8-KMaterial AgreementsFinancial Events

EVERSOURCE ENERGY 8-K Report, Material Agreement (Jul 30, 2012)

Filed July 30, 2012For Securities:ES

Summary

Eversource Energy (operating as Northeast Utilities and its subsidiaries) announced on July 30, 2012, the establishment of significant new credit facilities to enhance its liquidity and financial flexibility. These new senior, unsecured revolving credit facilities, totaling $1.15 billion for Northeast Utilities (NU) and its subsidiaries and $450 million for NSTAR Electric Company, will expire in July 2017. The primary purpose of these facilities is to support working capital needs, capital expenditures, debt repayment, and to backstop commercial paper programs. The company also announced the commencement of a new $1.15 billion commercial paper program for NU, allowing for unsecured note issuances to fund general corporate purposes. These new arrangements replace and consolidate prior credit facilities, providing a more streamlined approach to managing its short-term funding needs. The terms include variable interest rates based on LIBOR plus an applicable margin and quarterly facility fees, along with financial covenants requiring a Consolidated Indebtedness to Capitalization Ratio not to exceed 0.65:1.00.

Key Highlights

  • 1Northeast Utilities (NU) and its subsidiaries established new revolving credit facilities totaling $1.15 billion, expiring in July 2017.
  • 2NSTAR Electric Company secured a separate revolving credit facility of $450 million, also expiring in July 2017.
  • 3The new credit facilities are intended for working capital, capital expenditures, and debt repayment.
  • 4NU launched a new $1.15 billion commercial paper program to fund general corporate purposes.
  • 5These new facilities replace and consolidate multiple prior credit agreements, simplifying debt management.
  • 6Borrowing costs are tied to LIBOR plus a credit-rating-dependent margin, with quarterly facility fees also applicable.
  • 7A key financial covenant requires maintaining a Consolidated Indebtedness to Capitalization Ratio below 0.65:1.00.

Frequently Asked Questions

The company established a $1.15 billion revolving credit facility for Northeast Utilities and its subsidiaries, and a separate $450 million revolving credit facility for NSTAR Electric Company, totaling $1.6 billion in new credit capacity.

The facilities are designated for working capital needs, capital expenditures, repayment of debt, and to serve as a backstop for the companies' commercial paper programs.

Both the $1.15 billion NU Facility and the $450 million NSTAR Electric Facility expire on July 25, 2017.

These new facilities replace and consolidate several previous credit facilities, including the NSTAR Prior Facilities and the NU Prior Facilities, streamlining the company's debt structure.

Interest rates are based on the British Bankers Association LIBOR Rate plus an applicable margin (0 to 147.5 basis points), and borrowers also pay quarterly facility fees (7.5 to 27.5 basis points), both dependent on the borrower's credit rating.