CenterPoint Energy Houston Electric, LLC, a wholly owned subsidiary of CenterPoint Energy, said it entered into a delayed draw term loan agreement with Mizuho Bank, Ltd. as administrative agent on June 24, 2024. The banks committed to up to $300 million in term loans, and the company may request additional commitments and loans of up to $200 million, subject to customary conditions precedent, which are not guaranteed to be met.

1. 01

   CenterPoint Energy Houston Electric, LLC, a wholly owned subsidiary of CenterPoint Energy, said it entered into a delayed draw term loan agreement with Mizuho Bank, Ltd. as administrative agent on June 24, 2024. The banks committed to up to $300 million in term loans, and the company may request additional commitments and loans of up to $200 million, subject to customary conditions precedent, which are not guaranteed to be met.

2. 02

   The company said the loan matures on December 24, 2025. Borrowings bear interest, at the company's option, at Term SOFR, including an adjustment of 0.10%, plus a margin of 1.0%, or at the Alternate Base Rate. The company said it plans to use the proceeds for working capital to support liquidity needs from the May 2024 Storm Events and for general limited liability company purposes.

3. 03

   The company said the loan agreement includes a covenant limiting the ratio of consolidated debt to consolidated capitalization to 67.5%. The covenant would temporarily rise to 70% if a natural disaster causes system restoration costs that are reasonably likely to exceed $100 million in a consecutive twelve-month period, which the company intends to seek to recover through securitization financing, and if the company certifies this to the administrative agent.

4. 04

   The company estimated total costs to restore electric delivery facilities damaged by the May 2024 Storm Events at $425 to $475 million. It said outages from the May 16 storm peaked at nearly 922,000 customers. The company said it plans to recover the costs through traditional regulatory mechanisms or securitization bonds.

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