CenterPoint Energy Houston Electric obtains new $600 million loan

By Jennifer Chiou

New York, Nov. 26 - CenterPoint Energy Houston Electric announced that it closed on a new $600 million credit facility on Tuesday.

Citibank Global Markets Inc. was the lead arranger and bookrunner while CitiCorp North America, Inc. was the administrative agent.

Bank of America, NA and Deutsche Bank Securities Inc. were co-syndication agents, and HSBC Bank USA, NA and the Bank of Nova Scotia were co-documentation agents.

The new facility is secured by a pledge of $600 million of general mortgage bonds.

Borrowing costs for Libor-based loans will be at a margin of Libor plus 225 basis points based on ratings. In addition, the company will pay lenders a commitment fee of 50 bps for their commitments under the facility and a quarterly duration fee of 75 bps on the average amount of outstanding borrowings during the quarter.

The new 364-day facility will provide additional liquidity while the company is seeking to recover the costs incurred as a result of Hurricane Ike, and will terminate when bonds are issued to securitize those costs if the bonds are issued prior to the normal expiration of the facility.

The company said it expects to seek legislative and regulatory approval for the bonds during 2009.

"I am very pleased that 12 banks supported the company by participating in this facility for CenterPoint Energy Houston Electric," Gary L. Whitlock, executive vice president and chief financial officer, said in a news release.

"Obtaining this additional facility at CenterPoint, along with the recent amendment to our parent company facility to increase the permitted debt to EBITDA covenant ratio, were prudent steps in increasing our liquidity until the time we expect to recover the costs incurred to restore our electric system after Hurricane Ike."

CenterPoint Energy Houston also has a $288 million credit facility, which is scheduled to expire in June 2012. The company also maintains a $1.2 billion credit facility.

CenterPoint Energy Houston Electric is the electric transmission and distribution subsidiary of Houston-based CenterPoint Energy Inc.

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