Item 1.01. Entry into a Material Definitive Agreement.
On September 22, 2020, NRG Receivables LLC ("NRG Receivables"), a wholly-owned
subsidiary of NRG Retail LLC ("NRG Retail"), and certain of NRG Retail's
subsidiaries (the "Originators") entered into a $750 million accounts receivable
securitized borrowing facility (the "Receivables Facility") with a group of
conduit lenders and banks and Royal Bank of Canada ("RBC), as Administrative
Agent. The Receivables Facility includes a receivables sale agreement, a
receivables loan and servicing agreement and a performance guarantee.
Pursuant to the receivables sale agreement dated as of September 22, 2020 among
Green Mountain Energy Company, Reliant Energy Northeast LLC, Reliant Energy
Retail Services, LLC, Stream SPE, Ltd, US Retailers LLC and Xoom Energy Texas,
LLC, as the Originators, NRG Retail, as the Servicer, and NRG Receivables (the
"Receivables Sale Agreement"), the Originators will sell to NRG Receivables
substantially all of their receivables for the sale of electricity, natural gas
and/or related services to their customers and certain related rights
(collectively, the "Receivables") and in connection therewith have transferred
to NRG Receivables the deposit accounts into which the proceeds of such
Receivables are paid. The Receivables will be sold by the Originators to NRG
Receivables at a discount, which will initially be 1% and is subject to
adjustment for future sales to reflect changes in prevailing interest rates and
collection experience. NRG Receivables will be consolidated in the financial
statements of NRG Energy, Inc. ("NRG").
Pursuant to the receivables loan and servicing agreement dated as of September
22, 2020 (the "Receivables Loan Agreement") among NRG Receivables, as Borrower,
NRG Retail, individually and as Servicer, RBC, as Administrative Agent, the
conduit lenders described therein, the committed lenders described therein, the
LC Issuers described therein and the facility agents described therein
(collectively, the "Lenders"), NRG Receivables may borrow up to $750 million
outstanding at any time, of which up to $400 million may be in the form of
letters of credit issued by the LC Issuers for the benefit of the Originators or
their affiliates based on the availability of eligible Receivables and other
customary factors. As part of the Receivables Loan Agreement, the Borrower has
granted a security interest in its Receivables and other related assets to the
Administrative Agent, for the benefit of the Lenders. The proceeds of the
Receivables Facility will be used for general corporate purposes, including
providing additional liquidity for the acquisition by NRG of Centrica plc's
North American energy supply, services and trading business, Direct Energy,
under the terms of the previously disclosed Receivables Sale Agreement entered
into on July 24, 2020. Unless earlier terminated or subsequently extended
pursuant to the terms of the Receivables Loan Agreement, the Receivables
Facility will expire on September 21, 2021. The Receivables Loan Agreement
contains customary termination events that could cause an early termination
date, including, among other things, the failure to make timely payments or
deposits under the Receivables Facility documents, breach of representations or
covenants, events of default under other indebtedness, certain changes of
control and the failure to meet certain leverage ratios and Receivables ratios.
NRG has agreed to guarantee the performance of the Servicer and the Originators
under the Receivables Facility documents. NRG has not agreed to guarantee any
obligations of NRG Receivables or the collection of any of the Receivables.
In connection with the Receivables Facility, NRG Retail and the Originators also
entered into a separate uncommitted repurchase facility pursuant to which they
may obtain short-term financing secured by a subordinated note issued by NRG
Receivables up to the lesser of $75 million and the principal amount of such
subordinated note. Any such repurchase transaction will have a one-month
maturity unless terminated earlier as a result of a termination event under the
Receivables Facility or the occurrence of any other event of default under the
repurchase facility. NRG will guarantee the obligations of NRG Retail and the
Originators under the repurchase facility.
The foregoing description of the Receivables Sale Agreement and the Receivables
Loan Agreement and the transactions contemplated thereby does not purport to be
complete and is qualified in its entirety by reference to the full text of such
agreements, copies of which are filed as Exhibits 10.1 and 10.2 to this Current
Report on Form 8-K and are incorporated herein by reference.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation Under an
Off-Balance Sheet Arrangement of a Registrant.
The disclosures under Item 1.01 of this Current Report on Form 8-K are also
responsive to Item 2.03 of this report and are incorporated by reference into
this Item 2.03.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit
No. Description
10.1 Receivables Sale Agreement, dated as of September 22, 2020, among the
Originators from time to time parties thereto, NRG Retail LLC, as
Servicer, and NRG Receivables LLC.
10.2 Receivables Loan and Servicing Agreement, dated as of September 22,
2020, among NRG Receivables LLC, as Borrower, NRG Retail LLC, as
Servicer, the persons from time to time party thereto as Conduit
Lenders, the persons from time to time party thereto as Committed
Lenders, the persons from time to time party thereto as Facility Agents,
the financial institutions from time to time party thereto as LC
Issuers, and Royal Bank of Canada as Administrative Agent.
104 Cover Page Interactive Data File - the cover page XBRL tags are embedded
within the iXBRL document contained in Exhibit 101.
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