|Albuquerque, New Mexico||
November 15 , 2004
PNM Resources, Inc. (NYSE:PNM) today announced it has completed arrangements for a new $400 million, unsecured revolving credit facility with a group of 16 lenders, led by Bank of America and Wachovia Bank.
In a related transaction, the company entered into a floating-to-fixed interest rate swap to finance the debt component of its proposed acquisition of TNP Enterprises, Inc. (TNP). The agreement will fix the interest rate on $100 million of the credit facility at 4.97 percent through November 2009. The company had originally disclosed its intent to issue $100 million of debt at 8 percent interest.
The new credit facility has a maturity of five years. PNM Resources will use the facility for working capital needs, capital acquisitions and growth opportunities, including the proposed TNP acquisition.
"This revolving credit facility gives PNM Resources substantial, new liquidity for TNP operating units once the transaction closes and flexibility as we look for continued growth opportunities in regulated and unregulated markets in the Southwest and Texas," said PNM Resources Senior Vice President and Chief Financial Officer John Loyack.
PNM Resources previously announced its intent to replace approximately $600 million of TNP long-term debt and preferred equity. The company estimated replacing the more expensive TNP debt and securities would produce a net savings of $40 million in annual interest expense for the combined enterprise. The fixed-rate swap, along with the 6.625 percent rate achieved on equity-linked securities to be issued to Cascade Investment, enhances the projected interest savings even further.
"We are pleased to see our financing plan for the acquisition coming together so well," Loyack said.
PNM Resources is an energy holding company based in Albuquerque, New Mexico. PNM, the principal subsidiary of PNM Resources, serves about 460,000 natural gas customers and 405,000 electric customers in New Mexico. The company also sells power on the wholesale market in the Western U.S. PNM Resources stock is traded primarily on the NYSE under the symbol PNM.
Safe Harbor Statement under the Private
Securities Litigation Reform Act of 1995
Statements made in this release and documents the Company files with the SEC that relate to future events or the Company's expectations, projections, estimates, intentions, goals, targets and strategies, both with respect to PNM Resources and with respect to the proposed acquisition of TNP Enterprises, are made pursuant to the Private Securities Litigation Reform Act of 1995. You are cautioned that all forward-looking statements are based upon current expectations and are subject to risks and uncertainties. The company assumes no obligation to update this information. Because actual results may differ materially from those expressed or implied by the forward-looking statements, PNM Resources cautions you not to place undue reliance on these forward-looking statements. Future financial and operating results and cash flow will be affected by a number of factors, including: risks and uncertainties relating to the receipt of regulatory approvals for the proposed acquisition of TNP; the risks that the businesses will not be integrated successfully; the risk that the benefits of the TNP transaction will not be fully realized or will take longer to realize than expected; disruption from the TNP transaction making it more difficult to maintain relationships with customers, employees, suppliers or other third parties; conditions in the financial markets relevant to the proposed TNP acquisition; interest rates; weather; water supply; fuel costs; risk management and commodity risk transactions; seasonality and other changes in supply and demand in the market for electric power; wholesale power prices; market liquidity; the competitive environment in the electric and natural gas industries; the performance of generating units and transmission systems; state and federal regulatory and legislative decisions and actions; the cost and outcome of legal proceedings; changes in applicable accounting principles; and the performance of state, regional and national economies.
The securities to be issued in the proposed acquisition by PNM Resources of TNP Enterprises have not been registered under the Securities Act of 1933, as amended (the "Securities Act") or any state securities laws and may not be reoffered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws. This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities.
|Press & analysts' contact|
Frederick Bermudez: (505) 241-4831