Business Context and Reporting Period
This Form 8-K is a current report filed by Pinnacle West Capital Corporation and its subsidiary, Arizona Public Service Company (APS), on April 9, 2013. The filing discloses the entry into and termination of material definitive agreements regarding corporate credit facilities.
Key Financial Metrics and Agreements
- New Credit Facility: APS entered into a five-year unsecured revolving credit facility with a capacity of $500 million.
- Term: The facility is effective from April 9, 2013, through April 9, 2018.
- Purpose: Funds are designated for general corporate purposes and the issuance of letters of credit.
- Interest Rate: Borrowings bear interest based on APS's then-current senior unsecured debt ratings.
- Covenants: The agreement includes a requirement to maintain a consolidated debt-to-capitalization ratio no greater than a prescribed level and compliance with lien restrictions.
- Financial Performance: The filing text does not provide specific values for revenue, profit, cash flow, margins, or current liquidity positions.
Material Changes Versus Prior Period
On April 9, 2013, APS terminated its prior $500 million unsecured revolving credit facility, which was scheduled to expire on February 13, 2015. This prior facility was immediately replaced by the new five-year facility described above. The total borrowing capacity remains unchanged at $500 million, but the maturity date has been extended.
Outlook, Risks, and Contingencies
- Events of Default: The facility includes customary events of default, including a cross-default provision related to APS or its subsidiaries' indebtedness.
- Change of Control: A change of control provision relates to Pinnacle West Capital Corporation, the parent company of APS.
- Consequences of Default: If an event of default occurs, lenders may terminate obligations to make loans or issue letters of credit and may declare outstanding obligations due and payable.
- Conditions Precedent: Borrowings are conditioned on APS's ability to make certain representations at the time of borrowing, excluding representations concerning material adverse effects and litigation, which were made at the inception of the facility.
Key Facts for Investor Verification
- Verify the specific "prescribed level" for the consolidated debt-to-capitalization ratio covenant in the full agreement text.
- Confirm APS's current senior unsecured debt rating to determine the applicable interest rate for borrowings.
- Review the full list of lenders and agents to assess concentration risk and banking relationships.
- Check for any subsequent filings regarding the utilization of the $500 million facility or changes in credit ratings.