[8-K] Northwest Natural Holding Company Reports Material Event

Rhea-AI Filing Summary

Royal Bank of Canada (RBC) is offering Market-Linked One Look Notes with Enhanced Buffer linked to the Class A common stock of Tesla, Inc. (TSLA). The notes are senior, unsecured debt securities that mature in approximately 14 months (September 2026) and are subject to RBC’s credit risk.

Key terms:

• Principal: $10 per unit; minimum purchase pricing to be set on the pricing date.
• Step Up Payment: between $3.00 and $3.60 per unit (30.00%–36.00%) if the Ending Value of TSLA is ≥ 85% of the Starting Value (the Threshold Value).
• Buffer: First 15% downside is absorbed; below the Threshold Value, investors lose principal on a 1-to-1 basis, exposing up to 85% of capital.
• No interim interest and no dividend participation.
• Credit & liquidity: Unsecured obligations of RBC; no FDIC/CDIC insurance; limited secondary market and no exchange listing.
• Fees: Public offering price $10.00; underwriting discount $0.175; hedging-related charge $0.05. For ≥300,000 units the price/discount improve to $9.95 and $0.125, respectively.
• Initial estimated value: $9.19–$9.69 per unit, below the public price, reflecting RBC’s internal funding rate and hedging costs.

Investors who believe TSLA will stay flat or rise above a 15% draw-down over the 14-month term can earn a fixed 30%–36% return. Conversely, a decline beyond 15% results in proportional losses, and a severe fall could result in an 85% maximum loss. All payments occur only at maturity, and repayment depends on RBC’s ability to pay.

Positive

• 30%–36% fixed upside if TSLA is at or above 85% of its starting level at maturity.
• 15% downside buffer limits initial losses relative to a direct equity position.
• Short 14-month tenor provides clear timeline and reduces extended market exposure.
• Volume discount reduces underwriting fees for purchases ≥300,000 units.

Negative

• 85% of principal at risk once TSLA falls more than 15%.
• Initial estimated value ($9.19–$9.69) is below the $10 purchase price, embedding 3%–8% upfront cost.
• No interest or dividends during the term; opportunity cost for income-seeking investors.
• Limited liquidity and potential price concessions in any secondary market.
• Exposure to RBC credit risk; notes are unsecured and not FDIC/CDIC insured.

Insights

Structured Products Analyst

TL;DR: Attractive 30-36% capped upside with 15% buffer, but high Tesla volatility and issuer credit risk make overall risk/return neutral.

Analysis: The note packages a short-dated call spread on TSLA funded by selling downside protection after a 15% buffer. Investors gain clarity on payoff—either a fixed 30%–36% or a linear loss beyond the buffer—useful for tactical views on Tesla. However, TSLA’s historical 1-year volatility (~55%) suggests a >30% downside move is statistically plausible, meaning the 15% protection may be inadequate. The issuer captures ~3%–8% value through funding spread and hedging charges, creating negative carry for investors seeking early exit. The structure suits investors comfortable with RBC credit risk and limited liquidity who need a defined risk/return profile for 14 months.

Credit Analyst

TL;DR: RBC’s AA- category profile supports repayment, but investors still face unsecured credit exposure and no bail-in protection.

Because the notes rank pari passu with other senior unsecured obligations, any deterioration in RBC’s credit metrics would directly impair repayment. The term sheet confirms the notes are not bail-inable, but they remain outside insured deposit frameworks. RBC’s diversified revenue mix and strong capital ratios mitigate default probability; nevertheless, investors must price this credit risk along with market risk on TSLA.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)

June 23, 2025

NORTHWEST NATURAL HOLDING COMPANY

NORTHWEST NATURAL GAS COMPANY

(Exact name of registrant as specified in its charter)

(Exact name of registrant as specified in its charter)

Commission file number

1-38681

Commission file number

1-15973

Oregon

82-4710680

Oregon

93-0256722

(State or other jurisdiction of incorporation)

(IRS Employer Identification No.)

(State or other jurisdiction of incorporation)

(IRS Employer Identification No.)

250 SW Taylor Street

250 SW Taylor Street

Portland

,

Oregon

97204

Portland

,

Oregon

97204

(Address of principal executive offices)

(Zip Code)

(Address of principal executive offices)

(Zip Code)

Registrant's telephone number, including area code: (503) 226-4211 Registrant's telephone number, including area code: (503) 226-4211

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Registrant			Title of each class			Trading Symbol			Name of each exchange on which registered
Northwest Natural Holding Company			Common Stock			NWN			New York Stock Exchange
Northwest Natural Gas Company			None

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Northwest Natural Holding Company

Emerging growth company

☐

Northwest Natural Gas Company

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

Item 8.01 Other Events

As previously disclosed, on December 30, 2024, Northwest Natural Gas Company (NW Natural), a wholly owned subsidiary of Northwest Natural Holding Company (NW Holdings), filed a request for a general rate case (Rate Case) with the Public Utility Commission of Oregon (OPUC). The filing requested a $59.4 million annual revenue requirement increase.

On June 23, 2025, NW Natural, the OPUC staff, the Oregon Citizens’ Utility Board (CUB) and the Alliance of Western Energy Consumers (AWEC), which comprise all but one of the parties to the rate case, filed a stipulation (Stipulation) with the OPUC which addresses certain issues in the Rate Case. The other party to the Rate Case, specifically, the coalition of Climate Solutions, Coalition of Communities of Color, Verde, Sierra Club, and Oregon Environmental Council (collectively, Coalition), authorized the parties to the Stipulation to represent that the Coalition does not oppose the Stipulation.

The Stipulation provides for a total revenue requirement increase of $21.3 million over revenues from existing rates, which includes approximately $4.8 million related to an updated depreciation study, subject to completion of capital projects identified as being placed in service prior to the rate effective date. The revenue requirement is based on the following assumptions:

•Capital structure of 50% common equity and 50% long-term debt;

•Cost of long-term debt of 4.740%;

•Return on equity of 9.50%; and

•Overall cost of capital of 7.120%.

We expect rate base as of November 1, 2025 to be $2.234 billion, or an increase of $144 million since the last rate case.

The Stipulation does not address all aspects of the Rate Case. We expect the remaining items of the original request to be subject to the ongoing regulatory litigation process. The Stipulation is subject to the review and approval of the OPUC. For new rates to be effective, the OPUC must issue an order, which may approve or deny the terms of the Stipulation or be issued under the OPUC’s own terms. NW Natural expects new rates to take effect on October 31, 2025.

Forward-Looking Statements

This report, and other presentations made by NW Holdings or NW Natural from time to time, may contain forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as "anticipates," "assumes," “continues,” “could,” "intends," "plans," "seeks," "believes," "estimates," "expects," “forecasts,” “will” and similar references to future periods. Examples of forward-looking statements include, but are not limited to, statements regarding the following: plans, objectives, assumptions, expectations, estimates, timing, goals, strategies, commitments, expenses, future events, investments, targeted capital structure, cost of capital, return on equity, rate base, financial results, financial position, revenue requirement, cybersecurity, meter modernization, system and infrastructure reinforcement, expansion or reliability, gas storage investments, costs, timing or benefits, customer growth, customer rates and the timing and magnitude of any rate changes, revenues and earnings, performance, timing, outcome, or effects of rate cases or other regulatory proceedings, mechanisms, approvals or recoveries, regulatory prudence reviews, anticipated regulatory actions or filings, and other statements that are other than statements of historical facts.

Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy, geopolitical factors, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Actual results may differ materially from those contemplated by the forward-looking statements. You are therefore cautioned against relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future operational, economic or financial performance. Important factors that could cause actual results to differ materially from those in the forward-looking statements are discussed by reference to the factors described in Part I, Item 1A "Risk Factors", and Part II, Item 7 and Item 7A "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Quantitative and Qualitative Disclosure about Market Risk" in the most recent Annual Report on Form 10-K and in Part I, Items 2 and 3 "Management's

Discussion and Analysis of Financial Condition and Results of Operations" and "Quantitative and Qualitative Disclosures About Market Risk", and Part II, Item 1A, "Risk Factors", in the quarterly reports filed thereafter of NW Holdings or NW Natural, as applicable, which, among others, outline legal, regulatory and legislative risks, macroeconomic and geopolitical risks, growth and strategic risks, operational risks, business continuity and technology risks, environmental risks and risks related to NW Holdings’ water and renewables businesses.

All forward-looking statements made in this report and all subsequent forward-looking statements, whether written or oral and whether made by or on behalf of NW Holdings or NW Natural, are expressly qualified by these cautionary statements. Any forward-looking statement speaks only as of the date on which such statement is made, and NW Holdings and NW Natural undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law. New factors emerge from time to time and it is not possible to predict all such factors, nor can it assess the impact of each such factor or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statements.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, each Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. The signature for each undersigned company shall be deemed to relate only to matters having reference to such company and its subsidiaries.

						NORTHWEST NATURAL HOLDING COMPANY
						(Registrant)
Dated:			June 24, 2025			/s/ Megan H. Berge
						Deputy General Counsel & Corporate Secretary
						NORTHWEST NATURAL GAS COMPANY
						(Registrant)
Dated:			June 24, 2025			/s/ Megan H. Berge
						Vice President, General Counsel & Corporate Secretary

FAQ

What is the maximum return on RBC’s Tesla-linked notes (symbol RY)?

If Tesla’s ending price is at least 85% of its starting price, holders receive a Step Up Payment of $3.00–$3.60 per $10 unit (30%–36% total return).

How much principal is protected on the RBC Market-Linked One Look Notes?

Only the first 15% decline in Tesla’s stock is buffered; beyond that, losses are 1-for-1 and up to 85% of capital can be lost.

Do the notes pay any interest or Tesla dividends during the 14-month term?

No. The notes make no periodic interest payments and investors forgo all Tesla dividends.

What fees are embedded in the offering price?

The public price includes an $0.175 underwriting discount and a $0.05 hedging charge per unit; large orders receive a reduced spread.

Who bears the credit risk for these structured notes?

All payments depend on Royal Bank of Canada’s ability to pay, as the notes are senior unsecured obligations of RBC.