Hawaiian Electric restates revolvers for 2019 maturity, better pricing

By Marisa Wong

Madison, Wis., April 3 - Hawaiian Electric Industries, Inc. (HEI) and Hawaiian Electric Co., Inc. entered into amended and restated revolving credit agreements on April 2. The facilities amend and restate credit agreements originally dated May 7, 2010, extending the maturity date of the original facilities to April 2, 2019, according to an 8-K filing with the Securities and Exchange Commission.

The restated agreements, jointly syndicated, also increase the total lines of credit available to $350 million from the previous $300 million, improve pricing, establish a swingline lending feature for same-day funding of up to $15 million and $20 million for HEI and Hawaiian Electric, respectively, and expand the lending bank group to nine by adding two new banks.

J.P. Morgan Securities LLC and Wells Fargo Securities, LLC are joint lead arrangers and joint bookrunners, with JPMorgan Chase Bank, NA as administrative agent.

HEI facility

The HEI facility increased HEI's line of credit to $150 million from $125 million, extended the term of the facility to April 2, 2019 and provided improved pricing compared to the original facility.

Draws currently bear interest at adjusted Libor plus 137.5 basis points and annual fees on undrawn commitments of 20 bps.

In general, the applicable margin for Libor loans ranges from 100 bps to 175 bps, and the commitment fee ranges from 15 bps to 30 bps, both depending on HEI's long-term credit ratings.

The facility also contains updated provisions for pricing adjustments in the event of a long-term ratings change based on the ratings-based pricing grid, which includes the addition of ratings by Fitch Ratings to the ratings by Moody's Investors Service and Standard & Poor's, the filing noted.

In addition, the consolidated net worth covenant under the original facility was removed, leaving only one financial covenant relating to HEI's ratio of funded debt to total capitalization, each on a non-consolidated basis.

The facility may be drawn on to meet working capital needs and general corporate purposes but has primarily been used to support the company's short-term commercial paper program, of which $105.5 million was outstanding as of Dec. 31.

There are currently no outstanding draws under the HEI facility nor any outstanding letters of credit under the letter-of-credit sub-facility.

Hawaiian Electric facility

The Hawaiian Electric facility increased Hawaiian Electric's line of credit to $200 million from $175 million.

The facility terminates on April 1, 2015 but may be extended to up to April 2, 2019.

The amendment provided improved pricing compared to the original facility. In general, the applicable margin for Libor loans ranges from 100 bps to 175 bps, and the commitment fee ranges from 15 bps to 30 bps, both depending on Hawaiian Electric's long-term credit ratings.

The facility also contains updated provisions for pricing adjustments in the event of a long-term ratings change based on the ratings-based pricing grid, which includes the addition of ratings by Fitch to ratings by Moody's and S&P.

Interest is currently adjusted Libor plus 125 bps and annual fees on undrawn commitments of 17.5 bps.

The facility may be drawn on to meet working capital and general corporate purposes but has primarily been used to support Hawaiian Electric's short-term commercial paper program. There was no commercial paper outstanding as of Dec. 31.

There are currently no outstanding draws under the Hawaiian Electric facility nor any outstanding letters of credit under the letter-of- credit sub-facility.

Based in Honolulu, Hawaiian Electric is a holding company with its principal subsidiaries engaged in electric utility, banking and other businesses.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.