Current Report of Genon Holdings, Inc
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Current Report of GenOn Holdings, Inc. Delivered Pursuant to Section 6.01(a) of the Stockholders Agreement Date of Report: December 14, 2018 IMPORTANT EXPLANATORY NOTE On December 14, 2018, GenOn Holdings, Inc. (the “Company”) entered into the Stockholders Agreement (the “Stockholders Agreement”) with each of the stockholders party thereto from time to time (the “Stockholders”). Section 6.01(a) of the Stockholders Agreement requires the Company to furnish to the Stockholders certain of the current reports that would be required to be filed with the Securities and Exchange Commission (the “SEC”) on Form 8-K if the Company was required to file such reports with the SEC to the extent such reports relate to the occurrence of any event which would require such report to be filed, subject to the exceptions described therein. This Current Report has been prepared pursuant to the requirements of Section 6.01(a) of the Stockholders Agreement. The Company does not file reports with the SEC and the preparation of this report and the posting of this information to the Company’s website pursuant to the requirements of the Stockholders Agreement shall in no way be interpreted as an undertaking on the part of the Company to otherwise comply with all of the rules and regulations that are applicable to a company subject to the reporting requirements of the Securities Exchange Act of 1934, as amended. Item 1.01 Entry into a Material Definitive Agreement Plan of Reorganization As previously disclosed, on June 14, 2017, GenOn Energy, Inc. (“GenOn”) and certain of its directly and indirectly- owned subsidiaries (collectively, the “Debtors”) filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”) and on December 12, 2017, the Bankruptcy Court entered an order (the “Confirmation Order”) confirming the Debtors’ Third Amended Joint Chapter 11 Plan of Reorganization (the “Plan”). On December 14, 2018 (the “Effective Date”), GenOn Holdings, Inc. (the “Company”) satisfied the conditions to effectiveness set forth in the Confirmation Order and in the Plan, the Plan became effective in accordance with its terms and the Company emerged from the Chapter 11 cases. Revolving Credit Agreement On the Effective Date, GenOn Holdings, LLC (the “Partnership”) entered into a revolving credit agreement (the “Revolving Credit Agreement) with the lenders from time to time party thereto and Barclays Bank PLC as lead arranger, lead bookrunner, administrative agent and issuing bank. The Revolving Credit Agreement allows the Partnership, for the fees and expenses and at the interest rates specified therein, to borrow, on a revolving credit basis up to $125 million at any time outstanding (the “Revolving Facility”), all of which is available for the issuance of letters of credit. Initial availability is limited to $100 million and of that, $17.5 million is available for cash borrowings. The caps on initial availability are subject to removal upon the Partnership’s provision of a mortgage on the Bowline power plant. Commitments under the Revolving Facility will be reduced upon the sale of certain assets. In particular, upon the sale of the Bowline power plant, all commitments will be terminated under the Revolving Facility and any outstanding letters of credit will need to be cash collateralized. The Revolving Credit Agreement permits increases of commitments of up to an additional $50 million. Cash borrowings under such increases of commitments are subject to a sublimit of $25 million. The Revolving Facility will mature December 14, 2021. Borrowings under the the Revolving Facility are available at the Partnership’s option at either (a) the sum of Alternate Base Rate (as defined in the Revolving Credit Agreement), plus 3.50% or (b) the sum of the Adjusted LIBOR (as defined in the Revolving Credit Agreement), plus 4.50%. The Revolving Facility is secured by a first-priority lien on certain assets of the Partnership and certain of its subsidiaries (the “Collateral”). The Revolving Credit Agreement contains customary covenants and warranties, including specified restrictions on indebtedness, liens and the Partnership’s consolidated first lien leverage ratio that requires the ratio of Total First Lien Debt to Consolidated Cash Flow (each as defined in the Revolving Credit Agreement) to not exceed 2.50 to 1.00 as of the last day of any fiscal quarter. It also contains customary Events of Default (as defined in the Revolving Credit Agreement). If an Event of Default occurs, then, to the extent permitted in the Revolving Credit Agreement, the Administrative Agent with respect to the Revolving Facility may terminate the commitments under the Revolving Facility, accelerate any outstanding obligations under the Revolving Facility and demand the deposit of cash collateral equal to the letter of credit exposure of each letter of credit issuer or lender, as applicable, under the Revolving Facility. On the Effective Date, letters of credit with an aggregate face amount of $78 million were outstanding under the Revolving Facility. The description of the Revolving Credit Agreement in this Current Report is qualified in its entirety by reference to the complete text of the Revolving Credit Agreement, a copy of which is furnished as Exhibit 4.1 hereto and is incorporated herein by reference. Indenture Additionally, on the Effective Date, GenOn Energy, Inc. and NRG Americas, Inc. entered into an indenture (the “Indenture”), by and among the guarantors party thereto, Wells Fargo Bank, National Association, as trustee, and U.S. Bank National Association, as collateral trustee, governing the Floating Rate Senior Secured Second Lien Notes due 2023 (the “Notes”). Following the issuance of the Notes and entry into the Indenture, the parties thereto 2 entered into a supplemental indenture (the “Supplemental Indenture”) with the Partnership and a new co-issuer, formed for the sole purpose of acting as the co-issuer on the Notes (the “Co-Issuer”) whereby the obligations under the Indenture and the Notes were assumed by the Partnership and the Co-Issuer. Interest and Maturity The Notes will mature on December 1, 2023. The Notes bear interest at a variable rate equal to the LIBOR as determined on the relevant interest determination date, plus 6.50%, payable semi-annually in arrears on June 1 and December 1 of each year. Optional Redemption The Notes may be redeemed at the redemption prices (expressed as percentages of the principal amount) set forth below, plus accrued and unpaid interest thereon, if any, to the applicable redemption date (subject to the right of holders of record on the relevant record date to receive interest due on an interest payment date) according to the following schedule: Date Percentage Issue Date to, but excluding, June 14, 2019 ............................................................. 101.000% From, and including, June 14, 2019 and thereafter ................................................... 100.000% Change of Control If the Company experiences certain kinds of changes of control set forth in the Indenture, each holder of the Notes may require the Company to repurchase all or a portion of its Notes for cash at a price equal to 101% of the aggregate principal amount of such Notes, plus any accrued but unpaid interest to the date of repurchase. Certain Covenants The Indenture contains covenants that, among other things and subject to certain exceptions and qualifications, limit the Company and its restricted subsidiaries’ ability to: (i) incur or guarantee additional indebtedness or issue certain types of preferred stock; (ii) pay dividends on capital stock or redeem, repurchase or retire capital stock or subordinated indebtedness; (iii) make investments; (iv) create certain liens; (v) enter into agreements that restrict dividends or other payments from their subsidiaries to them; (vi) transfer or sell assets and subsidiary stock; (vii) engage in transactions with affiliates; (viii) create unrestricted subsidiaries; and (ix) consolidate, merge or transfer all or substantially all of their assets. Events of Default Upon an Event of Default (as defined in the Indenture), the Trustee or the holders of at least 25% of the aggregate principal amount of then outstanding Notes may declare the Notes immediately due and payable, except that a default resulting from certain events of bankruptcy or insolvency with respect to the Company, any restricted subsidiary of the Company that is a significant subsidiary or any group of restricted subsidiaries that, taken together, would constitute a significant subsidiary, will automatically cause all outstanding Notes to become due and payable. The description of the Indenture in this Current Report is qualified in its entirety by reference to the complete text of the Indenture, a copy of which is furnished as Exhibit 4.2 hereto and is incorporated herein by reference. Item 1.02 Termination of a Material Definitive Agreement In connection with the effectiveness of and pursuant to the terms of the Plan, on the Effective Date, the following obligations of GenOn and certain of its subsidiaries, as well as other obligations as detailed in the Plan, have been satisfied and discharged: • intercompany revolver with NRG Energy, Inc.; 3 • indenture governing the GenOn 7.875% Senior Notes due 2017; • indenture governing the GenOn 9.500% Notes due 2018; • indenture governing the GenOn 9.875% Notes due 2020;