Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
(Entergy Corporation)
On June 3, 2021, Entergy Corporation (“Entergy”), as borrower, amended and restated its existing credit agreement by entering into the Third Amended and Restated Credit Agreement (the "Entergy Credit Agreement”), with the banks named therein (the “Banks”), Citibank, N.A. (“Citibank”), as Administrative Agent and LC Issuing Bank, MUFG Bank, Ltd., as LC Issuing Bank, and the other LC Issuing Banks from time to time parties thereto . The Entergy Credit Agreement provides Entergy with a five-year, $3.5 billion unsecured revolving credit and letter of credit facility which may be increased up to $4 billion at Entergy’s request. The facility provides for the issuance of letters of credit in aggregate principal amount not to exceed $1.75 billion outstanding at any time and currently includes fronting commitments for the issuance of letters of credit against $20 million of the total borrowing capacity of the credit facility. Borrowings under the facility mature and are payable on the termination date for the facility, June 3, 2026. The term of the Entergy Credit Agreement and the maturity date of borrowings thereunder may be extended in one year increments no more than two times at Entergy’s request and upon the satisfaction of certain conditions. As of June 3, 2021, there were $150 million of loans outstanding and $5,850,000 of letters of credit issued under the Entergy Credit Agreement.
The Entergy Credit Agreement contains certain customary covenants, including restrictions on Entergy and its subsidiaries from pledging their assets and restrictions on certain asset sales. It also contains a covenant that requires Entergy to maintain a consolidated debt ratio of 65% or less of its total capitalization. The facility has a variable interest rate and a commitment fee that fluctuate depending on the senior unsecured debt rating of Entergy. The commitment fee is currently 0.225% of the undrawn commitment amount. Entergy’s obligations under the Entergy Credit Agreement may be accelerated upon an event of default, which includes non-payment of principal or interest, breach of representation or warranty, breach of covenant, cross-default, bankruptcy, material judgments, ERISA events and a change of control.
The foregoing description of the Entergy Credit Agreement does not purport to be complete and is qualified in its entirety be reference to the Entergy Credit Agreement filed as Exhibit 4.1 to this Current Report on Form 8-K.
(Entergy Arkansas)
On June 3, 2021, Entergy Arkansas, LLC (“Entergy Arkansas”), as borrower, amended and restated its existing credit agreement by entering into the Third Amended and Restated Credit Agreement (the “Entergy Arkansas Credit Agreement”), with the Banks, Citibank, as Administrative Agent, JPMorgan Chase Bank, N.A., as LC Issuing Bank, and the other LC Issuing Banks from time to time parties thereto . The Entergy Arkansas Credit Agreement provides Entergy Arkansas with a five-year, $150 million unsecured revolving credit and letter of credit facility which may be increased up to $175 million at Entergy Arkansas’s request. The facility provides for the issuance of letters of credit in aggregate principal amount not to exceed $75 million outstanding at any time and currently includes fronting
commitments for the issuance of letters of credit against $5 million of the total borrowing capacity of the credit facility. Borrowings under the facility mature and are payable on the termination date for the facility, June 3, 2026. The term of the Entergy Arkansas Credit Agreement and the maturity date of borrowings thereunder may be extended in one year increments no more than two times at Entergy Arkansas’s request and upon the satisfaction of certain conditions. As of June 3, 2021, there were no loans outstanding and no letters of credit issued under the Entergy Arkansas Credit Agreement.
The Entergy Arkansas Credit Agreement contains certain customary covenants, including restrictions on Entergy Arkansas from pledging its assets and restrictions on certain asset sales. It also contains a covenant that requires Entergy Arkansas to maintain a consolidated debt ratio of 65% or less of its total capitalization. The facility has a variable interest rate and a commitment fee that fluctuate depending on the senior unsecured debt rating of Entergy Arkansas. The commitment fee is currently 0.125% of the undrawn commitment amount. Entergy Arkansas’s obligations under the Entergy Arkansas Credit Agreement may be accelerated upon an event of default, which includes non-payment of principal or interest, breach of representation or warranty, breach of covenant, cross-default, bankruptcy, material judgments, ERISA events, a change of control occurs with respect to Entergy Arkansas and Entergy ceases to own, directly or indirectly, at least 80% of Entergy Arkansas’s common equity.
The foregoing description of the Entergy Arkansas Credit Agreement does not purport to be complete and is qualified in its entirety be reference to the Entergy Arkansas Credit Agreement filed as Exhibit 4.2 to this Current Report on Form 8-K.
(Entergy Louisiana)
On June 3, 2021, Entergy Louisiana LLC (“Entergy Louisiana”), as borrower, amended and restated its existing credit agreement by entering into the Third Amended and Restated Credit Agreement (the “Entergy Louisiana Credit Agreement”), with the Banks, Citibank, as Administrative Agent, Wells Fargo Bank, National Association and BNP Paribas, as LC Issuing Banks, and the other LC Issuing Banks from time to time parties thereto . The Entergy Louisiana Credit Agreement provides Entergy Louisiana with a five-year, $350 million unsecured revolving credit and letter of credit facility which may be increased up to $425 million at Entergy Louisiana’s request . The facility provides for the issuance of letters of credit in aggregate principal amount not to exceed $175 million outstanding at any time and currently includes fronting commitments for the issuance of letters of credit against $15 million of the total borrowing capacity of the facility. Borrowings under the facility mature and are payable on the termination date for the facility, June 3, 2026. The term of the Entergy Louisiana Credit Agreement and the maturity date of borrowings thereunder may be extended in one year increments no more than two times at Entergy Louisiana’s request and upon the satisfaction of certain conditions. As of June 3, 2021, there were no loans outstanding and no letters of credit issued under the Entergy Louisiana Credit Agreement.
The Entergy Louisiana Credit Agreement contains certain customary covenants, similar to those included in the Entergy Louisiana Credit Agreement, including the covenant that requires Entergy Louisiana to maintain a consolidated debt ratio of 65% or less of its total capitalization. The facility has a variable interest rate and a commitment fee that fluctuate depending on the senior unsecured debt rating of Entergy Louisiana. The commitment fee is currently 0.125% of the undrawn commitment amount. Entergy Louisiana’s obligations under the Entergy Louisiana Credit Agreement may be accelerated upon an event of default, which includes non-payment of principal or interest, breach of representation or warranty, breach of covenant, cross-default, bankruptcy, material judgments, ERISA events, a change of control
occurs with respect to Entergy Louisiana and Entergy ceases to own, directly or indirectly, 80% of Entergy Louisiana common equity.
The foregoing description of the Entergy Louisiana Credit Agreement does not purport to be complete and is qualified in its entirety be reference to the Entergy Louisiana Credit Agreement filed as Exhibit 4.3 to this Current Report on Form 8-K.
(Entergy Texas)
On June 3, 2021, Entergy Texas, Inc. (“Entergy Texas”), as borrower, amended and restated its existing credit agreement by entering into the Third Amended and Restated Credit Agreement (the “Entergy Texas Credit Agreement”), with the Banks, Citibank, as Administrative Agent, JPMorgan Chase Bank, N.A., BNP Paribas, Mizuho Bank, Ltd. and The Bank of Nova Scotia, as LC Issuing Banks, and the LC Issuing Banks from time to time parties thereto. The Entergy Texas Credit Agreement provides Entergy Texas with a five-year, $150 million unsecured revolving credit and letter of credit facility which may be increased up to $175 million at Entergy Texas’s request. The facility provides for the issuance of letters of credit in aggregate principal amount not to exceed $75 million outstanding at any time and currently includes fronting commitments for the issuance of letters of credit against $30 million of the total borrowing capacity of the credit facility. Borrowings under the facility mature and are payable on the termination date for the facility, June 3, 2026. The term of the Entergy Texas Credit Agreement and the maturity date of borrowings thereunder may be extended in one year increments no more than two times at Entergy Texas’s request and upon the satisfaction of certain conditions. As of June 3, 2021, there were no loans outstanding and $1,256,000 of letters of credit issued under the Entergy Texas Credit Agreement.
The Entergy Texas Credit Agreement contains certain customary covenants, similar to those included in the Entergy Texas Credit Agreement, including the covenant that requires Entergy Texas to maintain a consolidated debt ratio of 65% or less of its total capitalization. The facility has a variable interest rate and a commitment fee that fluctuate depending on the senior unsecured debt rating of Entergy Texas. The commitment fee is currently 0.225% of the undrawn commitment amount. Entergy Texas’s obligations under the Entergy Texas Credit Agreement may be accelerated upon an event of default, which includes non-payment of principal or interest, breach of representation or warranty, breach of covenant, cross-default, bankruptcy, material judgments, ERISA events, a change of control occurs with respect to Entergy Texas and Entergy ceases to own, directly or indirectly, 80% of Entergy Texas common stock.
The foregoing description of the Entergy Texas Credit Agreement does not purport to be complete and is qualified in its entirety be reference to the Entergy Texas Credit Agreement filed as Exhibit 4.4 to this Current Report on Form 8-K.