PACIFICORP /OR/ 8-K

What Happened
PacifiCorp announced on April 6, 2026 (agreement dated April 3, 2026) that it entered a Letter of Credit Agreement with PNC Bank, N.A. as administrative agent and PNC Capital Markets LLC as lead arranger. The two‑year, multi‑bank standby facility provides an aggregate stated commitment of up to $2.55 billion to support letters of credit that will be used solely as collateral for surety bonds tied to supersedeas undertakings for trial court judgments (the “James Judgments”) from a 2020 Oregon wildfire class action while those judgments remain on appeal.

Key Details

• Facility size: up to $2.55 billion aggregate commitment; available until the earlier of the two‑year anniversary of the Issuance Effective Date or termination.
• Timing: Issuance Effective Date must occur on or before September 30, 2026, and issuance is subject to customary conditions including required regulatory approvals (e.g., Idaho and Oregon utility commissions).
• Fees and reimbursement: PacifiCorp will pay letter‑of‑credit and commitment fees tied to its credit ratings, plus customary fronting and admin fees; PacifiCorp must reimburse drawings and unpaid amounts bear interest under the agreement.
• Collateral and covenants: agreement contains customary financial, affirmative and negative covenants (including a consolidated debt-to-capital ratio), and may require PacifiCorp to post cash collateral equal to 103% of outstanding letter-of-credit obligations in specified circumstances.
• Events of default: include non‑payment, covenant or representation breaches, insolvency and certain change‑of‑control events; on default banks can terminate commitments, declare amounts due, and require cash collateral.

Why It Matters
This facility gives PacifiCorp a secured mechanism to obtain collateral (via letters of credit) needed to back surety bonds that preserve appeals of large wildfire‑related judgments in Oregon. For investors, the agreement clarifies how PacifiCorp plans to meet potential collateral requirements without immediately funding judgments, but it also creates a contingent liability and includes financial covenants and cash‑collateral triggers that could affect liquidity if letters of credit are drawn or covenants are breached. The facility’s use, timing, and effect depend on regulatory approvals and the ongoing appeals.