Summary
Ameren Corporation (AEE) filed an 8-K on September 21, 2004, to report the amendment and restatement of its three-year revolving credit agreement. The key purpose of this amendment is to accommodate Ameren's pending acquisition of Illinois Power Company and to align with its more recent credit facilities established in July 2004. The amended agreement maintains a maturity date of July 17, 2006, and will continue to be used for general corporate purposes, including supporting commercial paper programs and subsidiary money pools. This updated credit agreement introduces new covenants and restrictions to reflect the increased scale and complexity of the company post-acquisition. Notably, it imposes a limit on the total indebtedness of Ameren and its subsidiaries to 60% of total capitalization, introduces cross-default provisions with a $50 million threshold for subsidiary defaults, and includes material adverse change clauses. These provisions are designed to enhance financial oversight and manage risk associated with the significant Illinois Power acquisition.
Key Highlights
- 1Ameren amended and restated its $235 million three-year revolving credit agreement, originally dated July 17, 2003.
- 2The primary driver for the amendment is to facilitate the pending acquisition of Illinois Power Company.
- 3The amended agreement matures on July 17, 2006, and will be used for general corporate purposes.
- 4New covenants restrict total indebtedness to 60% of total capitalization for Ameren and its subsidiaries.
- 5The agreement includes cross-default provisions for subsidiaries, triggering a default if any subsidiary (with exceptions) defaults on debt exceeding $50 million.
- 6Material adverse change clauses are included, similar to recent credit facilities.
- 7The credit facility also requires compliance with ERISA minimum funding rules for employee retirement plans.