| Item 1.01. | Entry into a Material Definitive Agreement. |
On August 23, 2022, CenterPoint Energy Resources Corp. (the “Company”), Mizuho Bank, Ltd., as administrative agent, and the banks party thereto entered into a $500 million Term Loan Agreement (the “Term Loan Agreement”). The Company borrowed the full $500 million at closing and intends to use the proceeds thereof for general corporate purposes. The maturity date for the borrowings under the Term Loan Agreement is August 22, 2023.
Borrowings under the Term Loan Agreement bear interest, at the Company’s option, at a rate equal to either (i) Term SOFR (as defined in the Term Loan Agreement, which includes an adjustment of 0.10% per annum) plus a margin of 0.70% or (ii) the Alternate Base Rate (as defined in the Term Loan Agreement). The Term Loan Agreement contains certain covenants, including a covenant that requires the Company not to exceed a specified ratio of debt to consolidated capitalization (excluding, among other things, non-cash reductions to net income).
Borrowings under the Term Loan Agreement may be voluntarily prepaid without penalty or premium, other than customary breakage costs related to prepayments of loans that bear interest based on Term SOFR. The Term Loan Agreement also provides a mechanism to replace Term SOFR or other then-applicable interest rate benchmark if it is no longer available.
Borrowings under the Term Loan Agreement are subject to acceleration upon the occurrence of events of default that the Company considers customary. The Term Loan Agreement also provides for customary fees, including administrative agent fees and other fees.
Mizuho Bank, Ltd. participates in the credit facilities of the Company and its affiliates.
The Term Loan Agreement described above is filed as Exhibit 10.1 to this Current Report and is incorporated by reference herein. The foregoing summary does not purport to be complete and is qualified in its entirety by reference to the Term Loan Agreement.
| Item 2.03. | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
To the extent required by Item 2.03 of Form 8-K, the information regarding the Term Loan Agreement contained in Item 1.01 of this Current Report on Form 8-K is incorporated by reference herein.
| Item 9.01. | Financial Statements and Exhibits. |
The exhibit list below is filed herewith. The Term Loan Agreement included as an exhibit is included only to provide information to investors regarding its terms. The Term Loan Agreement listed below may contain representations, warranties and other provisions that were made, among other things, to provide the parties thereto with specified rights and obligations and to allocate risk among them, and such agreement should not be relied upon as constituting or providing any factual disclosures about us, any other persons, any state of affairs or other matters.
(d) Exhibits.
