CenterPoint Energy 2014 Annual Report Download - page 69

consolidated debt (excluding transition and system restoration bonds) to an amount not to exceed 65% of CenterPoint Houston’
s consolidated
capitalization.
CERC Corp.’s $600 million revolving credit facility can be drawn at LIBOR plus 1.5% based on CERC Corp.’
s current credit ratings. The
revolving credit facility contains a financial covenant which limits CERC’s consolidated debt to an amount not to exceed 65% of CERC’
s
consolidated capitalization.
Borrowings under each of the three revolving credit facilities are subject to customary terms and conditions. However, there is no
requirement that the borrower 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 revolving credit facilities are subject to acceleration upon the
occurrence of events of default that we consider customary. The revolving credit facilities also provide for customary fees, including
commitment fees, administrative agent fees, fees in respect of letters of credit and other fees. In each of the three revolving credit facilities, the
spread to LIBOR and the commitment fees fluctuate based on the borrower’
s credit rating. The borrowers are currently in compliance with the
various business and financial covenants in the three revolving credit facilities.
On September 9, 2014, our revolving credit facility and the revolving credit facilities of CenterPoint Houston and CERC Corp. were
amended to, among other things, extend the maturity date of the commitments under the credit facilities from September 9, 2018 to September 9,
2019. The amendments also reduced the swingline and letter of credit sub-
facilities under each credit facility, with total commitments under each
credit facility remaining unchanged.
Our $1.2 billion revolving credit facility backstops our $1.0 billion commercial paper program. As of December 31, 2014, we had $191
million of outstanding commercial paper. CERC Corp.’
s $600 million revolving credit facility backstops its $600 million commercial paper
program. As of December 31, 2014 , CERC Corp. had $341 million of outstanding commercial paper.
Securities Registered with the SEC
CenterPoint Energy, CenterPoint Houston and CERC Corp. have filed a joint shelf registration statement with the SEC registering
indeterminate principal amounts of CenterPoint Houston’s general mortgage bonds, CERC Corp.’
s senior debt securities and CenterPoint
Energy’s senior debt securities and junior subordinated debt securities and an indeterminate number of CenterPoint Energy’
s shares of common
stock, shares of preferred stock, as well as stock purchase contracts and equity units.
Temporary Investments
As of February 17, 2015 , we had no temporary investments.
Money Pool
We have a money pool through which the holding company and participating subsidiaries can borrow or invest on a short-
term basis.
Funding needs are aggregated and external borrowing or investing is based on the net cash position. The net funding requirements of the money
pool are expected to be met with borrowings under our revolving credit facility or the sale of our commercial paper.
Impact on Liquidity of a Downgrade in Credit Ratings
The interest on borrowings under our credit facilities is based on our credit rating. As of February 17, 2015 , Moody’
s Investors Service, Inc.
(Moody’s), Standard & Poor’s Ratings Services (S&P), a division of The McGraw-
Hill Companies, and Fitch, Inc. (Fitch) had assigned the
following credit ratings to senior debt of CenterPoint Energy and certain subsidiaries:
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Moody’s S&P Fitch
Company/Instrument
Rating Outlook (1) Rating Outlook(2) Rating Outlook(3)
CenterPoint Energy Senior
Unsecured Debt
Baa1 Stable BBB+ Stable BBB Stable
CenterPoint Houston Senior
Secured Debt A1 Stable A Stable A Stable
CERC Corp. Senior Unsecured
Debt Baa2 Stable A- Stable BBB Stable