Form 8-K
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UNITED
STATES
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SECURITIES
AND EXCHANGE COMMISSION
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Washington,
D.C. 20549
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FORM
8-K
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CURRENT
REPORT
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PURSUANT
TO SECTION 13 OR 15(d) OF THE
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SECURITIES
EXCHANGE ACT OF 1934
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Date
of Report (Date of earliest event reported)
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April 21, 2006
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(April 18, 2006)
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Commission
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Name
of Registrant, State of Incorporation,
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I.R.S.
Employer
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File
Number
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Address
and Telephone Number
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Identification
No.
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001-32462
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PNM
Resources, Inc.
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85-0468296
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(A
New Mexico Corporation)
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Alvarado
Square
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Albuquerque,
New Mexico 87158
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(505)
241-2700
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______________________________
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(Former
name, former address and former fiscal year, if changed since last
report)
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Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
[]
Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[]
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[]
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)
[]
Pre-commencement
communications pursuant to Rule 13e-4 (c) under the Exchange Act (17
CFR 240.13e-4(c)
Item
1.01 Entry into a Material Definitive Agreement.
As
previously reported in a Current Report on Form 8-K filed January 20, 2006,
Altura Power L.P. (“Altura”), an indirect subsidiary of PNM Resources, Inc.
(“PNMR”), entered into an agreement to purchase the 305-megawatt coal fired Twin
Oaks power plant facility (“Twin Oaks”) located 150 miles south of Dallas,
Texas, for $480 million in cash, using bridge financing arranged by PNMR.
On
April
18, 2006, Altura completed the acquisition of Twin Oaks and PNMR entered into
a
new unsecured term loan agreement (the “Term Loan Agreement”) among PNMR, as
borrower, Lehman Commercial Paper Inc. (“Lehman”), as administrative agent,
Lehman Brothers Inc., as sole lead arranger and sole book-manager and the
following five lender parties: Lehman, Bank of America, N.A., Citicorp North
America, Inc., Merrill Lynch Bank USA and Morgan Stanley Bank. The Term Loan
Agreement is described in Item 2.03 of this report, which is incorporated by
reference into this Item 1.01.
The
agents and lender parties to the Term Loan Agreement perform normal banking
and
investment banking and advisory services for PNMR from time to time for which
they have received customary fees and expenses.
Item
2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
Under
the
Term Loan Agreement, PNMR was permitted to borrow up to $480 million in a single
draw on or after April 18, 2006, to finance the acquisition of Twin Oaks and
related expenses. Term loans made under the Term Loan Agreement bear interest
at
a base rate (the greater of the prime rate in effect and the Federal Funds
rate
plus ½ of 1%) or an adjusted Eurodollar rate (equal to the British Bankers
Association LIBOR rate plus an additional percentage based on PNMR’s then
current long-term senior unsecured non-credit enhanced debt rating). On April
18, 2006, PNMR borrowed $480 million under the Term Loan Agreement. PNMR must
repay the loan by April 17, 2007, unless accelerated as described below or
prepaid in whole or in part upon the issuance of certain additional equity
or
debt. PNMR used the proceeds of the loan to make capital contributions totaling
$480 million to Altura through the two wholly owned subsidiaries that are
partners in Altura to provide the funds for the acquisition of Twin Oaks. It
is
expected that the permanent financing for the $480 million Twin Oaks purchase
price will come from the issuance of debt and equity structured to maintain
PNMR’s investment grade rating.
The
Term
Loan Agreement includes customary covenants, including requirements that PNMR
maintain a maximum consolidated debt-to-consolidated capitalization
ratio.
The
Term
Loan Agreement includes customary events of default, including a cross default
provision and a change in control provision. If an event of default occurs,
the
administrative agent may, or upon the request and direction of lenders holding
more than 50% of the outstanding term loan shall, declare the unpaid principal
and interest on the term loan to be due and payable. Such acceleration will
occur automatically in the event of an insolvency or bankruptcy default.
Item
8.01 Other Events.
On
April
18, 2006, PNMR issued a press release announcing the closing of the acquisition
of Twin Oaks by Altura and the related execution and delivery of the Term Loan
Agreement by PNMR. The press release is furnished herewith as Exhibit 99.1
and
incorporated by reference herein.
Item
9.01 Financial Statements and Exhibits.
(d)
Exhibits
Exhibit
Number Exhibit
99.1 Press
Release dated April 18, 2006
Safe
Harbor Statement under the Private Securities Litigation Reform Act of
1995
Statements
made in this release that relate to future events or the Company's expectations,
projections, estimates, intentions, goals, targets and strategies are made
pursuant to the Private Securities Litigation Reform Act of 1995. You are
cautioned that all forward-looking statements are based upon current
expectations and estimates and the Company assumes no obligation to update
this
information. Because actual results may differ materially from those expressed
or implied by these forward-looking statements, the Company cautions you not
to
place undue reliance on these statements. The Company’s business, financial
condition, cash flow and operating results are influenced by many factors,
which
are often beyond its control, that can cause actual results to differ from
those
expressed or implied by the forward looking statements. These factors include
the potential unavailability of cash from TNP Enterprises, Inc. and its
subsidiaries, the risks that the businesses will not be integrated successfully,
the risk that the benefits of the acquisition will not be fully realized or
will
take longer to realize than expected, disruption from the acquisition making
it
more difficult to maintain relationships with customers, employees, suppliers
or
other third parties, the outcome of any appeals of the Public Utility Commission
of Texas order in the stranded cost true-up proceeding, the ability of First
Choice Power to attract and retain customers, changes in Electric Reliability
Council of Texas protocols, changes in the cost of power acquired by First
Choice Power, collections experience, insurance coverage available for claims
made in litigation, fluctuations in interest rates, conditions in the financial
markets affecting the Company's permanent financing for the Twin Oaks power
plant acquisition, weather (including impacts on the Company of the hurricanes
in the Gulf Coast region), water supply, changes in fuel costs, availability
of
fuel supplies, the effectiveness of risk management and commodity risk
transactions, seasonality and other changes in supply and demand in the market
for electric power, variability of wholesale power prices and natural gas
prices, volatility and liquidity in the wholesale power markets and the natural
gas markets, changes in the competitive environment in the electric and natural
gas industries, the performance of generating units, including PVNGS, and
transmission systems, the market for electrical generating equipment, the
ability to secure long-term power sales, the risks associated with completion
of
the construction of generation, transmission, distribution and other projects,
including construction delays and unanticipated cost overruns, state and federal
regulatory and legislative decisions and actions, the outcome of legal
proceedings, changes in applicable accounting principles and the performance
of
state, regional and national economies. For a detailed discussion of the
important factors that affect the Company and that could cause actual results
to
differ from those expressed or implied by the Company's forward-looking
statements, please see "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in the Company's current and future Annual
Reports on Form 10-K and Quarterly Reports on Form 10-Q and the Company's
current and future Current Reports on Form 8-K, filed with the SEC.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
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PNM
RESOURCES, INC.
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(Registrant)
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Date:
April 21, 2006
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/s/
Thomas G. Sategna
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Thomas
G. Sategna
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Vice
President and Corporate Controller
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(Officer
duly authorized to sign this
report)
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