Summary
ONEOK, Inc. (OKE) announced on September 17, 2004, the establishment of a significant $1 billion, five-year revolving credit facility. This facility, led by Bank of America, N.A. and Citibank, N.A., provides substantial financial flexibility for the company's future operations and strategic initiatives. The credit line is designed to support various corporate needs, including commercial paper issuance, working capital, capital expenditures, acquisitions, mergers, and general corporate purposes, underscoring a proactive approach to managing its financial resources. The facility includes a notable $500 million sublimit for letters of credit and offers the potential to increase the principal amount by an additional $200 million, demonstrating the lenders' confidence in ONEOK's financial standing. Key financial covenants, such as a debt-to-total capital ratio not exceeding 67.5% (with specific treatment for convertible securities and certain MLP debt), are in place to ensure prudent financial management. This new credit facility provides ONEOK with enhanced liquidity and strategic capacity for growth and operational stability.
Key Highlights
- 1ONEOK, Inc. has secured a $1 billion, five-year revolving credit facility maturing on September 16, 2009.
- 2The credit facility is led by Bank of America, N.A. and Citibank, N.A., with a syndicate of 15 banks.
- 3A $500 million sublimit is available for the issuance of standby letters of credit.
- 4The facility allows for a potential increase of up to $200 million in committed amounts.
- 5Proceeds are earmarked for commercial paper, working capital, capital expenditures, acquisitions, mergers, and general corporate purposes.
- 6A key financial covenant requires the consolidated total debt to total capital ratio to not exceed 67.5%.
- 7Convertible securities are treated as 75% equity and 25% debt for covenant calculation purposes until conversion.