Summary
CMS Energy Corporation (CMS) and its subsidiary Consumers Energy Company have entered into material definitive agreements to amend and restate their respective revolving credit facilities. The CMS Energy facility remains at $550 million, secured by common stock, while the Consumers Energy facility has been increased from $500 million to $650 million. These new facilities have a 5-year term, extending maturity to December 20, 2018, and replace prior agreements set to expire in 2017. Both companies expect to use these facilities for general corporate purposes, indicating a strengthened and extended liquidity position.
Key Highlights
- 1CMS Energy amended and restated its $550 million secured Revolving Credit Facility, extending its maturity to December 20, 2018.
- 2Consumers Energy increased its secured Revolving Credit Facility from $500 million to $650 million, also maturing on December 20, 2018.
- 3The new credit facilities have a 5-year term, replacing existing facilities with earlier expirations in 2017.
- 4CMS Energy's facility is secured by Consumers Energy common stock.
- 5Consumers Energy's increased facility is secured by first mortgage bonds.
- 6The termination of Consumers Energy's previous $500 million revolving credit agreement is noted.
- 7Funds drawn under these facilities are intended for general corporate purposes.
Frequently Asked Questions
The primary purpose is to amend and restate the revolving credit facilities for both CMS Energy and Consumers Energy, extending their maturity dates and, in Consumers Energy's case, increasing the available credit line. This provides the companies with extended access to liquidity for general corporate purposes.
The Consumers Energy facility has been increased from $500 million to $650 million. The new facility has a 5-year term, expiring on December 20, 2018, and replaces a previous agreement.
CMS Energy's facility is secured by its holdings of Consumers Energy common stock. Consumers Energy's facility is secured by its first mortgage bonds, with the additional $150 million being secured by newly issued bonds under a supplemental indenture.
By extending and, in one case, increasing their credit facilities, CMS Energy and Consumers Energy are demonstrating a commitment to maintaining robust liquidity. The longer maturity provides financial flexibility and suggests confidence from their banking partners.