Summary
DTE Energy Company (DTE) filed an 8-K on October 26, 2011, to report the execution of new credit agreements on October 21, 2011. The company and its subsidiary, Michigan Consolidated Gas Company (MichCon), entered into amended and restated five-year unsecured revolving credit facilities. The DTE Energy facility provides aggregate availability of $1.1 billion, maturing in October 2016. MichCon's facility offers $400 million in aggregate availability, also maturing in October 2016. These new agreements replace previously existing credit facilities and are designed to support commercial paper borrowings and general corporate purposes. Both agreements include a covenant requiring a debt to capitalization ratio of no more than 0.65 to 1.
Key Highlights
- 1DTE Energy secured a new five-year, $1.1 billion unsecured revolving credit facility, maturing in October 2016.
- 2Wholly-owned subsidiary MichCon obtained a new five-year, $400 million unsecured revolving credit facility, also maturing in October 2016.
- 3The new credit facilities replace previous agreements, indicating a refinancing or restructuring of DTE's debt capacity.
- 4Both facilities allow for borrowings at prevailing short-term interest rates and support commercial paper issuances.
- 5A key financial covenant requires DTE Energy and MichCon to maintain a debt to capitalization ratio of no more than 0.65 to 1.
- 6At the time of the filing, DTE Energy had $104 million in outstanding letters of credit under the new facility, with no other current borrowings.
- 7MichCon had no outstanding borrowings under its new facility at the time of the filing.
Frequently Asked Questions
This 8-K filing announces that DTE Energy and its subsidiary MichCon have entered into new, amended, and restated five-year unsecured revolving credit agreements. These agreements replace previous credit facilities and establish new borrowing capacities for the companies.
DTE Energy's facility has a total availability of $1.1 billion, and MichCon's facility has a total availability of $400 million. Both agreements mature in October 2016 and require the maintenance of a debt to capitalization ratio not exceeding 0.65 to 1. Borrowings will be at prevailing short-term interest rates and will also support commercial paper.
As of October 21, 2011, DTE Energy had transferred $104 million in letters of credit outstanding under the terminated facilities to the new facility. There were no other direct borrowings under the DTE Energy facility at that time. MichCon had no borrowings under its new facility.
The previous credit agreements were terminated because they have been replaced by the new, amended, and restated five-year credit facilities, as detailed in Item 1.01 of the filing.