RISK FACTORS
In addition to the following information about risks, you should consider carefully the risk factors and risks identified or referenced in
our Annual Report on Form
10-K
for the fiscal year ended December 31, 2018 (the 2018 Form
10-K)
and our Quarterly Reports on Form
10-Q
for the quarterly periods ended March 31, 2019 and June 30, 2019 (the 2nd Quarter 2019 Form
10-Q),
which are incorporated by reference in this
prospectus supplement and the accompanying prospectus, as they may be amended, supplemented or superseded from time to time by other reports that we subsequently file with the Securities and Exchange Commission (the SEC), together with
the other information contained or incorporated by reference in this prospectus supplement and the accompanying prospectus, before making an investment in the notes.
Risks Related to the Notes
A change in our credit
ratings or the credit ratings of the notes, or the placement of those ratings on negative watch or outlook, could adversely affect the market price and liquidity, if any, of the notes.
Earlier this year, certain credit rating agencies downgraded our unsecured debt credit ratings in connection with the closing of the Vectren
Merger. Our credit ratings may be affected in the future by a variety of factors, including, among others, if our financial measures were to weaken, if there is increased risk from our
non-regulated
businesses, if the regulatory environment becomes unfavorable resulting in increased regulatory lag, or by the outcome of Houston Electrics pending base rate case. For additional information on Houston Electrics pending base rate case,
please see Managements Discussion and Analysis of Financial Condition and Results of OperationsLiquidity and Capital ResourcesRegulatory Matters in the 2nd Quarter 2019 Form
10-Q.
Additional negative actions by credit rating agencies may adversely affect the market price and liquidity, if any, of the notes.
We cannot assure
you that an active trading market will develop for the notes.
Each series of notes will be a new issue of securities for which
currently there is no established trading market. We do not intend to apply for the listing of the notes on any securities exchange or for quotation of the notes on any dealer quotation system. We cannot assure you that a trading market will develop
for the notes. Even if a market for the notes does develop, we cannot assure you that there will be liquidity in that market or that the notes might not trade for less than their original value or face amount. The liquidity of any market for the
notes will depend on the number of holders of the notes, the interest of securities dealers in making a market in the notes and other factors. If a liquid market for the notes does not develop, you may be unable to resell the notes for a long period
of time, if at all. This means you may not be able to readily convert your notes into cash, and the notes may not be accepted as collateral for a loan.
Even if a market for the notes develops, trading prices could be higher or lower than the initial offering price. The price of the notes will
depend on many factors, including prevailing interest rates, our operating results and the market for similar securities. Declines in the market prices for debt securities generally may also materially and adversely affect the liquidity of the
notes, independent of our financial performance.
Our existing indebtedness, and any future indebtedness, may adversely affect our future financial
and operating flexibility and our ability to service the notes.
As of June 30, 2019, we, on an unconsolidated basis, had
approximately $5.1 billion aggregate principal amount of unsecured and unsubordinated indebtedness outstanding, and $828 million aggregate principal amount of our 2.0% Zero-Premium Exchangeable Subordinated Notes due 2029
(ZENS) outstanding . Excluding subsidiaries issuing transition and system restoration bonds, as of June 30, 2019, our subsidiaries had approximately $8.3 billion aggregate principal amount of third-party indebtedness
outstanding, of which approximately $4.3 billion was secured, as well as other liabilities. In addition, we had the ability to borrow an additional $2.3 billion under our credit facilities and commercial paper program, collectively,
subject to certain
S-6