Short-Term Borrowings and Long-term Debt

3 Months Ended

Mar. 31, 2020

Short-term Borrowings and Long-term Debt [Text Block]

Short-term Borrowings and Long-term Debt


(a)	Short-term Borrowings (CenterPoint Energy and CERC)

Inventory Financing. NGD has AMAs associated with its utility distribution service in Arkansas, Louisiana, Mississippi, Oklahoma and Texas. The AMAs have varying terms, the longest of which expires in 2021. Pursuant to the provisions of the agreements, NGD sells natural gas and agrees to repurchase an equivalent amount of natural gas during the winter heating seasons at the same cost. These transactions are accounted for as an inventory financing. CenterPoint Energy and CERC had no outstanding obligations related to the AMAs as of both March 31, 2020 and December 31, 2019.


(b)	Long-term Debt

Credit Facilities. The Registrants had the following revolving credit facilities as of March 31, 2020:



Execution Date	Registrant	Size of Facility		Draw Rate of LIBOR plus (1)	Financial Covenant Limit on Debt for Borrowed Money to Capital Ratio		Debt for Borrowed Money to Capital Ratio as of March 31, 2020 (2)	Termination Date
		(in millions)
March 3, 2016	CenterPoint Energy	$	3,300	1.500%	65%	(3)	59.0%	March 3, 2022
July 14, 2017	CenterPoint Energy (4)	400		1.125%	65%		50.4%	July 14, 2022
July 14, 2017	CenterPoint Energy (5)	200		1.250%	65%		56.5%	July 14, 2022
March 3, 2016	Houston Electric	300		1.250%	65%	(3)	53.4%	March 3, 2022
March 3, 2016	CERC	900		1.250%	65%		43.6%	March 3, 2022
	Total	$	5,100


(1)	Based on current credit ratings.


(2)	As defined in the revolving credit facility agreements, excluding Securitization Bonds.

(3)

For CenterPoint Energy and Houston Electric, the financial covenant limit will temporarily increase from 65% to 70% if Houston Electric experiences damage from a natural disaster in its service territory and CenterPoint Energy certifies to the administrative agent that Houston Electric has incurred system restoration costs reasonably likely to exceed $100 million in a consecutive 12-month period, all or part of which Houston Electric intends to seek to recover through securitization financing. Such temporary increase in the financial covenant would be in effect from the date CenterPoint Energy delivers its certification until the earliest to occur of (i) the completion of the securitization financing, (ii) the first anniversary of CenterPoint Energy’s certification or (iii) the revocation of such certification.


(4)	This credit facility was issued by VUHI, is guaranteed by SIGECO, Indiana Gas and VEDO and includes a $10 million swing line sublimit and a $20 million letter of credit sublimit. This credit facility backstops VUHI’s commercial paper program.


(5)	This credit facility was issued by VCC, is guaranteed by Vectren and includes a $40 million swing line sublimit and an $80 million letter of credit sublimit.

The Registrants, including the subsidiaries of CenterPoint Energy discussed above, were in compliance with all financial debt covenants as of March 31, 2020.

The table below reflects the utilization of the Registrants’ respective revolving credit facilities:



	March 31, 2020								December 31, 2019
Registrant	Loans		Letters of Credit		Commercial Paper		Weighted Average Interest Rate		Loans		Letters of Credit		Commercial Paper		Weighted Average Interest Rate
	(in millions, except weighted average interest rate)
CenterPoint Energy (1)	$	900	$	6	$	1,169	2.17	%	$	—	$	6	$	1,633	1.95	%
CenterPoint Energy (2)	150		—		76		2.19	%	—		—		268		2.08	%
CenterPoint Energy (3)	—		—		—		—	%	—		—		—		—	%
Houston Electric	—		—		—		—	%	—		—		—		—	%
CERC	—		1		205		2.80	%	—		1		377		1.94	%
Total	$	1,050	$	7	$	1,450			$	—	$	7	$	2,278


(1)	CenterPoint Energy’s outstanding commercial paper generally has maturities of 60 days or less.


(2)	This credit facility was issued by VUHI and is guaranteed by SIGECO, Indiana Gas and VEDO.


(3)	This credit facility was issued by VCC and is guaranteed by Vectren.

Other. As of March 31, 2020, certain financial institutions agreed to issue, from time to time, up to $50 million of letters of credit on behalf of Vectren and certain of its subsidiaries in exchange for customary fees. These agreements to issue letters of credit expire on December 31, 2020. As of March 31, 2020, such financial institutions had issued $20 million of letters of credit on behalf of Vectren and certain of its subsidiaries.

Houston Electric had $68 million and $68 million of general mortgage bonds outstanding as of March 31, 2020 and December 31, 2019, respectively, as collateral for long-term debt of CenterPoint Energy that matures in 2028. These bonds are not reflected in Houston Electric’s consolidated financial statements because of the contingent nature of the obligations.