The facility contains certain covenants, including a covenant that that requires SIGECO 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 SIGECO 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 SIGECO 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 Term SOFR 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.
The global coordinators for the four facilities are JPMorgan Chase Bank, N.A., Mizuho Bank, Ltd., and Wells Fargo Securities, LLC, who, together with BofA Securities, Inc., 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 Wells Fargo Bank, National Association serves as the administrative agent for SIGECO’s facility. Affiliates of the lenders in the previous facilities, the replacement facilities and the new facility 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 SIGECO 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 10.1, 10.2, 10.3 and 10.4 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.
In connection with the increase in the aggregate commitments under CERC’s credit facility, the size of CERC’s commercial paper program will increase to permit the issuance of commercial paper notes in an aggregate principal amount not to exceed $1.05 billion at any time outstanding (an increase of $150 million). The size of the Company’s commercial paper program will remain unchanged.
Any commercial paper notes have not been and will not be registered under the Securities Act of 1933, as amended, and may not be offered or sold absent registration or an applicable exemption from such registration requirements. The information contained in this Current Report on Form
8-K
shall not constitute an offer to sell or the solicitation of an offer to buy notes under any of the Company’s or CERC’s commercial paper programs.
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Financial Statements and Exhibits. |
The exhibits listed below are filed herewith. The agreements included as exhibits are included only to provide information to investors regarding their terms. The agreements listed below may contain representations, warranties and other provisions that were made, among other things, to provide the parties thereto with specified rights and obligations and to allocate risk among them, and such agreements should not be relied upon as constituting or providing any factual disclosures about us, any other persons, any state of affairs or other matters.