HOUSTON, Dec 16, 2005 /PRNewswire-FirstCall via COMTEX News Network/ -- CenterPoint Energy, Inc. (NYSE: CNP) announced today that CenterPoint Energy Transition Bond Company II, LLC closed on $1.85 billion in transition bonds with an effective annual weighted average interest rate of 5.45 percent. The Transition Bond Company is a special purpose subsidiary of CNP's electric transmission and distribution subsidiary, CenterPoint Energy Houston Electric (CEHE).
Issuance of these bonds, authorized by a financing order from the Public Utility Commission of Texas (Commission), is one of the final steps in the transition to a competitive retail electric market that was begun in 2001. The principal and interest on the bonds are recovered under a Transition Charge, which is added to the electric delivery rate paid by retail electric providers to CEHE for power delivered to Houston-area customers. The Transition Charge will begin now that the bonds have closed.
"These transition bonds are one of the principal ratepayer benefits of the 1999 Texas electric restructuring law, saving customers approximately $700 million when compared to the costs of traditional ratemaking," said Marc Kilbride, vice president and treasurer for CenterPoint Energy. "We are pleased that we were able to sell these bonds at favorable interest rates. We appreciate the leadership of the Commission in getting these bonds to market."
Proceeds from the transition bond issuance will be utilized to repay CEHE's $1.31 billion term loan and the balance will be used to reduce CNP's equity investment in CEHE.
CenterPoint Energy, Inc., headquartered in Houston, Texas, is a domestic energy delivery company that includes electric transmission & distribution, natural gas distribution and sales, and interstate pipeline and gathering operations. The company serves nearly five million metered customers primarily in Arkansas, Louisiana, Minnesota, Mississippi, Oklahoma, and Texas. Assets total approximately $16 billion. With more than 9,000 employees, CenterPoint Energy and its predecessor companies have been in business for more than 130 years. For more information, visit http://www.CenterPointEnergy.com .
This news release includes forward-looking statements. Actual events and results may differ materially from those projected. The statements in this news release that are not historical facts are forward-looking statements. 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 in CenterPoint Energy's or its subsidiaries' Form 10-Ks for the period ended Dec. 31, 2004, Form 10-Qs for the periods ended March 31, June 30, and Sept. 30, 2005, and other filings with the Securities and Exchange Commission.
SOURCE CenterPoint Energy, Inc.
media, Floyd LeBlanc, +1-713-207-7125, or investors, Marianne Paulsen, +1-713-207-6500, both of CenterPoint Energy, Inc.
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