Summary
Consolidated Edison, Inc. (ED) announced on April 28, 2021, the entry into a new $500 million, 364-day term loan facility, referred to as the April 2021 Credit Agreement. This facility is intended to provide liquidity to refinance maturing debt obligations. The primary purpose of this new credit line is to repay Con Edison's 2.00 percent debentures, Series 2016 A, which are set to mature on May 15, 2021. The agreement allows Con Edison to prepay the term loan at any time and includes provisions for mandatory termination and prepayment linked to the net proceeds from certain debt issuances or asset sales. This demonstrates proactive financial management in addressing upcoming debt maturities.
Key Highlights
- 1Entered into a $500 million, 364-day term loan credit agreement on April 28, 2021.
- 2The new credit facility is variable-rate.
- 3The primary use of funds is to repay $500 million of 2.00 percent debentures, Series 2016 A, maturing on May 15, 2021.
- 4Con Edison has the option to prepay the term loan at any time prior to maturity.
- 5Commitments can be terminated and loans may become immediately due upon a change of control or event of default.
- 6Key events of default include exceeding a consolidated debt to total capital ratio of 0.65 to 1, or material payment defaults on obligations exceeding $150 million.
Frequently Asked Questions
The primary purpose of the April 2021 Credit Agreement is to provide Con Edison with the necessary funds to repay its 2.00 percent debentures, Series 2016 A, which are due to mature on May 15, 2021.
The loan is a 364-day term loan with a variable interest rate. The commitments from the lenders are in place until May 18, 2021, and the loan itself has a 364-day tenor.
Yes, the lenders' obligations are subject to standard conditions precedent, such as no payment or bankruptcy default. Additionally, their commitments can be terminated, and outstanding loans declared immediately due and payable upon a change of control of Con Edison or certain 'events of default'.
Key events of default include exceeding a consolidated debt to total capital ratio of 0.65:1, having liens on assets exceeding 5% of consolidated total capital (with exceptions), failing to make material financial obligation payments exceeding an aggregate of $150 million, or the acceleration of material debt in excess of $150 million.