Summary
Xcel Energy Inc. (XEL) has entered into a 364-Day Term Loan Agreement, establishing a $500 million revolving credit facility. The company drew $250 million immediately upon closing on December 5, 2017, with the option to draw the remaining $250 million before March 31, 2018. This facility is intended to provide short-term liquidity and is an unsecured, 364-day loan maturing on December 4, 2018, with a potential one-year extension subject to lender consent. The primary purpose of this debt facility is to offer temporary incremental short-term debt capacity. Xcel Energy's stated plan is to issue long-term debt in 2018 to repay this term loan and other outstanding commercial paper. This indicates a strategic move to manage its capital structure and refinance short-term obligations with longer-term financing. The agreement includes a key financial covenant related to the consolidated funded debt to total capitalization ratio, which must remain at or below 65%.
Key Highlights
- 1Xcel Energy secured a $500 million 364-Day Term Loan Facility.
- 2The company immediately drew $250 million and has the option to borrow the remaining $250 million by March 31, 2018.
- 3The facility is unsecured and matures in 364 days (December 4, 2018), with a potential for a one-year extension.
- 4Proceeds will be used for general corporate purposes, including refinancing outstanding commercial paper and other indebtedness.
- 5Xcel Energy plans to issue long-term debt in 2018 to repay this short-term facility.
- 6A key financial covenant restricts the consolidated funded debt to total capitalization ratio to a maximum of 65%.
- 7The agreement contains covenants that restrict mergers, asset sales, and the incurrence of liens.