8-KMaterial AgreementsExhibits & Filings

American Water Works Company, Inc. 8-K Report, Material Agreement (Jul 7, 2015)

Filed July 7, 2015For Securities:AWK

Summary

American Water Works Company, Inc. (AWK) announced on June 30, 2015, through a Form 8-K filing dated July 7, 2015, a material amendment to its credit agreement. The primary change involves the extension of the maturity date of its wholly-owned finance subsidiary, American Water Capital Corp.'s (AWCC), unsecured revolving credit facility. This extension from October 2018 to June 2020 enhances the company's financial flexibility and provides a longer runway for its financing needs. The amendment also clarifies American Water's role as a guarantor, ensuring that AWCC's obligations under the credit facility are recognized as debt of the parent company. This provides continued assurance to lenders and reflects the integrated nature of the company's financing structure. The financial covenants within the credit facility remain unchanged, indicating a stable financial position and commitment to maintaining existing financial targets.

Key Highlights

  • 1Extended maturity of AWCC's unsecured revolving credit facility from October 2018 to June 2020.
  • 2AWCC may request up to two one-year extensions beyond the new maturity date, subject to lender approval and certain conditions.
  • 3American Water formally acknowledged its support agreement and the treatment of AWCC's credit facility obligations as its own debt.
  • 4Key representations, warranties, and covenants related to American Water are included in the amended credit agreement.
  • 5Breach of covenants or misrepresentation by American Water could result in an event of default under the credit facility.
  • 6Financial covenants governing the credit facility remain unchanged, indicating continued adherence to financial targets.
  • 7The filing includes the full text of the Amended and Restated Credit Agreement as an exhibit.

Frequently Asked Questions

The primary purpose of this 8-K filing is to announce and provide details on the amendment and restatement of American Water Works Company, Inc.'s (AWK) credit agreement for its finance subsidiary, American Water Capital Corp. (AWCC), specifically extending the maturity date of its revolving credit facility.

Extending the maturity date of the revolving credit facility from October 2018 to June 2020 provides American Water with greater financial flexibility and a longer-term source of liquidity. This allows the company to better plan its capital expenditures and manage its financing needs for future growth and operations without immediate refinancing concerns.

No, the filing explicitly states that the financial covenants with respect to the credit facility remain unchanged. This suggests that the company is comfortable with its current financial performance and its ability to meet existing debt obligations and financial ratios.

American Water's acknowledgement confirms that obligations of its finance subsidiary, AWCC, under the credit agreement will be considered 'debt' under a support agreement between the two entities. This reinforces the parent company's commitment to its subsidiary's financial obligations and provides lenders with additional assurance regarding repayment, as a breach could trigger an event of default for American Water.