Filed Pursuant to Rule 424(b)(5)
Registration No. 333-263221
PROSPECTUS SUPPLEMENT
(To Prospectus Dated March 2, 2022)
PNM Resources, Inc.
Shares of Common Stock
Having an Aggregate Offering Price of up to
$200,000,000
This prospectus supplement and the accompanying prospectus relate
to the offer and sale from time to time of shares of our common
stock, having an aggregate offering price of up to $200,000,000
through BofA Securities, Inc. (“BofA Securities”), MUFG Securities
Americas Inc. (“MUFG”) and Wells Fargo Securities, LLC (“Wells
Fargo”) as our agents under an at-the-market distribution agreement
(the “distribution agreement”). We refer to BofA Securities, MUFG
and Wells Fargo collectively as the sales agents. The distribution
agreement provides that, in addition to the issuance and sale of
common stock by us through the sales agents acting as sales agents
or directly to the sales agents acting as principals, we also may
enter into forward sale agreements, between us and affiliates of
each of BofA Securities, MUFG or Wells Fargo. We refer to these
affiliated entities, when acting in such capacity, as forward
purchasers. In connection with each such forward sale agreement,
and subject to the terms and conditions of the distribution
agreement, the relevant forward purchaser will, at our request,
borrow from third parties and, through the relevant sales agent,
sell a number of shares of our common stock equal to the number of
shares of our common stock that will underlie such forward sale
agreement to hedge its exposure under such forward sale agreement.
We refer to the sales agents, when acting as agents for the forward
purchasers, as the forward sellers. In no event will the aggregate
number of shares of our common stock sold through the sales agents,
each as an agent for us, as principal and as a forward seller,
under the distribution agreement have an aggregate sales price in
excess of $200,000,000. The offering of common stock pursuant to
the distribution agreement will terminate upon the earlier of (1)
the sale, under the distribution agreement, of shares of our common
stock with an aggregate sales price of $200,000,000, and (2) the
termination of the distribution agreement, pursuant to its terms,
by either all of the sales agents or us.
We will not initially receive any proceeds from the sale of
borrowed shares of our common stock by a forward seller. In the
event of full physical settlement of each forward sale agreement
(by delivery of our common stock) with the relevant forward
purchaser on one or more dates specified by us on or prior to the
maturity date of the relevant forward sale agreement, we expect to
receive aggregate cash proceeds equal to the product of the initial
forward sale price under such forward sale agreement and the number
of shares of our common stock underlying such forward sale
agreement, subject to the price adjustment and other provisions of
such forward sale agreement. If, however, we elect to cash settle
or net share settle a forward sale agreement, we may not receive
any proceeds (in the case of cash settlement) or will not receive
any proceeds (in the case of net share settlement), and we may owe
cash (in the case of cash settlement) or shares of our common stock
(in the case of net share settlement) to the relevant forward
purchaser.
The shares of our common stock will be offered at market prices
prevailing at the time of sale in “at the market offerings,” as
defined in Rule 415 of the Securities Act of 1933, as amended (the
“Securities Act”), including sales made directly on the New York
Stock Exchange (the “NYSE”), the existing trading market for shares
of our common stock, or sales made to or through a market maker or
through an electronic communications network or by such other
methods, including privately negotiated transactions (including
block transactions), as we and any sales agent agree to in writing.
We will submit orders to only one sales agent or one forward
seller, as the case may be, relating to the sale of shares of our
common stock on any given day. Subject to the terms and conditions
of the distribution agreement, the sales agents, forward sellers or
forward purchasers have agreed to use their commercially reasonable
efforts consistent with their respective normal trading and sales
practices to sell on our behalf all of the designated
shares.
The distribution agreements also provide that we may sell shares of
our common stock to a sales agent as principal for its own account
at a price agreed upon at the time of the sale. If we sell shares
of our common stock to a sales agent as principal, then we will
enter into a separate terms agreement with that sales agent setting
forth the terms of such transaction.
We have agreed to pay each sales agent a commission equal to up to
2% of the sales price of all shares of our common stock sold
through it as our sales agent under the distribution agreement. In
connection with each forward sale agreement, the relevant forward
seller will receive, reflected in a reduced initial forward sale
price payable by the relevant forward purchaser under its forward
sale agreement, a commission equal to up to 2% of the volume
weighted average of the sales prices of all borrowed shares of our
common stock sold during the applicable period by it as a forward
seller. In connection with the sale of the shares of common stock
on our behalf, each sales agent will be deemed to be an
“underwriter” within the meaning of the Securities Act and the
compensation of each sales agent will be deemed to be underwriting
commissions or discounts.
Our common stock is listed on the NYSE under the symbol “PNM.” The
last reported sale price of our common stock on the NYSE on
November 8, 2022 was $47.06 per share.
Investing in our common stock involves risks. See “Risk Factors”
beginning on page S-5 of this prospectus supplement to read
important factors you should consider before investing in our
common stock.
Neither the Securities and Exchange Commission (the “SEC”) nor any
other regulatory body has approved or disapproved of these
securities or passed upon the adequacy or accuracy of this
prospectus supplement or the accompanying prospectus. Any
representation to the contrary is a criminal offense.
BofA Securities MUFG Wells
Fargo Securities
The date of this prospectus supplement is November 10,
2022.
TABLE OF CONTENTS
Prospectus Supplement
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PROSPECTUS SUPPLEMENT SUMMARY |
S-1 |
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RISK FACTORS |
S-5 |
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WHERE CAN YOU FIND MORE INFORMATION
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S-8 |
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DISCLOSURES REGARDING FORWARD-LOOKING STATEMENTS
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S-9 |
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USE OF PROCEEDS
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S-11 |
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MATERIAL U.S. FEDERAL INCOME AND ESTATE TAX CONSIDERATIONS FOR
NON-U.S. HOLDERS
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S-13 |
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PLAN OF DISTRIBUTION (CONFLICTS OF INTEREST)
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S-17 |
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LEGAL MATTERS
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S-23 |
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EXERPTS
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S-23 |
Base Prospectus
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About This Prospectus |
1 |
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Where You Can Find More Information |
2 |
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PNM Resources, Inc. |
3 |
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Risk Factors |
3 |
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Disclosure Regarding Forward-Looking Statements |
3 |
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Use of Proceeds |
3 |
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Description of Debt Securities |
4 |
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Description of Common Stock and Preferred Stock |
13 |
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Description of Warrants |
16 |
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Description of Securities Purchase Contracts |
18 |
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Description of Units |
19 |
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Plan of Distribution |
20 |
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Legal Matters |
21 |
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Experts |
21 |
This document is in two parts. The first part is this prospectus
supplement, which describes the specific terms of the offering and
certain other matters relating to us and our financial condition.
The second part, the accompanying base shelf prospectus, gives more
general information about securities we may offer from time to
time, some of which does not apply to this offering. The
accompanying base shelf prospectus dated March 2, 2022 is referred
to as the “accompanying prospectus” in this prospectus supplement.
Generally, when we refer to the prospectus, we are referring to
both parts of this document combined. If this prospectus supplement
is inconsistent with the accompanying prospectus, you should rely
on the information in this prospectus supplement.
You should rely only on the information contained in this document
or to which this document refers you, or in other offering
materials filed by us with the SEC. This prospectus supplement, the
accompanying prospectus and any free writing prospectus that we
prepare or authorize contain and incorporate by reference
information that you should consider when making your investment
decision. We have not, and the sales agents, forward sellers and
forward purchasers have not, authorized anyone to provide you with
different information and, if given, you should not rely on it. We
take no responsibility for, and can provide no assurance as to the
reliability of, any different or inconsistent information. This
document may only be used where it is legal to sell these
securities. We are not, and the sales agents, forward sellers and
forward purchasers are not, making an offer of these securities in
any jurisdiction where the offer is not permitted. You should not
assume that the information in this prospectus supplement, the
accompanying prospectus or the documents incorporated by reference
herein or therein is accurate as of any date other than the date on
the front of those documents. Our business, financial condition,
results of operations and prospects may have changed since the date
of such information.
PROSPECTUS SUPPLEMENT SUMMARY
The following information supplements, and should be read together
with, the information contained or incorporated by reference in
other parts of this prospectus supplement and the accompanying
prospectus. This summary highlights selected information from this
prospectus supplement and the accompanying prospectus. As a result,
it does not contain all of the information you should consider
before investing in our common stock. You should carefully read
this prospectus supplement and the accompanying prospectus,
including the documents incorporated by reference, which are
described under the caption “Where You Can Find More Information”
in this prospectus supplement and the accompanying
prospectus.
Unless otherwise indicated or unless the context otherwise
requires, all references in this prospectus supplement to “PNMR,”
“PNM Resources,” “the Company,” “we,” “our” and “us” refer to PNM
Resources, Inc. and its subsidiaries. Unless otherwise indicated,
financial information included or incorporated by reference herein
is for PNM Resources, Inc. and its subsidiaries on a consolidated
basis.
PNM Resources
PNM Resources is an investor-owned holding company with two
regulated utilities providing electricity and electric services in
New Mexico and Texas. PNMR’s primary subsidiaries are Public
Service Company of New Mexico (“PNM”) and Texas-New Mexico Power
Company (“TNMP”). PNM is an electric utility that provides electric
generation, transmission, and distribution service to its
rate-regulated customers in New Mexico. TNMP provides regulated
transmission and distribution services to various retail electric
providers that, in turn, provide retail electric service to
consumers within TNMP’s service area in Texas.
For more information about PNMR and its subsidiaries, visit our
website at
www.pnmresources.com.
Except for documents specifically incorporated into this prospectus
supplement, the information contained in, or that can be accessed
through, our website is not a part of this prospectus
supplement.
Our executive office is located at 414 Silver Ave. SW, Albuquerque,
New Mexico 87102-3289, and our telephone number is (505)
241-2700.
The Offering
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Issuer |
PNM Resources, Inc. |
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Common Stock Offered by this Prospectus Supplement |
Shares of common stock having an aggregate offering price of up to
$200,000,000. |
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Manner of Offering |
“At the market offering” that may be made from time to time through
the sales agents. We may also sell shares of common stock to each
sales agent as principal for its own account at a price agreed upon
at the time of sale. If we sell shares of common stock to a sales
agent as principal, we will enter into a separate terms agreement
with such sales agent and we will describe this terms agreement in
a separate prospectus supplement or pricing supplement if
required.
In addition to the issuance and sale of common stock by us through
the sales agents acting as sales agents or directly to the sales
agents acting as principals, we also may enter into forward sale
agreements, between us and affiliates of each of BofA Securities,
MUFG or Wells Fargo. We refer to these affiliated entities, when
acting in such capacity, as forward purchasers. In connection with
each such forward sale agreement, and subject to the terms and
conditions of the distribution agreement, the relevant forward
purchaser will, at our request, borrow, from third parties and,
through the relevant sales agent, sell a number of shares of our
common stock equal to the number of shares of our common stock that
will underlie such forward sale agreement to hedge its exposure
under such forward sale agreement. We refer to sales agents, when
acting as agents for forward purchasers, as forward sellers. See
“Plan of Distribution (Conflicts of Interest)” in this prospectus
supplement.
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Use of Proceeds |
We intend to use the net proceeds that we receive from the sale of
shares of our common stock, after deducting the sales agents’
commissions and our offering expenses, for general corporate
purposes, which may include repayment of borrowings under our term
loan and our short-term debt, including our unsecured revolving
credit facility.
We will not initially receive any proceeds from the sale of
borrowed shares of our common stock by the forward sellers, as
agents for the forward purchasers, in connection with any forward
sale agreement as a hedge of the relevant forward purchaser’s
exposure under such forward sale agreement. We currently intend to
use any cash proceeds that we receive upon physical settlement of
any forward sale agreement, if physical settlement applies, or upon
cash settlement of any forward sale agreement, if we elect cash
settlement and are owed a payment thereunder, for general corporate
purposes, which may include repayment of borrowings under our term
loan and our short-term debt, including our unsecured revolving
credit facility. See “Use of Proceeds.”
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Listing |
Our common stock is listed on the NYSE under the symbol
“PNM.” |
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Dividend Policy |
We expect to pay dividends on our common stock in amounts
determined from time to time by our board of directors. Future
dividend levels will be dependent on our results of operations,
financial position, cash flows and other factors. |
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Material U.S. Federal Income and Estate Tax Considerations for
Non-U.S. Holders |
Certain U.S. federal income and estate tax considerations of the
acquisition, ownership and disposition of our common stock for
non-U.S. holders are described in “Material U.S. Federal Income and
Estate Tax Considerations for Non-U.S. Holders” included elsewhere
in this prospectus supplement. |
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Transfer Agent and Registrar |
The transfer agent and registrar for our common stock is
Computershare Trust Company, N.A. |
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Accounting Treatment of Forward Sales
Risk Factors
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In the event that we enter into any forward sale agreement, we
expect that before the issuance of shares of our common stock, if
any, upon physical or net share settlement of any forward sale
agreement, the shares issuable upon settlement of that particular
forward sale agreement will be reflected in our diluted earnings
per share calculations using the treasury stock method. Under this
method, the number of shares of our common stock used in
calculating diluted earnings per share is deemed to be increased by
the excess, if any, of the number of shares of our common stock
that would be issued upon full physical settlement of that
particular forward sale agreement over the number of shares of our
common stock that could be purchased by us in the market (based on
the average market price during the relevant period) using the
proceeds receivable upon full physical settlement (based on the
adjusted forward sale price at the end of the relevant reporting
period).
Consequently, we anticipate there will be no dilutive effect on our
earnings per share except during periods when the average market
price of shares of our common stock is above the applicable
adjusted forward sale price subject to increase or decrease based
on the federal funds rate, less a spread, and subject to decrease
by amounts related to expected dividends on shares of our common
stock during the term of the relevant forward sale agreement.
However, if we decide to physically settle or net share settle any
forward sale agreement, delivery of our shares to the relevant
forward purchaser on the physical settlement or net share
settlement of the forward sale agreement would result in dilution
to our earnings per share and return on equity.
An investment in our common stock involves various risks, and
prospective investors should carefully consider the matters
discussed under the caption entitled “Risk Factors” on page S-5 of
this prospectus supplement.
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Conflicts of Interest |
We may use a portion of the net proceeds from this offering to
repay a portion of the outstanding amounts owed by us under our
term loan and our short-term debt, including amounts we owe to the
sales agents, the forward sellers and forward purchasers or their
respective affiliates who have extended to us loans under such
debt, including as lenders under our term loan and our unsecured
revolving credit facility as described under “Use of Proceeds” in
this prospectus supplement. In addition, the forward purchasers (or
their respective affiliates) will receive the net proceeds from any
sale of borrowed shares of our common stock sold pursuant to this
prospectus supplement in connection with any forward sale
agreement. Because certain sales agents or their affiliates are
expected to receive part of the net proceeds from the sale of
shares of our common stock in connection with any forward sale
agreement or in connection with the repayment of a portion of the
outstanding amounts owed by us under our term loan and our
short-term debt, including our revolving |
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credit facility, such sales agents would be deemed to have a
conflict of interest under Financial Industry Regulatory Authority,
Inc. (“FINRA”) Rule 5121 to the extent such sales agents or
affiliates receive at least 5% of the net proceeds from the
offering. Any sales agent deemed to have a conflict of interest
would be required to conduct the distribution of our common stock
in accordance with FINRA Rule 5121. If the offering is conducted in
accordance with FINRA Rule 5121, such sales agent would not be
permitted to confirm a sale to an account over which it exercises
discretionary authority without first receiving specific written
approval from the account holder. The appointment of a “qualified
independent underwriter” (as defined in FINRA Rule 5121) is not
necessary for this offering because the shares of common stock
being offered have a “bona fide public market” (as defined in FINRA
Rule 5121). See “Plan of Distribution (Conflicts of Interest) –
Conflicts of Interest” in this prospectus supplement. |
RISK FACTORS
An investment in our common stock involves certain risks. Our
business is influenced by many factors that are difficult to
predict, involve uncertainties that may materially affect actual
results and are often beyond our control. In addition to the risk
factors set forth below, you should carefully consider the risks
and uncertainties, as well as any cautionary language or other
information, contained or incorporated by reference in this
prospectus supplement and the accompanying prospectus, including
the information under the caption “Item 1A Risk Factors” in our
Annual Report on Form 10-K for the year ended December 31, 2021, as
modified by our other SEC filings filed after such annual report,
which are incorporated by reference in this prospectus supplement,
before investing in our common stock. Those risks and the risks set
forth below are those that we consider to be the most significant
to your decision whether to invest in our common stock. If any of
the events described therein occur, our business, financial
condition or results of operations could be materially harmed. As a
result, the trading price of our common stock could decline and you
could lose all or part of your investment. In consultation with
your own financial and legal advisers, you should carefully
consider, among other matters, the discussions of risks that we
have incorporated by reference before deciding whether an
investment in this offering is suitable for you. See “Where You Can
Find More Information” on page S-8.
Settlement provisions contained in any forward sale agreement
subject us to certain risks.
A forward purchaser will have the right to accelerate a forward
sale agreement that it enters into with us and require us to
physically settle such forward sale agreement (with respect to all
or any portion of the transaction under such forward sale agreement
that such forward purchaser determines is affected by such event)
on a date specified by such forward purchaser if:
•in
such forward purchaser’s commercially reasonable judgment, it or
its affiliate is unable to hedge (or maintain a hedge of) its
exposure under such forward sale agreement in a commercially
reasonable manner because (x) insufficient shares of our common
stock have been made available for borrowing by securities lenders
or (y) the forward purchaser or its affiliate would incur a stock
borrowing cost in excess of a specified threshold;
•we
declare any dividend, issue or distribution on shares of our common
stock
opayable
in cash in excess of specified amounts,
othat
constitutes an extraordinary dividend under the forward sale
agreement,
opayable
in securities of another company as a result of a spinoff or
similar transaction, or
oof
any other type of securities (other than our common stock), rights,
warrants or other assets for payment (cash or other consideration)
at less than the prevailing market price as determined in a
commercially reasonable manner by the applicable calculation
agent;
•certain
ownership thresholds applicable to such forward purchaser and its
affiliates are exceeded;
•an
event is announced that if consummated would result in a specified
extraordinary event (including certain mergers or tender offers, as
well as certain events involving our nationalization, insolvency, a
delisting of our common stock, or change in law); or
•certain
other events of default or termination events occur (each as more
fully described in each forward sale agreement).
A forward purchaser’s decision to exercise its right to accelerate
any forward sale agreement and to require us to settle any such
forward sale agreement will be made irrespective of our interests,
including our need for capital. In such cases, we could be required
to issue and deliver shares of our common stock under the terms of
the
physical settlement provisions of the applicable forward sale
agreement irrespective of our capital needs, which would result in
dilution to our earnings per share and return on
equity.
We expect that settlement of any forward sale agreement will
generally occur no later than the date specified in such forward
sale agreement. However, any forward sale agreement may be settled
earlier than such specified date in whole or in part at our option.
Except under the circumstances described above, we generally have
the right to elect physical, cash or net share settlement under
each forward sale agreement. Delivery of our common stock upon
physical settlement of any forward sale agreement (or, if we elect
net share settlement of any forward sale agreement, upon such
settlement to the extent we are obligated to deliver our common
stock) will result in dilution to our earnings per share and return
on equity. If we elect to cash or net share settle all or a portion
of the shares of our common stock underlying any forward sale
agreement, we would expect the relevant forward purchaser or one of
its affiliates to purchase shares of our common stock in secondary
market transactions over an unwind period to:
•return
shares of our common stock to securities lenders in order to unwind
such forward purchaser’s hedge (after taking into consideration any
shares of our common stock to be delivered by us to such forward
purchaser, in the case of net share settlement); and,
•if
applicable, in the case of net share settlement, deliver shares of
our common stock to us to the extent required in settlement of such
forward sale agreement.
The forward sale price that we expect to receive upon physical
settlement of any forward sale agreement will be subject to
adjustment on a daily basis based on a floating interest rate
factor equal to the federal funds rate less a spread and will be
subject to decrease on certain dates specified in the relevant
forward sale agreement by the amount per share of quarterly
dividends we currently expect to declare during the term of such
forward sale agreement. If the federal funds rate is less than the
spread on any day, the interest rate factor will result in a daily
reduction of the forward sale price. If the volume-weighted average
price at which the relevant forward purchaser (or its affiliate)
purchases shares during the applicable unwind period under a
forward sale agreement is above the relevant forward sale price, in
the case of cash settlement, we would pay the relevant forward
purchaser under such forward sale agreement an amount in cash equal
to the difference or, in the case of net share settlement, we would
deliver to such forward purchaser a number of shares of our common
stock having a value equal to the difference. Thus, we could be
responsible for a potentially substantial cash payment in the case
of cash settlement. If the volume-weighted average price at which
the relevant forward purchaser (or its affiliate) purchases shares
during the applicable unwind period under a forward sale agreement
is below the relevant forward sale price, in the case of cash
settlement, we would be paid the difference in cash by the relevant
forward purchaser under such forward sale agreement or, in the case
of net share settlement, we would receive from such forward
purchaser a number of shares of our common stock having a value
equal to the difference. Any such difference could be significant.
See “Plan of Distribution (Conflicts of Interest)—Sales Through
Forward Sellers.”
In addition, the purchase of our common stock by a forward
purchaser or its affiliate to unwind the forward purchaser’s hedge
position could cause the price of our common stock to increase over
time (or prevent a decrease over time), thereby increasing the
amount of cash (in the case of cash settlement), or the number of
shares (in the case of net share settlement), that we would owe
such forward purchaser upon settlement of the applicable forward
sale agreement or decreasing the amount of cash (in the case of
cash settlement), or the number of shares (in the case of net share
settlement), that such forward purchaser would owe us upon
settlement of the applicable forward sale agreement, as the case
may be.
In the case of our bankruptcy or insolvency, any forward sale
agreement that is in effect will automatically terminate, and we
would not receive the expected proceeds from any forward sales of
our common stock.
If we or a regulatory authority with jurisdiction over us
institutes, or we consent to, a proceeding seeking a judgment in
bankruptcy or insolvency or any other relief under any bankruptcy
or insolvency law or other similar law affecting creditors’ rights,
or we or a regulatory authority with jurisdiction over us presents
a petition for our winding-up or liquidation, or we consent to such
a petition, any forward sale agreements that are then in effect
will automatically terminate. If any such forward sale agreement so
terminates, we would not be obligated to deliver to
the relevant forward purchaser any shares of our common stock not
previously delivered, and the relevant forward purchaser would be
discharged from its obligation to pay the applicable forward sale
price per share in respect of any shares of our common stock not
previously settled under the applicable forward sale agreement.
Therefore, to the extent that there are any shares of our common
stock with respect to which any forward sale agreement has not been
settled at the time of the institution of or consent to any such
bankruptcy or insolvency proceedings or any such petition, we would
not receive the relevant forward sale price per share in respect of
those shares of our common stock.
We have broad discretion in the use of the net proceeds from this
offering and may use them in a manner that does not improve our
financial performance or operating results.
We intend to use the net proceeds from this offering, if any, after
deducting the sales agents’ commissions and our offering expenses,
for general corporate purposes, which may include, among other
things, repayment of borrowings under our term loan and our
short-term debt, including our unsecured revolving credit facility.
See the section of this prospectus supplement entitled “Use of
Proceeds.” Although we plan to use the net proceeds from this
offering as described, we have not designated the amount of net
proceeds from this offering to be used for any specific purpose.
Pending their use, we may invest the net proceeds from this
offering in investment-grade, interest-bearing obligations, highly
liquid cash equivalents, certificates of deposit, or direct or
guaranteed obligations of the United States of America. These
investments may not yield a favorable return to our shareholders.
We will have broad discretion in the use of the net proceeds. You
will be relying on the judgment of our management regarding the
application of the proceeds from this offering. The results and
effectiveness of the use of proceeds are uncertain, and we could
spend the proceeds in ways that you do not agree with or that do
not improve our results of operations or enhance the value of our
shares of common stock.
The shares of common stock offered hereby will be sold in “at the
market offerings,” and investors who buy shares at different times
will likely pay different prices.
Investors who purchase shares in this offering at different times
will likely pay different prices and therefore may experience
different outcomes in their investment results. We will have
discretion, subject to market demand, to vary the timing, prices,
and number of shares sold from time to time in this offering. In
addition, there is no minimum or maximum sales price for shares to
be sold in this offering. Investors may experience a decline in the
value of the shares they purchase in this offering as a result of
sales made at prices lower than the prices they paid.
You may experience significant dilution as a result of this
offering, which may adversely affect the per share trading price of
our common stock.
This issuance of common stock in this offering, as well as any
shares issued by us in connection with a physical or net share
settlement in respect of a forward sale agreement, may have a
dilutive effect on our earnings per share. The actual amount of
dilution from the issuance of common stock in this offering, as
well as any shares issued by us in connection with a physical or
net share settlement in respect of a forward sale agreement, or
from any future offering of our common or preferred stock, will be
based on numerous factors, particularly the use of proceeds and the
return generated on those proceeds, and cannot be determined at
this time.
The issuance of substantial numbers of shares of common stock or
securities convertible into shares of common stock, or the
perception that those issuances might occur, could materially
adversely affect us, including the per share trading price of
shares of our common stock, and could be dilutive to our
stockholders.
The vesting of equity awards granted to certain directors,
executive officers and other employees under our equity incentive
plans and other issuances of our common stock could have an adverse
effect on the per share trading price of our common stock, and may
adversely affect the terms upon which we may be able to obtain
additional capital through the sale of equity
securities.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports and other information
with the SEC, and these filings are publicly available through the
SEC’s website at
www.sec.gov.
This prospectus supplement and the accompanying prospectus, which
include information incorporated by reference, are part of a
registration statement on Form S-3ASR we have filed with the SEC
relating to the common stock offered hereby. As permitted by the
SEC’s rules, this prospectus supplement and the accompanying
prospectus do not contain all of the information included in the
registration statement and the accompanying exhibits and schedules
we file with the SEC. You should read the registration statement
and the exhibits and schedules for more complete information about
us and our common stock.
The registration statement, exhibits and schedules are also
available through the SEC’s website.
You may obtain a free copy of our filings with the SEC by writing
or telephoning us at our principal executive offices: PNM
Resources, Inc., 414 Silver Ave. SW, Albuquerque, New Mexico,
87102-3289, Attention: Shareholder Services, telephone number
(505) 241-2868. The filings are also available through the
Investors section of our website: is
www.pnmresources.com.
The information on our website is not incorporated into this
prospectus supplement by reference, and you should not consider it
a part of this prospectus supplement.
The SEC allows us to “incorporate by reference” into this
prospectus supplement and the accompanying prospectus information
we file with the SEC. This means that we can disclose important
information to you by referring you to documents that we have
previously filed with the SEC or documents that we will file with
the SEC in the future. The information we incorporate by reference
is considered to be an important part of this prospectus supplement
and the accompanying prospectus. Information that we file later
with the SEC that is incorporated by reference into this prospectus
supplement and the accompanying prospectus will automatically
update and supersede this information.
We are “incorporating by reference” in this prospectus supplement
and the accompanying prospectus information we file with the SEC,
which means that we are disclosing important information to you by
referring you to those documents. Our combined filings with the SEC
present separate filings by PNMR, PNM and TNMP. Information
contained therein relating to an individual registrant is filed by
that registrant on its own behalf and each registrant makes no
representation as to information relating to other registrants. The
information we incorporate by reference is considered to be part of
this prospectus supplement, unless it is updated or superseded by
the information contained in this prospectus supplement or the
information we file subsequently with the SEC that is incorporated
by reference in this prospectus supplement.
We are incorporating by reference the following documents that we
have filed with the SEC (except those portions of filings that
relate to PNM or TNMP as separate registrants), other than any
information in these documents that is deemed not to be “filed”
with the SEC:
•Our
Current Reports on Form 8-K as filed on
January 3, 2022,
March 1, 2022,
March 11, 2022,
March 22, 2022,
May 11, 2022,
May 16, 2022,
May 19, 2022,
May 24, 2022,
June 30, 2022,
July 21, 2022,
July 28, 2022,
August 5, 2022
and
September 6, 2022
(only with respect to Item 8.01);
•The
description of our common stock contained in our Current Report on
Form 8-K filed on
December 31, 2001
and any amendment or report filed for the purpose of updating such
description.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus supplement, the accompanying prospectus, and the
documents they incorporate by reference contain statements that are
not historical fact and constitute “forward-looking statements.”
When we use words like “anticipate,” “believe,” “could,”
“estimate,” “expect,” “intend,” “may,” “objective,” “outlook,”
“plan,” “project,” “possible,” “potential,” “should,” “will,”
“would” and similar expressions, or when we discuss our strategy or
plans, we are making forward-looking statements. Forward-looking
statements are not guarantees of performance. They involve risks,
uncertainties and assumptions. Our future results may differ
materially from those expressed in these forward-looking
statements. These statements are necessarily based upon various
assumptions involving judgments with respect to the future and
other risks, including, among others:
•The
expected timing and likelihood of completion of the pending merger
of NM Green Holdings, Inc., a New Mexico corporation (“Merger Sub”)
and wholly-owned subsidiary of Avangrid, Inc., a New York
corporation (“Avangrid”), with and into the Company pursuant to the
Agreement and Plan of Merger, dated October 20, 2020, as amended,
between the Company, Avangrid and Merger Sub (the “Merger
Agreement”), with the Company surviving as a direct, wholly-owned
subsidiary of Avangrid (the “Merger”), including the timing,
receipt and terms and conditions of any required governmental and
regulatory approvals of the pending Merger that could reduce
anticipated benefits or cause the parties to abandon the
transaction;
•The
occurrence of any event, change or other circumstances that could
give rise to the termination of the Merger Agreement;
•The
risk that the parties may not be able to satisfy the conditions to
the proposed Merger in a timely manner or at all;
•The
risk that the proposed Merger could have an adverse effect on the
ability of the Company to retain and hire key personnel and
maintain relationships with its customers and suppliers, and on its
operating results and businesses generally;
•The
ability of PNM and TNMP to recover costs and earn allowed returns
in regulated jurisdictions, including the prudence of PNM’s
undepreciated investments in the Four Corners Power Plant (“Four
Corners”) and recovery of PNM’s investments and other costs
associated with that plant, revisions to its rates to remove San
Juan Generating Station (“SJGS”) by issuing rate credits prior to
issuing Energy transition bonds (“Securitized Bonds”) and the
establishment of the Energy Transition Charge, and the impact on
service levels for PNM customers if the ultimate outcomes do not
provide for the recovery of costs and operating and capital
expenditures, as well as other impacts of federal or state
regulatory and judicial actions;
•The
ability of the Company to successfully forecast and manage its
operating and capital expenditures, including aligning expenditures
with the revenue levels resulting from the ultimate outcomes of
regulatory proceedings, or resulting from potential mid-term or
long-term impacts related to COVID-19;
•Uncertainty
relating to PNM's decision to return the currently leased
generating capacity in the Palo Verde Nuclear Generating Station
(“PVNGS”) Units 1 and 2 at the expiration of their lease terms in
2023 and 2024, including future regulatory outcomes relating to the
ratemaking treatment;
•Uncertainty
surrounding the status of PNM’s participation in jointly-owned
generation projects, including the changes in PNM's generation
entitlement share for PVNGS following termination of the leases in
2023 and 2024, the proposed exit from Four Corners and the exit and
abandonment of SJGS;
•Uncertainty
regarding the requirements and related costs of decommissioning
power plants and reclamation of coal mines supplying certain power
plants, as well as the ability to recover those costs from
customers, including the potential impacts of current and future
regulatory proceedings;
•The
impacts on the electricity usage of customers and consumers due to
performance of state, regional, and national economies, energy
efficiency measures, weather, seasonality, alternative sources of
power, advances in technology, the impacts of COVID-19 on customer
usage, and other changes in supply and demand;
•Uncertainty
related to the potential for regulatory orders, legislation or
rulemakings that provide for municipalization of utility assets or
public ownership of utility assets, including generation resources,
or which would delay or otherwise impact the procurement of
necessary resources in a timely manner;
•The
Company’s ability to maintain its debt and access the financial
markets in order to provide financing to repay or refinance debt as
it comes due, as well as for ongoing operations and construction
expenditures, including disruptions in the capital or credit
markets, actions by ratings agencies, and fluctuations in interest
rates, including any negative impacts that could result from the
ultimate outcomes of regulatory proceedings, from the economic
impacts of COVID-19, actions by the Federal Reserve to address
inflationary concerns or other market conditions, geopolitical
activity, or from the entry into the Merger Agreement;
•The
risks associated with completion of generation, transmission,
distribution, and other projects, including uncertainty related to
regulatory approvals and cost recovery, the ability of
counterparties to meet their obligations under certain arrangements
(including coal supply agreements, renewable energy resources, and
approved power purchase agreements related to replacement resources
for facilities to be retired or for which the leases will
terminate), and supply chain or other outside support services that
may be disrupted;
•The
potential unavailability of cash from the Company’s subsidiaries
due to regulatory, statutory, or contractual restrictions or
subsidiary earnings or cash flows;
•The
performance of generating units, transmission systems, and
distribution systems, which could be negatively affected by
operational issues, fuel quality and supply chain issues
(disruptions), unplanned outages, extreme weather conditions,
wildfires, terrorism, cybersecurity breaches, and other
catastrophic events, including the impacts of COVID-19, as well as
the costs the Company may incur to repair its facilities and/or the
liabilities the Company may incur to third parties in connection
with such issues;
•State
and federal regulation or legislation relating to environmental
matters and renewable energy requirements, the resultant costs of
compliance, and other impacts on the operations and economic
viability of PNM’s generating plants;
•State
and federal regulatory, legislative, executive, and judicial
decisions and actions on ratemaking, and taxes, including guidance
related to the Tax Cuts and Jobs Act, and other
matters;
•Risks
related to climate change, including potential financial risks
resulting from climate change litigation and legislative and
regulatory efforts to limit greenhouse gas emissions, including the
impacts of the New Mexico Energy Transition Act;
•Employee
workforce factors, including cost control efforts and issues
arising out of collective bargaining agreements and labor
negotiations with union employees;
•Variability
of prices and volatility and liquidity in the wholesale power and
natural gas markets;
•Changes
in price and availability of fuel and water supplies, including the
ability of the mines supplying coal to PNM’s coal-fired generating
units and the companies involved in supplying nuclear fuel to
provide adequate quantities of fuel;
•Regulatory,
financial, and operational risks inherent in the operation of
nuclear facilities, including spent fuel disposal
uncertainties;
•The
impacts of decreases in the values of marketable securities
maintained in trusts to provide for decommissioning, reclamation,
pension benefits, and other postretirement benefits, including
potential increased volatility resulting from international
developments and the impacts of COVID-19;
•Uncertainty
surrounding counterparty performance and credit risk, including the
ability of counterparties to supply fuel and perform reclamation
activities and impacts to financial support provided to facilitate
the coal supply at SJGS;
•The
effectiveness of risk management regarding commodity transactions
and counterparty risk;
•The
outcome of legal proceedings, including the extent of insurance
coverage; and
•Changes
in applicable accounting principles or policies.
USE OF PROCEEDS
The amount of proceeds from this offering will depend upon the
number of shares of common stock sold and the market price at which
they are sold and, with respect to any forward sale transaction,
the settlement method as described below. There can be no assurance
that we will be able to sell any shares under or fully utilize the
distribution agreement.
We currently intend to use the net proceeds from this offering,
after deducting the sales agents’ commissions and our offering
expenses, for general corporate purposes, which may include
repayment of borrowings under our term loan and our short-term
debt, including our unsecured revolving credit facility.
As of September 30, 2022, we had $1.0 billion drawn under the PNM
Resources
term loan bearing interest at a variable rate of 4.13% and a
maturity date of May 18, 2025. With respect to our short-term
borrowings, as of September 30, 2022, we had $60.2
million outstanding on a consolidated basis, which included $57.2
million outstanding at the Company, with a weighted average
interest rate of 4.45%. Of these short-term borrowings at the
Company, $57.2 million was drawn under our unsecured revolving
credit facility, with a weighted average interest rate at September
30, 2022 of 4.47% and a maturity date of October 31, 2024.Pending
the use of the net proceeds as described above, we intend to invest
these net proceeds in investment-grade interest-bearing
obligations, highly liquid cash equivalents, certificates of
deposit, or direct or guaranteed obligations of the United States
of America.
The expected use of net proceeds from this offering represents our
intentions based upon our present plans and business conditions. We
cannot predict with certainty all of the particular uses for the
proceeds from this offering or the amounts that we will actually
spend on the uses set forth above. Accordingly, our management will
have significant flexibility in applying the net proceeds from this
offering. The timing and amount of our actual expenditures will be
based on many factors, including cash flows from
operations.
We will not initially receive any proceeds from the sale of
borrowed shares of our common stock by the forward sellers, as
agents for the forward purchasers, in connection with any forward
sale agreement. The initial forward sale price for a particular
forward sale agreement will be set through sales of borrowed shares
of our common stock by an affiliate of the forward purchaser in an
“at the market offering” as described in this prospectus
supplement. The forward sale price we expect to receive upon
physical settlement of a particular forward sale agreement will be
subject to adjustment on a daily basis based on a floating interest
rate factor equal to the federal funds rate less a spread and
reduced by a commission of up to 2% of the volume-weighted average
of the gross sales prices of all borrowed shares of our common
stock sold during the applicable forward hedge selling period by
the applicable sales agent, as a forward seller. In addition, the
forward sale price will be subject to decrease on certain dates
specified in the relevant forward sale agreement by the amount per
share of quarterly dividends that, as of the time of entry into
such forward sale agreement, we expect to declare during the term
of such forward sale agreement. The forward sale price may also be
subject to decrease if the cost to the forward purchaser of
borrowing the number of shares of our common stock underlying the
particular forward sale agreement exceeds a specified amount. If
the federal funds rate is less than the spread on any day, the
interest factor will result in a daily reduction of the forward
sale price.
In the event of full physical settlement of a forward sale
agreement, which we expect to occur on or prior to the maturity
date of such forward sale agreement, we expect to receive aggregate
cash proceeds equal to the product of the initial forward sale
price under such forward sale agreement and the number of shares of
our common stock underlying such forward sale agreement, subject to
the price adjustment and other provisions of such forward sale
agreement. If, however, we elect to cash settle or net share settle
any forward sale agreement, we would expect to receive an amount of
proceeds that is significantly lower than the product set forth in
the immediately preceding sentence (in the case of any cash
settlement) or will not receive any cash proceeds (in the case of
any net share settlement), and we may owe cash (in the case of any
cash settlement) or shares of our common stock (in the case of any
net share settlement) to the relevant forward purchaser. We intend
to use any cash proceeds that we receive upon physical settlement
of any forward sale agreement, if physical settlement applies, or
upon cash settlement of any forward sale agreement, if we elect
cash settlement, for the purposes provided in the second paragraph
of this section.
All of the sales agents, either directly or through affiliates,
have extended to us loans under our short-term
debt, including in some cases as lenders under our term loan and
revolving credit facility and accordingly may receive a portion of
the proceeds from this offering pursuant to the repayment of
borrowings under such short-term debt. In addition, the forward
purchasers will receive the net proceeds from any sale of borrowed
shares of our common stock sold pursuant to this prospectus
supplement in connection with any forward sale agreement. See “Plan
of Distribution (Conflicts of Interest)—Conflicts of Interest” in
this prospectus supplement.
MATERIAL U.S. FEDERAL INCOME AND ESTATE TAX
CONSIDERATIONS
FOR NON-U.S. HOLDERS
The following discussion summarizes material U.S. federal income
and (to the limited extent set forth below) estate tax
considerations relevant to the acquisition, ownership and
disposition of shares of our common stock, but does not purport to
be a complete analysis of all potential U.S. federal income and
estate tax considerations. This discussion only applies to shares
of our common stock that are purchased in this offering by Non-U.S.
Holders (as defined below), and that are held as capital assets
within the meaning of Section 1221 of the Internal Revenue Code of
1986, as amended (the “Code”). This summary is based on the Code,
administrative pronouncements, judicial decisions and regulations
of the Treasury Department, changes to any of which subsequent to
the date of this prospectus supplement may affect the tax
consequences described herein. This discussion does not describe
all of the U.S. federal income tax considerations that may be
relevant to Non-U.S. Holders in light of their particular
circumstances or to Non-U.S. Holders subject to special rules, such
as certain financial institutions, tax-exempt organizations,
insurance companies, traders or dealers in securities or
commodities, persons holding shares of our common stock as part of
a straddle, hedge, conversion transaction or other integrated or
risk-reduction transaction, shareholders that acquired our common
stock through the exercise of employee stock options or otherwise
as compensation or through a tax-qualified retirement plan, persons
that directly, indirectly or constructively hold in excess of 5% of
our common stock, “controlled foreign corporations,” “passive
foreign investment companies,” real estate investment trusts,
regulated investment companies, governmental organizations,
qualified foreign pension funds (or any entities all of the
interests of which are held by a qualified foreign pension fund),
persons subject to the alternative minimum tax, accrual method
taxpayers subject to special tax accounting rules as a result of
their use of financial statements or certain former citizens or
residents of the United States. This discussion does not address
any U.S. federal income or estate tax consequences for any
beneficial owner of shares of our common stock that is a United
States person within the meaning of Section 7701(a)(30) of the Code
(a “United States person”) or any entity or arrangement treated as
a partnership for U.S. federal income tax purposes. Furthermore,
this discussion does not describe the effect of U.S. federal estate
(except to the limited extent set forth below), generation-skipping
or gift tax laws, the Medicare tax on investment income or the
effect of any applicable foreign, state or local laws. Persons
considering the purchase of shares of our common stock are urged to
consult their tax advisors with regard to the application of the
U.S. federal income and estate tax laws to their particular
situations as well as any tax consequences arising under other U.S.
federal laws or the laws of any state, local or foreign taxing
jurisdiction.
We have not and will not seek any rulings or opinions from the
Internal Revenue Service (the “IRS”) with respect to the matters
discussed below. There can be no assurance that the IRS will not
take a different position concerning the tax consequences of the
acquisition, ownership or disposition of shares of our common stock
or that any such position would not be sustained.
Prospective investors should consult their own tax advisors with
regard to the application of the U.S. federal income and estate tax
considerations discussed below to their particular situations as
well as the application of any state, local, foreign or other tax
laws, including gift tax laws.
For purposes of this summary, a “Non-U.S. Holder” means a
beneficial owner of shares of our common stock that is an
individual, corporation (or entity treated as a corporation for
U.S. federal income tax purposes), estate or trust and, for U.S.
federal income tax purposes, is not: (i) an individual that is a
citizen or resident of the United States; (ii) a corporation or
other entity treated as a corporation for U.S. federal income tax
purposes that is created or organized under the laws of the United
States, any state thereof or the District of Columbia; (iii) an
estate the income of which is subject to U.S. federal income
taxation regardless of its source; or (iv) a trust if (A) a court
within the United States is able to exercise primary supervision
over its administration and one or more United States persons have
the authority to control all substantial decisions of such trust,
or (B) the trust has made an election under the applicable Treasury
regulations to be treated as a United States person. If a
partnership, or other entity or arrangement treated as a
partnership for U.S. federal income tax purposes, holds shares of
our common stock, the tax treatment of a partner in such a
partnership will generally depend upon the status of the partner
and the activities of the partnership. Partners in a partnership
holding shares of our common stock should consult their tax
advisors as to the particular U.S. federal income tax
considerations relevant to the acquisition, ownership and
disposition of such shares of our common stock applicable to
them.
Distributions
In general, a distribution that we make to a Non-U.S. Holder with
respect to shares of our common stock will constitute a dividend
for U.S. federal income tax purposes to the extent paid out of our
current or accumulated earnings and profits as determined under the
Code. To the extent the amount of a distribution exceeds our
current and accumulated earnings and profits, such excess will
constitute a return of capital and will first reduce the Non-U.S.
Holder’s adjusted tax basis in our common stock, but not below
zero, and then will be treated as gain from the sale of our common
stock (see “—Sale or Other Taxable Disposition of Our Common Stock”
below). Dividends paid to a Non-U.S. Holder that are not
effectively connected with the Non-U.S. Holder’s conduct of a trade
or business within the United States will generally be subject to
U.S. federal withholding tax at a rate of 30% of the gross amount
of the dividends (unless such dividend is eligible for a reduced
rate under an applicable income tax treaty). In order to obtain a
reduced rate of withholding under an applicable income tax treaty,
a Non-U.S. Holder is generally required to provide to the
applicable withholding agent an IRS Form W-8BEN or IRS Form
W-8BEN-E (or a suitable substitute form) properly certifying such
Non-U.S. Holder’s eligibility for the reduced rate. Non-U.S.
Holders that do not timely provide the applicable withholding agent
with the required certification, but that qualify for a reduced
withholding rate, may obtain a refund of any excess amounts
withheld by timely filing an appropriate claim for a refund with
the IRS. Non-U.S. Holders should consult their tax advisors
regarding their entitlement to benefits under an applicable income
tax treaty and the timing and manner of claiming the
benefits.
Dividends that are effectively connected with a Non-U.S. Holder’s
conduct of a trade or business within the United States (and, if an
applicable income tax treaty so requires, are attributable to a
permanent establishment maintained by the Non-U.S. Holder in the
United States) are not subject to U.S. federal withholding tax but
generally will be subject to U.S. federal income taxation on a
net-income basis in the same manner as if such dividends were
received by a United States person. The Non-U.S. Holder is
generally required to provide to the applicable withholding agent a
properly executed IRS Form W-8ECI (or a suitable substitute form)
in order to claim the exemption from U.S. federal withholding tax.
In addition, a “branch profits tax” may be imposed at a 30% rate
(or a reduced rate under an applicable income tax treaty) on a
foreign corporation’s effectively connected earnings and profits
for the taxable year, as adjusted for certain items.
Sale or Other Taxable Disposition of Our Common Stock
Subject to the discussions below under “—Information Reporting and
Backup Withholding” and “—Foreign Account Tax Compliance Act,” a
Non-U.S. Holder generally will not be subject to U.S. federal
withholding tax with respect to gain, if any, recognized on the
sale or other taxable disposition of shares of our common stock. A
Non-U.S. Holder will also generally not be subject to U.S. federal
income tax with respect to any such gain unless (i) the gain is
effectively connected with the conduct by such Non-U.S. Holder of a
trade or business within the United States (and, if an applicable
income tax treaty so requires, is attributable to a permanent
establishment maintained by the Non-U.S. Holder in the United
States), (ii) in the case of a Non-U.S. Holder that is a
nonresident alien individual, such Non-U.S. Holder is present in
the United States for 183 or more days in the taxable year of the
disposition and certain other conditions are satisfied, or (iii)
our common stock constitutes a U.S. real property interest by
reason of our status as a U.S. real property holding corporation (a
“USRPHC”) for U.S. federal income tax purposes.
In the case described in (i) above, gain recognized on the
disposition of shares of our common stock generally will be subject
to U.S. federal income taxation on a net-income basis in the same
manner as if such gain were recognized by a United States person,
and, in the case of a Non-U.S. Holder that is a foreign
corporation, may also be subject to the branch profits tax at a
rate of 30% (or a lower applicable treaty branch profits tax rate).
In the case described in (ii) above, the Non-U.S. Holder will be
subject to a 30% tax (or a lower applicable treaty rate) on any
capital gain recognized on the disposition of shares of our common
stock (after being offset by certain U.S.-source capital
losses).
Generally, a U.S. corporation is a USRPHC if the fair market value
of its U.S. real property interests equals or exceeds 50% of the
sum of the fair market value of its worldwide real property
interests and its other assets used or held for use in a trade or
business (all as determined for U.S. federal income tax purposes).
We have not determined whether we are a USRPHC; however, even if we
are or become a USRPHC, so long as shares of our common stock
continue to be regularly traded on an established securities
market, within the meaning of applicable
Treasury regulations, a Non-U.S. Holder will not be subject to U.S.
federal income tax on the disposition of shares of our common stock
if the Non-U.S. Holder has not held more than 5% (directly,
indirectly or constructively) of our total outstanding common stock
at any time during the shorter of the five-year period preceding
the date of disposition, or such Non-U.S. Holder’s holding period.
If our common stock were not considered to be regularly traded on
an established securities market, a Non-U.S. Holder (regardless of
the percentage of shares of our common stock owned) generally would
be subject to U.S. federal income tax on a taxable disposition of
shares of our common stock at the regular rates applicable to
United States persons and a 15% withholding tax generally would
apply to the gross proceeds from such disposition.
Non-U.S. Holders should consult their tax advisors regarding the
U.S. federal income tax consequences of investing in our common
stock if we were to be treated as a USRPHC. Non-U.S. Holders should
also consult their tax advisors regarding potentially applicable
income tax treaties that may provide for different
rules.
Information Reporting and Backup Withholding
Payors must report annually to the IRS and to each Non-U.S. Holder
the amount of any distributions paid to such holder (whether or not
the distribution represents a taxable dividend), the name and
address of the recipient and any tax withheld with respect to such
distributions, regardless of whether withholding was required.
Copies of the information returns reporting such distributions and
withholding also may be made available to the tax authorities in
the country in which the Non-U.S. Holder resides under the
provisions of an applicable tax treaty.
A Non-U.S. Holder may be subject to backup withholding for
dividends paid to such holder unless such holder certifies on IRS
Form W-8BEN or IRS Form W-8BEN-E (or another appropriate form) that
it is a Non-U.S. Holder (and the payor does not have actual
knowledge or reason to know that such holder is a United States
person), or such holder otherwise establishes an
exemption.
Information reporting and, depending on the circumstances, backup
withholding may apply to the proceeds of a sale or other taxable
disposition of our common stock by a Non-U.S. Holder within the
United States or conducted through certain U.S.-related financial
intermediaries, unless the beneficial owner certifies on IRS Form
W-8BEN or IRS Form W-8BEN-E (or another appropriate form) that it
is a Non-U.S. Holder (and the withholding agent does not have
actual knowledge or reason to know that the beneficial owner is a
United States person), or such owner otherwise establishes an
exemption.
Backup withholding is not an additional tax. Any amounts withheld
under the backup withholding rules may be allowed as a refund or a
credit against a Non-U.S. Holder’s U.S. federal income tax
liability provided the required information is timely furnished to
the IRS.
Foreign Account Tax Compliance Act
Sections 1471 to 1474 of the Code and related IRS guidance
(commonly referred to as the Foreign Account Tax Compliance Act
(“FATCA”)) impose a 30% U.S. withholding tax on any dividends on
our common stock and (subject to proposed Treasury regulations
discussed below) on the gross proceeds from a disposition of our
common stock, in each case if paid to a “foreign financial
institution” or a “non-financial foreign entity” (including, in
some cases, when such foreign financial institution or entity is
acting as an intermediary), unless (i) in the case of a foreign
financial institution, such institution enters into an agreement
with the U.S. government to withhold on certain payments, and to
collect and provide to the U.S. tax authorities substantial
information regarding U.S. account holders of such institution
(which includes certain equity and debt holders of such
institution, as well as certain account holders that are foreign
entities with U.S. owners), (ii) in the case of a non-financial
foreign entity, such entity certifies that it does not have any
substantial U.S. owners or provides the withholding agent with a
certification (generally on an IRS Form W-8BEN-E) identifying the
direct and indirect substantial U.S. owners of the entity, or (iii)
the foreign financial institution or non-financial foreign entity
otherwise qualifies for an exemption from these rules and provides
appropriate documentation (such as an IRS Form W-8BEN-E). Under
certain circumstances, a holder of our common stock might be
eligible for refunds or credits of such taxes. Although withholding
under FATCA would have applied to payments of gross proceeds from
the taxable disposition of our common stock on or after January 1,
2019, proposed Treasury regulations eliminate FATCA withholding on
payments of gross proceeds entirely. Taxpayers generally may rely
on these proposed Treasury regulations until
final Treasury regulations are issued. Intergovernmental agreements
governing FATCA between the United States and certain other
countries may modify the foregoing requirements for certain holders
of our common stock. Prospective investors should consult their own
tax advisors regarding FATCA and whether it may be relevant to the
ownership and disposition of shares of our common
stock.
Federal Estate Tax
Shares of our common stock beneficially owned by an individual who
is not a citizen or resident of the United States (as defined for
U.S. federal estate tax purposes) at the time of death will
generally be includable in the decedent’s gross estate for U.S.
federal estate tax purposes unless an applicable income tax treaty
provides otherwise.
PLAN OF DISTRIBUTION (CONFLICTS OF INTEREST)
We have entered into a distribution agreement, dated November 10,
2022, with each of the sales agents, forward sellers and forward
purchasers under which we may issue and sell up to $200,000,000 in
the aggregate of shares of our common stock from time to time
through the sales agents acting as sales agents or directly to the
sales agents acting as principals for the offer and sale of shares
of our common stock. Further, the distribution agreement provides
that, in addition to the issuance and sale of shares of our common
stock by us to or through the sales agents, we also may deliver
from time to time instructions to any sales agent specifying that
such sales agent, as a forward seller, use commercially reasonable
efforts consistent with their respective normal trading and sales
practices to sell shares of our common stock borrowed by the
applicable forward purchaser in connection with one or more forward
sale agreements, as described below. In no event will the aggregate
number of shares of our common stock sold through the sales agents,
each as an agent for us, as principal and as a forward seller,
under the distribution agreement have an aggregate sales price in
excess of $200,000,000.
The sales, if any, of shares of our common stock under the
distribution agreement will be made in “at the market offerings” as
defined in Rule 415 of the Securities Act, including sales made
directly on the New York Stock Exchange, the existing trading
market for shares of our common stock, or sales made to or through
a market maker or through an electronic communications network. In
addition, shares of our common stock may be offered and sold by
such other methods, including privately negotiated transactions
(including block transactions), as we and any sales agent agree to
in writing.
The distribution agreement also provides that we may sell shares of
common stock to a sales agent as principal for its own account at a
price agreed upon at the time of the sale. If we sell shares of
common stock to a sales agent as principal, then we will enter into
a separate terms agreement with that sales agent setting forth the
terms of such transaction, and if required, we will describe that
terms agreement in a separate prospectus supplement or pricing
supplement.
We have also agreed to reimburse the sales agents, the forward
sellers and the forward purchasers for their reasonable and
documented out-of-pocket expenses, including the fees and expenses
of counsel in connection with this offering up to an agreed
aggregate amount, with the excess to be paid by the sales agents
and forward purchasers. These reimbursed fees and expenses are
deemed to be underwriting compensation to the sales agents under
FINRA Rule 5110.
In connection with the sale of our common stock as contemplated in
this prospectus supplement, the sales agents and the forward
purchasers may be deemed to be “underwriters” within the meaning of
the Securities Act, and the compensation paid to the sales agents
and the forward purchasers may be deemed to be underwriting
commissions or discounts. We have agreed to indemnify the sales
agents and the forward purchasers against certain liabilities,
including liabilities under the Securities Act.
If a sales agent or we have reason to believe that the exemptive
provisions set forth in Rule 101(c)(1) of Regulation M under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)
are not satisfied, that party will promptly notify the other and
sales of common stock under the distribution agreement will be
suspended until that or other exemptive provisions have been
satisfied in the judgment of the sales agents and us.
We estimate that the total expenses from this offering payable by
us, excluding compensation payable to the sales agents under the
distribution agreement, will be approximately
$562,050.
We intend to report to the SEC at least quarterly (1) the number of
shares of our common stock sold to or through the sales agents in
connection with at-the-market sales as described below under
“—Sales Through Sales Agents,” (2) the number of borrowed shares of
our common stock sold by the forward sellers, as agents for the
forward purchasers, in connection with the forward sale agreements
as described below under “—Sales Through Forward Sellers” and (3)
the net proceeds received by us and the compensation paid by us to
the sales agents in connection with transactions described in
clauses (1) and (2).
Sales of our common stock as contemplated in this prospectus
supplement will be settled through the facilities of The Depository
Trust Company or by such other means as we and the sales agents may
agree upon. The offering of common stock pursuant to the
distribution agreement will terminate upon the earlier of (1) the
sale, under the distribution agreement, of shares of our common
stock with an aggregate sales price of $200,000,000, and (2) the
termination of the distribution agreement, pursuant to its terms,
by either all of the sales agents or us.
In the ordinary course of their business, certain of the sales
agents and/or their affiliates have in the past performed, and may
continue to perform, investment banking, broker dealer, lending,
financial advisory or other services for us for which they have
received, or may receive, separate fees. For example, under our
term loan, Wells Fargo Bank, N.A., an affiliate of Wells Fargo
Securities, LLC, is the administrative agent and a lender, an
affiliate of BofA Securities, Inc. is a lender and an affiliate of
MUFG Securities Americas Inc. is a lender. Additionally, under the
revolving credit facility, Wells Fargo Securities, LLC, MUFG Union
Bank, N.A., an affiliate of MUFG Securities Americas Inc. and BofA
Securities, Inc. are joint lead arrangers and co-bookrunners and an
affiliate of Wells Fargo Securities, LLC is the administrative
agent and a lender, an affiliate of MUFG Securities Americas Inc.
is a lender and an affiliate of BofA Securities, Inc. is a
lender.
The sales agents and their affiliates are full service financial
institutions engaged in various activities, which may include
securities trading, commercial and investment banking, financial
advisory, investment management, investment research, principal
investment, hedging, financing, market making, brokerage and other
financial and non-financial activities and services. In the
ordinary course of their business, the sales agents and their
affiliates may make or hold a broad array of investments and
actively trade debt and equity securities (or related derivative
securities) and financial instruments (including bank loans) for
their own account and for the accounts of their customers and such
investment and securities activities may involve securities and/or
instruments of the Company. The sales agents and their affiliates
may also make investment recommendations and/or publish or express
independent research views in respect of such securities or
instruments and may at any time hold, or recommend to clients that
they acquire, long and/or short positions in such securities and
instruments.
Sales Through Sales Agents
From time to time during the term of the distribution agreement,
and subject to the terms and conditions set forth therein, we may
deliver instructions to any of the sales agents. Upon receipt of
such instructions from us, and subject to the terms and conditions
of the distribution agreement, each sales agent has agreed to use
its commercially reasonable efforts consistent with its normal
trading and sales practices to sell the amount of shares of our
common stock specified in our instructions. We or the relevant
sales agent may suspend the offering of shares of our common stock
at any time upon proper notice to the other, upon which the selling
period will immediately terminate. Settlement for sales of shares
of our common stock will occur on the second trading day following
the date on which the sales were made unless another date shall be
agreed to in writing by us and the relevant sales agent. The
obligation of any sales agent under the distribution agreement to
sell shares of our common stock pursuant to our instructions is
subject to a number of conditions, which such sales agent reserves
the right to waive in its sole discretion.
We will pay each sales agent a commission equal to up to 2% of the
sales price of all shares of our common stock sold through it as
our agent under the distribution agreement.
Sales Through Forward Sellers
From time to time during the term of the distribution agreement,
and subject to the terms and conditions set forth therein, we may
enter into one or more forward sale agreements with a forward
purchaser and deliver instructions to its sales agent, requesting
that the sales agent execute sales of borrowed shares of our common
stock as a forward seller in connection with the applicable forward
sale agreement, and subject to the terms and conditions of the
distribution agreement, the relevant forward purchaser will, at our
request, borrow from third parties, and such forward seller will
use its commercially reasonable efforts consistent with its normal
trading and sales practices to sell, such shares of our common
stock on such terms to hedge such forward purchaser’s exposure
under such forward sale agreement. We or the relevant forward
seller may immediately suspend the offering of shares of our common
stock at any time upon proper notice to the other. We expect
settlement between a forward purchaser and the relevant forward
seller of sales of borrowed shares of our common stock, as well as
the settlement between the
relevant forward seller and buyers of such shares in the market, to
occur on the second trading day following each date on which the
sales are made unless another date shall be agreed to in writing by
us and the relevant sales agent. The obligation of each forward
seller under the distribution agreement to execute such sales of
shares of our common stock is subject to a number of conditions,
which each forward seller reserves the right to waive in its sole
discretion.
In connection with each forward sale agreement, the relevant
forward seller will receive, reflected in a reduced initial forward
sale price payable by the relevant forward purchaser under its
forward sale agreement, a commission equal to up to 2% of the
volume weighted average of the sales prices of all borrowed shares
of our common stock sold during the applicable period by it as a
forward seller. We refer to this commission rate as the forward
selling commission.
The initial forward sale price per share under each forward sale
agreement will equal the product of (1) an amount equal to one
minus the applicable forward selling commission and (2) the volume
weighted average price per share at which the borrowed shares of
our common stock were sold pursuant to the distribution agreement
by the relevant forward seller to hedge the relevant forward
purchaser’s exposure under such forward sale agreement. Thereafter,
the initial forward sale price will be subject to price adjustment
as described below. If we elect to physically settle any forward
sale agreement by delivering shares of our common stock, we will
receive an amount of cash from the relevant forward purchaser equal
to the product of the initial forward sale price per share under
such forward sale agreement and the number of shares of our common
stock underlying such forward sale agreement, subject to the price
adjustment and other provisions of such forward sale agreement.
Each forward sale agreement will provide that the initial forward
sale price, as well as the sales prices used to calculate the
initial forward sale price, will be subject to adjustment based on
a floating interest rate factor equal to the federal funds rate
less a spread. In addition, the initial forward sale price will be
subject to decrease on certain dates specified in the relevant
forward sale agreement by the amount per share of quarterly
dividends we currently expect to declare during the term of such
forward sale agreement. If the federal funds rate is less than the
spread on any day, the interest rate factor will result in a daily
reduction of the forward sale price.
Before any issuance of shares of our common stock upon settlement
of any forward sale agreement, we expect that the shares issuable
upon settlement of such forward sale agreement will be reflected in
our diluted earnings per share calculations using the treasury
stock method. Under this method, the number of shares of our common
stock used in calculating diluted earnings per share is deemed to
be increased by the excess, if any, of the number of shares that
would be issued upon full physical settlement of such forward sale
agreement over the number of shares that could be purchased by us
in the market (based on the average market price of our common
stock during the applicable reporting period) using the proceeds
receivable upon full physical settlement (based on the adjusted
forward sale price at the end of the reporting period).
Consequently, we anticipate there will be no dilutive effect on our
earnings per share except during periods when the average market
price of shares of our common stock is above the applicable
adjusted forward sale price subject to increase or decrease as
described in the immediately preceding paragraph. However, if we
decide to physically settle or net share settle any forward sale
agreement, delivery of our shares to the relevant forward purchaser
on the physical settlement or net share settlement of the forward
sale agreement would result in dilution to our earnings per share
and return on equity.
We expect that settlement of any forward sale agreement will
generally occur no later than the date specified in such forward
sale agreement. However, any forward sale agreement may be settled
earlier than that specified date in whole or in part at our option.
Except under the circumstances described below, we have the right,
in lieu of physical settlement of any forward sale agreement, to
elect cash or net share settlement of such forward sale agreement.
If we elect cash or net share settlement of any forward sale
agreement, we would expect the relevant forward purchaser or one of
its affiliates to purchase shares of our common stock in secondary
market transactions over an unwind period to:
•return
shares of our common stock to securities lenders in order to unwind
such forward purchaser’s hedge (after taking into consideration any
shares of our common stock to be delivered by us to such forward
purchaser, in the case of net share settlement); and,
•if
applicable, in the case of net share settlement, deliver shares of
our common stock to us to the extent required in settlement of such
forward sale agreement.
If the volume-weighted average price at which the relevant forward
purchaser (or its affiliate) purchases shares during the applicable
unwind period under a forward sale agreement is above the relevant
forward sale price, in the case of cash settlement, we would pay
the relevant forward purchaser under such forward sale agreement an
amount in cash equal to the difference or, in the case of net share
settlement, we would deliver to such forward purchaser a number of
shares of our common stock having a value equal to the difference.
Thus, we could be responsible for a potentially substantial cash
payment in the case of cash settlement. If the volume-weighted
average price at which the relevant forward purchaser (or its
affiliate) purchases shares during the applicable unwind period
under a forward sale agreement is below the relevant forward sale
price, in the case of cash settlement, we would be paid the
difference in cash by the relevant forward purchaser under such
forward sale agreement or, in the case of net share settlement, we
would receive from such forward purchaser a number of shares of our
common stock having a value equal to the difference.
In addition, the purchase of our common stock by a forward
purchaser or its affiliate to unwind the forward purchaser’s hedge
position could cause the price of our common stock to increase over
time (or prevent a decrease over time), thereby increasing the
amount of cash (in the case of cash settlement), or the number of
shares (in the case of net share settlement), that we would owe
such forward purchaser upon settlement of the applicable forward
sale agreement or decreasing the amount of cash (in the case of
cash settlement), or the number of shares (in the case of net share
settlement), that such forward purchaser would owe us upon
settlement of the applicable forward sale agreement, as the case
may be.
A forward purchaser will have the right to accelerate the forward
sale agreement that it enters into with us and require us to
physically settle such forward sale agreement (with respect to all
or any portion of the transaction under such forward sale agreement
that such forward purchaser determines is affected by such event)
on a date specified by such forward purchaser if:
•in
such forward purchaser’s commercially reasonable judgment, it or
its affiliate is unable to hedge (or maintain a hedge of) its
exposure under such forward sale agreement in a commercially
reasonable manner because (x) insufficient shares of our common
stock have been made available for borrowing by securities lenders
or (y) the forward purchaser or its affiliate would incur a stock
borrowing cost in excess of a specified threshold;
•we
declare any dividend, issue or distribution on shares of our common
stock
opayable
in cash in excess of specified amounts,
othat
constitutes an extraordinary dividend under the forward sale
agreement,
opayable
in securities of another company as a result of a spinoff or
similar transaction, or
oof
any other type of securities (other than our common stock), rights,
warrants or other assets for payment (cash or other consideration)
at less than the prevailing market price as determined in a
commercially reasonable manner by the applicable calculation
agent;
•certain
ownership thresholds applicable to such forward purchaser and its
affiliates are exceeded;
•an
event is announced that if consummated would result in a specified
extraordinary event (including certain mergers or tender offers, as
well as certain events involving our nationalization, insolvency, a
delisting of our common stock, or change in law); or
•certain
other events of default or termination events occur (each as more
fully described in each forward sale agreement).
A forward purchaser’s decision to exercise its right to accelerate
any forward sale agreement and to require us to settle any such
forward sale agreement will be made irrespective of our interests,
including our need for capital. In such cases, we could be required
to issue and deliver shares of our common stock under the terms of
the physical settlement provisions of the applicable forward sale
agreement irrespective of our capital needs, which would result in
dilution to our earnings per share and return on equity. In
addition, upon certain events of bankruptcy, insolvency or
reorganization relating to us, the forward sale agreement will
terminate without further liability of either party. Following any
such termination, we would not issue any shares and we would not
receive any proceeds pursuant to the forward sale
agreement.
Restrictions on Sales of Similar Securities
During any period beginning on the date we deliver instructions to
any of the sales agents and the applicable sales agent, as forward
seller, and ending on the settlement date with respect to the sale
of such shares or, in the case of sales by the applicable sales
agent as forward seller, ending one settlement cycle after the
applicable forward hedge selling period (each, a “Delivery
Period”), we have agreed not to, unless we give the sales agents
prior written notice, (i) directly or indirectly offer, pledge,
announce the intention to sell, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase or otherwise
transfer or dispose of any shares of our common stock or any equity
securities or securities convertible into or exercisable,
redeemable or exchangeable for shares of our common stock or file
any registration statement under the Securities Act with respect to
any of the foregoing or (ii) enter into any swap or any other
agreement that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of our common
stock, whether any such transaction described in clause (i) or (ii)
above is to be settled by delivery of our common stock, in cash or
otherwise. The restriction described in this paragraph does not
apply to:
•sales
of shares of our common stock we offer or sell pursuant to the
distribution agreement (including sales of borrowed shares of our
common stock by the forward sellers in connection with any forward
sale agreement);
•the
issuance by us of shares of our common stock pursuant to, or the
grant of options under our stock option, employee benefit or
dividend reinvestment plans (as described in this prospectus
supplement, the accompanying prospectus and any free writing
prospectus), or the filing of a registration statement with the SEC
relating to the offering of any shares of our common stock issued
or reserved for issuance under such plans; or
•the
establishment of a trading plan pursuant to Rule 10b5-1 under the
Exchange Act for the repurchase of shares of our common stock,
provided that such plan does not provide for the repurchase of our
common stock during the Delivery Period.
No Public Offering Outside of the United States
No action has been or will be taken in any jurisdiction (except in
the United States) that would permit a public offering of the
shares of our common stock, or the possession, circulation, or
distribution of this prospectus supplement or the accompanying
prospectus or any other material relating to us or the shares of
our common stock in any jurisdiction where action for that purpose
is required. Accordingly, the shares of our common stock offered by
this prospectus supplement and the accompanying prospectus may not
be offered or sold, directly or indirectly, and this prospectus
supplement, the accompanying prospectus and any other offering
material or advertisements in connection with the shares of our
common stock may not be distributed or published, in or from any
country or jurisdiction except in compliance with any applicable
rules and regulations of any such country or
jurisdiction.
Conflicts of Interest
We may use a portion of the net proceeds from this offering to
repay a portion of the outstanding amounts owed by us under our
term loan and our short-term debt, including amounts we owe to the
sales agents, the forward sellers and forward purchasers or their
respective affiliates who have extended to us loans under such
debt, including as lenders under our term loan and our unsecured
revolving credit facility as described under “Use of Proceeds”
in
this prospectus supplement. In addition, the forward purchasers (or
their respective affiliates) will receive the net proceeds of any
sale of borrowed shares of our common stock sold pursuant to this
prospectus supplement in connection with any forward sale
agreement. Because certain sales agents or their affiliates are
expected to receive part of the net proceeds from the sale of
shares of our common stock in connection with any forward sale
agreement or in connection with the repayment of a portion of the
outstanding amounts owed by us under our short-term debt, including
our revolving credit facility, such sales agents would be deemed to
have a conflict of interest under FINRA Rule 5121 to the extent
such sales agents or affiliates receive at least 5% of the net
proceeds from the offering. Any sales agent deemed to have a
conflict of interest would be required to conduct the distribution
of our common stock in accordance with FINRA Rule 5121. If the
offering is conducted in accordance with FINRA Rule 5121, such
sales agent would not be permitted to confirm a sale to an account
over which it exercises discretionary authority without first
receiving specific written approval from the account holder. The
appointment of a “qualified independent underwriter” (as defined in
FINRA Rule 5121) is not necessary for this offering because the
shares of common stock being offered have a “bona fide public
market” (as defined in FINRA Rule 5121).
LEGAL MATTERS
The validity of the common stock offered hereby and certain other
related legal matters will be passed upon for us by Leonard D.
Sanchez, Esq., Associate General Counsel of PNMR, and Troutman
Pepper Hamilton Sanders, LLP, and certain legal matters will be
passed upon for the sales agents, forward sellers and forward
purchasers by Simpson Thacher & Bartlett LLP, New York, New
York.
As of September 30, 2022, Mr. Sanchez held 1,478 shares of PNMR
common stock (pursuant to the vesting of restricted stock rights)
and 1,576 restricted stock rights (which vest in equal annual
installments over a three-year period from the respective grant
date).
EXPERTS
The consolidated financial statements and schedules of PNM
Resources, Inc. as of December 31, 2021 and 2020, and for each of
the years in the three-year period ended December 31, 2021, and
management’s assessment of the effectiveness of internal control
over financial reporting as of December 31, 2021 have been
incorporated by reference herein in reliance upon the report of
KPMG LLP, independent registered public accounting firm,
incorporated by reference herein, and upon the authority of said
firm as experts in accounting and auditing.
Debt Securities
Common Stock
Preferred Stock
Warrants
Securities Purchase Contracts
Units
This prospectus is part of a registration statement that we filed
with the Securities and Exchange Commission, or SEC, utilizing a
“shelf” registration process. Under this shelf process, we may,
from time to time, offer, issue and sell debt securities, shares of
our common stock, shares of our preferred stock, warrants,
securities purchase contracts or units, which we collectively refer
to as the “securities”. We may offer and sell these securities in
amounts, at prices and on terms determined at the time of the
offering.
This prospectus describes some of the general terms that may apply
to the securities. The specific terms of any securities to be
offered will be described in supplements to this prospectus. The
prospectus supplements also may add, update or change information
contained in this prospectus. Any statement that we make in this
prospectus will be modified or superseded by any inconsistent
statement made by us in a prospectus supplement.
This prospectus may not be used to offer and sell securities unless
accompanied by a prospectus supplement.
You should carefully read this prospectus and the applicable
prospectus supplement, together with the documents we incorporate
by reference, before you make your investment
decision.
We may sell the securities directly or to or through underwriters
or dealers, and also to other purchasers or through agents or a
combination of these methods. The names of any underwriters or
agents participating in a sale of securities to you, and any
applicable commissions or discounts, will be stated in an
accompanying prospectus supplement. For general information about
the distribution of securities offered, please see “Plan of
Distribution” on page 20 of this prospectus.
Investing in our securities involves risks. See “Risk Factors” on
page 3 and “Forward Looking Statements” on page 3 for information
on certain risks related to the purchase of any
securities.
Our common stock is quoted on the New York Stock Exchange under the
symbol “PNM.”
Our executive office is located at 414 Silver Ave. SW, Albuquerque,
New Mexico 87102, and our telephone number is (505)
241-2700.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal
offense.
The date of this prospectus is March 2, 2022.
TABLE OF CONTENTS
Prospectus page
About this Prospectus 1
Where You Can Find More
Information 2
PNM Resources, Inc. 3
Risk Factors 3
Disclosure Regarding Forward-Looking
Statements 3
Use of Proceeds 3
Description of Debt
Securities 4
Description of Common Stock and Preferred
Stock 13
Description of Warrants 16
Description of Securities Purchase
Contracts 18
Description of Units 19
Plan of Distribution 20
Legal Matters 21
Experts 21
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed
with the Securities and Exchange Commission, or SEC, utilizing a
“shelf” registration process.
This prospectus provides you with a general description of the
securities we may offer. Each time we offer and sell the
securities, we will describe in a supplement to this prospectus the
specific terms of that offering. The applicable prospectus
supplement also may add, update or change information in this
prospectus. Please carefully read both this prospectus and the
applicable prospectus supplement, together with the documents that
are incorporated by reference herein that are described under
“Where You Can Find More Information,” before investing in the
securities. In particular, you should carefully consider the risks
and uncertainties described under the section titled “Risk Factors”
or otherwise included in any applicable prospectus supplement or
incorporated by reference in this prospectus before you decide
whether to purchase the securities.
Unless otherwise indicated or unless the context otherwise
requires, all references in this prospectus and any accompanying
prospectus supplement to “PNMR,” “PNM Resources,” “we,” “our” and
“us” refer to PNM Resources, Inc. and its subsidiaries. Unless
otherwise indicated, financial information included or incorporated
by reference herein and in any accompanying prospectus supplement
is for PNM Resources, Inc. and its subsidiaries on a consolidated
basis.
This prospectus contains summaries of certain provisions contained
in some of the documents described in this prospectus. Please refer
to the actual documents for complete information. All of the
summaries are qualified in their entirety by the actual documents.
Copies of the documents referred to in this prospectus have been
filed, or will be filed or incorporated by reference as exhibits to
the registration statement of which this prospectus is a part, and
you may obtain copies of those documents as described below under
“Where You Can Find More Information.”
Pursuant to the registration statement of which this prospectus is
a part, we may offer, issue and sell securities as set forth on the
cover page of this prospectus. Because we are a “well-known
seasoned issuer,” as defined in Rule 405 of the Securities Act of
1933, as amended, which we refer to as the “Securities Act,” we may
add to and offer additional securities, including securities held
by security holders, by filing a prospectus supplement with the SEC
at the time of the offer.
You should rely only on the information contained or incorporated
by reference in this prospectus, any applicable prospectus
supplements and any free writing prospectus prepared by or on
behalf of us. We have not authorized any other person to provide
you with different information. If anyone provides you with
different or inconsistent information, you should not rely on it.
We are not making an offer to sell these
securities in any jurisdiction where the offer or sale is not
permitted. You should assume that the information appearing in this
prospectus, any applicable prospectus supplement, any free writing
prospectuses and the documents incorporated by reference is
accurate only as of the respective dates of those documents in
which the information is contained. Our business, financial
condition, results of operations and prospects may have changed
since those dates.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports and other information
with the SEC. You may read and copy these documents at the SEC’s
Public Reference Room at 100 F Street, N.E., Room 1580, Washington,
D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information about the Public Reference Room. The SEC also maintains
an Internet website that contains reports, proxy and information
statements and other information regarding registrants that file
electronically with the SEC. The address of the site is
www.sec.gov.
Our Internet address is
www.pnmresources.com.
The contents of the website are not a part of the registration
statement of which this prospectus is a part. Our filings with the
SEC, including annual reports on Form 10-K, quarterly reports on
Form 10-Q, current reports on Form 8-K and amendments to those
reports, filed or furnished pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act of 1934, as amended, which we refer to
as the “Exchange Act”, are accessible free of charge at
www.pnmresources.com
as soon as reasonably practicable after we electronically file such
material with, or furnish it to, the SEC. These reports are also
available upon request in print from us free of
charge.
We are “incorporating by reference” in this prospectus information
we file with the SEC, which means that we are disclosing important
information to you by referring you to those documents. Our
combined filings with the SEC present separate filings by PNMR,
Public Service Company of New Mexico (“PNM”) and Texas-New Mexico
Power Company (“TNMP”). Information contained therein relating to
an individual registrant is filed by that registrant on its own
behalf and each registrant makes no representation as to
information relating to other registrants. The information we
incorporate by reference is considered to be part of this
prospectus, unless it is updated or superseded by the information
contained in this prospectus or the information we file
subsequently with the SEC that is incorporated by reference in this
prospectus or a prospectus supplement. We are incorporating by
reference the following documents that we have filed with the SEC
(except those portions of filings that relate to PNM or TNMP as
separate registrants), other than any information in these
documents that is deemed not to be “filed” with the
SEC:
•our
Annual Report on Form 10-K for the year ended December 31, 2021,
filed with the SEC on
March 1, 2022;
•the
description of our common stock contained in our Annual Report on
Form 10-K filed with the SEC on
March 1, 2022,
including any amendments or reports filed for the purpose of
updating such description.
We also incorporate by reference into this prospectus any filings
we make with the SEC (excluding information furnished under Item
2.02 or 7.01 of Current Reports on Form 8-K) under Section 13(a),
13(c), 14 or 15(d) of the Exchange Act, after the initial filing of
the registration statement that contains this
prospectus.
You may obtain without charge a copy of any of the documents we
incorporate by reference, except for exhibits to such documents
which are not specifically incorporated by reference into such
documents, by contacting us at PNM Resources, Inc., 414 Silver Ave.
SW, Albuquerque, New Mexico, 87102-3289, Attention: Shareholder
Services. You may also telephone your request at (505)
241-2868.
PNM RESOURCES, INC.
PNMR is an investor-owned holding company with two regulated
utilities providing electricity and electric services in New Mexico
and Texas. PNMR’s electric utilities are PNM and TNMP. PNMR is
focused on achieving three key financial objectives:
••Earning
authorized returns on regulated businesses
••Delivering
at or above industry-average earnings and dividend
growth
••Maintaining
investment grade credit ratings
Our executive office is located at 414 Silver Ave. SW, Albuquerque,
New Mexico 87102-3289, and our telephone number is (505)
241-2700.
RISK FACTORS
Investing in the securities involves risk. Please carefully
consider the specific risks set forth under the section entitled
“Risk Factors” in our most recent Annual Report on Form 10-K,
together with all of the other information included in this
prospectus and any prospectus supplement and any other information
that we have incorporated by reference, including annual, quarterly
and other reports filed with the SEC subsequent to the date hereof,
which are all incorporated by reference in this prospectus, and in
the applicable prospectus supplement. Before making an investment
decision, you should carefully consider these risks as well as
other information contained or incorporated by reference in this
prospectus or the applicable supplement to this prospectus. The
risks and uncertainties described are not the only ones facing us.
Additional risks and uncertainties not presently known to us or
that we currently deem immaterial also may impair our business
operations, financial results and the value of our
securities.
DISCLOSURE REGARDING FORWARD LOOKING STATEMENTS
This prospectus, any accompanying prospectus supplement, other
offering materials and the documents incorporated by reference
herein and therein contain forward-looking statements within the
meaning of Section 27A of the Securities Act, as amended, and
Section 21E of the Exchange Act. These forward-looking statements
relate to future events or our expectations, projections,
estimates, intentions, goals, targets, and strategies and 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 we assume no
obligation to update this information. You generally can identify
these statements by the use of words such as “outlook,”
“potential,” “continue,” “may,” “seek,” “approximately,” “predict,”
“believe,” “expect,” “plan,” “intend,” “estimate” or “anticipate”
and similar expressions or the negative versions of these words or
comparable words, as well as future or conditional verbs such as
“will,” “should,” “would,” “likely” and “could.” These statements
are subject to certain risks and uncertainties that could cause
actual results to differ materially from those included in the
forward-looking statements.
Because actual results may differ materially from those expressed
or implied by these forward-looking statements, we caution you not
to place undue reliance on these statements. Our business,
financial condition, cash flow, and operating results are
influenced by many factors, which are often beyond our control,
that can cause actual results to differ from those expressed or
implied by the forward-looking statements.
Important risk factors that could cause our results to differ
materially from those expressed in the forward-looking statements
are listed under “Risk Factors” in a prospectus supplement and may
also be found in our periodic reports filed with the SEC at
www.sec.gov.
USE OF PROCEEDS
Each prospectus supplement will describe the uses of the proceeds
from our issuances and sales of securities offered by that
prospectus supplement.
DESCRIPTION OF DEBT SECURITIES
General
The following description sets forth certain general terms and
provisions of our debt securities. When we offer our debt
securities in the future, a prospectus supplement will explain the
particular terms of those debt securities and the extent to which
any of these general provisions will not apply. You should read
this prospectus and any applicable prospectus supplement before you
make any investment decision. We may issue one or more series of
debt securities directly to the public or as part of a purchase
unit from time to time. We may also sell hybrid or novel securities
now existing or developed in the future that combine certain
features of the debt securities described in this
prospectus.
The debt securities will be our direct unsecured general
obligations. We may issue the debt securities from time to time in
one or more series under an indenture dated as of March 15, 2005
between us and U.S. Bank Trust Company, National Association
(ultimate successor as trustee to JPMorgan Chase Bank, N.A.), as
trustee (the ‘‘Trustee’’). This indenture, as previously amended
and supplemented and as it may be further amended and supplemented
from time to time, is referred to in this prospectus as the
‘‘Indenture.’’
We have summarized selected provisions of the Indenture below. You
should read this summary together with the Indenture, any
supplemental indentures or other documents establishing the debt
securities for a complete understanding of the provisions that may
be important to you. The following description of the debt
securities and the Indenture is qualified by reference to the
Indenture, which is incorporated by reference as an exhibit to the
registration statement of which this prospectus is a part.
References to certain sections in parentheses below are references
to sections of the Indenture. Whenever particular provisions or
defined terms in the Indenture are referred to under this
‘‘Description of Debt Securities,’’ such provisions or defined
terms are incorporated by reference herein. The Indenture is
qualified under the Trust Indenture Act of 1939. You should refer
to the Trust Indenture Act of 1939 for provisions that apply to the
debt securities.
There is no requirement under the Indenture that our future
issuances of debt securities be issued exclusively under the
Indenture and we will be free to employ other indentures or
documentation containing provisions different from those included
in the Indenture or applicable to one or more issuances of debt
securities in connection with future issuances of other debt
securities. Nonetheless, the debt securities registered under the
registration statement of which this prospectus is a part will only
be issued either pursuant to the Indenture or pursuant to an
indenture (or a form thereof) that is filed with the SEC in
connection with the offering of the debt securities.
The Indenture provides that the applicable debt securities will be
issued in one or more series, may be issued at various times, may
have differing maturity dates and may bear interest at differing
rates. We need not issue all debt securities of one series at the
same time and, unless otherwise provided, we may reopen a series,
without the consent of the holders of the debt securities of that
series for issuances of additional debt securities of that series.
Unless otherwise described in the applicable prospectus supplement,
the Indenture does not limit the aggregate amount of debt,
including secured debt, we or our subsidiaries may
incur.
The Indenture does not currently contain any restriction on the
payment of dividends or any financial covenants. However, the
supplemental indenture for any series of debt securities may
contain such restrictions. The prospectus supplement related to
such debt securities will describe such restrictions and the
protections, if any, that such restrictions provide the holders of
the debt securities in the event of a highly leveraged transaction
involving us that may adversely affect the holders of the debt
securities.
Ranking
The debt securities will be our direct unsecured general
obligations and will rank equally with all of our other
unsubordinated debt. As of December 31, 2021, PNMR, exclusive of
its subsidiaries, had $954.9 million of outstanding short-term and
long-term debt that would have ranked equally with the debt
securities.
We are a holding company and derive substantially all of our income
from our operating subsidiaries. As a result, our cash flows and
consequent ability to service our debt, including the debt
securities, are dependent upon the earnings of our subsidiaries and
distribution of those earnings to us and other payments or
distributions of funds by our subsidiaries to us, including
payments of principal and interest under intercompany indebtedness.
Our operating subsidiaries are separate and distinct legal entities
and will have no obligation, contingent or otherwise, to pay any
dividends or make any other distributions (except for payments
required pursuant to the terms of intercompany indebtedness) to us
or to otherwise pay amounts due with respect to the debt securities
or to make specific funds available for such payments. Various
financing arrangements, charter provisions and regulatory
requirements may
impose certain restrictions on the ability of our subsidiaries to
transfer funds to us in the form of cash dividends, loans or
advances. The debt securities will be effectively subordinated to
the claims of all creditors, including trade creditors and tort
claimants, of our subsidiaries. In the event of the bankruptcy,
insolvency, liquidation or reorganization of the business of one of
our subsidiaries, creditors of that subsidiary would generally have
the right to be paid in full before any distribution is made to us
or the holders of the debt securities. As of December 31, 2021, our
subsidiary PNM had $11.5 million aggregate stated value of
cumulative preferred stock outstanding and $1,898.2 million
aggregate principal amount of short-term and long-term debt
outstanding, all of which was unsecured. As of December 31, 2021,
our subsidiary TNMP had $908.6 million aggregate principal amount
of secured short-term and long-term debt outstanding.
The Indenture provides that payment of principal, premium and
interest on any debt security issued under the Indenture shall be
made solely from the assets of PNMR and not from any assets of
utility subsidiaries. (See Section 1.14)
Provisions of a Particular Series
The prospectus supplement relating to any series of debt securities
being offered will include specific terms relating to that
offering. These terms will include any of the following terms that
apply to that series:
•the
title of the debt securities;
•the
total principal amount of the debt securities;
•the
person or persons to whom interest payments are made, if other than
the registered holder;
•the
date or dates on which the principal of the debt securities will be
payable, how the dates will be determined and whether the stated
maturity may be extended;
•the
rate or rates at which the debt securities will bear interest, if
any, and how the rate or rates will be determined;
•the
date or dates from which interest on the debt securities will
accrue, the interest payment dates on which interest will be paid,
and the record dates for the interest payments;
•the
right, if any, to extend the interest payment periods for the debt
securities and the duration of the extension;
•the
place or places at which or methods by which payments will be
made;
•whether
we have the option to redeem the debt securities and, if so, the
terms of our redemption option;
•any
sinking fund or other provisions or options held by holders of the
debt securities that would obligate us to repurchase or otherwise
redeem the debt securities;
•if
the debt securities will be issued in denominations other than
$1,000 and integral multiples thereof;
•any
index or formula used for determining principal, premium or
interest;
•any
collateral, security, assurance or guarantee applicable to a series
of debt securities;
•the
currency or currencies in which payments will be made if other than
United States dollars, and the manner of determining the equivalent
of those amounts in United States dollars;
•if
payments may be made on any of the debt securities, at our election
or at the holder’s election, in a currency or currencies other than
that in which the debt securities are stated to be payable, then
the currency or currencies in which those payments may be made, the
terms and conditions of the election and the manner of determining
those amounts;
•the
portion of the principal payable upon acceleration of maturity, if
other than the entire principal;
•if
the principal payable on the maturity date will not be determinable
on one or more dates prior to the maturity date, the amount which
will be deemed to be such principal amount as of any such date or
the manner of determining such amount;
•whether
the provisions described below under ‘‘Discharge, Defeasance and
Covenant Defeasance’’ will apply to the debt
securities;
•whether
the debt securities will be issuable as global securities and, if
so, the securities depositary;
•any
changes or additions to the events of default under the Indenture
or changes or additions to our covenants under the Indenture;
and
•any
other terms of the debt securities not inconsistent with the terms
of the Indenture.
(See Section 3.01)
All debt securities of any one series will be substantially
identical except as to denomination and except as may otherwise be
determined in the manner provided for in the Indenture. (See
Section 3.01)
Debt securities may be issued and sold at a substantial discount
below their stated principal amount. If applicable, the prospectus
supplement will describe any special United States federal income
tax consequences and other considerations which apply to senior
debt securities issued at a discount or to any securities
denominated or payable in a foreign currency or currency
unit.
Redemption
We will set forth any terms for the redemption of any debt
securities in the applicable prospectus supplement. Unless we
indicate differently in the applicable prospectus supplement, the
debt securities will be redeemable upon notice by mail to the
holders between 30 and 60 days prior to the redemption date. If
less than all of the debt securities of any series are to be
redeemed, the Trustee will select the debt securities to be
redeemed from the outstanding debt securities of such series or
tranche, not previously called for redemption. In the absence of
any provision for selection, the Trustee will choose a method of
random selection as it deems fair and appropriate. (See Sections
11.03 and 11.04)
The debt securities will cease to bear interest on the redemption
date assuming we redeem them. We will pay the redemption price and
any accrued interest once the debt securities are surrendered for
redemption. (See Section 11.06) If only part of a debt security is
redeemed, the Trustee will deliver to you a new debt security of
the same series for the remaining portion without charge. (See
Section 11.07)
We may make any redemption, at our option, conditional upon the
receipt by the paying agent or agents, on or prior to the date
fixed for redemption, of money sufficient to pay the redemption
price. If the paying agent or agents have not received the money by
the date fixed for redemption, we will not be required to redeem
the debt securities. (See Section 11.04)
Payment
Except as may be provided in the applicable prospectus supplement,
interest, if any, on each debt security payable on each interest
payment date will be paid to the person in whose name the debt
security is registered as of the close of business on the regular
record date for the interest payment date. If there has been a
default in the payment of interest on any debt security, the
defaulted interest may be paid to the holder of that debt security
as of the close of business on a date to be fixed by the Trustee,
which will be between 10 and 15 days prior to the date we proposed
for payment of the defaulted interest, and not less than 10 days
after receipt by the Trustee of the notice of the proposed payment.
The defaulted interest may also be paid in any other manner
permitted by any securities exchange on which that debt security
may be listed, if the Trustee finds it practicable. (See Section
3.07)
Registration of Transfer and Exchange
Unless otherwise specified in the prospectus supplement applicable
to any series of debt securities, subject to any limitations on the
transfer of global securities, the transfer of the debt securities
may be registered, and the debt securities may be exchanged for
other debt securities of the same series, of authorized
denominations and with the same terms and principal amount, at the
corporate trust office of the Trustee. We may change the place for
registration of transfer and exchange of the debt securities and
may designate additional places for registration and exchange.
Unless otherwise provided in the prospectus supplement applicable
to any series of debt securities, no service charge will be made
for any transfer or exchange of the debt securities. However, we
may require payment to cover any tax or other governmental charge
that may be imposed. We will not be required to execute or to
provide for the registration of transfer of, or the exchange
of:
•any
debt security during a period of 15 days prior to giving any notice
of redemption; or
•any
debt security selected for redemption except the unredeemed portion
of any debt security being redeemed in part.
(See Section 3.05)
Restrictions on Mergers and Sale of Assets
Under the terms of the Indenture, we may not consolidate with or
merge into any other entity or convey, transfer or lease our
properties and assets substantially as an entirety to any entity or
individual, unless:
••the
surviving or successor entity is organized and validly existing
under the laws of the United States, any state thereof or the
District of Columbia and it expressly assumes our obligations on
all debt securities and under the Indenture;
••immediately
after giving effect to the transaction, no event of default and no
event which, after notice or lapse of time or both, would become an
event of default shall have occurred and be continuing;
and
••we
deliver to the Trustee an officers’ certificate and an opinion of
counsel as to compliance with the foregoing.
(See Section 8.01)
Discharge, Defeasance and Covenant Defeasance
The Indenture provides that we may be:
•discharged
from our obligations, with certain limited exceptions, with respect
to any particular series of debt securities, as described in the
Indenture, such a discharge being called a ‘‘defeasance’’ in this
prospectus; and
•released
from our obligations under certain restrictive covenants especially
established with respect to any particular series of debt
securities, including the covenants described above under
‘‘Restrictions on Mergers and Sale of Assets’’ and any additional
covenants set forth in the applicable prospectus supplement, such a
release being called a ‘‘covenant defeasance’’ in this
prospectus.
(See Sections 13.02 and 13.03)
We must satisfy certain conditions to effect a defeasance or
covenant defeasance. Those conditions include the irrevocable
deposit with the Trustee, in trust, of money or government
obligations which through their scheduled payments of principal and
interest would provide sufficient money to pay the principal and
any premium and interest on those debt securities on the maturity
dates of those payments or upon redemption. In addition, we will be
required to deliver to the Trustee an opinion of counsel to the
effect that the deposit and related defeasance or covenant
defeasance will not cause the holders of the applicable series of
debt securities to recognize gain or loss for federal income tax
purposes, and that such holders will be subject to federal income
tax on the same amount, in the same manner and at the same times as
would be the case if such deposit and related defeasance or
covenant defeasance were not to occur. In the case of a defeasance,
that opinion of counsel must be based upon a ruling from the
Internal Revenue Service or a change in federal income tax law.
(See Section 13.04)
Modification of the Indenture
We and the Trustee may enter into one or more supplemental
indentures without the consent of any holder of the debt securities
for certain specified purposes, including:
•to
evidence the assumption by any permitted successor of our covenants
in the Indenture and in the debt securities;
•to
add to our existing covenants or to surrender any of our rights or
powers under the Indenture;
•to
add additional events of default;
•to
add to or change any of the provisions to such extent necessary for
the issuance of debt securities in bearer form, registrable or not
registrable as to principal, and with or without interest coupons,
or to permit or facilitate the issuance of debt securities in
uncertificated form;
•to
change, eliminate, or add any provision to the Indenture; provided,
however, if the change, elimination, or addition will adversely
affect the interests of the holders of the debt securities of any
particular series in any material respect, that change,
elimination, or addition will become effective only:
owhen
the consent of the holders of a majority in aggregate principal
amount of the debt securities of that series has been obtained in
accordance with the Indenture; or
owhen
no debt securities of the affected series remain outstanding under
the Indenture;
•to
secure the debt securities;
•to
establish the form or terms of the debt securities of any other
series as permitted by the Indenture;
•to
evidence and provide for the acceptance of appointment of a
successor trustee;
•to
provide for or facilitate the administration of the trust by more
than one trustee; or
•to
cure any ambiguity or inconsistency or to make any other provisions
with respect to matters and questions arising under the Indenture;
provided that the action will not adversely affect the interests of
the holders of the debt securities of any particular series in any
material respect.
(See Section 9.01)
If the Trust Indenture Act of 1939 is amended after the date of the
Indenture to require changes to the Indenture, the Indenture will
be deemed to be amended so as to conform to that amendment of the
Trust Indenture Act of 1939. We and the Trustee may, without the
consent of any of the holders, enter into one or more supplemental
indentures to evidence that amendment. (See Section
9.01)
The consent of the holders of a majority in aggregate principal
amount of the debt securities of all series then outstanding,
considered as one class, is required for all other modifications to
the Indenture. However, if less than all of the series of debt
securities outstanding are directly affected by a proposed
supplemental indenture, then only the consent of the holders of a
majority in aggregate principal amount of the outstanding debt
securities of all series that are directly affected will be
required. No amendment or modification may:
•change
the stated maturity of the principal of, or any installment of
principal of or interest on, any debt security, or reduce the
principal amount of any debt security or its rate of interest or
change the method of calculating the interest rate or reduce any
premium payable upon redemption, or reduce the amount of the
principal of any debt security which would be due and payable upon
a declaration of acceleration of the maturity thereof, or change
the currency in which payments are made, or impair the right to
institute suit for the enforcement of any payment on or after the
date that any principal or interest is due and payable on any debt
security, without the consent of the holder;
•reduce
the percentage in principal amount of the outstanding debt security
of any particular series the consent of which is required for any
supplemental indenture or any waiver of compliance with a provision
of the Indenture or any default thereunder and its consequences, or
reduce the requirements for quorum or voting, without the consent
of all the holders of the series; or
•modify
certain provisions of the Indenture relating to supplemental
indentures, waivers of certain covenants and waivers of past
defaults with respect to the debt securities of any particular
series, without, in each case, the consent of the holder of each
outstanding debt security affected thereby.
(See Section 9.02)
A supplemental indenture which changes the Indenture solely for the
benefit of one or more particular series of debt securities, or
modifies the rights of the holders of the debt securities of one or
more series, will not affect the rights under the Indenture of the
holders of the debt securities of any other series. (See Section
9.02)
The Indenture provides that the debt securities owned by us or
anyone else required to make payment on the debt securities will be
disregarded and considered not to be outstanding in determining
whether the required holders have given a request or consent. (See
Section 1.01)
We may fix in advance a record date to determine the required
number of holders entitled to give any request, demand,
authorization, direction, notice, consent, waiver or other such
‘‘act’’ or action of the holders, in certain situations. If the
record date is fixed, the holders of the outstanding debt
securities of the relevant series on that record date, and no other
holders, will be entitled to take or revoke the relevant action,
whether or not those holders remain holders after that record date.
No action, however, will be effective unless taken on or prior to
the applicable expiration date by holders of the requisite
principal amount of the outstanding debt securities of that series
on that record date. Any request, demand, authorization, direction,
notice, consent, election, waiver or other act of a holder will
bind every
future holder of the same debt securities and the holder of every
debt security issued upon the registration of transfer of or in
exchange of those debt securities. A transferee will be bound by
our acts or those of the Trustee taken in reliance thereon, whether
or not notation of that action is made upon that debt security.
(See Section 1.04)
Events of Default
‘‘Event of default’’ when used in the Indenture with respect to any
particular series of debt securities, means any of the
following:
•failure
to pay interest on any debt security of the applicable series for
60 days after it is due;
•failure
to pay the principal of or premium on any debt security of the
applicable series when due (whether at maturity or upon earlier
redemption);
•failure
to pay the deposit of any sinking fund payment, when and as due by
the terms of the applicable series;
•failure
to perform any other covenant in the Indenture, other than a
covenant that does not relate to that series of debt securities,
that continues for 90 days after we receive written notice from the
Trustee, or we and the Trustee receive a written notice from the
holders of a majority in principal amount of the debt securities of
such series; however, the Trustee or the Trustee and such holders,
as applicable, can agree to an extension of the 90-day period and
this extension will be automatic if we are diligently pursuing
action to correct the default;
•certain
events related to our bankruptcy, insolvency or reorganization;
or
•any
other event of default provided with respect to the debt securities
of that series.
(See Section 5.01)
Remedies
Acceleration of Maturity
If an event of default with respect to any one series of debt
securities occurs and continues, either the Trustee or the holders
of a majority in principal amount of the outstanding debt
securities of that series may declare the principal amount of all
the debt securities of that series to be due and payable
immediately. However, if the event of default is applicable to more
than one series of debt securities, the Trustee or the holders of a
majority in principal amount of all the outstanding debt securities
of all series, considered as one class, and not the holders of any
one series, may make a declaration of acceleration. (See Section
5.02)
At any time after a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been
obtained by the Trustee, the event of default giving rise to the
declaration of acceleration will be considered waived, and the
declaration and its consequences will be automatically rescinded
and annulled if:
•we
have paid or deposited with the Trustee a sum sufficient to
pay:
oall
overdue interest on all the debt securities of the
series;
othe
principal of and premium, if any, on any debt securities of the
series which have otherwise become due and interest, if any, that
is currently due;
ointerest,
if any, on overdue interest (to the extent lawful);
and
oall
amounts due to the Trustee under the Indenture; and
•any
other event of default with respect to the debt securities of that
series has been cured or waived as provided in the
Indenture.
(See Section 5.02)
The holders of a majority in principal amount of the outstanding
debt securities of any particular series may on behalf of the
holders of all the debt securities of that series waive any past
default under the Indenture with respect to that series and its
consequences, except a default:
•in
the payment of the principal of or any premium or interest on any
debt security of that series, or
•in
respect of a covenant or provision of the Indenture which cannot be
modified or amended by supplemental indenture without the consent
of the holder of each outstanding debt security of the series
affected.
However, if a default occurs and continues with respect to more
than one series of debt securities, the holders of a majority in
aggregate principal amount of the outstanding debt securities of
all such series, considered as one class, has the right to waive
the default, and not the holders of the debt securities of any one
such series. Upon any waiver, the default ceases to exist, and any
and all events of default arising therefrom is deemed to have been
cured, for every purpose of the Indenture; but no waiver will
extend to any subsequent or other default or impair any right
consequent thereon.
(See Section 5.13)
Right to Direct Proceedings
If an event of default with respect to any particular series of
debt securities occurs and continues, the holders of a majority in
principal amount of the outstanding debt securities of that series
have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with
respect to the debt securities of that series. However, if an event
of default occurs and continues with respect to more than one
series of debt securities, the holders of a majority in aggregate
principal amount of the outstanding debt securities of all such
series, considered as one class, have the right to make the
direction, and not the holders of the debt securities of any one of
such series. In either case, the Indenture further provides
that:
•such
direction will not be in conflict with any rule of law or with the
Indenture;
•the
Trustee may take any other action deemed proper by the Trustee and
not inconsistent with such direction, and
•subject
to the provisions of the Indenture the Trustee will have the right
to decline to follow any direction if the Trustee in good faith
determines that the proceeding so directed would involve the
Trustee in personal liability.
(See Section 5.12)
Limitation on Right to Institute Proceedings
No holder of debt securities of any particular series will have any
right to institute any proceeding, judicial or otherwise, with
respect to the Indenture, or for the appointment of a receiver or
Trustee, or for any other remedy under the Indenture,
unless:
•the
holder has previously given to the Trustee written notice of a
continuing event of default;
•the
holders of a majority in aggregate principal amount of the
outstanding debt securities of all series in respect of which an
event of default has occurred and is continuing, considered as one
class, have made a written request to the Trustee;
•such
holder or holders have offered reasonable indemnity to the Trustee
to institute proceedings; and
•the
Trustee has failed to institute any proceeding for 60 days after
notice and has not received any direction inconsistent with the
written request of the holders during that period.
(See Section 5.07)
No Impairment of Right to Receive Payment
The limitations on the right to institute proceedings, however, do
not apply to a suit by a holder of a debt security for payment of
the principal of or premium, if any, or interest if any, on that
debt security on or after the applicable due date. (See Section
5.08)
Annual Notice to Trustee
We will provide to the Trustee an annual statement by an
appropriate officer as to whether we are in default in the
performance and observance of any of the terms, provisions and
conditions of the Indenture. (See Section 10.04)
Notices
Notices to holders of the debt securities will be given by mail to
the holders at the addresses that appear in the security register.
(See Section 1.06)
Title
We, the Trustee, and any of our agents or the agents of the
Trustee, may treat the person in whose name the debt securities are
registered as the absolute owner thereof, whether or not such debt
securities may be overdue, for the purpose of making payments and
for all other purposes irrespective of notice to the contrary. (See
Section 3.08)
Governing Law
The Indenture and the debt securities will be governed by, and
construed in accordance with, the laws of the State of New York.
(See Section 1.12)
Regarding the Trustee
The Trustee is U.S. Bank Trust Company, National Association
(ultimate successor to JPMorgan Chase Bank, N.A.). In addition to
acting as Trustee, U.S. Bank Trust Company, National Association
and its affiliates act, and may act, as Trustee under our and/or
our affiliates’ other various indentures and trusts. We and our
affiliates also maintain credit and liquidity facilities and
conduct other banking transactions with affiliates of the Trustee
in the ordinary course of our businesses.
The Trustee may resign at any time by giving us written notice or
be removed at any time by an act of the holders of a majority in
principal amount of any particular series of debt securities then
outstanding delivered to the Trustee and us. In addition, provided
that no event of default has occurred or is continuing, we may
appoint a new trustee upon delivering to the Trustee a resolution
of our board of directors appointing a successor trustee and the
successor’s acceptance of our appointment. In this case, the
Trustee will be deemed to have resigned and the successor will be
deemed to have been appointed as trustee in accordance with the
Indenture. In any event, the resignation or removal of the Trustee,
and no appointment of a successor trustee, will be effective until
the acceptance of appointment by a successor trustee. (See Section
6.10)
The Trustee will perform only those duties that are specifically
set forth in the Indenture unless an event of default under the
Indenture occurs and continues. In case an event of default occurs
and continues, the Trustee will exercise the same degree of care
and skill as a prudent individual would exercise in the conduct of
his or her own affairs. (See Section 6.01)
Book-Entry Issuance
Unless otherwise provided in a prospectus supplement, we will issue
debt securities of each series in the form of one or more fully
registered global securities. The global securities will be
deposited with the Trustee under the Indenture as custodian for the
depositary, which will be The Depository Trust Company or another
depositary identified in a prospectus supplement, and registered in
the name of the depositary or its nominee.
Unless and until it is exchanged in whole or in part for the
individual debt securities it represents, a global security may not
be transferred except as a whole:
•by
the applicable depositary to a nominee of the
depositary;
••by
any nominee of the depositary to the depositary or another nominee;
or
••by
the depositary or any nominee to a successor depositary or any
nominee of the successor.
Investors may hold their beneficial interests in the global
securities directly through the depositary if they have an account
with the depositary or indirectly through organizations that have
accounts with the depositary.
DESCRIPTION OF COMMON STOCK AND PREFERRED STOCK
The following summary of the material terms of the common stock and
preferred stock of PNM Resources, Inc. (“we” or “our”) does not
purport to be complete and is subject to and qualified in its
entirety by reference to our articles of incorporation, as amended
(our “articles of incorporation”), and by-laws, as amended (our
“by-laws”), each of which is incorporated by reference as exhibits
to our Annual Report on Form 10-K for the year ended December 31,
2021, filed with the SEC on March 1, 2022. For a more complete
understanding of our common stock and preferred stock, we encourage
you to read carefully our articles of incorporation and by-laws,
each as may be amended, and the applicable provisions of the New
Mexico Business Corporation Act and the New Mexico Public Utility
Act and other applicable provisions of the laws of the state of New
Mexico.
General
Our authorized capital stock consists of 120,000,000 shares of
common stock, no par value and 10,000,000 shares of preferred
stock, no par value, of which 500,000 shares have been designated
Convertible Preferred Stock, Series A, which we refer to in this
prospectus as “Series A Preferred Stock”. Each share of Series A
Preferred Stock is convertible at the option of the holder at any
time into 10 shares of common stock, subject to certain
anti-dilution adjustments. As of December 31, 2021, 85,834,874
shares of our common stock and no shares of our Series A Preferred
Stock were outstanding.
Dividend Rights with Respect to Our Common Stock and Series A
Preferred Stock
After giving effect to any prior rights of our Series A Preferred
Stock, and any other series of preferred stock that should become
outstanding, we will pay dividends on our common stock as
determined by our Board of Directors (the “Board”) out of legally
available funds. Our ability to pay dividends depends primarily
upon the ability of our subsidiaries to pay dividends or otherwise
transfer funds to us. Various financing arrangements, charter
provisions and regulatory requirements may impose certain
restrictions on the ability of our subsidiaries to transfer funds
to us in the form of cash dividends, loans or
advances.
Unless waived by the holders of at least two-thirds of the number
of then outstanding shares of Series A Preferred Stock, no dividend
on our common stock shall be declared unless a dividend on the
Series A Preferred Stock is declared and paid at the same time in
an amount equal to the dividend that would be received by a holder
of the number of shares (including fractional shares) of common
stock into which such Series A Preferred Stock is convertible on
the record date for such dividend.
Voting Rights with Respect to Our Common Stock and Series A
Preferred Stock
Holders of common stock are entitled to one vote for each share
held by them on all matters submitted to our shareholders. Holders
of our common stock do not have cumulative voting rights in the
election of directors. The New Mexico Business Corporation Act and
our articles of incorporation and by-laws generally require the
affirmative vote of a majority of the shares represented at a
shareholder meeting and entitled to vote for shareholder action,
including the election of directors. Under the New Mexico Business
Corporation Act, some corporate actions, including amending the
articles of incorporation and approving a plan of merger,
consolidation or share exchange, require the affirmative vote of a
majority of the outstanding shares entitled to vote, which could
include, in certain circumstances, classes of preferred
stock.
Our articles of incorporation limit the Board to designating voting
rights for series of preferred stock only (1) when we fail to pay
dividends on the applicable series of preferred stock, (2) when
proposed changes to the articles of incorporation would adversely
impact preferred shareholders’ rights and privileges and (3) if the
Board issues a new series of preferred stock convertible into
common stock and confers upon the holders of such convertible
preferred stock the right to vote as a single class with holders of
common stock on all matters submitted to a vote of holders of
common stock at a meeting of shareholders other than for election
of directors, with the same number of votes as the number of shares
of common stock into which the shares of such preferred stock are
convertible, provided that at all times the aggregate preferred
stock outstanding with such voting rights is convertible into no
more than 12 million shares of common stock.
Holders of each outstanding share of Series A Preferred Stock are
entitled to vote as a single class with holders of our common stock
on all matters submitted to our shareholders except the election of
directors. Without first obtaining the consent or approval of the
holders of a majority of the outstanding shares of Series A
Preferred Stock, voting as a separate class, we cannot amend any
provisions of our articles of incorporation in a manner that would
have an adverse impact on the rights and privileges of the Series A
Preferred Stock. Holders of our outstanding shares of Series A
Preferred Stock are entitled to the number of votes corresponding
to the number of shares of common stock into which such shares of
Series A Preferred Stock are convertible on the record date for
determining shareholders entitled to vote.
Our articles of incorporation do not allow our directors to create
classes of directors. All directors are elected
annually.
Liquidation Rights with Respect to Our Common Stock and Series A
Preferred Stock
In the event we are liquidated or dissolved, either voluntarily or
involuntarily, each share of Series A Preferred Stock is entitled
to a liquidation preference of $1.00 per share. After that claim is
satisfied, holders of our common stock are entitled to, ratably, an
amount equal to (i) $1.00, divided by the number of shares of
common stock into which a share of Series A Preferred Stock is then
convertible, (ii) multiplied by the number of shares of common
stock then outstanding. After that claim is satisfied, all
remaining assets will be distributed to the holders of the Series A
Preferred Stock and common stock ratably on the basis of the number
of shares of outstanding common stock and, in the case of the
Series A Preferred Stock, the number of shares of common stock into
which the outstanding shares of Series A Preferred Stock are then
convertible. The rights of the holders of our common stock to share
ratably (according to the number of shares held by them) in the
distribution of remaining assets will also be subject to the
liquidation preferences and other rights of any additional series
of preferred stock that we may issue in the future.
Preemptive Rights with Respect to Our Common Stock and Series A
Preferred Stock
Neither the holders of our common stock nor the holders of our
Series A Preferred Stock have a preemptive right to purchase shares
of our authorized but unissued shares, or securities convertible
into shares or carrying a right to subscribe to or acquire shares,
except under the terms and conditions as may be provided by our
Board in its sole judgment.
As discussed above, each share of Series A Preferred Stock is
convertible at the option of the holder at any time into 10 shares
of common stock, subject to certain anti-dilution
adjustments.
Listing
Our common stock is listed on the New York Stock Exchange under the
“PNM” symbol.
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is
Computershare Trust Company, N.A. 250 Royall Street, Canton, MA
02021.
Preferred Stock
Our Board is authorized, pursuant to our articles of incorporation,
by resolution to provide for the issuance of up to 10,000,000
shares of preferred stock in one or more series and to fix, from
time to time before issuance:
•the
serial designation, authorized number of shares and the stated
value;
•the
dividend rate, if any, the date or dates on which the dividends
will be payable, and the extent to which the dividends may be
cumulative;
•the
price or prices at which shares may be redeemed, and any terms,
conditions and limitations upon any redemption;
•the
amount or amounts to be received by the holders in the event of our
dissolution, liquidation, or winding up;
•any
sinking fund provisions for redemption or purchase of shares of any
series;
•the
terms and conditions, if any, on which shares may be converted
into, or exchanged for, shares of other capital stock, or of other
series of preferred stock; and
•the
voting rights, if any, for the shares of each series, limited to
circumstances when (1) we fail to pay dividends on the applicable
series of preferred stock, (2) proposed changes to the articles of
incorporation would adversely impact preferred shareholders’ rights
and privileges and (3) the Board issues a new series of preferred
stock convertible into common stock and confers upon the holders of
such convertible preferred stock the right to vote as a single
class with holders of common stock on all matters submitted to a
vote of holders of common stock at a meeting of shareholders other
than for election of directors, with the same number of votes as
the number of shares of common stock into which the shares of such
preferred stock are convertible, provided that at all times the
aggregate preferred stock outstanding with such voting rights is
convertible into no more than 12 million shares of common stock.
Currently, of the 10,000,000 authorized shares of preferred stock,
500,000 have been designated as Series A Preferred Stock, and no
Series A Preferred Stock shares have been issued and are
outstanding.
Prior to the issuance of shares of each series of our preferred
stock, our Board is required to adopt resolutions and file articles
of amendment with the New Mexico Public Regulation Commission. The
certificate of amendment will fix for each series the designation
and number of shares and the rights, preferences, privileges and
restrictions of the shares subject to the limitations set forth
above.
All shares of preferred stock will, when issued, be fully paid and
nonassessable and will not have any preemptive or similar rights.
We are not required by the New Mexico Business Corporation Act to
seek shareholder approval prior to any issuance of authorized but
unissued stock.
Limitation of Liability and Indemnification of Officers and
Directors
Our articles of incorporation provide that liability for our
directors for monetary damages will be eliminated or limited to the
fullest extent permissible under New Mexico law, and our by-laws
provide that we must indemnify our officers and directors to the
fullest extent permissible under New Mexico law.
Certain Other Matters
Our articles of incorporation and by-laws include a number of
provisions that may have the effect of discouraging persons from
acquiring large blocks of our stock or delaying or preventing a
change in our control. The material provisions that may have such
an effect include:
•authorization
for our Board to issue our preferred stock in series and to fix
rights and preferences of the series (including, among other
things, whether, and to what extent, the shares of any series will
have voting rights, within the limitations described above, and the
extent of the preferences of the shares of any series with respect
to dividends and other matters);
•advance
notice procedures with respect to any proposal other than those
adopted or recommended by our Board; and
•provisions
specifying that only a majority of the Board, the chairman of the
Board, the president or holders of not less than one-tenth of all
our shares entitled to vote may call a special meeting of
stockholders.
Under the New Mexico Public Utility Act, approval of the New Mexico
Public Regulation Commission is required for certain transactions
which may result in our change in control or exercise of
control.
DESCRIPTION OF WARRANTS
This section describes the general terms of the warrants that we
may offer and sell by this prospectus. This prospectus and any
applicable prospectus supplement will contain the material terms
and conditions for each warrant. The applicable prospectus
supplement may add, update or change the terms and conditions of
the warrants as described in this prospectus.
General
We may issue warrants to purchase debt securities, common stock or
preferred stock. Warrants may be issued independently or together
with any securities and may be attached to or separate from those
securities. The warrants will be issued under warrant agreements to
be entered into between us and a bank or trust company, as warrant
agent, all of which will be described in the prospectus supplement
relating to the warrants we are offering. The warrant agent will
act solely as our agent in connection with the warrants and will
not have any obligation or relationship of agency or trust for or
with any holders or beneficial owners of warrants. A copy of the
warrant agreement will be filed with the SEC in connection with the
offering of the warrants.
Debt Warrants
We may issue warrants for the purchase of our debt securities. As
explained below, each debt warrant will entitle its holder to
purchase debt securities at an exercise price set forth in, or to
be determinable as set forth in, the related prospectus supplement.
Debt warrants may be issued separately or together with debt
securities.
Any debt warrants will be issued under debt warrant agreements to
be entered into between us and one or more banks or trust
companies, as debt warrant agent, as will be set forth in the
prospectus supplement relating to the debt warrants being offered
by the prospectus supplement and this prospectus. A copy of the
debt warrant agreement, including a form of debt warrant
certificate representing the debt warrants, will be filed with the
SEC in connection with the offering of the debt
warrants.
The particular terms of each issue of debt warrants, the debt
warrant agreement relating to the debt warrants and the debt
warrant certificates representing debt warrants will be described
in the applicable prospectus supplement, including, as
applicable:
•the
title of the debt warrants;
•the
initial offering price;
•the
title, aggregate principal amount and terms of the debt securities
purchasable upon exercise of the debt warrants;
•the
currency or currency units in which the offering price, if any, and
the exercise price are payable;
•the
title and terms of any related debt securities with which the debt
warrants are issued and the number of the debt warrants issued with
each debt security;
•the
date, if any, on and after which the debt warrants and the related
debt securities will be separately transferable;
•the
principal amount of debt securities purchasable upon exercise of
each debt warrant and the price at which that principal amount of
debt securities may be purchased upon exercise of each debt
warrant;
•if
applicable, the minimum or maximum number of warrants that may be
exercised at any one time;
•the
date on which the right to exercise the debt warrants will commence
and the date on which the right will expire;
•if
applicable, a discussion of United States federal income tax,
accounting or other considerations applicable to the debt
warrants;
•whether
the debt warrants represented by the debt warrant certificates will
be issued in registered or bearer form and, if registered, where
they may be transferred and registered;
•anti-dilution
provisions of the debt warrants, if any;
•redemption
or call provisions, if any, applicable to the debt warrants;
and
•any
additional terms of the debt warrants, including terms, procedures
and limitations relating to the exchange and exercise of the debt
warrants.
Debt warrant certificates will be exchangeable for new debt warrant
certificates of different denominations and, if in registered form,
may be presented for registration of transfer and debt warrants may
be exercised at the corporate trust office of the debt warrant
agent or any other office indicated in the related prospectus
supplement. Before the exercise
of debt warrants, holders of debt warrants will not be entitled to
payments of principal, premium, if any, or interest, if any, on the
debt securities purchasable upon exercise of the debt warrants, or
to enforce any of the covenants in the applicable
indenture.
Equity Warrants
We may issue warrants for the purchase of our equity securities
such as our preferred stock or common stock. As explained below,
each equity warrant will entitle its holder to purchase equity
securities at an exercise price set forth in, or to be determinable
as set forth in, the related prospectus supplement. Equity warrants
may be issued separately or together with equity
securities.
Any equity warrants will be issued under equity warrant agreements
to be entered into between us and one or more banks or trust
companies, as equity warrant agent, as will be set forth in the
prospectus supplement relating to the equity warrants being offered
by the prospectus supplement and this prospectus. A copy of the
equity warrant agreement, including a form of equity warrant
certificate representing the equity warranty, will be filed with
the SEC in connection with the offering of the equity
warrants.
The particular terms of each issue of equity warrants, the equity
warrant agreement relating to the equity warrants and the equity
warrant certificates representing equity warrants will be described
in the applicable prospectus supplement, including, as
applicable:
•the
title of the equity warrants;
•the
initial offering price;
•the
aggregate number of equity warrants and the aggregate number of
shares of the equity security purchasable upon exercise of the
equity warrants;
•the
currency or currency units in which the offering price, if any, and
the exercise price are payable;
•if
applicable, the designation and terms of the equity securities with
which the equity warrants are issued, and the number of equity
warrants issued with each equity security;
•the
date, if any, on and after which the equity warrants and the
related equity security will be separately
transferable;
•if
applicable, the minimum or maximum number of the warrants that may
be exercised at any one time;
•the
date on which the right to exercise the equity warrants will
commence and the date on which the right will expire;
•if
applicable, a discussion of United States federal income tax,
accounting or other considerations applicable to the equity
warrants;
•anti-dilution
provisions of the equity warrants, if any;
•redemption
or call provisions, if any, applicable to the equity warrants;
and
•any
additional terms of the equity warrants, including terms,
procedures and limitations relating to the exchange and exercise of
the equity warrants.
Holders of equity warrants will not be entitled, solely by virtue
of being holders, to vote, to consent, to receive dividends, to
receive notice as shareholders with respect to any meeting of
shareholders for the election of directors or any other matter, or
to exercise any rights whatsoever as a holder of the equity
securities purchasable upon exercise of the equity
warrants.
DESCRIPTION OF SECURITIES PURCHASE CONTRACTS
This section describes the general terms of the securities purchase
contracts that we may offer and sell by this prospectus. This
prospectus and any prospectus supplement will contain the material
terms and conditions for each securities purchase contract. A
prospectus supplement may add, update or change the terms and
conditions of the securities purchase contracts as described in
this prospectus.
We may issue securities purchase contracts, representing contracts
obligating holders to purchase from or sell to us, and obligating
us to sell to or purchase from the holders, a specified number of
shares of common stock or preferred stock or a specified number of
equity warrants, at a future date or dates, or a variable number of
shares of common stock or preferred stock or a variable number of
equity warrants for a stated amount of consideration. The price per
share or per equity warrant and the number of shares of common
stock or preferred stock or the number of equity warrants may be
fixed at the time the securities purchase contracts are issued or
may be determined by reference to a specific formula set forth in
the securities purchase contracts. Any such formula may include
anti-dilution provisions to adjust the number of shares of common
stock or preferred stock or the number of equity warrants issuable
pursuant to the securities purchase contracts upon certain
events.
We also may issue securities purchase contracts, representing
contracts obligating holders to purchase from or sell to us, and
obligating us to sell to or purchase from the holders, a specified
principal amount of debt securities or debt warrants at a future
date or dates. The purchase price and the interest rate may be
fixed at the time the securities purchase contracts are issued or
may be determined by reference to a specific formula set forth in
the securities purchase contracts.
The securities purchase contracts may require holders to secure
their obligations in a specified manner and in certain
circumstances we may deliver newly issued prepaid securities
purchase contracts upon release to a holder of any collateral
securing such holder’s obligations under the original securities
purchase contract.
The applicable prospectus supplement will describe the general
terms of any securities purchase contracts and, if applicable,
prepaid securities purchase contracts. The description in the
prospectus supplement will not purport to be complete and will be
qualified in its entirety by reference to:
•the
securities purchase contracts;
•the
collateral arrangements and depositary arrangements, if applicable,
relating to such securities purchase contracts; and
•if
applicable, the prepaid securities purchase contracts and the
document pursuant to which such prepaid securities purchase
contracts will be issued.
Material United States federal income tax considerations applicable
to the securities purchase contracts also will be discussed in the
applicable prospectus supplement.
DESCRIPTION OF UNITS
We may issue units comprising one or more of the other securities
described in this prospectus in any combination. Units also may
include debt obligations of third parties, such as U.S. Treasury
securities. Each unit will be issued so that the holder of the unit
is also the holder of each security included in the unit. Thus, the
holder of a unit will have the rights and obligations of a holder
of each included security. The unit agreement under which a unit is
issued may provide that the securities included in the unit may not
be held or transferred separately at any time or at any time before
a specified date.
The applicable prospectus supplement may describe:
•the
designation and terms of the units and of the securities composing
the units, including whether and under what circumstances those
securities may be held or transferred separately;
•any
provisions for the issuance, payment, settlement, transfer or
exchange of the units or of the securities comprising the units;
and
•whether
the units will be issued in fully registered or global
form.
The applicable prospectus supplement will describe the terms of any
units. The preceding description and any description of units in
the applicable prospectus supplement does not purport to be
complete and is subject to and is qualified in its entirety by
reference to the unit agreement and, if applicable, collateral
arrangements and depositary arrangements relating to such units,
which documents will be filed with the SEC in connection with the
offering of any units.
PLAN OF DISTRIBUTION
We may sell the securities, in or outside of the United States, to
underwriters or dealers, through agents, directly to purchasers or
through a combination of these methods. The applicable prospectus
supplement will contain specific information relating to the terms
of the offering, including, to the extent not otherwise included in
the prospectus:
•the
name or names of any underwriters or agents;
•the
purchase price of the securities;
•our
net proceeds from the sale of the securities;
•any
underwriting discounts or agency fees and other items constituting
underwriters’ or agents’ compensation;
•any
initial public offering price and any discounts or concessions
allowed or re-allowed or paid to dealers; and
•any
securities exchange on which the securities may be
listed.
By Underwriters
If underwriters are used in the sale, the securities will be
acquired by the underwriters for their own account. Underwriters
may offer the securities directly or through underwriting
syndicates represented by one or more managing underwriters. The
underwriters may resell the securities in one or more transactions,
including negotiated transactions, at a fixed public offering
price, which may be changed, at market prices prevailing at the
time of the sale, at prices based on prevailing market prices or at
negotiated prices. Unless otherwise set forth in the applicable
prospectus supplement, the obligations of the underwriters to
purchase the securities will be subject to certain
conditions.
By Dealers
If dealers are used in the sale, unless otherwise specified in the
applicable prospectus supplement, we will sell the securities to
the dealers as principals. The dealers may then resell the
securities to the public at varying prices to be determined by the
dealers at the time of resale. The applicable prospectus supplement
will contain more information about the dealers, including the
names of the dealers and the terms of our agreement with
them.
By Agents and Direct Sales
We may sell the securities directly to the public, without the use
of underwriters, dealers or agents. We may also sell the securities
through agents we designate from time to time. The applicable
prospectus supplement will contain more information about the
agents, including the names of the agents and any commission we
agree to pay the agents.
We also may engage a broker-dealer from time to time to act as
agent or principal for the offer of the securities in one or more
placements pursuant to a distribution agreement. If we and the
broker-dealer agree, we will sell to the broker-dealer as agent or
as principal, and the broker-dealer will seek to solicit offers to
purchase on an agency basis and/or will purchase on a principal
basis, the securities. The number and purchase price (less an
underwriting discount) of the securities we sell to the
broker-dealer will be mutually agreed on the relevant trading day.
The securities sold under the distribution agreement will be sold
at prices related to the prevailing market price for such
securities, and therefore exact figures regarding the price,
proceeds that will be raised or commissions to be paid will be
described in a prospectus supplement to this prospectus or in other
filings made in accordance with and as permitted by the Securities
Act and the Exchange Act. The broker-dealer may make sales of the
securities pursuant to the distribution agreement in privately
negotiated transactions and/or any other method permitted by law
deemed to be an “at-the-market” offering as defined in Rule 415
promulgated under the Securities Act including sales made on the
New York Stock Exchange, the current trading market for our common
stock.
General Information
Underwriters, dealers and agents that participate in the
distribution of the securities may be deemed underwriters as
defined in the Securities Act, and any discounts or commissions we
pay to them and any profit made by them on the resale of the
securities may be treated as underwriting discounts and commissions
under the Securities Act. Any underwriters, dealers or agents will
be identified and their compensation from us will be described in
the applicable prospectus supplement. Any initial public offering
price and any discounts or concessions allowed or reallowed or paid
to dealers may be changed from time to time.
We may agree with the underwriters, dealers and agents to indemnify
them against certain civil liabilities, including liabilities under
the Securities Act, or to contribute with respect to payments which
the underwriters, dealers or agents may be required to
make.
Underwriters, dealers and agents may be customers of, engage in
transactions with or perform services for, us in the ordinary
course of their businesses. We will describe in the applicable
prospectus supplement naming the underwriters, dealers or agents,
the nature of any material relationship between us and the
underwriters, dealers or agents, respectively.
LEGAL MATTERS
Certain legal matters in connection with the securities offered
hereby will be passed upon for us by Leonard D. Sanchez, Esq.,
Associate General Counsel of PNMR, and, unless otherwise indicated
in the applicable prospectus supplement, certain other matters will
be passed upon for us by Troutman Pepper Hamilton Sanders LLP. If
legal matters in connection with offerings made pursuant to this
prospectus are passed upon by counsel for the underwriters, dealers
or agents, if any, such counsel will be named in the applicable
prospectus supplement relating to such offering. As of December 31,
2021, Mr. Sanchez held 1,023 shares of PNMR common stock (pursuant
to the vesting of restricted stock rights) and 1,439 restricted
stock rights (which vest in equal annual installments over a
three-year period from the respective grant date).
EXPERTS
The consolidated financial statements and schedules of PNM
Resources, Inc. as of December 31, 2021 and 2020, and for each of
the years in the three-year period ended December 31, 2021, and
management’s assessment of the effectiveness of internal control
over financial reporting as of December 31, 2021 have been
incorporated by reference herein in reliance upon the report of
KPMG LLP, independent registered public accounting firm,
incorporated by reference herein, and upon the authority of said
firm as experts in accounting and auditing.
PNM Resources, Inc.
Shares of Common Stock
Having an Aggregate Offering Price of up to
$200,000,000
PROSPECTUS SUPPLEMENT
November 10, 2022
BofA Securities
MUFG Wells
Fargo Securities
PNM Resources (NYSE:PNM)
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From Feb 2023 to Mar 2023
PNM Resources (NYSE:PNM)
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From Mar 2022 to Mar 2023
