SPIRE INC 8-K 2013
Securities and Exchange Commission
Washington, D.C. 20549
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Item 1.01 Entry into a Material Definitive Agreement
On January 16, 2013, The Laclede Group, Inc. ("Group") and Laclede Gas Company (“Gas”) each entered into a first amendment (each, a “First Amendment”) to its respective Loan Agreement, dated as of July 18, 2011 (each, a “Loan Agreement”), with Wells Fargo Bank, National Association, as Administrative Agent, U.S. Bank National Association, as Syndication Agent, Wells Fargo Securities, LLC and U.S. Bank National Association, as Lead Arrangers, JPMorgan Chase Bank, N. A., as Documentation Agent, and Comerica Bank, Fifth Third Bank, Commerce Bank and UMB Bank, N.A. , as the other participating banks.
The First Amendments were entered into in connection with (i) Group's previously announced agreement to acquire substantially all of the assets and liabilities of Missouri Gas Energy (“MGE”) and New England Gas Company (“NEG”) from Southern Union Company (“SUG”), pursuant to separate purchase and sale agreements, dated as of December 14, 2012 (the “Purchase Agreements”), among SUG, Group and each of two newly-formed wholly owned subsidiaries of Group (collectively the “Transaction”), and (ii) the related commitment letter (the “Commitment Letter”) among Group, Wells Fargo Bank, National Association and Wells Fargo Securities, LLC. On January 11, 2013, the right to acquire the MGE assets and liabilities was assigned by the applicable Group subsidiary to Gas. The First Amendments are expected to facilitate the financing of the Transaction by Group and Gas.
MGE and NEG, each a division of SUG, are primarily engaged in the local distribution of natural gas to approximately 500,000 and 50,000 residential, commercial and industrial customers in western Missouri and Massachusetts, respectively.
Each Loan Agreement was amended to, among other things, increase the required Maximum Consolidated Capitalization Ratio, as defined in the Loan Agreement, to 72.5% from 70% for the applicable borrower from the date the MGE acquisition is consummated through September 30, 2014, after which date the maximum ratio will return to 70%; provided, that the ratio will only increase for Gas if it or its subsidiary incurs the debt financing for the MGE acquisition.
In addition, the Group Loan Agreement was amended to exempt from a requirement to guaranty Group's obligations under that agreement any subsidiary that is prohibited from providing such a guaranty by any applicable regulatory authority. The change to the Maximum Consolidated Capitalization Ratio provision makes it consistent with Group's comparable financial covenant in the Commitment Letter.
Copies of the First Amendments are filed as Exhibits 10.1 and 10.2, respectively, to this report and are incorporated herein by reference. The foregoing description of the First Amendments does not purport to be complete and is qualified in its entirety by reference to the First Amendments.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement or a Registrant.
The information set forth under Item 1.01 above is incorporated herein by reference.
Item 9.01 Financial Statements and exhibits.
Pursuant to the requirements of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.