8-KMaterial AgreementsFinancial EventsExhibits & Filings

EXELON CORP 8-K Report, Material Agreement (Apr 9, 2020)

Filed April 9, 2020For Securities:EXC

Summary

Exelon Corporation, through its subsidiary Constellation NewEnergy, Inc. (CNE), has entered into a new $750 million Receivables Facility with MUFG Bank and other financial institutions. This facility allows CNE to sell certain trade receivables to a special purpose entity, NewEnergy Receivables LLC (NER), on a revolving basis in exchange for cash. This arrangement provides Exelon with a source of liquidity and enhances its working capital management. The initial funding under this facility amounted to approximately $500 million. The Receivables Facility is structured to provide ongoing financing through the sale of receivables, with CNE continuing to service these receivables for a fee. The facility has a term of one year, expiring in April 2021, with the possibility of extension. This move is a strategic financial maneuver aimed at optimizing cash flow and ensuring operational flexibility, particularly relevant in the current economic climate.

Key Highlights

  • 1Exelon's subsidiary, Constellation NewEnergy, Inc. (CNE), entered into a new $750 million Receivables Facility.
  • 2The facility involves the sale of trade receivables by CNE to a bankruptcy-remote special purpose entity, NewEnergy Receivables LLC (NER).
  • 3The agreement is with MUFG Bank, LTD. as Agent, and various Conduits and financial institutions as Purchasers.
  • 4CNE will continue to service the receivables under the agreement and will receive a monthly servicing fee.
  • 5The facility provides Exelon with immediate access to liquidity, with an initial cash purchase of approximately $500 million received by CNE.
  • 6The Receivables Facility has a term of one year, expiring on April 7, 2021, unless extended.
  • 7This transaction is designed to improve working capital and provide financial flexibility.

Frequently Asked Questions

The Receivables Facility is designed to provide Constellation NewEnergy, Inc. (CNE), a subsidiary of Exelon, with a source of liquidity and working capital by allowing it to sell its trade receivables to a special purpose entity. This enables CNE to receive immediate cash payments for these receivables, enhancing its financial flexibility.

The Receivables Facility has a maximum funding limit of $750 million. Exelon's subsidiary, CNE, received approximately $500 million in cash purchase price in connection with the initial incremental purchase under this facility.

The Receivables Facility expires on April 7, 2021, unless it is extended by the parties involved. It is a one-year facility from the date of the agreement.

Yes, Constellation NewEnergy, Inc. (CNE) will continue to act as the servicer for the receivables sold under the facility. In exchange for servicing these receivables, CNE will receive a monthly servicing fee.