NorthWestern extends existing revolver to 2028, enters new revolver

By Marisa Wong

Los Angeles, Dec. 5 – NorthWestern Corp., which does business as NorthWestern Energy, amended and restated its existing revolving credit facility and entered into a new credit facility in anticipation of completing the second and final phase of its holding company reorganization, according to an 8-K filing with the Securities and Exchange Commission.

As previously disclosed, on Oct. 2 NorthWestern created a new public holding company, NorthWestern Energy Group, Inc., by implementing a merger, under which NorthWestern Energy Group became the successor issuer to NorthWestern.

In the early part of 2024, the two entities intend to complete the second and final phase of the holding company reorganization.

NorthWestern is proposing to contribute the assets and liabilities of its South Dakota and Nebraska regulated utilities to its direct subsidiary, NorthWestern Energy Public Service Corp.

Upon completion of the reorganization, the new unsecured loans for NorthWestern, Northwestern Energy Group and NorthWestern Energy Public Service, totaling $600 million, will replace the current unsecured loans of NorthWestern, totaling $550 million.

Revolver amendment

NorthWestern entered into on Nov. 29 a second amendment and restatement of its existing revolving credit facility to extend the maturity date of the facility to Nov. 29, 2028 from May 18, 2027.

Until the reorganization occurs, the amended facility maintains the existing base capacity of the facility at $425 million, with uncommitted features that allow NorthWestern to request up to two one-year extensions to the maturity date and increase the size by an additional $100 million.

After the reorganization occurs, NorthWestern will own and operate only the Montana regulated utility, and the base capacity of the amended facility will automatically reduce to $400 million. At that time, the company will also be terminating its $25 million swingline facility and its $100 million additional credit facility.

BofA Securities, Inc., Mizuho Bank, Ltd. and U.S. Bank NA are joint lead arrangers for the amended facility; Mizuho Bank and U.S. Bank are co-syndication agents; Keybank NA is documentation agent; and Bank of America, NA acts as administrative agent.

The amended facility does not amortize and is unsecured.

Borrowings bear interest at SOFR plus a credit spread adjustment of 10 basis points, plus a margin of 100 bps to 175 bps, depending on the company’s senior unsecured credit ratings.

Advances will be used for general corporate purposes.

The amended facility has one financial covenant, requiring that consolidated debt to total capitalization ratio be less than or equal to 65%.

As of Dec. 1, the company has $239 million of loans outstanding under the amended facility and has no letters of credit issued under the letter-of-credit subfacility.

New facility

On Nov. 29, NorthWestern Energy Group and its indirect subsidiary, NorthWestern Energy Public Service, entered into a new unsecured revolving credit facility due Nov. 29, 2028.

Under this credit facility, the lenders are not required to make any revolving credit loans until the reorganization occurs.

Once the reorganization occurs, the credit facility has a $200 million base capacity, with base sublimits for NorthWestern Energy Group of $50 million and NorthWestern Energy Public Service of $150 million, plus uncommitted features that allow the borrowers to request up to two one-year extensions to the maturity date and increase the size of the credit facility by an additional $50 million.

The new credit facility also gives the borrowers the flexibility to adjust the sublimits as needed, provided that NorthWestern Energy Group’s base sublimit cannot exceed $100 million and NorthWestern Energy Public Service’s sublimit cannot exceed $200 million.

BofA Securities, Mizuho Bank and U.S. Bank are also joint lead arrangers for the new credit facility; Mizuho Bank and U.S. Bank are co-syndication agents; Keybank is documentation agent; and Bank of America is administrative agent.

The credit facility does not amortize and is unsecured.

Borrowings bear interest at SOFR plus a credit spread adjustment of 10 bps, plus a margin of 100 bps to 175 bps, depending on ratings.

Advances will be used for general corporate purposes.

The credit facility has one financial covenant, requiring that consolidated debt to total capitalization ratio for each borrower be less than or equal to 65%.

The energy company is based in Sioux Falls, S.D.

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