Summary
FirstEnergy Corp. (FE) and its subsidiaries have entered into two new five-year syndicated revolving credit facilities totaling $4.5 billion, effective June 17, 2011. These new facilities, which replace previously existing credit arrangements, provide aggregate borrowing capacity for both the parent company and its subsidiaries, and a separate facility for FirstEnergy Solutions Corp. (FES) and Allegheny Energy Supply Company, LLC (AESC). The primary purpose of these new credit facilities is to refinance outstanding obligations under the prior agreements and to provide general corporate purposes and working capital. This move enhances the company's liquidity and financial flexibility.
Key Highlights
- 1FirstEnergy Corp. and subsidiaries established two new five-year syndicated revolving credit facilities with a total commitment of $4.5 billion.
- 2The facilities are comprised of a $2.0 billion New FirstEnergy Facility and a $2.5 billion New FES/AESC Facility.
- 3These new credit facilities replace and terminate several prior credit agreements, consolidating borrowing capacity.
- 4Proceeds from initial borrowings under the new facilities were used to pay off outstanding obligations under the prior facilities.
- 5The new facilities provide funds for working capital and general corporate purposes.
- 6Commitments under the new facilities are available until June 17, 2016, with potential for one-year extensions.
- 7Borrowings are subject to customary covenants, including a consolidated debt to total capitalization ratio not exceeding 0.65 to 1.00.
Frequently Asked Questions
The aggregate commitment under the two new five-year syndicated revolving credit facilities is $4.5 billion.
The primary purposes are to refinance outstanding obligations under previously existing credit facilities and to provide funds for working capital and other general corporate purposes for FirstEnergy Corp. and its subsidiaries.
Commitments under the new facilities are available until June 17, 2016, and can be extended for up to two additional one-year periods if lenders agree.
Borrowings can be in the form of alternate base rate advances, eurodollar rate advances, or swing line loans. Letters of credit may also be issued.