What is the primary purpose of these new credit agreements?

The new credit agreements are primarily for general corporate purposes. This includes providing backup for the company's commercial paper program and supporting letters of credit, ensuring Xcel Energy and its subsidiaries have adequate liquidity for their ongoing operations.

How much additional borrowing capacity does Xcel Energy have with these new agreements?

The new credit facilities collectively provide a total borrowing capacity of $2.25 billion. This represents an increase from the previous combined capacity, with Xcel Energy's own facility increasing from $700 million to $800 million, and its subsidiaries also seeing increases or maintaining significant credit lines.

What are the key terms and conditions of these credit facilities?

The facilities are unsecured, have a five-year term with extension provisions, and allow for potential increases in borrowing capacity. Interest rates are based on Eurodollar or alternate base rates plus a margin, and commitment fees apply, all influenced by the company's credit ratings. A critical financial covenant limits the debt to total capitalization ratio to 65%.

What happens if Xcel Energy's financial health deteriorates?

The credit agreements contain covenants that, if breached, could lead to default. These include a financial covenant requiring the debt to total capitalization ratio to remain at or below 65%. Events of default that could trigger acceleration of the debt include significant indebtedness acceleration from other sources, change of control, large unpaid judgments, and certain ERISA or bankruptcy events.

XEL/XELLL 8-K: Material Agreements & Financial Events

Summary

Xcel Energy Inc. (XEL) has filed an 8-K report detailing significant updates to its credit facilities. On December 14, 2006, the company and its key subsidiaries, Northern States Power Company (NSP-Minnesota), Public Service Company of Colorado (PSCo), and Southwestern Public Service Company (SPS), entered into new, larger unsecured credit agreements. These new facilities replace existing ones and collectively provide Xcel Energy and its subsidiaries with enhanced borrowing capacity, totaling $2.25 billion. The agreements are for a five-year term and include provisions for potential increases and extensions, offering financial flexibility. The primary purpose of these credit lines is for general corporate needs, including backing commercial paper programs and letters of credit, while maintaining a strong liquidity position.

Key Highlights

1Xcel Energy Inc. and its subsidiaries (NSP-Minnesota, PSCo, SPS) entered into new credit agreements on December 14, 2006.
2The total aggregate borrowing capacity under the new credit facilities is $2.25 billion ($800M for Xcel Energy, $500M for NSP-Minnesota, $700M for PSCo, and $250M for SPS).
3These new facilities are unsecured and have a five-year term, replacing older, smaller credit lines.
4The credit agreements include provisions for extending the term and increasing the facility size under certain conditions.
5Borrowings will be used for general corporate purposes, including backup for commercial paper and letters of credit.
6A key financial covenant requires the debt to total capitalization ratio to be less than or equal to 65%.
7The agreements allow for borrowings at Eurodollar or alternate base rates, with margins and commitment fees tied to credit ratings.

XCEL ENERGY INC 8-K Report, Material Agreement (Dec 20, 2006)

Summary

Key Highlights

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