OGE, Oklahoma Gas and Electric close $900 million five-year revolvers

By Marisa Wong

Morgantown, W.Va., March 8 – OGE Energy Corp. and its subsidiary, Oklahoma Gas and Electric Co., each entered into a new $450 million unsecured revolving credit facility on March 8, according to an 8-K filing with the Securities and Exchange Commission.

Each of the new facilities is scheduled to terminate on March 8, 2022, but each facility has two one-year extension options, subject to majority lender group approval.

Each of the facilities may be increased by up to $150 million, to a maximum commitment limit of $600 million.

The two facilities allow for issuance of letters of credit, provided that the aggregate outstanding credit exposure is not to exceed the amount of the revolvers and that the aggregate outstanding stated amount of letters of credit issued under each facility is not to exceed $100 million.

Both facilities are with Wells Fargo Securities, LLC, JPMorgan Chase Bank, NA, Mizuho Bank, Ltd., MUFG Union Bank, NA, RBC Capital Markets and U.S. Bank NA as joint lead arrangers and joint bookrunners; Wells Fargo Bank, NA as administrative agent; JPMorgan Chase Bank as syndication agent; and Mizuho Bank, MUFG Union Bank, Royal Bank of Canada and U.S. Bank as co-documentation agents.

OGE Energy’s new $450 million facility replaced its $750 million revolving credit facility dated Dec. 13, 2011, which was terminated on the closing date of the new facility. The old facility was set to expire on Dec. 13, 2018.

As of the closing date, there were no borrowings outstanding under OGE Energy’s old facility and no borrowings outstanding under its new facility.

Borrowings under the new facility will bear interest at Libor plus a margin of 69 basis points to 127.5 bps. There is also a facility fee that ranges from 6 bps to 22.5 bps. Interest rate margins and facility fees are based on OGE Energy’s senior unsecured credit ratings.

Oklahoma Gas and Electric’s new $450 million facility replaced its $400 million revolver dated Dec. 13, 2011, which was terminated on the closing date. The old facility was set to expire on Dec. 13, 2018.

As of March 8, there were about $172 million of revolving loan borrowings and $1.7 million of standby letters of credit outstanding under Oklahoma Gas and Electric’s old facility. The outstanding letters of credit were assumed under and the outstanding revolving loans were repaid with borrowings under the new facility.

Borrowings under the new facility will bear interest at Libor plus a margin of 69 bps to 127.5 bps, and the facility fee ranges from 6 bps to 22.5 bps. The margins and fees are based on Oklahoma Gas and Electric’s senior unsecured credit ratings.

Each revolver includes a financial covenant requiring that the respective borrower maintain a maximum debt to capitalization ratio of 65%.

The electric utility is based in Oklahoma City.

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