HIFR Infrareit, Inc.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

Current Report

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (date of earliest event reported) – May 16, 2019

1616 Woodall Rodgers Fwy., Dallas, Texas 75202

(Address of principal executive offices, including zip code)

Registrants’ telephone number, including Area Code – (214) 486-2000

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 (see General Instruction A.2. below):

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Introductory Note

InfraREIT Mergers

As previously announced, InfraREIT, Inc., a Maryland Corporation (the “Company”) entered into that certain Agreement and Plan of Merger (the “Merger Agreement”), dated as of October 18, 2018, by and among the Company, InfraREIT Partners, LP, a Delaware limited partnership and subsidiary of the Company (“InfraREIT Partners”), Oncor Electric Delivery Company LLC, a Delaware limited liability company (“Oncor”), 1912 Merger Sub LLC, a Delaware limited liability company and a wholly owned subsidiary of Oncor (“Merger Sub”), and Oncor T&D Partners, LP, a Delaware limited partnership and a wholly owned indirect subsidiary of Oncor (“Merger Partnership”). On January 4, 2019, the Company filed its definitive proxy statement with the Securities and Exchange Commission (the “SEC”) regarding, among other things, the adoption of the Merger Agreement and approval of the transactions contemplated thereunder (the “Merger Proposal”). On February 7, 2019, the stockholders of the Company voted to approve the Merger Proposal at a special meeting of the stockholders of the Company. On May 9, 2019, the Public Utility Commission of Texas issued an order approving the Mergers (as defined below), which marked the final regulatory approval required to consummate the Mergers.

On May 16, 2019, the Company and InfraREIT Partners completed the mergers contemplated under the Merger Agreement, and upon the effective time (the “Effective Time”), (i) the Company merged with and into Merger Sub (the “Company Merger”), with Merger Sub continuing as the surviving company (the “Surviving Company”), and (ii) Merger Partnership merged with and into InfraREIT Partners (the “Partnership Merger” and, together with the Company Merger, the “Mergers”), with InfraREIT Partners continuing as the surviving entity (the “Surviving Partnership”). Subsequently, the Surviving Company was renamed “Oncor NTU Holdings Company LLC,” and the Surviving Partnership was renamed “Oncor NTU Partnership LP.”

Upon the Effective Time, (i) each share of common stock, par value $0.01 per share (the “Common Stock”), of the Company issued and outstanding was converted into the right to receive $21.00 per share in cash from Oncor, except that shares of Common Stock held, directly or indirectly, by Oncor, Merger Sub or Merger Partnership were automatically cancelled, and (ii) each limited partnership unit of InfraREIT Partners issued and outstanding was converted into the right to receive $21.00 per unit in cash from Oncor, except that units of InfraREIT Partners held, directly or indirectly, by the Surviving Company or Oncor were not affected and remain outstanding as units of the Surviving Partnership (collectively, the “Merger Consideration”).

In connection with the Mergers, Oncor extinguished all of the Company’s outstanding debt (which was held by certain of the Company’s subsidiaries) totaling an aggregate principal amount of approximately $953.35 million as of May 16, 2019. Approximately $602.50 million principal amount of outstanding debt was paid in full by Oncor on behalf of the respective debt holders in connection with the closing of the Mergers using proceeds from borrowings and the issuance of commercial paper, and $350.85 million principal amount of outstanding debt was exchanged for senior secured notes issued by Oncor, as further described under “—Notes Exchange.” As a result of these repayments and exchanges, all debt held by the Company’s subsidiaries was extinguished in connection with the closing of the Mergers.

The foregoing discussion of the terms of the Merger Agreement and the transactions contemplated thereby is not complete and is subject to, and qualified in its entirety by reference to, the Merger Agreement, a copy of which was filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 18, 2018 and incorporated herein by reference.

Asset Exchange

On May 16, 2019, immediately prior to the Company Merger, the transactions contemplated by the previously announced asset exchange (the “Asset Exchange”) pursuant to that certain Agreement and Plan of Merger, dated as of October 18, 2018 (the “Asset Exchange Agreement”) by and among Sharyland Distribution & Transmission Services, L.L.C. (“SDTS”), Oncor and Sharyland Utilities, L.P., a Texas limited partnership and the Company’s sole tenant (“SU”), were completed. Additionally, immediately prior to the closing of the Asset Exchange, the equity interests and related economic interests in SDTS held by SU were cancelled. SDTS became a wholly owned, indirect subsidiary of Oncor in connection with the Mergers and was renamed “Oncor Electric Delivery Company NTU LLC.”

In connection with the Asset Exchange Agreement, pursuant to the joint survivor merger of SU and SDTS, (i) SDTS assumed certain of the electric transmission and distribution-related assets and liabilities of SU (the “NTX Package”), and (ii) SU assumed certain of the electric transmission and distribution-related assets and liabilities of SDTS (the “STX Package”). The NTX Package consisted of certain real property and other assets used in the electric transmission and distribution business in Central, North and West Texas, as well as equity interests in GS Project Entity, L.L.C., a Texas limited liability company, that was subsequently merged with and into SDTS. The STX Package consisted of certain real property and other assets used in the electric transmission and distribution business in the vicinity of the Texas-Mexico border, including certain real property and other assets that SDTS owned and leased to SU.

The Asset Exchange was structured to qualify, in part, as a simultaneous tax deferred like kind exchange of assets to the extent that the assets exchanged are of “like kind” (within the meaning of Section 1031 of the Internal Revenue Code). Pursuant to the Asset Exchange Agreement, SDTS paid approximately $13.18 million to SU to settle the difference between the sums of the net book value of the assets and liabilities exchanged and the net working capital amounts associated with the Asset Exchange.

The foregoing discussion of the terms of the Asset Exchange Agreement and the transactions contemplated thereby is not complete and is subject to, and qualified in its entirety by reference to, the Asset Exchange Agreement, a copy of which was filed as Exhibit 2.2 to the Company’s Current Report on Form 8-K filed with the SEC on October 18, 2018 and incorporated herein by reference.

Notes Exchange

On May 3, 2019, Oncor entered into a Note Purchase Agreement (the “Prudential Note Purchase Agreement”) with The Prudential Insurance Company of America and certain of its affiliates (the “Prudential Holders”) which provided for the exchange of certain existing senior notes held by the Prudential Holders and issued by the Company’s subsidiaries, SDTS and Transmission and Distribution Company, L.L.C. (“TDC”), for newly issued Oncor senior notes. Upon the Effective Time, Oncor issued (i) $86,711,551.03 aggregate principal amount of newly issued Oncor 6.47% Senior Notes, Series A, due September 30, 2030 (the “2030 Notes”), in exchange for a like principal amount of SDTS’s 6.47% Senior Notes due September 30, 2030, (ii) $37,761,590.15 aggregate principal amount of newly issued Oncor 7.25% Senior Notes, Series B, due December 30, 2029 (the “2029 Notes,”) in exchange for a like principal amount of SDTS’s 7.25% Senior Notes due December 30, 2029, and (iii) $14,375,000 aggregate principal amount of newly issued Oncor 8.5% Senior Notes, Series C, due December 30, 2020 (the “2020 Notes”) in exchange for a like principal amount of TDC’s 8.5% Senior Notes due December 30, 2020.

On May 6, 2019, Oncor entered into a Note Purchase Agreement (the “AB Note Purchase Agreement” and, together with the Prudential Note Purchase Agreement, the “Note Purchase Agreements”) with the purchasers named therein (the “AB Holders”) which provided for the exchange of certain existing senior notes of SDTS held by the AB Holders for newly issued Oncor senior notes. Upon the Effective Time, Oncor issued (i) $174,000,000.00 aggregate principal amount of newly issued Oncor 3.86% Senior Notes, Series A, due December 3, 2025 (the “2025 Notes”), in exchange for a like principal amount of SDTS’s 3.86% Senior Notes, Series A, due December 3, 2025 (the “Prior 2025 Notes”), and (ii) $38,000,000.00 aggregate principal amount of newly issued Oncor 3.86% Senior Notes, Series B, due January 14, 2026 (the “2026 Notes,” and together with the 2030 Notes, the 2029 Notes, the 2020 Notes, and the 2025 Notes, the “New Notes”) in exchange for a like principal amount of SDTS’s 3.86% Senior Notes, Series B, due January 14, 2026 (the “Prior 2026 Notes” and together with the Prior 2025 Notes, the “Prior AB Notes”). Oncor received no proceeds from the issuance of the New Notes. Upon the Effective Time, Oncor paid approximately $311.51 million to the holders of the Prior AB Notes who did not enter into the AB Note Purchase Agreement, consisting of $288.00 million in principal, $4.76 million in interest and approximately $18.75 million in make-whole fees, which payment discharged all obligations of SDTS with respect to the Prior AB Notes, as further described under Item 1.02.

The foregoing discussions of the terms of the Prudential Note Purchase Agreement and the AB Note Purchase Agreement, and the transactions contemplated thereby, are not complete and are subject to, and qualified in their entirety by reference to, the Prudential Note Purchase Agreement and AB Note Purchase Agreement, copies of which were filed as Exhibits 10.1 and 10.2, respectively, to Oncor’s Current Report on Form 8-K filed with the SEC on May 7, 2019.

thereto and Canadian Imperial Bank of Commerce, New York Branch, as administrative agent (as subsequently amended, the “Term Loan Agreement”), pursuant to which approximately $200.0  million principal amount was outstanding immediately prior to the Effective Time; and (iii) Credit Agreement, dated as of December 10, 2014, by and among InfraREIT Partners, Bank of America, N.A., as administrative agent and L/C issuer and the other lenders party thereto (the “InfraREIT Credit Agreement,” and together with the SDTS Credit Agreement and the Term Loan Agreement, the “Credit Agreements”), pursuant to which $0 principal amount was outstanding immediately prior to the Effective Time. In connection with the terminations of the Credit Agreements, Oncor, on behalf of the respective debt holders, repaid all of the outstanding obligations in respect of principal, interest, fees and expenses under the Credit Agreements.

Prior AB Notes

As previously disclosed, SDTS entered into a note purchase agreement on December 3, 2015, with certain initial purchasers of the Prior AB Notes, pursuant to which SDTS sold $400.00 million in aggregate principal amount of its Prior 2025 Notes on December 3, 2015 and $100.00 million in aggregate principal amount of its Prior 2026 Notes on January 14, 2016.

Upon the Effective Time, Oncor exchanged certain Prior 2025 Notes and Prior 2026 Notes for the 2025 Notes and 2026 Notes, respectively, pursuant to the AB Note Purchase Agreement, upon which time such exchanged notes were held by Oncor. Additionally, upon the Effective Time, SDTS redeemed the outstanding Prior AB Notes that were not exchanged pursuant to the AB Note Purchase Agreement, in accordance with the redemption provisions contained in the Prior AB Notes. Approximately $288.00 million of aggregate principal amount under the Prior AB Notes were not exchanged. In connection with the redemption, Oncor, on behalf of SDTS paid make-whole payments in the amount of approximately $18.75 million and SDTS was released from its obligations with respect to the Prior AB Notes that were not exchanged, except with respect to those provisions of the Prior AB Notes that by their terms survive satisfaction and discharge.

Pursuant to the terms of the Merger Agreement, at the Effective Time, all issued and outstanding shares of Common Stock (other than Common Stock held, directly or indirectly, by Oncor, Merger Sub or Merger Partnership, which shares were automatically cancelled) were automatically cancelled and converted into the right to receive the Merger Consideration and, accordingly, the holders of such Common Stock ceased to have any rights in the Company as stockholders, other than the right to receive the Merger Consideration. Additionally, each share of Restricted Stock granted pursuant to the 2015 Plan outstanding immediately prior to the Effective Time received immediate and full acceleration of vesting and became one fully vested share of Common Stock entitled to receive the Merger Consideration at the Effective Time.