| Item 1.01 | Entry into a Material Definitive Agreement |
On May 15, 2019, CenterPoint Energy, Inc. (the “Company”), Mizuho Bank, Ltd., as administrative agent and lead arranger, and the banks party thereto entered into a $1.0 billion Term Loan Agreement (the “Term Loan Agreement”). The Company borrowed the full $1.0 billion at closing and intends to use the proceeds thereof for general corporate purposes, including the repayment of indebtedness of the Company and its subsidiaries. The maturity date for the borrowings under the Term Loan Agreement is May 15, 2021.
Borrowings under the Term Loan Agreement bear interest, at the Company’s option, at a rate equal to either (i) the Eurodollar Rate (as defined in the Term Loan Agreement) plus a margin of 0.650% 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 (excluding, among other things, transition and system restoration bonds) to consolidated capitalization (excluding, among other things,non-cash reductions to net income). The Term Loan Agreement provides a temporary increase of the permitted ratio of debt to consolidated capitalization if CenterPoint Energy Houston Electric, LLC experiences damage from a natural disaster in its service territory and the Company certifies to the administrative agent that the system restoration costs incurred by the Company and its subsidiaries in connection with that natural disaster are reasonably likely to exceed $100 million in a consecutive twelve-month period, all or part of which the Company or one of its subsidiaries intend to seek to recover through securitization financing. Such temporary increase in the financial ratio covenant would be in effect from the date the Company delivers its certification until the earliest to occur of (i) the completion of the securitization financing, (ii) the first anniversary of the delivery of such certification or (iii) the revocation by the Company of such certification in accordance with the terms of the Term Loan Agreement.
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 4.1 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 anOff-Balance Sheet Arrangement of a Registrant |
To the extent required by Item 2.03 of Form8-K, the information regarding the Term Loan Agreement contained in Item 1.01 of this Current Report on Form8-K is incorporated by reference herein.
| Item 9.01 | Financial Statements and Exhibits. |
The exhibit listed 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.
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EXHIBIT NUMBER | | EXHIBIT DESCRIPTION |
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| 4.1 | | $1,000,000,000 Term Loan Agreement dated as of May 15, 2019 among CenterPoint Energy, Inc., as Borrower, Mizuho Bank, Ltd., as Administrative Agent and Lead Arranger, and the banks named therein. |
