PNM achieves $400 million in short-term credit commitments

Public Service Co. of New Mexico has reached binding commitments with financial institutions for a total of $400 million in short-term credit.

Merrill Lynch & Co. Inc. (NYSE: MER), Morgan Stanley (NYSE: MS) and Wachovia Corp. (NYSE: WB) have committed to a 364-day, $300 million credit facility to shore up the utility's near-term liquidity, said Chuck Eldred, executive vice president of parent firm PNM Resources (NYSE: PNM), in a news release.

Deutsche Bank Securities Inc. and Royal Bank of Canada (NYSE: RY) also have committed to a $100 million, 364-day letter-of-credit facility.

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Separately, JPMorgan (NYSE: JPM) and Union Bank of California have committed to serve as lead arrangers of a syndicate for an $80 million revolving credit facility for Texas-New Mexico Power, a PNM Resources subsidiary .

All of the announced commitments are subject to final documentation, Eldred said.

Meanwhile, as part of company efforts to separate merchant activities from regulated operations, PNM Resources has established agreements to sell its share of power from the Palo Verde Nuclear Generating Station Unit 3, totaling about 135 megawatts. The long-term power-sale deals begin May 1 and run through Dec. 31, 2010. PNM will receive about $70 million in pre-payments from the sales agreements.

"These new credit facilities, along with the power sales from Palo Verde Unit 3, will greatly enhance our liquidity profile and position us well to meet our future credit and capital expenditure needs," Eldred said. "We are in a strong position to go back to our original long-term debt financing plans and access the capital markets as needed."