8-KMaterial AgreementsExhibits & Filings

CENTERPOINT ENERGY INC 8-K Report, Material Agreement (Sep 10, 2013)

Filed September 10, 2013For Securities:CNP

Summary

CenterPoint Energy, Inc. (CNP) and its subsidiaries, CenterPoint Energy Houston Electric, LLC (CEHE) and CenterPoint Energy Resources Corp. (CERC), have executed amendments to their respective credit agreements, dated September 9, 2013. These amendments are primarily focused on extending debt maturity dates and modifying financial covenants. Notably, the maturity date for commitments under these credit agreements has been extended from September 9, 2016, to September 9, 2018. This extension provides the company with a longer runway for debt management and financial planning. Key changes also include adjustments to financial covenants. The consolidated indebtedness-to-consolidated EBITDA covenant for CenterPoint has been replaced with a consolidated indebtedness-to-consolidated capitalization covenant, which may offer more flexibility. Additionally, the aggregate commitments under CERC's credit agreement have been reduced from $950 million to $600 million. These changes signal a proactive approach to managing the company's capital structure and ensuring adequate liquidity.

Key Highlights

  • 1Extended maturity dates for credit agreements of CNP, CEHE, and CERC from September 9, 2016, to September 9, 2018.
  • 2Amended certain provisions related to the determination of LIBOR in the credit agreements.
  • 3Replaced the consolidated indebtedness-to-consolidated EBITDA financial covenant with a consolidated indebtedness-to-consolidated capitalization covenant for CenterPoint Energy, Inc.
  • 4Reduced the aggregate commitments under CenterPoint Energy Resources Corp.'s (CERC) credit agreement from $950 million to $600 million.
  • 5Ensured financial covenant calculations exclude CERC's subordinated guarantee of collection for the Enable Midstream Partners, LP term loan facility.
  • 6The amendments were entered into on September 9, 2013, and reported on September 10, 2013, via Form 8-K.

Frequently Asked Questions

The primary impact is the extension of the maturity date for commitments under the credit agreements for CenterPoint Energy, Inc., CenterPoint Energy Houston Electric, LLC, and CenterPoint Energy Resources Corp. from September 9, 2016, to September 9, 2018. This provides the company with an additional two years to manage its debt obligations.

The consolidated indebtedness-to-consolidated EBITDA financial covenant has been replaced with a consolidated indebtedness-to-consolidated capitalization financial covenant. This change could offer greater financial flexibility in managing debt relative to the company's overall capital structure.

The reduction in aggregate commitments under CenterPoint Energy Resources Corp.'s (CERC) credit agreement from $950 million to $600 million indicates a potential strategic adjustment in the company's financing needs or risk management for this subsidiary. It could suggest a deleveraging or a restructuring of CERC's financing arrangements.

The amendments ensure that the calculation of financial covenants for CenterPoint Energy, Inc. and CERC excludes CERC's subordinated guarantee of collection for the term loan facility of Enable Midstream Partners, LP. This reduces the direct impact of this specific guarantee on the company's core financial covenant compliance, potentially limiting financial risk associated with that venture.