Oncor issues new notes in exchange for InfraREIT units’ notes

By Angela McDaniels

Tacoma, Wash., May 16 – Oncor Electric Delivery Co. LLC completed its acquisition of InfraREIT, Inc. and extinguished all of InfraREIT’s outstanding debt, according to an 8-K filing with the Securities and Exchange Commission.

InfraREIT’s debt totaled about $953.35 million principal amount at closing.

Oncor repaid about $602.5 million principal amount on behalf of InfraREIT’s subsidiaries using proceeds from a new $600 million term loan due Nov. 9, 2019 and the issuance of commercial paper.

Oncor also exchanged about $350.85 million principal amount of secured senior notes issued by InfraREIT subsidiaries Sharyland Distribution & Transmission Services, LLC and Transmission and Distribution Co., LLC for secured senior notes issued by Oncor.

Under a note purchase agreement with Prudential Insurance Co. of America, Oncor issued

• $86,711,551 principal amount of newly issued 6.47% senior notes, series A, due Sept. 30, 2030 in exchange for a like principal amount of Sharyland’s 6.47% senior notes due Sept. 30, 2030;

• $37,761,590 principal amount of newly issued 7¼% senior notes, series B, due Dec. 30, 2029 in exchange for a like principal amount of Sharyland’s 7¼% senior notes due Dec. 30, 2029; and

• $14,375,000 principal amount of newly issued 8½% senior notes, series C, due Dec. 30, 2020 in exchange for a like principal amount of Transmission and Distribution’s 8½% senior notes due Dec. 30, 2020.

Under a separate agreement (the AB note purchase agreement), Oncor issued

• $174 million principal amount of newly issued 3.86% senior notes, series A, due Dec. 3, 2025 in exchange for a like principal amount of Sharyland’s 3.86% senior notes due Dec. 3, 2025; and

• $38 million principal amount of newly issued 3.86% senior notes, series B, due Jan. 14, 2026 in exchange for a like principal amount of Sharyland’s 3.86% senior notes due Jan. 14, 2026.

Oncor paid about $311.51 million to the holders of the prior 3.86% notes who did not enter into the AB note purchase agreement, consisting of $288 million in principal, $4.76 million in interest and about $18.75 million in make-whole fees.

Oncor’s obligations under the new notes are secured by a lien on all property acquired or constructed by Oncor for the transmission and distribution of electric energy.

The note purchase agreements provide for optional prepayment and make-whole payments.

Oncor is an electric company based in Dallas and InfraREIT is a Dallas-based real estate investment trust.

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