 3-year credit facility with a Lender, subject to the aggregate authorized amount up to $905,000,000 for all such unsecured credit facilities referenced herein; and
NOW THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE COOPERATIVE, that the Cooperative authorizes the issuance or incurrence of an up to 3-year credit facility as described herein, in an amount up to $300,000,000, which may be unsecured; and
BE IT FURTHER RESOLVED BY THE BOARD OF DIRECTORS OF THE COOPERATIVE, that the credit facility and related 3-year credit agreement authorized herein 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 the credit facility as described herein, 3-year credit agreement and any one or more extensions and amendments to any such 3-year credit agreement; 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 facility as described herein, 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 facility as described herein, the 3-year credit agreement, , and/or any other agreements that may be required in connection with such transaction, and any other agreements, certificates, consents, affidavits, opinions, and other instruments of any nature necessary or appropriate to give effect to such transaction, 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.