FirstEnergy units get $1 billion revolver; other revolvers extended

By Angela McDaniels

Tacoma, Wash., May 11 - FirstEnergy Corp. subsidiaries FirstEnergy Transmission, LLC, American Transmission Systems, Inc. and Trans-Allegheny Interstate Line Co. entered into a new $1 billion revolving credit facility due May 8, 2017 on Tuesday, according to an 8-K filing with the Securities and Exchange Commission.

The borrowers have two one-year extension options.

There is a $225 million sublimit for letters of credit.

The interest rate is Libor plus 112.5 basis points to 250 bps, depending on ratings. The commitment fee is 12.5 bps to 50 bps.

The lead arrangers are PNC Capital Markets LLC, J.P. Morgan Securities LLC, RBS Securities Inc., Citigroup Global Markets Inc., CoBank, ACB, Union Bank, NA and Bank of Tokyo-Mitsubishi UFJ, Ltd.

PNC Bank, NA is the administrative agent. J.P. Morgan Securities and Royal Bank of Scotland plc are the syndication agents. Citibank, NA, CoBank, Union Bank and Bank of Tokyo-Mitsubishi UFJ are the documentation agents.

Generally, borrowings are available to each borrower separately and will mature on the earlier of 364 days from the date of borrowing or the commitment termination date unless extended. American Transmission Systems may draw no more than $100 million under the new revolver, and Trans-Allegheny may draw no more than $200 million.

Proceeds may be used for working capital and other general corporate purposes.

On Wednesday, FirstEnergy Transmission drew down the revolver in full and used a portion of the proceeds to repay $171.3 million of its short-term borrowings under the FirstEnergy unregulated companies money pool and to pay $3.2 million of expenses related to the closing of the revolver. The remainder of the draw, $825.5 million, was invested into the money pool.

The borrowers are required to maintain a consolidated debt to total capitalization ratio of no more than 0.65 times in the case of American Transmission Systems and Trans-Allegheny and of no more than 0.70 times in the case of FirstEnergy Transmission.

For American Transmission Systems, the new revolver replaces its $100 million borrowing capability under FirstEnergy's revolver. For Trans-Allegheny, the new revolver replaces its $450 million credit facility dated as of Jan. 25, 2010 with BNP Paribas as administrative agent, which was terminated.

Other revolvers amended

On Thursday, FirstEnergy repaid $1 billion under its existing $2 billion five-year revolver, amended the interest rate and commitment fee and extended it to May 8, 2017.

The revolver was also amended to remove American Transmission Systems as a borrower and to add a $1.5 billion accordion feature.

Additional borrowers under the revolver are Cleveland Electric Illuminating Co., Metropolitan Edison Co., Ohio Edison Co., Pennsylvania Power Co., Toledo Edison Co., American Transmission Systems, Jersey Central Power & Light Co., Monongahela Power Co., Pennsylvania Electric Co., Potomac Edison Co. and West Penn Power.

Royal Bank of Scotland plc is the administrative agent.

Finally, FirstEnergy Solutions Corp. and Allegheny Energy Supply Co. extended their $2.5 billion revolver to May 8, 2017 and amended the interest rate and commitment fee.

JPMorgan Chase Bank, NA is the administrative agent.

For both revolvers, the interest rate is now Libor plus 125 bps to 250 bps, and the commitment fee is 15 bps to 55 bps.

Each revolver has up to two additional one-year extensions.

FirstEnergy is a diversified energy company based in Akron, Ohio.

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