| Item 1.01 | Entry into a Material Definitive Agreement. |
On March 22, 2019, Dominion Energy, Inc. (Dominion Energy), and its wholly-owned subsidiaries, Virginia Electric and Power Company (Virginia Power), Dominion Energy Gas Holdings, LLC (Dominion Energy Gas), Questar Gas Company (Questar Gas) and South Carolina Electric & Gas Company (SCE&G), entered into a $6,000,000,000 Fourth Amended and Restated Revolving Credit Agreement (the Credit Facility) with JPMorgan Chase Bank, N.A., as Administrative Agent, Mizuho Bank, Ltd., Bank of America, N.A., The Bank of Nova Scotia and Wells Fargo Bank, N.A., as Syndication Agents, and other lenders named therein.
The Credit Facility will mature in March 2023, unless extended, and bear interest at a variable rate. The Credit Facility amends and restates its predecessor agreement in its entirety to add SCE&G, which became a subsidiary of Dominion Energy in January 2019, as a borrower and to make certain administrative and related changes prompted by the addition of SCE&G as a borrower. The Credit Facility can be used by SCE&G and theco-borrowers to support bank borrowings and the issuance of commercial paper, as well as to support the issuance of letters of credit. A maximum of $1,000,000,000 of the Credit Facility is available to SCE&G, assuming adequate capacity is available after giving effect to uses byco-borrowers Dominion Energy, Virginia Power, Dominion Energy Gas and Questar Gas and subject to anysub-limits for SCE&G agreed to among SCE&G and theco-borrowers from time to time.
The Credit Facility contains covenants that, in the event of default, could result in the acceleration of principal and interest payments and in some cases, termination of credit commitments unless a waiver of such requirements is agreed to by the lenders. These provisions are customary and not unique to the Credit Facility. The covenants include:
| | • | | The timely payment of principal and interest; |
| | • | | Information requirements, including submitting required financial reports and information about changes in SCE&G’s credit ratings to lenders; |
| | • | | Performance obligations, audits/inspections, continuation of the basic nature of business, restrictions on certain matters related to merger or consolidation, and restrictions on disposition of all or substantially all assets; and |
SCE&G is required to pay annual commitment fees to maintain its access to the Credit Facility. In addition, the Credit Facility contains various terms and conditions that could affect SCE&G’s ability to borrow under the Credit Facility. They include a maximum 65% debt to total capital ratio that applies to SCE&G and cross-default provisions that apply separately to each borrower.
If Dominion Energy, Virginia Power, Dominion Energy Gas, Questar Gas, SCE&G or any of these companies’ material subsidiaries, as defined in the Credit Facility, fails to make payment on various debt obligations in excess of $100 million, the lenders could require that company to accelerate its repayment of any outstanding borrowings under the Credit Facility, and the lenders could terminate their commitments to lend funds to that company. Accordingly, any default by Dominion Energy, Virginia Power, Dominion Energy Gas or Questar Gas will not affect the lenders’ commitments to SCE&G.
The foregoing description of the Credit Facility does not purport to be complete and is qualified in its entirety by reference to the complete text of such agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form8-K and is incorporated by reference herein.
