8-KMaterial AgreementsFinancial EventsExhibits & Filings

FIRSTENERGY CORP 8-K Report, Material Agreement (Oct 18, 2021)

Filed October 18, 2021For Securities:FE

Summary

FirstEnergy Corp. (FE) announced on October 18, 2021, the establishment of six new senior unsecured five-year syndicated revolving credit facilities, collectively totaling $4.5 billion. These facilities replace prior credit agreements and are designed to provide the company and its subsidiaries with substantial liquidity. The new facilities include separate credit lines for the parent company, its Ohio utilities, Pennsylvania utilities, New Jersey utility, West Virginia and Maryland utilities, and its transmission operations (TransCo). The aggregate amount available under these facilities is accessible until October 18, 2026. The terms include provisions for alternate base rate or Eurodollar rate advances, with interest rates tied to applicable margins based on the borrower's senior unsecured debt ratings. The agreements also outline covenants, including debt-to-capitalization ratios for most borrowers and an interest coverage ratio for the parent company, along with standard provisions for letters of credit and events of default.

Key Highlights

  • 1FirstEnergy Corp. entered into six new syndicated revolving credit facilities totaling $4.5 billion, replacing previous agreements.
  • 2These facilities provide a significant liquidity source for the company and its subsidiaries, available until October 18, 2026.
  • 3The credit facilities are structured with separate agreements for different segments of the business, including the parent company, various utility subsidiaries, and transmission operations.
  • 4Borrowing costs are tied to applicable margins influenced by the company's senior unsecured debt ratings, allowing for potential cost reductions if ratings improve.
  • 5The new agreements include covenants such as debt-to-total capitalization ratios for subsidiaries and a minimum interest coverage ratio for the parent company.
  • 6Provisions for issuing letters of credit are included, with stated amounts counting against available commitments.
  • 7The facilities are secured by customary representations, warranties, terms, and conditions, and are subject to acceleration upon specified events of default.

Frequently Asked Questions

FirstEnergy Corp. established six new syndicated revolving credit facilities with an aggregate amount of $4.5 billion available.

These new credit facilities are available until October 18, 2026.

The $4.5 billion is divided into six separate facilities: a $1.0 billion Parent Credit Facility for FE and FET, an $800 million OH Utilities Credit Facility, a $950 million PA Utilities Credit Facility, a $500 million NJ Utility Credit Facility, a $400 million WV & MD Utilities Credit Facility, and an $850 million TransCo Credit Facility.

Most borrowers (excluding FE under its specific facility) must maintain a consolidated debt to total capitalization ratio of no more than 0.65 to 1.00 (or 0.75 to 1.00 for FET). FE, under the Parent Credit Facility, is required to maintain a minimum interest coverage ratio of 2.50 to 1.00 starting from the fiscal quarter ending December 31, 2021.