Summary
Consolidated Edison, Inc. (ED) reported on July 2, 2020, an amendment to its credit agreement. Specifically, the company entered into a Commitment Increase Supplement that raised the aggregate principal amount of loans available from $750 million to $820 million. This increase was made possible by the addition of an "Additional Lender" to the agreement. Following this amendment, Con Edison borrowed the full $820 million on July 1, 2020. The proceeds are designated for general corporate purposes, including the repayment of variable-rate short-term debt. This newly acquired $820 million was converted into a term loan on July 2, 2020, with a maturity date of March 29, 2021. The company retains the option to prepay this loan. Importantly, the loan is subject to mandatory prepayment requirements tied to future debt or equity issuances and includes standard covenants with defined events of default.
Key Highlights
- 1Con Edison increased its aggregate borrowing capacity under a credit agreement by $70 million, bringing the total available to $820 million.
- 2The company utilized the full $820 million borrowing capacity shortly after the amendment.
- 3Proceeds from the borrowing will be used for general corporate purposes, including refinancing variable-rate short-term debt.
- 4The borrowed amount was converted into a term loan maturing on March 29, 2021.
- 5Con Edison has the option to prepay the term loan.
- 6Mandatory prepayments are required from future debt or equity issuances.
- 7The credit agreement includes covenants with specific financial ratios and events of default.