Alliant Energy, utility subsidiaries obtain $1 billion revolver

By Rebecca Melvin

Concord, N.H., Dec. 21 – Alliant Energy Corp. and subsidiaries Interstate Power and Light Co. and Wisconsin Power and Light Co. entered into a credit agreement that provides for a combined $1 billion revolving credit facility among the three borrowers, according to an 8-K filing with the Securities and Exchange Commission.

The amended and restated five-year master credit agreement was entered into on Dec. 17 with Wells Fargo Bank NA as administrative agent and matures on Dec. 17, 2026. Subject to certain conditions, the borrowers may exercise two extension options, for one year each.

The initial sublimit for borrowings is $450 million, $250 million and $300 million, respectively. The credit facility includes a $100 million letter of credit subfacility and $50 million swingline subfacility, which are available to all of the borrowers. Subject to certain conditions, Alliant Energy, IPL and WPL may each reallocate and change its initial sublimit up to $500 million, $400 million and $500 million, respectively, within the $1 billion total commitment.

The facility provides for an expansion option that will allow Alliant Energy, IPL and WPL to request an increase in the facility of up to an additional $300 million. The credit facility amends and restates an existing master five-year credit facility, by and between Alliant Energy, IPL, WPL, the lenders from time to time who are a party thereto, and Wells Fargo Bank, NA as administrative agent.

Each borrower may use borrowings under the credit facility for general corporate purposes including working capital, interim funding of capital expenditures and supporting such borrower’s commercial paper program.

Borrowings accrue interest at a Eurodollar rate plus 69 basis points to 147.5 bps, depending on ratings.

The credit agreement contains covenants that, among other things, require Alliant Energy to maintain a debt-to-capital ratio of not greater than 65% on a consolidated basis.

It also contains a covenant that prohibits placing liens on any of the property of Alliant Energy, IPL or WPL or their subsidiaries with certain exceptions such as liens to secure obligations of up to 10% of the consolidated tangible assets of such borrower.

It also contains a covenant that requires, during its term, any proceeds from asset sales, with certain exclusions, in excess of 25% of a borrower’s consolidated assets be used to reduce certain debt commitments. Exclusions include certain sale and lease-back transactions, sales of non-regulated assets, intercompany asset sales and sales of certain contracts and accounts receivables.

There are customary events of default, including a cross-default provision whereby Alliant Energy would be in default under the credit agreement if Alliant Energy or significant subsidiaries including IPL and WPL defaults on debt (other than nonrecourse debt) totaling $100 million or more.

IPL is subject to a similar-cross default provision with respect to its own consolidated debt. WPL is subject to a similar cross default provision with respect to its own consolidated debt. A default by Alliant Energy or its non-regulated subsidiaries would not trigger a cross default at IPL or WPL, nor would a default by either of IPL or WPL constitute a cross-default event for the other.

The obligations of Alliant Energy, IPL and WPL are several and not joint. No borrower is liable for the conduct of any other borrower, and no borrower is a primary obligor, guarantor or surety for the obligation of any other borrower under the agreement.

Alliant Energy is a Madison, Wis., utility holding company.

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