Washington, D.C. 20549
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Item 1.01 Entry Into a Material Definitive Agreement
Item 1.02 Termination of a Material Definitive Agreement
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of the Registrant
Nevada Power Company Credit Facility
On March 23, 2012, Nevada Power Company d/b/a NV Energy (“NPC”), a wholly-owned subsidiary of NV Energy, Inc., entered into a secured revolving credit facility with Wells Fargo Bank, National Association, as administrative agent, swingline lender and issuing bank, and the other lenders parties thereto, allowing NPC to borrow, repay and reborrow, from time to time, up to $500 million on or prior to March 23, 2017. The facility replaces NPC’s prior $600 million secured revolving credit facility with Wells Fargo Bank, National Association, as administrative agent, which would have expired in April 2013. NPC may use the facility for general corporate purposes and for the issuance of letters of credit. The facility is secured by a General and Refunding Mortgage Bond of NPC, which is equal to the amounts due and payable by NPC under the facility from time to time, but in no event exceeding $500 million.
Borrowings under the facility will bear interest at either an applicable base rate (defined as the highest of the Prime Rate, the Federal Funds Rate plus ½ of 1.0% and the LIBOR Base Rate plus 1.0%) plus a margin, or a LIBOR rate plus a margin. The margin varies based upon NPC’s secured debt credit rating by S&P and Moody’s. Currently, NPC’s applicable base rate margin is 0.50% and the LIBOR rate margin is 1.50%. The rate for outstanding letters of credit will be at the LIBOR rate margin plus a fee for the issuing bank.
Borrowings under the facility are conditioned on NPC’s ability to make certain representations at the time such borrowing is made. However, so long as NPC’s secured debt credit rating by S&P and Moody’s is investment grade (in each case, with a stable or better outlook), NPC will not have to make a no material adverse effect representation as a condition to borrowing under the facility. The facility contains a provision which reduces the availability under the credit facility by the negative mark-to-market exposure for hedging transactions with credit facility lenders or their energy trading affiliates. The reduction in availability limits the amount that NPC can borrow or use for letters of credit and would require that NPC prepay any amount in excess of that limitation. The amount of the reduction will be calculated by NPC on a monthly basis, and after calculating such reduction, the agreement provides that the availability under the revolving credit facility to NPC shall at no time be less than 50% of the total commitments thereunder. As of the closing date, NPC did not have any negative mark-to-market exposure for hedging transactions. The facility also includes customary covenants, including a financial maintenance covenant that requires NPC to maintain a ratio of consolidated indebtedness to consolidated capital, determined as of the last day of each fiscal quarter, not to exceed 0.68 to 1.00.
NPC currently does not have any borrowings under the facility other than approximately $21 million in letters of credit that were rolled over from the prior credit facility.
Sierra Pacific Power Company Credit Facility
On March 23, 2012, Sierra Pacific Power Company d/b/a NV Energy (“SPPC”), a wholly-owned subsidiary of NV Energy, Inc., entered into a secured revolving credit facility with Wells Fargo Bank, National Association, as administrative agent, swingline lender and issuing bank, and the other lenders parties thereto, allowing SPPC to borrow, repay and reborrow, from time to time, up to $250 million on or prior to March 23, 2017. The facility replaces SPPC’s prior $250 million secured revolving credit facility with Bank of America, N.A., as administrative agent, which would have expired in April 2013. SPPC may use the facility for general corporate purposes and for the issuance of letters of credit. The facility is secured by a General and Refunding Mortgage Bond of SPPC, which is equal to the amounts due and payable under the facility by SPPC from time to time, but in no event exceeding $250 million.
Borrowings under the facility will bear interest at either an applicable base rate (defined as the highest of the Prime Rate, the Federal Funds Rate plus ½ of 1.0% and the LIBOR Base Rate plus 1.0%) plus a margin, or a LIBOR rate plus a margin. The margin varies based upon SPPC’s secured debt credit rating by S&P and Moody’s. Currently, SPPC’s applicable base rate margin is 0.50% and the LIBOR rate margin is 1.50%. The rate for outstanding letters of credit will be at the LIBOR rate margin plus a fee for the issuing bank.
Borrowings under the facility are conditioned on SPPC’s ability to make certain representations at the time such borrowing is made. However, so long as SPPC’s secured debt credit rating by S&P and Moody’s is investment grade (in each case, with a stable or better outlook), SPPC will not have to make a no material adverse effect representation as a condition to borrowing under the facility. The facility contains a provision which reduces the availability under the credit facility by the negative mark-to-market exposure for hedging transactions with credit facility lenders or their energy trading affiliates. The reduction in availability limits the amount that SPPC can borrow or use for letters of credit and would require that SPPC prepay any amount in excess of that limitation. The amount of the reduction will be calculated by SPPC on a monthly basis, and after calculating such reduction, the agreement provides that the availability under the revolving credit facility to SPPC shall at no time be less than 50% of the total commitments thereunder. As of the closing date, SPPC did not have any negative mark-to-market exposure for hedging transactions. The facility also includes customary covenants, including a financial maintenance covenant that requires SPPC to maintain a ratio of consolidated indebtedness to consolidated capital, determined as of the last day of each fiscal quarter, not to exceed 0.68 to 1.00.
SPPC currently does not have any borrowings under the facility other than approximately $10.5 million in letters of credit that were rolled over from the prior credit facility.
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrants have each duly caused this report to be signed on their behalf by the undersigned, thereunto duly authorized.
