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.