CenterPoint Energy Resources Corp. Credit Facility
. CERC replaced its existing $900 million senior unsecured revolving credit facility that was previously entered into on March 3, 2016 (as amended) with a new $900 million three-year senior unsecured revolving credit facility. Borrowings under the facility bear interest, at CERC’s option, at a rate equal to either (i) LIBOR plus a specified margin (which is currently 125 basis points) based on CERC’s current credit ratings or (ii) the Alternate Base Rate (as defined in the credit facility), plus a specified margin (which is currently 25 basis points) based on CERC’s current credit ratings. CERC may (i) extend, on up to two occasions, the scheduled maturity thereof for successive
one-year
periods, subject to, among other terms and conditions, the consent of the banks thereunder holding greater than 50% of the commitments then outstanding and (ii) request increases in the aggregate commitments thereunder to an amount not to exceed $1.375 billion, subject to certain terms and conditions. The facility contains certain covenants, including a covenant that that requires CERC not to exceed a ratio of consolidated debt to consolidated capitalization (excluding, among other things,
non-cash
reductions to net income) of 65%.
Vectren Utility Holdings, Inc. Credit Facility
. VUHI replaced its existing $400 million senior unsecured revolving credit facility that was previously entered into on July 14, 2017 with a new $400 million three-year senior unsecured revolving credit facility. The facility is guaranteed by its wholly owned subsidiaries, Indiana Gas Company, Inc., Southern Indiana Gas and Electric Company and Vectren Energy Delivery of Ohio, Inc. Borrowings under the facility bear interest, at VUHI’s option, at a rate equal to either (i) LIBOR plus a specified margin (which is currently 125 basis points) based on VUHI’s current credit ratings or (ii) the Alternate Base Rate (as defined in the credit facility), plus a specified margin (which is currently 25 basis points) based on VUHI’s current credit ratings. VUHI may (i) extend, on up to two occasions, the scheduled maturity thereof for successive
one-year
periods, subject to, among other terms and conditions, the consent of the banks thereunder holding greater than 50% of the commitments then outstanding and (ii) request increases in the aggregate commitments thereunder to an amount not to exceed $600 million, subject to certain terms and conditions. The facility contains certain covenants, including a covenant that that requires VUHI not to exceed a ratio of consolidated debt to consolidated capitalization (excluding, among other things,
non-cash
reductions to net income) of 65%.
. Borrowings under each of the committed facilities are subject to customary terms and conditions. However, there is no requirement that the Company, Houston Electric, CERC or VUHI make representations prior to borrowings as to the absence of material adverse changes or litigation that could be expected to have a material adverse effect. Borrowings under each of the credit facilities are subject to acceleration upon the occurrence of events of default that the Company, Houston Electric, CERC and VUHI consider customary. The facilities also provide for customary fees, including commitment fees, administrative agent fees, fees in respect of letters of credit and other fees. Under each credit facility, the applicable margins over LIBOR and the Alternate Base Rate and the commitment fee fluctuate based on the applicable borrower’s senior unsecured long-term debt rating or its equivalent (or if such rating is discontinued or unavailable, corporate credit rating) at the time of borrowing. Each credit facility also contains provisions relating to the replacement of LIBOR.
The global coordinators for the four replacement facilities are JPMorgan Chase Bank, N.A., Mizuho Bank, Ltd., Wells Fargo Securities, LLC and BofA Securities, Inc. who, together with Citibank, N.A., MUFG Bank, Ltd., RBC Capital Markets and Barclays Bank PLC, also served as joint lead arrangers and joint bookrunners for the facilities. JPMorgan Chase Bank, N.A. continues to serve as the administrative agent for the Company’s facility; Mizuho Bank, Ltd. continues to serve as the administrative agent for Houston Electric’s facility; Wells Fargo Bank, National Association continues to serve as the administrative agent for CERC’s facility; and Bank of America, N.A. continues to serve as the administrative agent for VUHI’s facility. Affiliates of the lenders in both the previous facilities and the replacement facilities have performed depository and other banking, investment banking, trust, investment management and advisory services for the Company and its affiliates, including Houston Electric, CERC and VUHI from time to time for which they have received customary fees and expenses and may, from time to time, engage in transactions with and perform services for the Company and its affiliates in the ordinary course of their business.
The credit agreements described above are filed as Exhibits 4.1, 4.2, 4.3 and 4.4 to this report and are incorporated by reference herein. The foregoing summary does not purport to be complete and is qualified in its entirety by reference to the credit agreements.