Summary
ONEOK, Inc. (OKE) filed an 8-K on September 27, 2005, reporting on amendments to its credit facilities. The company entered into a Fourth Amendment to its $1.2 billion Credit Agreement and a First Amendment to its $1 billion, 364-day Bridge Credit Facility. These amendments, effective September 1, 2005, importantly modify the definition of "Consolidated Net Worth" to exclude the impact of gains and losses from commodity hedging agreements that are recorded in other comprehensive income (loss). This change in the calculation of Consolidated Net Worth is designed to increase the amount of indebtedness ONEOK can incur while remaining in compliance with the debt-to-capital ratio covenants within both the Credit Agreement and the Bridge Facility. This adjustment offers the company greater financial flexibility regarding its borrowing capacity, which is a key consideration for investors assessing its capital structure and potential for future growth or acquisitions.
Key Highlights
- 1ONEOK, Inc. amended its $1.2 billion Credit Agreement and its $1 billion Bridge Credit Facility.
- 2The amendments are effective as of September 1, 2005.
- 3The core change is the modification of the definition of 'Consolidated Net Worth'.
- 4The amendments exclude gains and losses from commodity hedging agreements recognized in other comprehensive income (loss) from the calculation of Consolidated Net Worth.
- 5This change is expected to increase the maximum amount of indebtedness ONEOK can incur.
- 6The amendments ensure continued compliance with debt-to-capital ratio covenants in both credit facilities.
- 7This provides ONEOK with enhanced financial flexibility for borrowing.