Business Context and Reporting Period
This Form 8-K is filed by TXNM Energy, Inc. and Public Service Company of New Mexico for the reporting period of July 17, 2026. The filing addresses the ongoing merger process with affiliates of Blackstone Infrastructure Partners L.P. following a regulatory ruling by the New Mexico Public Regulation Commission (NMPRC) that declared a prior $400 million PIPE Transaction void.
Key Financial Metrics and Obligations
- New Debt Obligation: TXNM entered into a $400 million term loan (TXNM 2026 Term Loan) with Wells Fargo Bank as Administrative Agent.
- Loan Maturity: January 17, 2029.
- Debt Covenant: The loan requires maintenance of a consolidated debt-to-consolidated capitalization ratio of less than or equal to 0.70 to 1.00.
- Termination Fee Adjustment: The Parent Termination Fee payable by the acquirer in the event of termination is reduced from $350 million to $175 million.
- Equity Financing Constraint: Future equity financing to repay the term loan must be issued at a price of no less than $50.00 per share.
Note: This filing does not provide revenue, profit, cash flow, or margin data for the period.
Material Changes and Regulatory Developments
On July 2, 2026, the NMPRC issued a Final Order declaring the May 2025 PIPE Transaction (involving the purchase of 8 million shares at $50.00 per share) void and of no effect. Consequently, the parties are required to unwind the transaction. To facilitate this and maintain the merger agreement, the following material changes were executed on July 17, 2026:
- Unwinding Mechanism: TXNM will draw the full $400 million under the new Term Loan to repay the Purchaser for the voided stock purchase. Dividends previously paid on the PIPE shares may be retained by the Purchaser in lieu of interest.
- Merger Agreement Waiver: The parties waived their right to terminate the Merger Agreement due to the failure to close by the original End Date, extending the deadline to May 31, 2027.
- Breach Waivers: A Letter Agreement was signed waiving claims related to breaches arising from the NMPRC's voiding of the PIPE Transaction and the lack of regulatory approval for the original stock issuance.
Outlook, Risks, and Management Commentary
Management has secured a waiver to extend the merger timeline to May 31, 2027, acknowledging that delays in regulatory proceedings resulting from the unwinding process will not constitute a breach of the Merger Agreement. The filing includes standard forward-looking statements cautioning that actual results may differ materially from expectations due to factors beyond the company's control. Specific risks include the potential for an event of default under the new Term Loan, which could trigger automatic acceleration of debt in the event of insolvency or bankruptcy.
Investor Verification Checklist
- Verify the status of the NMPRC regulatory approval process for the Merger following the July 2, 2026 Final Order.
- Confirm the terms and interest rate of the $400 million TXNM 2026 Term Loan (Exhibit 10.3).
- Monitor TXNM's ability to maintain the required debt-to-capitalization ratio of 0.70 or less under the new loan covenant.
- Review the timeline for the proposed Equity Financing to repay the Term Loan, ensuring compliance with the $50.00 per share minimum price floor.
- Assess the impact of the reduced $175 million termination fee on the overall economics of the proposed merger.