National Fuel Gas has locked in a $1.20 billion loan straight from the company it is buying from, a financing move tied to its $2.62 billion purchase of CenterPoint Energy Resources Corp.'s Ohio natural gas utility business. The unsecured seller note agreement carries a 6.5% annual interest rate and comes due September 30, 2027.
According to TradingView, National Fuel Gas entered into the seller note agreement establishing the unsecured $1.20 billion term loan facility, with proceeds earmarked to finance the acquisition of CenterPoint Ohio and cover related transaction costs. CenterPoint Energy Resources is the counterparty on the note, which was signed and became effective October 1.
What National Fuel Is Buying
The underlying deal is sizable on its own. National Fuel entered into a definitive agreement with CenterPoint Energy Resources Corp. to acquire CenterPoint's Ohio natural gas utility business for total consideration of $2.62 billion on a cash-free, debt-free basis, according to National Fuel Gas Company. The Ohio operation, known as CNP Ohio, operates approximately 5,900 miles of distribution and transmission pipeline and serves roughly 335,000 customers, the company said.
At closing, National Fuel is set to issue a $1.2 billion promissory note to CERC bearing 6.5% interest, with a maturity date 364 days after closing, the company's release notes. For the rest of the purchase price, National Fuel intends to use approximately $300 million to $400 million of common equity, along with long-term debt and future free cash flow, for permanent financing.
Loan Terms Come With Strings Attached
The seller term loan facility isn't free of guardrails. Per the TradingView report, the loan carries a maximum debt-to-capitalization ratio covenant of 0.65, and the seller note agreement restricts mergers, asset sales and liens while the facility remains outstanding through its September 30, 2027 maturity. The agreement also includes a covenant defeasance option that would let National Fuel escape those restrictions by depositing sufficient funds with a paying agent and delivering required certificates.
Company management expects the facility to provide efficient, acquisition-specific financing with aligned terms, the same report states. The structure effectively lets the seller help bankroll the sale of its own business, a bridge-style arrangement meant to smooth the transition until National Fuel lines up permanent financing.
Conflicting Signals on Closing Date
There's an open question about exactly where this deal stands. National Fuel's own announcement said closing of the transaction was expected to occur in the fourth quarter of calendar 2026, subject to regulatory reviews and other customary closing conditions. But a separate CenterPoint statement distributed via PR Newswire said CenterPoint had successfully completed the previously announced $2.62 billion sale on October 1. CenterPoint added that the transaction had received all required federal and state approvals necessary to complete the sale, including review by the Public Utilities Commission of Ohio.
The regulatory path required a notice filing and review with the Public Utilities Commission of Ohio along with Hart-Scott-Rodino antitrust review and other customary closing conditions, per National Fuel's release. Separately, an 8-K filed with the U.S. Securities and Exchange Commission indicates the deal was not subject to a financing condition.
A Bigger Footprint for National Fuel
Once folded into National Fuel's operations, the Ohio business would roughly double the company's gas utility rate base to approximately $3.2 billion, according to the company's announcement. Pro forma for the CNP Ohio addition, National Fuel expects to serve approximately 1.1 million customers across New York, Pennsylvania and Ohio — three contiguous cold-weather states.
The purchase price itself reflects how the market values these aging gas distribution networks. CenterPoint Energy disclosed that the $2.62 billion sales price represents an approximately 1.9 times multiple of the Ohio business's 2024 rate base.
Part of a Record Year for Utility Deals
This transaction lands amid an unusually active stretch for utility dealmaking nationally. Power and utilities M&A reached $205 billion in aggregate announced transaction value across 92 deals in the first half of 2026, more than triple the value recorded in the same period of 2025, according to Deloitte. Two megadeals drove that record-setting period: NextEra Energy's $124 billion merger with Dominion Energy and the $48 billion AES take-private deal.
Deloitte also notes that investors have grown more selective as regulatory scrutiny, affordability pressure, policy uncertainty, financing constraints and execution risks have intensified since 2025. Natural gas remained central to the broader trend, accounting for 43% of the 97 gigawatts of generation capacity traded through M&A in the first half of 2026, even though National Fuel's deal involves gas distribution rather than generation.
