8-KFinancial EventsOther EventsExhibits & Filings

CONSOLIDATED EDISON INC 8-K Report, Financial Obligation (Dec 13, 2018)

Filed December 13, 2018For Securities:ED

Summary

Consolidated Edison, Inc. (Con Edison) announced the completion of its acquisition of Sempra Solar Holdings, LLC, a subsidiary of Sempra Energy, on December 13, 2018. The total purchase price for this acquisition was approximately $1,609 million, which included working capital adjustments. This strategic move signifies Con Edison's expansion into the solar energy sector. To finance this acquisition, Con Edison utilized a combination of debt and equity. The company borrowed $825 million under a new credit agreement, with the proceeds from the physical settlement of forward sale agreements for its common shares contributing $705 million. The remaining $79 million was funded through other company resources. The credit agreement specifies variable interest rates and a maturity date of June 11, 2019, with provisions for prepayment and mandatory repayment tied to future financing activities and financial covenants.

Key Highlights

  • 1Con Edison subsidiary acquired Sempra Solar Holdings, LLC for $1,609 million.
  • 2The acquisition was completed on December 13, 2018.
  • 3Financing for the acquisition included an $825 million credit facility.
  • 4The company also used $705 million from the settlement of forward sale agreements for its common shares.
  • 5The new credit agreement matures on June 11, 2019, with variable interest rates.
  • 6The credit agreement contains covenants, including a debt-to-capital ratio not exceeding 0.65 to 1.
  • 7Events of default are detailed, including breaches of covenants and material financial obligations.

Frequently Asked Questions

This filing primarily announced the completion of Con Edison's acquisition of Sempra Solar Holdings, LLC and detailed the financing arrangements for this transaction, including a new credit agreement and the use of proceeds from forward sale agreements.

The $1,609 million acquisition was financed through a combination of an $825 million borrowing under a new credit agreement, $705 million from the physical settlement of forward sale agreements for Con Edison's common shares, and $79 million from other company funds.

The credit agreement for $825 million bears variable interest rates, matures on June 11, 2019, and offers Con Edison the option to prepay. It also includes mandatory prepayment provisions tied to future debt or equity issuances and asset sales, and specific financial covenants such as a consolidated debt to consolidated total capital ratio not exceeding 0.65 to 1.

The acquisition of Sempra Solar Holdings indicates Con Edison's strategic expansion into the solar energy sector, likely diversifying its energy portfolio and potentially enhancing its renewable energy generation capabilities.