AWK Amends Secured Seller Note Agreement, Material Debt Change

TL;DR

**AWK just tweaked a key debt deal, watch for financial impact.**

AI Summary

American Water Works Company, Inc. (AWK) filed an 8-K on February 5, 2024, reporting an amendment to a Secured Seller Note Agreement, effective February 2, 2024. This amendment is a material definitive agreement, indicating a change in the terms of a debt instrument. For investors, this matters because changes to debt agreements can impact the company's financial flexibility, interest expenses, or future obligations, potentially affecting profitability and stock valuation.

Why It Matters

This amendment to a material definitive agreement could alter American Water Works' financial obligations or terms of debt, impacting its cash flow and overall financial health.

Risk Assessment

Risk Level: low — While a material agreement change, the filing doesn't disclose specific adverse terms, suggesting a routine amendment rather than a crisis.

Analyst Insight

Investors should monitor American Water Works Company, Inc.'s upcoming financial reports for specific details regarding the amended Secured Seller Note Agreement to understand its impact on debt obligations and financial performance.

Key Numbers

• February 2, 2024 — Earliest event reported date (Indicates when the amendment to the Secured Seller Note Agreement became effective.)
• February 5, 2024 — Filing date of 8-K (The date American Water Works Company, Inc. officially reported the event to the SEC.)
• 001-34028 — Commission File Number (Unique identifier for American Water Works Company, Inc. with the SEC.)

Key Players & Entities

• American Water Works Company, Inc. (company) — registrant filing the 8-K
• 001-34028 (dollar_amount) — Commission File Number
• February 2, 2024 (date) — Date of earliest event reported
• February 5, 2024 (date) — Date of 8-K filing
• Delaware (company) — State of incorporation for AWK
• 1 Water Street Camden, NJ 08102-1658 (company) — Address of principal executive offices
• 856-955-4001 (dollar_amount) — Registrant's telephone number
• $0.01 (dollar_amount) — par value per share of common stock
• AWK (company) — Trading Symbol on New York Stock Exchange

Forward-Looking Statements

• The amendment to the Secured Seller Note Agreement will lead to a minor adjustment in AWK's interest expense. (AWK) — medium confidence, target: Q1 2024 Earnings Report
• American Water Works Company, Inc. will provide more details about the specific terms of the amendment in its next quarterly report. (American Water Works Company, Inc.) — high confidence, target: Q1 2024 Earnings Report

FAQ

Key Financial Figures

• $0.01 — ich Registered Common stock, par value $0.01 per share AWK New York Stock Exchange
• $1.275 billion — lly issued as part of the approximately $1.275 billion aggregate consideration received by the
• $720 million — e to increase the principal amount from $720 million to $795 million (the "Loan"), in full s
• $795 million — e principal amount from $720 million to $795 million (the "Loan"), in full satisfaction of t
• $75 million — to make the contingent cash payment of $75 million to Lender as required under the terms o
• $87 million — r cause to be contributed approximately $87 million of additional equity capital to the Bor
• $50 m — equity contribution to the Borrower of $50 million, and (ii) within three business d

Filing Documents

• awk-20240202.htm (8-K) — 39KB
• ex1012-amendmentno1tosecur.htm (EX-10.1 2) — 1028KB
• 0001410636-24-000043.txt ( ) — 1392KB
• awk-20240202.xsd (EX-101.SCH) — 2KB
• awk-20240202_def.xml (EX-101.DEF) — 14KB
• awk-20240202_lab.xml (EX-101.LAB) — 27KB
• awk-20240202_pre.xml (EX-101.PRE) — 15KB
• awk-20240202_htm.xml (XML) — 3KB

01. Entry Into a Material Definitive Agreement

Item 1.01. Entry Into a Material Definitive Agreement. Amendment of Secured Seller Note Agreement and Related Documentation On February 2, 2024, American Water Enterprises, LLC, a wholly owned subsidiary of American Water Works Company, Inc. (the "Company") and as lender ("Lender") under that certain Secured Seller Note Agreement, dated December 9, 2021, and related secured promissory note (collectively, the "Secured Seller Note"), issued by Lakehouse Buyer Inc., as borrower (the "Borrower") and an indirect, wholly owned subsidiary of funds advised by Apax Partners LLP ("Apax"), together with the other parties to the Secured Seller Note, have amended certain of the terms and conditions of the Secured Seller Note and related transaction documentation (as amended, the "Amended Secured Seller Note"). The Secured Seller Note was originally issued as part of the approximately $1.275 billion aggregate consideration received by the Company for the sale of all of the equity interests in entities comprising the Company's former Homeowner Services Group ("HOS"). With an affiliate of the Borrower having entered into an extension of its service line protection program agreements with the New York City Water Board, the parties have amended the Secured Seller Note to increase the principal amount from $720 million to $795 million (the "Loan"), in full satisfaction of the Borrower's requirement to make the contingent cash payment of $75 million to Lender as required under the terms of the HOS sale agreement (the "HOS Contingent Payment"). In addition, the annual interest rate payable on the Secured Seller Note has increased from 7.00% per year to 10.00% per year until maturity, and certain affirmative and negative covenants in the Secured Seller Note have been amended, including to provide for annual reductions of specified debt incurrence ratios. Furthermore, the parties have amended the Secured Seller Note to eliminate Lender's conditional right, beginning December 9, 2024, t

01. Financial Statements and Exhibits

Item 9.01. Financial Statements and Exhibits. (d) Exhibits. The following exhibits to this Current Report have been provided herewith as noted below: Exhibit No. Description 10.1.1 Secured Seller Note Agreement, dated as of December 9, 2021, by and among Lender, the Borrower and the other parties thereto (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, File No. 001-34028, filed December 9, 2021) . 10.1.2* Amendment No. 1 to Secured Seller Note Agreement, dated as of February 2, 2024, by and among Lender, the Borrower and the other parties thereto. 104 Cover Page Interactive Data File (the cover page XBRL tags are included and formatted as Inline XBRL). * Filed herewith. 3

SIGNATURES

SIGNATURES 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 hereunto duly authorized. AMERICAN WATER WORKS COMPANY, INC. Dated: February 5, 2024 By: /s/ JOHN C. GRIFFITH John C. Griffith Executive Vice President and Chief Financial Officer 4

View Full Filing

View this 8-K filing on SEC EDGAR