Summary
Xcel Energy Inc.'s wholly-owned subsidiary, Southwestern Public Service Company (SPS), entered into a $350 million unsecured interim credit agreement on August 23, 2006. This facility is designed to provide bridge financing, primarily to help SPS manage maturing long-term debt. The agreement expires on November 1, 2006, with any borrowings due by December 29, 2006. Currently, there are no outstanding borrowings under this facility. This short-term credit line offers flexibility for SPS while it potentially refinances its existing debt obligations. Investors should note that the terms, including interest rates and commitment fees, are tied to SPS's senior unsecured credit ratings.
Key Highlights
- 1Southwestern Public Service Company (SPS), a subsidiary of Xcel Energy, secured a $350 million unsecured interim credit agreement.
- 2The agreement is intended to provide bridge financing for maturing long-term debt at SPS.
- 3The credit facility has a term expiring on November 1, 2006, with all borrowings due by December 29, 2006.
- 4No borrowings are currently outstanding under this new credit agreement.
- 5Interest rates are based on the Eurodollar rate plus a margin or an alternate base rate, with rates and fees linked to SPS's credit ratings.
- 6The agreement includes a financial covenant limiting the debt to total capitalization ratio to 65% or less.
- 7The credit agreement contains covenants restricting certain corporate actions like mergers, asset sales, and affiliate transactions.
Frequently Asked Questions
The primary purpose of the $350 million credit agreement is to provide bridge financing for Southwestern Public Service Company (SPS) to manage its maturing long-term debt. It offers a temporary funding source to ensure financial stability while SPS potentially refinances its existing obligations.
The agreement is for $350 million, is unsecured, and has a short-term nature, expiring in November 2006 with a December 2006 maturity for any borrowings. Interest rates are variable, based on the Eurodollar rate or an alternate base rate plus a margin, and commitment fees are also applicable. The terms are influenced by SPS's credit ratings. It includes a debt-to-capitalization ratio covenant of 65% and other operational restrictions.
No, as of the filing date (August 23, 2006), there are no borrowings outstanding under this $350 million interim credit agreement.
This filing indicates proactive financial management by Xcel Energy's subsidiary to address upcoming debt maturities. The short-term nature of the facility and its reliance on credit ratings suggest that investors should monitor SPS's creditworthiness and Xcel Energy's overall debt management strategy. The covenants provide some assurance regarding financial discipline.