8-KMaterial AgreementsFinancial Events

ONEOK INC /NEW/ 8-K Report, Material Agreement (Aug 7, 2008)

Filed August 7, 2008For Securities:OKE

Summary

ONEOK Inc. announced on August 6, 2008, the execution of a new $400 million unsecured 364-day revolving credit agreement. This new facility provides additional liquidity and flexibility for the company's operations. It is intended to serve as a backup for its commercial paper program and to support general corporate purposes, including working capital and capital expenditures. The credit agreement includes standard covenants, notably a maximum consolidated total debt to total capital ratio of 67.5%. The agreement also mandates maintaining control over ONEOK Partners, L.P. and limits investments in master limited partnerships. The new credit line matures on August 4, 2009, and offers interest rate options based on either a prime rate/Federal Funds Rate spread or a Eurodollar rate plus a basis point spread tied to the company's credit ratings.

Key Highlights

  • 1ONEOK entered into a new $400 million unsecured 364-day revolving credit agreement on August 6, 2008.
  • 2The credit facility matures on August 4, 2009, providing a one-year liquidity backstop.
  • 3Funds from the agreement will be used for working capital, capital expenditures, and as a backup to the commercial paper program.
  • 4Key covenants include a debt-to-capital ratio limit of 67.5% and the requirement to maintain control over ONEOK Partners, L.P.
  • 5Interest rates are determined by either a prime rate/Federal Funds Rate option or a Eurodollar rate plus a credit-rating-based spread.
  • 6The agreement contains standard provisions for default, including events like failure to make payments, insolvency, or a change of control.

Frequently Asked Questions

The new $400 million credit agreement is intended to serve as an additional back-up to ONEOK's commercial paper program and for general corporate purposes, including funding working capital and capital expenditures.

The new 364-day revolving credit agreement matures on August 4, 2009.

Key financial covenants include a limit on the ratio of consolidated total debt to total capital to no more than 67.5% at the end of any calendar quarter, and the requirement for ONEOK to maintain control over the management and policies of ONEOK Partners, L.P.

Interest rates are determined at ONEOK's election, based on either the higher of the prime rate or one-half of one percent above the Federal Funds Rate, or the Eurodollar rate plus a number of basis points dependent on ONEOK's current long-term unsecured debt ratings from Moody's and Standard & Poor's.