CenterPoint Energy Subsidiary Closes on Low-Cost Transition Bonds
HOUSTON, Jan. 19, 2012 /PRNewswire/ -- CenterPoint Energy, Inc. (NYSE: CNP) announced today that CenterPoint Energy Transition Bond Company IV, LLC has closed on the sale of $1.695 billion in transition bonds with an effective annual weighted average interest rate of approximately 2.45%.
The issuance of the transition bonds was authorized by a financing order issued by the Public Utility Commission of Texas (PUC) in October 2011 following the PUC's approval of a final order in the CenterPoint Energy Houston Electric, LLC (CenterPoint Energy Houston Electric) true-up remand proceeding before the PUC. The proceeding related to CenterPoint Energy Houston Electric's recovery of stranded costs and other true-up balances associated with the transition to a competitive retail electric market in Texas.
"We appreciate the leadership of the PUC for getting these bonds to market quickly to take advantage of the current favorable interest rate environment which will produce significant savings for Houston-area electric consumers," said Marc Kilbride, vice president and treasurer for CenterPoint Energy.
As in the case of the three previous issuances of transition bonds by subsidiaries of CenterPoint Energy Houston Electric, the principal and interest on the bonds will be recovered through a transition charge added to the electric delivery rate paid by retail electric providers (REPs) to CenterPoint Energy Houston Electric for power delivered to Houston-area customers. The new monthly transition charge for a residential consumer using 1,000 Kwh will initially be $2.39, will be assessed to REPs for approximately 13 years beginning January 20 and will be subject to periodic adjustment under certain circumstances.
This news release does not constitute an offer to sell, or the solicitation of an offer to buy, any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offering would be unlawful.
This news release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual events and results may differ materially from those expressed or implied by these forward-looking statements. The statements in this news release regarding future events and other statements that are not historical facts are forward-looking statements. Each forward-looking statement contained in this news release speaks only as of the date of this release. Factors that could affect actual results include the accuracy of the assumptions used in calculating cost recovery and rates of return had the securitization not been completed and other factors discussed in CenterPoint Energy's and its subsidiaries' Forms 10-K for the fiscal year ended December 31, 2010, CenterPoint Energy's and its subsidiaries' Forms 10-Q for the periods ended March 31, June 30, and September 30, 2011, and other filings with the SEC.
CenterPoint Energy, Inc., headquartered in Houston, Texas, is a domestic energy delivery company that includes electric transmission & distribution, natural gas distribution, competitive natural gas sales and services, interstate pipelines, and field services operations. The company serves more than five million metered customers primarily in Arkansas, Louisiana, Minnesota, Mississippi, Oklahoma, and Texas. Assets total nearly $21 billion. With about 8,800 employees, CenterPoint Energy and its predecessor companies have been in business for more than 135 years. For more information, visit the Web site at www.CenterPointEnergy.com.
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SOURCE CenterPoint Energy, Inc.