CenterPoint Wrote Data Centers Into Its Covenants

CenterPoint Energy, Inc. filed an 8-K on September 9, 2026 reporting that it and its subsidiaries CenterPoint Energy Houston Electric, LLC, CenterPoint Energy Resources Corp. and Southern Indiana Gas and Electric Company “replaced their existing revolving credit facilities with four revolving credit facilities totaling $4.6 billion in aggregate commitments,” with no termination penalties on the facilities they replaced, all of which had been entered into on December 6, 2022. The parent’s facility went from $2.4 billion to $2.2 billion, with an accordion to $2.5 billion and current pricing of Term SOFR plus 150 basis points. Houston Electric’s went from $300 million to $1.0 billion, with an accordion to $1.5 billion. CenterPoint Energy Resources went from $1.05 billion to $1.1 billion, and Southern Indiana Gas and Electric from $250 million to $300 million. All four are five-year senior unsecured revolvers. The leverage covenant is unchanged in form: debt to consolidated capitalization not above 67.5 percent at the parent and at Houston Electric, and 65 percent at the other two, with a temporary step up to 70 percent after certain storm damage.

The change is in the definitions. In the parent’s credit agreement, Consolidated Indebtedness for Borrowed Money is now computed “less (v) Non-Recourse Debt, less (vi) Data Center Development Indebtedness.” PSV pulled the December 6, 2022 agreement the new one replaces and searched it: the phrase “data center” does not appear in it once, and its version of the same definition stops at clause (v). The new agreement uses the term fourteen times. “Data Center Developments” is defined as financings “including, without limitation, project financings, synthetic leases, built to suit lease financings and other structured financings,” joint ventures and other equity and debt investments, “including, without limitation, structures involving assignments or dispositions of related real property,” to support building and operating energy generation assets and selling energy “in full or in material part to or for the benefit of one or more data center projects.” Debt qualifies for the carve-out only where a rating agency treats it as equity or partial equity, or where it is non-recourse. The same term appears in the permitted liens list as Data Center Development Liens, in an exclusion from Secured Indebtedness, in what holding companies may incur, in the negative pledge carve-outs, and in a basket letting the borrower and significant subsidiaries transfer “up to $1.0 billion” of property to subsidiaries “to facilitate Data Center Developments.”

Utilities are the gating counterparty on every data center site, and the constraint is rarely engineering. It is balance sheet. A regulated utility that has to hold a leverage ratio cannot fund an unlimited amount of new generation for a single class of customer without either a rate case, an equity raise, or a structure that keeps the obligation off the tested ratio. What this filing shows is a utility and its bank group agreeing in advance on the third route, and describing it in the vocabulary of real estate rather than of power. Synthetic leases, built to suit lease financings, assignments of related real property and joint ventures are not generation-industry terms of art. They are the structures an owner, a developer and a credit tenant lender already use, now written into a utility’s bank documents for the purpose of serving data centers.

The scale CenterPoint has told investors about is the reason to care. Its first quarter 2026 investor presentation, filed April 23, states that “8GWs of data center load expected to be energized by 2029,” and shows firmly committed large industrial load rising from about 7.5 gigawatts at the fourth quarter of 2025 to about 12.2 gigawatts at the first quarter of 2026. The same deck lists data center related investments in Indiana among at least $10 billion of incremental capital opportunities. Those are the company’s own figures and forecasts, not PSV findings and not commitments. Set beside them, the covenant rewrite reads as preparation: Houston Electric, the wires company for the Houston market, more than tripled its revolver in the same filing. PSV did not find any CenterPoint statement linking that increase to data center load, and the company published no press release about the refinancing that PSV could locate.

The artifact is one memo per utility a firm depends on for a site, refreshed when that utility files. Inputs: the utility’s current credit agreements and their 8-K cover pages, the definitions of Consolidated Indebtedness and any carve-outs, the leverage covenant and its headroom, the permitted liens and asset transfer baskets, the most recent investor presentation with its load forecast and capital plan, and the rating agency reports if the firm has access. Output: for each utility, what it is permitted to fund off the tested ratio, how much property it may move into joint ventures, what conditions that permission carries, and where its own filings put the load it expects to serve.

The reviewer is whoever owns the capital relationship, a development lead or a portfolio manager, with finance counsel on the covenant mechanics. The approval gate: no site is underwritten as powered on the strength of a utility’s stated pipeline until that memo exists and names the structural route the utility has available. An assistant is well suited to this work, because it is document extraction at volume: diffing a new credit agreement against the one it replaces, pulling defined terms and baskets, and flagging language that appeared for the first time. That diff is exactly how this story surfaced. What an assistant should not do is conclude that a permission will be used, or price the credit.