CenterPoint Energy 2008 Annual Report Download - page 72

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Under our $1.2 billion credit facility, CenterPoint Houston’s $289 million credit facility and CERC Corp’s
$950 million credit facility, an additional utilization fee of 5 basis points applies to borrowings any time more than
50% of the facility is utilized. The spread to LIBOR and the utilization fee fluctuate based on the borrower’s credit
rating.
Borrowings under each of the facilities are subject to customary terms and conditions. However, there is no
requirement that we, CenterPoint Houston or CERC Corp. make representations prior to borrowings as to the
absence of material adverse changes or litigation that could be expected to have a material adverse effect.
Borrowings under each of the credit facilities are subject to acceleration upon the occurrence of events of default
that we, CenterPoint Houston or CERC Corp. consider customary.
In November 2008, CERC replaced a receivables facility that had expired in October 2008 with a new receivables
facility that expires in November 2009. Availability under the new facility ranges from $128 million to
$375 million, reflecting seasonal changes in receivables balances.
We, CenterPoint Houston and CERC Corp. are currently in compliance with the various business and financial
covenants contained in the respective credit facilities as disclosed above.
As of February 13, 2009, we had the following facilities (in millions):
Date Executed
Company
Type of
Facility
Size of
Facility
Amount
Utilized at
February
13, 2009
Termination Date
June 29, 2007
CenterPoint Energy
Revolver
$1,156
$ 184 (2)
June 29, 2012
June 29, 2007
CenterPoint Houston
Revolver
289
4
June 29, 2012
June 29, 2007
CERC Corp.
Revolver
950 (1)
781 (1)
June 29, 2012
November 25, 2008
CERC Corp.
Receivables
375
—
November 24, 2009
November 25, 2008
CenterPoint Houston
Revolver
600
—
November 24, 2009
________
(1) Lehman Brothers Bank, FSB, stopped funding its commitments following the bankruptcy filing of its
parent in September 2008, effectively causing a reduction to the total available capacity of $20 million
under CERC Corp.’s facility.
(2) Includes $155 million of borrowings and $29 million of outstanding letters of credit.
(3) Includes $4 million of outstanding letters of credit.
Our $1.2 billion credit facility backstops a $1.0 billion CenterPoint Energy commercial paper program under
which we began issuing commercial paper in June 2005. The $950 million CERC Corp. credit facility backstops a
$915 million commercial paper program under which CERC Corp. began issuing commercial paper in February
2008. The CenterPoint Energy commercial paper is rated ―Not Prime‖ by Moody’s Investors Service, Inc.
(Moody’s), ―A-2‖ by Standard & Poor’s Rating Services (S&P), a division of The McGraw-Hill Companies, and
―F3‖ by Fitch, Inc. (Fitch). The CERC Corp. commercial paper is rated ―P-3‖ by Moody’s, ―A-2‖ by S&P, and ―F2‖
by Fitch. As a result of the credit ratings on the two commercial paper programs, we do not expect to be able to rely
on the sale of commercial paper to fund all of our short-term borrowing requirements. We cannot assure you that
these ratings, or the credit ratings set forth below in ―— Impact on Liquidity of a Downgrade in Credit Ratings,‖
will remain in effect for any given period of time or that one or more of these ratings will not be lowered or
withdrawn entirely by a rating agency. We note that these credit ratings are not recommendations to buy, sell or hold
our securities and may be revised or withdrawn at any time by the rating agency. Each rating should be evaluated
independently of any other rating. Any future reduction or withdrawal of one or more of our credit ratings could
have a material adverse impact on our ability to obtain short- and long-term financing, the cost of such financings
and the execution of our commercial strategies.
Securities Registered with the SEC. In October 2008, CenterPoint Energy and CenterPoint Houston jointly
registered indeterminate principal amounts of CenterPoint Houston’s general mortgage bonds and CenterPoint
Energy’s senior debt securities and junior subordinated debt securities and an indeterminate number of CenterPoint