Item 2.03. Creation of a Direct Financial Obligation
On February 21, 2023, the Company issued and sold $2.5 billion in aggregate principal amount of Notes. The Notes were issued under an indenture, dated as of June 11, 2015 (the “Base Indenture”), between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee, as amended and supplemented by the Sixth Supplemental Indenture, dated as of February 1, 2023 (the “Sixth Supplemental Indenture”). The Base Indenture is filed as Exhibit 4.1 to this Form 8-K and the Sixth Supplemental Indenture is filed as Exhibit 4.2 to this Form 8-K and are each incorporated herein by reference.
A portion of the net proceeds from the sale of the Notes, together with available cash balances, will be used to repay $850 million of Exelon’s outstanding term loans maturing in July 2023 and bearing interest at the Secured Overnight Financing Rate (SOFR) plus 0.65% and $588 million of currently outstanding commercial paper borrowings issued at the Exelon Corporation level having an approximate weighted average interest rate of 4.835% per annum as of February 13, 2023. The remainder of the net proceeds will be used for general corporate purposes.
The 2028 Notes will pay interest at the fixed rate of 5.150% per annum, the 2033 Notes will pay interest at the fixed rate of 5.300% per annum and the 2053 Notes will pay interest at the fixed rate of 5.600% per annum. Interest on the Notes will be payable semi-annually on March 15 and September 15 of each year, beginning on September 15, 2023. The 2028 Notes will mature on March 15, 2028, the 2033 Notes will mature on March 15, 2033, and the 2053 Notes will mature on March 15, 2053.
In connection with the issuance of the Notes, Ballard Spahr LLP provided the Company with the legal opinions attached to this report as Exhibit 5.1 and Exhibit 8.1.
A copy of the Underwriting Agreement dated February 16, 2023 among the Company, Barclays Capital, Inc., Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC and Morgan Stanley & Co., as representatives of the several underwriters named therein, is filed as Exhibit 1.1 to this report.