Summary
Duke Energy Corporation (DUK) filed an 8-K on March 19, 2020, detailing significant actions taken to bolster its liquidity. The company entered into a new $1.5 billion 364-day term loan credit agreement and immediately borrowed the full amount. This new facility also includes an option to increase borrowings by an additional $500 million under certain conditions, potentially raising the total new funding to $2.0 billion. These new borrowings, alongside previously drawn funds and available credit, are intended to reduce outstanding commercial paper and support general corporate purposes. The filing also provides a snapshot of Duke Energy's liquidity position as of March 19, 2020, indicating substantial cash on hand, significant availability under its master credit facility, and additional liquidity from equity forward agreements. These measures suggest a proactive approach by Duke Energy to ensure financial flexibility during a period of economic uncertainty.
Key Highlights
- 1Entered into a new $1.5 billion 364-day term loan credit agreement on March 19, 2020.
- 2Immediately borrowed the full $1.5 billion under the new term loan agreement.
- 3The new credit agreement allows for a potential increase of up to $500 million in borrowing capacity.
- 4Borrowed the remaining $500 million of availability under an existing $1.0 billion revolving credit facility on March 17, 2020.
- 5Total new borrowings and drawn amounts under these facilities aggregate $2.0 billion.
- 6Funds raised will be used to reduce commercial paper and for general corporate purposes.
- 7As of March 19, 2020, Duke Energy reported $1.9 billion in cash on hand and $4.4 billion available under its master credit facility.