8-KMaterial AgreementsFinancial EventsExhibits & Filings

CENTERPOINT ENERGY INC 8-K Report, Material Agreement (May 16, 2019)

Filed May 16, 2019For Securities:CNP

Summary

CenterPoint Energy, Inc. (CNP) announced on May 16, 2019, the entry into a $1.0 billion Term Loan Agreement, effective May 15, 2019. The full amount was borrowed at closing and is designated for general corporate purposes, including the repayment of existing debt for the company and its subsidiaries. This facility matures on May 15, 2021. The loan carries interest at either the Eurodollar Rate plus a 0.650% margin or the Alternate Base Rate, at the company's discretion. The agreement includes covenants, notably a debt-to-consolidated capitalization ratio. A specific provision allows for a temporary increase in this ratio under certain natural disaster scenarios affecting CenterPoint Energy Houston Electric, LLC, provided restoration costs exceed $100 million and securitization financing is pursued.

Key Highlights

  • 1CenterPoint Energy secured a $1.0 billion Term Loan Agreement on May 15, 2019.
  • 2The full $1.0 billion was borrowed at closing.
  • 3Proceeds are earmarked for general corporate purposes, including debt repayment.
  • 4The Term Loan Agreement matures on May 15, 2021.
  • 5Interest rates are variable, based on either the Eurodollar Rate + 0.650% or the Alternate Base Rate.
  • 6A key covenant is a debt-to-consolidated capitalization ratio.
  • 7A flexible covenant provision allows for temporary increases in the debt ratio in cases of significant natural disaster damage in the Houston Electric service territory.

Frequently Asked Questions

The primary purpose of the $1.0 billion term loan is for general corporate purposes, which includes the repayment of existing indebtedness of CenterPoint Energy and its subsidiaries.

The borrowings under this Term Loan Agreement have a maturity date of May 15, 2021.

Yes, the Term Loan Agreement includes covenants, most notably a requirement to maintain a specified ratio of debt (excluding certain items like transition and system restoration bonds) to consolidated capitalization. There is also a provision for a temporary increase in this ratio under specific natural disaster conditions impacting CenterPoint Energy Houston Electric, LLC.

The main parties are CenterPoint Energy, Inc. as the Borrower, Mizuho Bank, Ltd. as the Administrative Agent and Lead Arranger, and the other banks that are parties to the agreement.