Summary
Xcel Energy Inc. (XEL) reported on March 23, 2011, through a Form 8-K filing, the execution of new, larger credit agreements for the parent company and its major subsidiaries: Northern States Power Company (Minnesota and Wisconsin), Public Service Company of Colorado, and Southwestern Public Service Company. These new facilities, totaling over $2.45 billion across the entities, replace previously existing credit lines and provide enhanced borrowing capacity. The primary purpose of these new credit agreements is to support general corporate needs, serve as backup for the companies' commercial paper programs, and back letters of credit. The agreements are unsecured, have an initial four-year term with options for extension, and feature interest rates and fees tied to the companies' credit ratings. A key financial covenant across all facilities requires the consolidated funded debt to total capitalization ratio to remain at or below 65%.
Key Highlights
- 1Xcel Energy Inc. and its subsidiaries entered into new, larger credit agreements totaling over $2.45 billion on March 17, 2011.
- 2The new credit facilities for Xcel Energy, NSP-Minnesota, NSP-Wisconsin, PSCo, and SPS replace existing lines of credit and increase overall borrowing capacity.
- 3These facilities are unsecured and have a base term of four years, with provisions for two additional one-year extensions.
- 4The agreements allow for potential increases in credit availability under certain circumstances, ranging from $50 million to $200 million depending on the borrower.
- 5Borrowing costs are based on Eurodollar or alternate base rates plus a margin, with commitment fees on unused portions, all influenced by senior unsecured credit ratings.
- 6A key financial covenant requires a consolidated funded debt to total capitalization ratio of 65% or less for all borrowers.
- 7As of March 21, 2011, substantial availability existed across the new credit facilities, indicating strong liquidity post-agreement execution.