Summary
DTE Energy Co. (DTE) filed an 8-K on May 4, 2009, reporting a material definitive agreement entered into by its subsidiary, The Detroit Edison Company. Detroit Edison secured a new two-year, $211 million unsecured revolving credit agreement, which became effective on April 29, 2009. This new facility replaces a previously existing credit agreement that was terminated on the same date. The new credit facility matures in April 2011 and includes a covenant requiring Detroit Edison to maintain a debt to capitalization ratio of no more than 0.65 to 1. While the facility provides significant borrowing capacity, the report indicates that Detroit Edison had no outstanding borrowings under this new agreement at the time of filing. This action signals a refinancing and potential restructuring of Detroit Edison's short-term debt arrangements.
Key Highlights
- 1Detroit Edison entered into a new two-year unsecured revolving credit agreement for approximately $211 million, effective April 29, 2009.
- 2The new credit facility replaces and terminates a previous credit agreement dated October 17, 2005.
- 3The facility expires in April 2011.
- 4A key covenant requires Detroit Edison to maintain a debt to capitalization ratio not exceeding 0.65 to 1.
- 5The agreement supports Detroit Edison's commercial paper borrowings.
- 6There were no borrowings outstanding under the new facility as of the filing date.
- 7Barclays Bank PLC acts as the Administrative Agent, with Citibank, JPMorgan Chase Bank, N.A., and The Royal Bank of Scotland plc serving as Co-Syndication Agents.