8-KMaterial AgreementsFinancial Events

EVERSOURCE ENERGY 8-K Report, Material Agreement (Oct 30, 2015)

Filed October 30, 2015For Securities:ES

Summary

Eversource Energy and several of its key subsidiaries have amended and restated their senior, unsecured revolving credit facilities, extending the maturity date to September 4, 2020. The total aggregate borrowing capacity under these facilities remains unchanged at $1.45 billion for Eversource's facilities and $450 million for NSTAR Electric's facility. These facilities are crucial for supporting working capital needs, capital expenditures, debt repayment, and commercial paper programs, indicating the company's ongoing commitment to maintaining financial flexibility and operational stability. Investors should note that the terms, including interest rates and facility fees, are tied to credit ratings, with margins ranging from 80 to 147.5 basis points for loans and 7.5 to 27.5 basis points for facility fees. Key covenants are in place, including a restriction on the Consolidated Indebtedness to Capitalization Ratio not to exceed 0.65:1.00. The extension of these credit lines demonstrates the company's continued access to liquidity, a positive signal for its ability to fund future growth and meet its financial obligations.

Key Highlights

  • 1Eversource Energy and subsidiaries amended and restated two major credit facilities.
  • 2Extended the maturity date of both the Eversource Facility and the NSTAR Electric Facility to September 4, 2020.
  • 3Total credit facility amounts remain unchanged at $1.45 billion (Eversource Facility) and $450 million (NSTAR Electric Facility).
  • 4Facilities are earmarked for working capital, capital expenditures, debt repayment, and backstopping commercial paper programs.
  • 5Interest rates are variable, based on LIBOR plus an applicable margin (80-147.5 bps) dependent on credit rating.
  • 6Quarterly facility fees range from 7.5 to 27.5 basis points, also dependent on credit rating.
  • 7A key financial covenant requires maintaining a Consolidated Indebtedness to Capitalization Ratio not exceeding 0.65:1.00.

Frequently Asked Questions

The primary purpose of these amended and restated credit facilities is to provide ongoing financial flexibility for Eversource Energy and its subsidiaries. They are intended for general corporate purposes, including funding working capital needs, supporting capital expenditures, repaying existing debt, and providing backstop support for the companies' commercial paper programs.

No, the total borrowing capacity has not changed. The Eversource Facility remains at $1.45 billion, and the NSTAR Electric Facility remains at $450 million.

The extension of the maturity date to September 4, 2020, provides Eversource Energy and its subsidiaries with a longer-term commitment of available credit. This reduces near-term refinancing risk and offers greater certainty for funding operations and strategic initiatives over the next five years, which is generally viewed positively by investors.

Interest rates on borrowed funds are based on the London Interbank Offered Rate (LIBOR) plus an applicable margin that can range from 80 to 147.5 basis points, depending on the borrower's credit rating. In addition to interest, borrowers pay quarterly facility fees, regardless of borrowing activity. These fees range from 7.5 to 27.5 basis points of the facility amount and are also influenced by the borrower's credit rating.