nov7phi8k-no2.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of
The
Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported): November 7, 2008
PEPCO
HOLDINGS, INC.
(Exact
name of registrant as specified in its charter)
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Delaware
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001-31403
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52-2297449
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(State
or other jurisdiction
of
incorporation)
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(Commission
File
Number)
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(IRS
Employer
Identification
No.)
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701
Ninth Street, N.W., Washington, DC
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20068
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant's
telephone number, including area code
(202)
872-3526
Not
Applicable
(Former
name or former address, if changed since last report.)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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¨
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
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Pepco
Holdings, Inc.
Form
8-K
Item
1.01. Entry into a Definitive Material
Agreement.
See Item 2.03 below.
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Item
2.03.
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Creation
of a Direct Financial Obligation or an Obligation under an Off-Balance
Sheet Arrangement of a Registrant.
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On November 7, 2008, Pepco Holdings,
Inc. (“PHI”) entered into a Credit Agreement with a syndicate of eight lenders,
with Bank of America, N.A., as administrative agent and swingline lender
(“BOA”), Banc of America Securities, as sole lead arranger and sole book runner,
and KeyBank National Association, JPMorgan Chase Bank, N.A., SunTrust Bank, The
Bank of Nova Scotia, Morgan Stanley Bank, Credit Suisse, Cayman Islands Branch
and Wachovia Bank, National Association as co-documentation
agents. Under the facility, PHI may obtain revolving loans and
swingline loans over the term of the facility, which expires on November 6,
2009. All indebtedness incurred under the facility is
unsecured.
The aggregate of the commitment of the
lenders under the facility is $390 million. In addition, at any time
during the term of the facility, PHI is entitled to request that the lenders
consent to increases in the aggregate commitment by an amount up to $10
million. The interest rate payable by PHI on funds borrowed under the
facility is, at its election, based on either (a) the corresponding Eurodollar
rate or (b) the highest of (i) the prevailing prime rate, (ii) the federal funds
effective rate plus 0.5% or (iii) the one-month Eurodollar rate plus 1.0%, plus
a margin that varies according to the credit rating of PHI. Under the
swingline loan sub-facility, PHI may obtain from, and with the consent of, BOA,
as the swingline lender, loans for up to seven days in an aggregate principal
amount which, when combined with the outstanding principal amount of revolving
loans made by BOA under the facility, does not exceed BOA’s total commitment of
$50 million and which in no event exceeds 10% of the aggregate borrowing limit
under the facility.
PHI intends to use the proceeds of
loans drawn under the facility for general corporate purposes. In order to
obtain loans under the facility, certain representations and warranties made by
PHI at the time the credit agreement was entered into also must be true at the
time the facility is utilized, and PHI must be in compliance with specified
covenants, including the (i) the requirement that PHI maintain a ratio of total
indebtedness to total capitalization of 65% or less, computed in accordance with
the terms of the credit agreement, which calculation excludes from the
definition of total indebtedness certain trust preferred securities and
deferrable interest subordinated debt (not to exceed 15% of total
capitalization), (ii) a restriction on sales or other dispositions of assets,
other than certain permitted sales and dispositions, and (iii) a restriction on
the incurrence of liens on the assets of PHI or any of its significant
subsidiaries other than permitted liens. The absence of a material
adverse change in the borrower’s business, property, and results of operations
or financial condition is not a condition to the availability of credit under
the facility. The credit agreement does not include any ratings
triggers.
Pepco
Holdings, Inc.
Form
8-K
The failure to satisfy any of the
covenants or the occurrence of other specified events that constitute an event
of default could result in the acceleration of the repayment obligations of PHI.
The events of default include (i) the failure of PHI or any of its significant
subsidiaries to pay when due, or the acceleration of, certain indebtedness under
other borrowing arrangements, (ii) certain bankruptcy events, judgments or
decrees against PHI or its significant subsidiaries, and (iii) a change in
control (as defined in the credit agreement) of PHI or the failure of PHI to own
all of the voting stock of its regulated utility subsidiaries (Potomac Electric
Power Company, Delmarva Power & Light Company and Atlantic City Electric
Company).
All of the lenders or their affiliates
have provided investment or commercial banking services to PHI and its
affiliates, including as an underwriter of their securities, in the past and are
likely to do so in the future. They receive customary fees and commissions for
these services.
* * * * *
* * *
Pepco
Holdings, Inc.
Form
8-K
SIGNATURES
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly
authorized.
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PEPCO HOLDINGS,
INC.
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(Registrant) |
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Date November 7,
2008
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/s/ P. H.
BARRY
Name: Paul
H. Barry
Title: Senior
Vice President
and
Chief Financial Officer
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