8-KOther EventsExhibits & Filings

ENTERGY CORP /DE/ 8-K Report, Corporate Update (Mar 29, 2023)

Filed March 29, 2023For Securities:ETR

Summary

Entergy Corporation's subsidiary, Entergy Louisiana, LLC (ELL), has successfully closed a securitization transaction on March 29, 2023, for approximately $1.49 billion. This securitization, authorized by Louisiana state legislation, aims to finance costs incurred by ELL from various weather events, including Hurricane Laura, Hurricane Delta, Hurricane Zeta, Winter Storm Uri, and Hurricane Ida, net of amounts previously financed. The proceeds from the issuance of bonds by the Louisiana Local Government Environmental Facilities and Community Development Authority will be channeled through a trust to purchase preferred membership interests in Entergy Finance Company, LLC, an indirect subsidiary of Entergy Corporation. This transaction is designed to enhance ELL's financial strength and stability. The preferred interests will pay an annual dividend of 7.5% to the trust. The trust will then distribute 99% of these dividends to ELL and 1% to the Louisiana Utilities Restoration Corporation (LURC) for the benefit of customers. This securitization follows a similar, larger transaction completed in 2022 for ELL and represents a strategic move to manage storm-related costs and support the subsidiary's financial health.

Key Highlights

  • 1Successful closing of a $1.49 billion securitization for Entergy Louisiana, LLC (ELL) on March 29, 2023.
  • 2The securitization is intended to finance ELL's costs related to past hurricanes and winter storms.
  • 3Proceeds will be used to purchase preferred membership interests in Entergy Finance Company, LLC, an indirect subsidiary.
  • 4The transaction is structured to support ELL's financial strength and stability.
  • 5Preferred interests carry a 7.5% annual dividend rate.
  • 699% of the dividend proceeds will go to ELL, with 1% allocated to LURC for customer benefits.
  • 7This follows a prior, larger securitization for ELL completed in 2022.

Frequently Asked Questions

The primary purpose is to finance approximately $1.49 billion of Entergy Louisiana, LLC's (ELL) costs incurred from major weather events such as Hurricane Laura, Hurricane Delta, Hurricane Zeta, Winter Storm Uri, and Hurricane Ida. This financing aims to bolster ELL's financial strength and stability.

The net proceeds from the bond issuance are channeled through a Louisiana Utilities Restoration Corporation (LURC)-sponsored trust. The trust uses these proceeds to purchase preferred membership interests from Entergy Finance Company, LLC (EFC), an indirect subsidiary of Entergy Corporation. EFC's use of these funds is intended to support ELL's financial health.

The preferred membership interests have a stated annual dividend rate of 7.5%. The trust that holds these interests will distribute 99% of the annual dividends received to Entergy Louisiana, LLC (ELL) and 1% to the Louisiana Utilities Restoration Corporation (LURC) for the benefit of customers, after deducting trust expenses.

No, this securitization follows a substantially similar, larger transaction for Entergy Louisiana, LLC that closed in May 2022, involving the issuance of $3.19 billion in bonds.