8-KOther Events

SOUTHERN CO 8-K Report, Corporate Update (Feb 20, 2014)

Filed February 20, 2014For Securities:SOSOJESOJFSOJCSOJDSOMN

Summary

Southern Company, through its subsidiary Georgia Power, has entered into significant agreements with the U.S. Department of Energy (DOE) and the Federal Financing Bank (FFB) related to the construction of Plant Vogtle Units 3 and 4. This filing details the execution of a Loan Guarantee Agreement, a Note Purchase Agreement, and related security and ownership agreements. The core of this announcement is the establishment of a loan facility of up to approximately $3.46 billion, backed by a DOE loan guarantee. This facility will provide funding for a portion of the eligible construction costs for the new nuclear units. Georgia Power has already drawn down $1 billion as an initial borrowing. The terms include a long maturity date of 2044, with principal payments starting in 2020 and interest rates tied to Treasury rates plus a spread. This arrangement aims to secure necessary financing for the ambitious Vogtle expansion project.

Key Highlights

  • 1Georgia Power finalized loan guarantee agreements with the U.S. DOE and FFB for Plant Vogtle Units 3 and 4 construction.
  • 2A new multi-advance term loan facility of up to approximately $3.46 billion has been established, backed by a DOE loan guarantee.
  • 3Georgia Power made an initial borrowing of $1 billion under this facility on February 20, 2014.
  • 4Proceeds will reimburse Georgia Power for a portion of eligible construction costs for Plant Vogtle Units 3 and 4.
  • 5The loan facility matures in 2044, with principal repayments commencing in 2020.
  • 6Interest rates are variable, linked to applicable Treasury rates plus a 0.375% spread.
  • 7Georgia Power's reimbursement obligations are secured by its ownership interest in Plant Vogtle Units 3 and 4 and related contracts.

Frequently Asked Questions

The agreements are to secure financing for the construction of Plant Vogtle Units 3 and 4. Georgia Power entered into a loan guarantee agreement with the DOE and FFB credit facility documents to obtain a loan facility of up to approximately $3.46 billion, which is guaranteed by the DOE.

The total facility can provide up to approximately $3.46 billion in borrowings. Georgia Power made an initial borrowing of $1 billion on February 20, 2014, with future advances subject to certain conditions and quarterly requests through December 31, 2020.

The loan facility has a final maturity date of February 20, 2044. Principal payments are scheduled to begin on February 20, 2020. Interest rates are based on the applicable Treasury rate plus a spread of 0.375%, with specific rates for the initial $1 billion borrowing at 3.860% and 3.488% for different interest periods.

Georgia Power's reimbursement obligations to the DOE are secured by a first priority lien on its 45.7% ownership interest in Plant Vogtle Units 3 and 4, as well as its rights and obligations under key project contracts like the EPC contract.