8-KOther EventsExhibits & Filings

EXELON CORP 8-K Report, Corporate Update (Apr 4, 2017)

Filed April 4, 2017For Securities:EXC

Summary

Exelon Corporation (EXC) filed an 8-K on April 4, 2017, reporting on the completion of a remarketing of its 2.50% Junior Subordinated Notes due 2024. These notes, originally issued as part of Equity Units in June 2014, were remarketed into $1,150,000,000 aggregate principal amount of 3.497% Junior Subordinated Notes due 2022. Notably, Exelon did not directly receive proceeds from this remarketing. Instead, the funds were used to purchase a portfolio of treasury securities. These matured securities are expected to be used by the company to settle purchase contracts associated with the original Equity Units on June 1, 2017. This transaction effectively modifies the terms of the original notes and serves as a step in settling the associated Equity Unit obligations.

Key Highlights

  • 1Exelon Corporation completed the remarketing of $1.15 billion in 2.50% Junior Subordinated Notes due 2024.
  • 2The original notes were part of Equity Units issued in June 2014.
  • 3The remarketed notes are now 3.497% Junior Subordinated Notes due 2022.
  • 4Exelon did not directly receive proceeds from the remarketing.
  • 5Proceeds were used to purchase treasury securities maturing on or about May 31, 2017.
  • 6The company expects to use funds from the treasury securities to settle purchase contracts related to the Equity Units on June 1, 2017.
  • 7The transaction involved a Second Supplemental Indenture to modify the terms of the original notes.

Frequently Asked Questions

The main event was the completion of a remarketing of $1.15 billion of Exelon's 2.50% Junior Subordinated Notes due 2024. These notes were part of Equity Units issued in 2014 and have now been converted into 3.497% Junior Subordinated Notes due 2022.

No, Exelon Corporation did not directly receive any proceeds from the remarketing. The funds were used to purchase a portfolio of treasury securities.

The treasury securities purchased are expected to mature around May 31, 2017. Exelon anticipates using a portion of these matured funds to settle purchase contracts associated with the original Equity Units on June 1, 2017.

This remarketing is a mechanism to manage the obligations associated with the original Equity Units. By remarketing the notes and using the proceeds to acquire treasury securities, Exelon is preparing to settle the purchase contracts that were part of those Equity Units.