8-KFinancial EventsExhibits & Filings

EXELON CORP 8-K Report, Financial Obligation (Jun 10, 2005)

Filed June 10, 2005For Securities:EXC

Summary

On June 9, 2005, Exelon Corporation announced a significant debt financing event through the issuance of $1.7 billion in aggregate principal amount of senior notes. These notes were sold in three tranches: $400 million of 4.45% notes due 2010, $800 million of 4.90% notes due 2015, and $500 million of 5.625% notes due 2035. The net proceeds of approximately $1.685 billion will be used primarily to repay existing term loan borrowings, specifically addressing a $1.5 billion term loan and a portion of a $500 million term loan. This transaction represents a strategic move by Exelon to refinance its debt structure, potentially lowering its overall cost of borrowing and extending its debt maturity profile. The issuance of these senior notes is a direct financial obligation, and the filing details key terms, including interest rates, maturity dates, and redemption provisions. Investors should note the specific covenants introduced, such as restrictions on pledging equity interests of key subsidiaries like PECO Energy Company, Commonwealth Edison Company, and Exelon Generation Company, LLC, as well as enhanced events of default related to other indebtedness.

Key Highlights

  • 1Exelon Corporation issued $1.7 billion in senior notes across three series with varying interest rates and maturity dates.
  • 2The issuance includes $400 million in 4.45% notes due 2010, $800 million in 4.90% notes due 2015, and $500 million in 5.625% notes due 2035.
  • 3Net proceeds of approximately $1.685 billion will be used to repay outstanding term loan borrowings.
  • 4The transaction involves the refinancing of a $1.5 billion term loan and a portion of a $500 million term loan.
  • 5New covenants restrict the pledging of equity interests in key subsidiaries: PECO Energy, Commonwealth Edison, and Exelon Generation.
  • 6Additional events of default were added related to Exelon's aggregate indebtedness exceeding $50 million.

Frequently Asked Questions

The primary purpose of issuing these new senior notes is to refinance existing debt, specifically to repay approximately $1.5 billion of principal and accrued interest on a term loan and a portion of another $500 million term loan. This allows Exelon to manage its debt maturity profile and potentially reduce its cost of borrowing.

Exelon issued $1.7 billion in senior notes in three series: $400 million at 4.45% due June 15, 2010; $800 million at 4.90% due June 15, 2015; and $500 million at 5.625% due June 15, 2035. Interest is payable semi-annually, and the notes are subject to redemption under specific conditions outlined in the filing.

Yes, Exelon has implemented additional covenants. Notably, the company cannot create or incur pledges or security interests on the capital stock of or equity interests in its key subsidiaries: PECO Energy Company, Commonwealth Edison Company, and Exelon Generation Company, LLC, or subsidiaries that directly hold equity in these entities. New events of default related to aggregate indebtedness exceeding $50 million have also been added.

Exelon received aggregate net proceeds of approximately $1,685,213,000 from the sale of the Senior Notes, after deducting underwriting discounts but before other expenses.