Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
On October 13, 2022, Spire Alabama Inc. (“Spire Alabama”), a wholly owned subsidiary of Spire Inc., entered into the Fifth Supplement to Master Note Purchase Agreement, dated as of October 13, 2022 (the “Fifth Supplement”) among Spire Alabama and certain institutional investors (“Note Purchasers”). Pursuant to the terms of the Fifth Supplement, Spire Alabama issued and sold (i) $90 million in aggregate principal amount of its Series 2022A Senior Notes (“Series 2022A Notes”) and (ii) $85 million in aggregate principal amount of its Series 2022B Notes (“Series 2022B Notes”, and together with the Series 2022A Notes, the “Notes”) to the Note Purchasers in a private placement exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”).
The Series 2022A Notes bear interest at a rate per annum of 5.32% payable semi-annually on the 15th day of April and October of each year commencing on April 15, 2023, and the maturity date of the Series 2022A Notes will be October 15, 2029. The Series 2022B Notes bear interest at a rate per annum of 5.41% payable semi-annually on the 15th day of April and October of each year commencing on April 15, 2023, and the maturity date of the Series 2022A Notes will be October 15, 2032.
The Notes are senior unsecured obligations of Spire Alabama and rank equal in right to payment with all other senior unsecured indebtedness of Spire Alabama. Spire Alabama will use the proceeds from the sale of Notes to refinance existing debt and for general corporate purposes.
A copy of the Fifth Supplement is attached to this Current Report on Form 8-K as Exhibit 4.1 and incorporated herein by reference. The summary set forth above is qualified in its entirety by reference to Exhibit 4.1.
Also on October 13, 2022, Spire Gulf Inc. (“Spire Gulf”), a wholly owned subsidiary of Spire Inc., entered into a Bond Purchase Agreement, dated as of October 13, 2022 (“Bond Purchase Agreement”) among Spire Gulf and certain institutional investors (“Bond Purchasers”). Pursuant to the Bond Purchase Agreement, Spire Gulf sold $30 million in aggregate principal amount of its First Mortgage Bonds, 5.61% Series due October 15, 2037 (the “Bonds”) to the Bond Purchasers in a private placement exempt from registration under the Securities Act.
The Bonds bear interest at a rate per annum of 5.61% payable semi-annually on the 15th day of April and October of each year commencing on April 15, 2023, and have a maturity date of October 15, 2037.
The Bonds were issued and secured by the Second Supplemental Indenture, dated as of October 13, 2022 (the “Second Supplemental Indenture”), between Spire Gulf and Regions Bank as Trustee, to the Amended and Restated Indenture of Mortgage dated as of September 1, 2011 (the “Amended and Restated Indenture”). The Bonds rank pari passu, without preference or priority, with all other series of First Mortgage Bonds issued by Spire Gulf. Spire Gulf will use the proceeds from the sale of the Bonds to refinance existing short-term debt and for additional corporate and working capital purposes.
The Second Supplemental Indenture contains collateral fall away provisions whereby, subject to Spire Gulf's compliance with certain conditions, Spire Gulf may elect to exchange the Bonds, which are secured, for unsecured notes. To effect such exchange, Spire Gulf must cause other bonds issued under the above Amended and Restated Indenture to be either repaid in full or to be likewise exchanged for unsecured notes. Any such exchange would not affect the interest rate, maturity or other economic terms of the Bonds.