Entergy Corporation
12/11/2025 | Press release | Distributed by Public on 12/11/2025 16:09
Material Agreement, Financial Obligation (Form 8-K)
Item 1.01 Entry into a Material Definitive Agreement. (Entergy Texas, Inc.)
On December 9, 2025, Entergy Texas, Inc. ("Entergy Texas") entered into certain agreements related to the construction and leasing of a planned 754-megawatt combined cycle gas power plant, Legend Power Station, in Jefferson County, Texas (the "Facility" and, together with the ground site, the "Leased Property"). Among others, those agreements included (collectively, the "Transaction Documents"):
•a Participation Agreement (the "Participation Agreement") among Entergy Texas, as Lessee and Construction Agent, BA Leasing BSC, LLC ("BAL"), as Lessor, Bank of America, N.A., acting in the capacity as Administrative Agent, and the persons named on Schedule II thereto, as "Rent Assignees" (together with BAL, the "Participants");
•a Construction Agency Agreement (the "Construction Agency Agreement") between Entergy Texas, as Construction Agent, and BAL, as Lessor; and
•a Lease, Deed of Trust and Security Agreement (the "Lease") between Entergy Texas, as Lessee, and BAL, as Lessor.
Costs of construction of the Facility to be funded under the Participation Agreement are expected not to exceed $1.450 billion. The Facility will be constructed on property owned by Entergy Texas, which will be leased to BAL under a ground lease.
Pursuant to the Construction Agency Agreement, Entergy Texas will act as the Construction Agent for BAL in connection with the design, construction and development of the Facility until Lease commencement. The Lease is expected to commence approximately twenty-six (26) months from the date hereof.
Construction advances will be made monthly to Entergy Texas as Construction Agent for the Facility under the Participation Agreement and, together with capitalized yield, will accrue into the Lease Balance (as such term is used in the Transaction Documents). Upon commencement of the Lease, Entergy Texas will lease the Leased Property from BAL for a term of up to approximately fifty-eight (58) months (the "Term"). During the Term, Entergy Texas will make rent payments for yield incurred on the Lease Balance. In addition, Entergy Texas will pay all operating costs (including insurance, taxes and utility costs) and all costs of repairs and modifications to the Facility.
At any time following commencement of the Lease, Entergy Texas will have the option to purchase the Facility (the "Early Purchase Option") for an amount approximately equal to the Lease Balance, accrued and unpaid rent, any applicable breakage cost, any unamortized lessor's indirect cost, plus all other amounts then due and payable under the related agreements (the "Purchase Amount"). If the Early Purchase Option were exercised prior to the second anniversary of the commencement date of the Lease, such purchase will be financed by the Participants, who will take back a secured, non-amortizing note in an amount equal to the Purchase Amount.
If Entergy Texas does not exercise the Early Purchase Option, at the end of the Term Entergy Texas must elect one of the following options:
(a) extend the Lease for an additional five years with the consent of Participants;
(b) purchase the Leased Property; or
(c) arrange a sale of the Leased Property to a third party (in which case Entergy Texas will owe or be owed any difference between the Lease Balance and the sale price).
The Transaction Documents contain certain customary covenants, including restrictions on Entergy Texas relating to the pledge of its assets and certain asset sales. The Participation Agreement also includes a covenant that requires Entergy Texas to maintain a consolidated debt ratio of 65% or less of its total capitalization. Entergy Texas's obligations under the Transaction Documents may be accelerated and/or its rights to the Leased Property may be terminated upon an event of default, which includes non-payment of rent or yield, breach of representation or warranty, breach of covenant, certain cross-defaults, bankruptcy, material judgments, ERISA events and Entergy Corporation ceasing to own, directly or indirectly, at least 80% of Entergy Texas common stock.
The foregoing description of each of the Transaction Documents does not purport to be complete and is qualified in its entirety by reference to the full text of each such Transaction Document, filed as Exhibits 10.1, 10.2 and 10.3 hereto, respectively.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. (Entergy Texas, Inc.)
The information set forth above under Item 1.01 is incorporated herein by reference.
Item 8.01 Other Events. (Entergy Corporation)
The information set forth above under Item 1.01 is incorporated herein by reference.
Entergy Corporation published this content on December 11, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on December 11, 2025 at 22:09 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]