8-KMaterial AgreementsFinancial EventsExhibits & Filings

CONSOLIDATED EDISON INC 8-K Report, Material Agreement (Jun 30, 2022)

Filed June 30, 2022For Securities:ED

Summary

Consolidated Edison, Inc. (ED) announced on June 30, 2022, the execution of a 364-Day Senior Unsecured Term Loan Credit Agreement with Barclays Bank PLC. Under this agreement, ED immediately borrowed $400 million for general corporate purposes. The agreement also provides for potential additional term loans up to $200 million, subject to certain conditions, until November 30, 2022. This new debt facility provides Con Edison with short-term liquidity and flexibility. The company retains the option to prepay the loans, and the facility's commitments can be terminated and loans prepaid upon the net cash proceeds from certain equity issuances or asset sales, indicating a strategy to manage leverage. The agreement includes standard covenants, with a key debt-to-capital ratio not exceeding 0.65 to 1, and customary events of default.

Key Highlights

  • 1Execution of a 364-Day Senior Unsecured Term Loan Credit Agreement on June 30, 2022.
  • 2Immediate borrowing of $400 million for general corporate purposes.
  • 3Potential for up to an additional $200 million in term loans, expiring November 30, 2022.
  • 4Option for Con Edison to prepay outstanding loans prior to maturity.
  • 5Commitments and loans are subject to mandatory termination/prepayment with proceeds from equity issuances or asset sales.
  • 6Key financial covenant: consolidated debt to consolidated total capital ratio not to exceed 0.65 to 1.
  • 7The agreement is unsecured and includes customary covenants and events of default.

Frequently Asked Questions

The $400 million borrowed under the 364-Day Senior Unsecured Term Loan Credit Agreement is for general corporate purposes. This provides Con Edison with short-term liquidity and financial flexibility.

The agreement allows for an initial borrowing of $400 million, with the lender committed to providing additional tranches of term loans up to an aggregate of $200 million, bringing the total potential borrowing to $600 million. However, these additional commitments expire on November 30, 2022.

Yes, the lender's obligation to provide additional loans is subject to conditions, including no payment or bankruptcy defaults. The commitments can be terminated and loans prepaid if Con Edison undergoes a change of control or upon an event of default. Key covenants include a maximum debt-to-capital ratio of 0.65:1 and limitations on liens. The facility also allows for mandatory prepayment using proceeds from equity issuances or asset sales.

The filing explicitly states that the lender's commitments are not subject to the maintenance of credit rating levels. Therefore, this specific credit agreement does not appear to be directly tied to or contingent upon Con Edison's credit ratings.