What is the primary purpose of these new credit agreements?

The primary purpose of these second amended and restated credit agreements (New Facilities) is to provide Xcel Energy and its subsidiaries with continued access to significant borrowing capacity for general corporate purposes, including the repayment of existing indebtedness and the issuance of letters of credit.

How much total borrowing capacity do these new agreements provide?

The combined initial maximum borrowing capacity across Xcel Energy and its specified subsidiaries is $3.25 billion. Additionally, there is potential for aggregate increases of up to $450 million under certain conditions.

What are the key financial covenants associated with these new credit facilities?

The most significant financial covenant requires that the applicable borrower's consolidated funded debt to total capitalization ratio remains less than or equal to 65 percent. There are also other covenants restricting activities such as mergers, sales of substantially all assets, and the incurrence of liens.

What is the term and interest rate structure of these new credit facilities?

Each of the New Facilities has a five-year term, with most including provisions for maturity extensions of up to two additional one-year periods. Interest rates are variable, calculated based on either the Eurodollar rate or an alternate base rate, plus a specified margin that depends on the borrower's credit rating. Commitment fees are also charged on the unused portion of the credit lines.

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

Summary

Xcel Energy Inc. (XEL) and its key subsidiaries have entered into second amended and restated credit agreements, referred to as "New Facilities," on June 20, 2016. These agreements replace existing credit lines that were set to expire in October 2019. The new facilities provide significant borrowing capacity for Xcel Energy, totaling an initial maximum of $1.0 billion, with the potential to increase by an additional $200 million. Similar increases and capacities are provided for its subsidiaries, Northern States Power Company (Minnesota and Wisconsin), Public Service Company of Colorado, and Southwestern Public Service Company. The New Facilities are unsecured, have a five-year term with options for maturity extensions, and offer interest rate flexibility based on Eurodollar or alternate base rates. They are primarily intended for general corporate purposes, including debt repayment and letter of credit issuances. A key financial covenant requires the consolidated funded debt to total capitalization ratio to remain at or below 65 percent, with other standard covenants restricting actions like mergers and asset sales. These agreements are crucial for maintaining the company's operational flexibility and financial health.

Key Highlights

1Xcel Energy and its subsidiaries entered into new, restated credit agreements on June 20, 2016.
2The total initial maximum borrowing capacity across all facilities is $3.25 billion ($1.0B XEL, $500M NSP-MN, $700M PSCo, $400M SPS, $150M NSP-WI).
3Each facility has an option to increase its borrowing capacity by a further $450 million in aggregate.
4The New Facilities are unsecured, have a five-year term, and include maturity extension options.
5Interest rates are variable, based on Eurodollar or alternate base rates plus specified margins.
6A key financial covenant requires consolidated funded debt to total capitalization to be no more than 65%.
7Funds are to be used for general corporate purposes, including debt repayment and letters of credit.

XCEL ENERGY INC 8-K Report, Material Agreement (Jun 22, 2016)

Summary

Key Highlights

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