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Item 1.01
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Entry into a Material Definitive Agreement.
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On March 29, 2021, Vistra Operations Company LLC (“Vistra Operations” or the “Borrower”), an indirect, wholly owned subsidiary of Vistra Corp. (the “Company”), entered into a secured, 364-day term loan credit agreement (the credit facility established thereby, the “364-Day Facility”) by and among the Borrower, Vistra Intermediate Company LLC, the lenders party thereto, and Royal Bank of Canada, as Administrative and Collateral Agent. On April 1, 2021, the parties entered into an amendment to the 364-Day Facility (the “Amendment”) whereby an additional lender joined the 364-Day Facility (as amended, the “Upsized 364-Day Facility”). In connection with the 364-Day Facility and the Upsized 364-Day Facility, Vistra Operations borrowed an aggregate principal amount of $1.25 billion to prepay certain amounts outstanding under Vistra Operations’ revolving credit facility (the “Revolving Credit Facility”).
Loans made under the Upsized 364-Day Facility mature on March 28, 2022. Interest accrues on the loans made under the Upsized 364-Day Facility at variable rates which are tied to either a LIBOR rate (as defined in the Upsized 364-Day Facility), determined with reference to the London Interbank Offered Rate (LIBOR) plus an applicable margin, or a base rate (as defined in the Upsized 364-Day Facility) determined with reference to the highest of the federal funds rate plus 50 bps, the applicable prime rate and the LIBOR rate plus 100 bps, in each case plus an applicable margin.
The Upsized 364-Day Facility contains customary covenants and warranties which are generally consistent with the Revolving Credit Facility. The Upsized 364-Day Facility is also secured pari passu on substantially the same collateral, and guaranteed by the same guarantors, as the Revolving Credit Facility. Each of the lenders have in the past performed, and may in the future from time to time perform, investment banking, financial advisory, lending and/or commercial banking services, or other services for the Company and its subsidiaries, for which they have received, and may in the future receive, customary compensation and expense reimbursement.
The Company believes that, even without the Upsized 364-Day Facility, it would have had sufficient liquidity to conduct its operations in the ordinary course of business. However, in light of the short-term financial impacts of Winter Storm Uri, the Company believes it was prudent to enter into the Upsized 364-Day Facility in order to provide an additional liquidity cushion to better position itself to, among other things, take advantage of potential opportunities to continue to grow and strengthen the Company’s business and address any unforeseen liquidity events.
The foregoing summary of the 364-Day Facility and the Amendment does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the 364-Day Facility and the Amendment, copies of which are attached as Exhibit 10.1 and Exhibit 10.2 hereto, respectively, and incorporated by reference herein.