What is the main purpose of the new credit facility announced by ONEOK?

The new $1.2 billion unsecured revolving credit facility is primarily for general corporate purposes and will also serve as a backstop for ONEOK's commercial paper program, ensuring access to liquidity for its operational needs.

How does this new credit agreement compare to the previous one?

The new 2011 Credit Agreement replaces the Amended and Restated Credit Agreement from July 14, 2006. It is a larger facility ($1.2 billion compared to the previous agreement's terms) and provides a similar, if not improved, framework for managing the company's short-term financing needs.

What is the financial significance of this unsecured credit facility for ONEOK?

As an unsecured facility, it suggests strong creditworthiness from ONEOK, allowing access to substantial capital without pledging specific assets. The size of the facility and the option to increase it provide significant financial flexibility and a strong liquidity backstop, which is positive for investors concerned about the company's financial stability and ability to fund operations and growth.

What is the maturity date of the new credit facility and are there extension options?

The 2011 Credit Agreement matures on April 5, 2016. ONEOK has the ability to extend the maturity date by one year, up to two times, subject to the lenders' consent prior to each anniversary date.

OKE 8-K: Material Agreements, Financial Events & More

Summary

ONEOK, Inc. (OKE) announced on April 6, 2011, that it has entered into a new five-year, $1.2 billion unsecured revolving credit facility, referred to as the '2011 Credit Agreement,' effective April 5, 2011. This facility replaces their previous credit agreement dated July 14, 2006. The new agreement provides significant financial flexibility for general corporate purposes, including acting as a backstop for their commercial paper program. It also includes options to increase the total commitments by up to an additional $500 million, demonstrating the company's proactive approach to managing its liquidity and financing needs. The 2011 Credit Agreement, maturing on April 5, 2016, with potential one-year extensions subject to lender consent, is unsecured and not guaranteed by any subsidiaries. It contains standard covenants and conditions for borrowing and events of default. The termination of the previous credit agreement was also noted. This move signifies a strengthening of ONEOK's financial foundation and its ability to access capital in the market, which are key considerations for investors evaluating the company's operational capacity and financial health.

Key Highlights

1ONEOK entered into a new $1.2 billion unsecured revolving credit facility (the '2011 Credit Agreement') effective April 5, 2011.
2The new credit facility has a five-year term, maturing on April 5, 2016, with options for one-year extensions.
3The facility includes a $100 million letter of credit subfacility and a $100 million swing line subfacility.
4ONEOK has the option to increase commitments by an additional $500 million from existing or new lenders.
5This new agreement replaces ONEOK's previously existing credit facility dated July 14, 2006.
6The credit facility is intended for general corporate purposes, including serving as a backstop for the company's commercial paper program.
7The obligations under the 2011 Credit Agreement are unsecured and not guaranteed by subsidiaries.

ONEOK INC /NEW/ 8-K Report, Material Agreement (Apr 7, 2011)

Summary

Key Highlights

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