XML 47 R22.htm IDEA: XBRL DOCUMENT v3.21.2
Short-term Borrowings and Long-term Debt
 6 Months Ended
Jun. 30, 2021
Debt Disclosure [Abstract]  
Short-term Borrowings and Long-term Debt Short-term Borrowings and Long-term Debt
Inventory Financing. Upon expiration of the AMA’s with the Energy Services Disposal Group discussed in Note 3, CenterPoint Energy’s and CERC’s Natural Gas businesses entered into new third-party AMAs beginning in April 2021 associated with their utility distribution service in Arkansas, Indiana, Louisiana, Minnesota, Mississippi, Oklahoma and Texas. The AMAs have varying terms, the longest of which expires in 2027. Pursuant to the provisions of the agreements, CenterPoint Energy’s and CERC’s Natural Gas either sells natural gas to the asset manager and agrees to repurchase an equivalent amount of natural gas throughout the year at the same cost, or simply purchases its full natural gas requirements at each delivery point from the asset manager. These transactions are accounted for as an inventory financing. CenterPoint Energy and CERC had $3 million and $24 million outstanding obligations related to the AMAs as of June 30, 2021 and December 31, 2020, respectively, recorded in Short-term borrowings on CenterPoint Energy’s and CERC’s Condensed Consolidated Balance Sheets. Outstanding obligations related to third-party AMAs associated with utility distribution service in Arkansas and Oklahoma as of June 30, 2021 are reflected in current liabilities held for sale on CenterPoint Energy’s and CERC’s Condensed Consolidated Balance Sheets. See Note 3 for further information.

Debt Transactions. During the six months ended June 30, 2021, the following debt instruments were issued or incurred:
RegistrantIssuance DateDebt InstrumentAggregate Principal AmountInterest Rate Maturity Date
(in millions)
CERC Corp.
March 2021Senior Notes$700 0.70%2023
CERC Corp.
March 2021Floating Rate Senior Notes1,000 
Three-month LIBOR plus 0.50%
2023
Total CERC Corp. (1)
1,700 
Houston Electric
March 2021General Mortgage Bonds400 2.35%2031
Houston Electric March 2021General Mortgage Bonds700 3.35%2051
Total Houston Electric (2)
1,100 
CenterPoint Energy
May 2021Senior Notes500 1.45%2026
CenterPoint Energy May 2021Senior Notes500 2.65%2031
CenterPoint Energy May 2021Floating Rate Senior Notes700 
SOFR plus 0.65%
2024
Total CenterPoint Energy (3)
$4,500 

(1)In February 2021, CERC Corp. received financing commitments totaling $1.7 billion on a 364-day term loan facility to bridge any working capital needs related to the February 2021 Winter Storm Event. Total proceeds of the senior notes and floating rate senior note offerings, net of issuance expenses and fees, of approximately $1.69 billion were used for general corporate purposes, including to fund working capital. Upon the consummation of its senior notes offerings, in March 2021, CERC Corp. terminated all of the commitments for the 364-day term loan facility.
(2)Total proceeds, net of issuance expenses and fees, of approximately $1.08 billion were used for general limited liability company purposes, including capital expenditures and the repayment of outstanding debt discussed below and Houston Electric’s borrowings under the CenterPoint Energy money pool.
(3)Total proceeds, net of issuance expenses and fees, of approximately $1.69 billion, excluding amounts issued by Houston Electric and CERC Corp., were used for general corporate purposes, including the repayment of outstanding debt discussed below and a portion of CenterPoint Energy’s outstanding commercial paper.
Debt Repayments and Redemptions. During the six months ended June 30, 2021, the following debt instruments were repaid at maturity or redeemed:

RegistrantRepayment/Redemption DateDebt InstrumentAggregate PrincipalInterest RateMaturity Date
(in millions)
Houston ElectricMarch 2021First Mortgage Bonds$102 9.15%2021
Houston Electric (1)
May 2021General Mortgage Bonds300 1.85%2021
Total Houston Electric402 
CenterPoint Energy (2)
January 2021Senior Notes250 3.85%2021
CenterPoint Energy (3)
May 2021Term Loan700 0.76%2021
CenterPoint Energy (4)
June 2021Senior Notes500 3.60%2021
Total CenterPoint Energy$1,852 

(1)In April 2021, Houston Electric provided notice of redemption and on May 1, 2021, Houston Electric redeemed all of the outstanding bonds of the series at a redemption price equal to 100% of the principal amount, plus accrued and unpaid interest.
(2)In December 2020, CenterPoint Energy provided notice of redemption of a portion of its outstanding $500 million aggregate principal amount of the series and on January 15, 2021, CenterPoint Energy redeemed $250 million aggregate principal amount of the series at a redemption price equal to 100% of the principal amount redeemed, plus accrued and unpaid interest and an applicable make-whole premium of $26 million.
(3)In April 2021, CenterPoint Energy amended its existing term loan agreement by extending its maturity from May 15, 2021 to June 14, 2021. The outstanding LIBOR rate loan balance was prepaid in full at a price equal to 100% of the principal amount, plus accrued and unpaid interest, which was calculated based on the interest rate at maturity.
(4)In May 2021, CenterPoint Energy provided notice of redemption and on June 1, 2021, CenterPoint Energy redeemed all of the outstanding senior notes of the series at a redemption price equal to 100% of the principal amount, plus accrued and unpaid interest and an applicable make-whole premium of $7 million.
Credit Facilities. In February 2021, each of CenterPoint Energy, Houston Electric, CERC Corp. and VUHI replaced their existing revolving credit facilities with new amended and restated credit facilities. The size of the CenterPoint Energy facility decreased from $3.3 billion to $2.4 billion, while the sizes of the Houston Electric, CERC Corp. and VUHI facilities remained unchanged.

The Registrants had the following revolving credit facilities as of June 30, 2021:
Execution
 Date 		RegistrantSize 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
June 30, 2021 (2)
Termination Date
(in millions)
February 4, 2021CenterPoint Energy $2,400 1.625%65.0%(3)57.7%February 4, 2024
February 4, 2021
CenterPoint Energy (4)
400 1.250%65.0%50.1%February 4, 2024
February 4, 2021Houston Electric300 1.375%67.5%(3)55.8%February 4, 2024
February 4, 2021CERC 900 1.250%65.0%61.0%February 4, 2024
Total$4,000 

(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 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 $20 million letter of credit sublimit. This credit facility backstops VUHI’s commercial paper program.

The Registrants, including the subsidiaries of CenterPoint Energy discussed above, were in compliance with all financial debt covenants as of June 30, 2021.

The table below reflects the utilization of the Registrants’ respective revolving credit facilities:
June 30, 2021December 31, 2020
RegistrantLoansLetters
of Credit
Commercial
Paper (1)
Weighted Average Interest RateLoansLetters
of Credit
Commercial
Paper (1)
Weighted Average Interest Rate
(in millions, except weighted average interest rate)
CenterPoint Energy $— $11 $911 0.18 %$— $11 $1,078 0.23 %
CenterPoint Energy (2)
— — 268 0.18 %— — 92 0.22 %
Houston Electric— — — — %— — — — %
CERC — — 564 0.18 %— — 347 0.23 %
Total$— $11 $1,743 $— $11 $1,517 

(1)Outstanding commercial paper generally has maturities of 60 days or less and each Registrants’ commercial paper program is backstopped by such Registrants’ long-term credit facilities. Houston Electric does not have a commercial paper program.
(2)This credit facility was issued by VUHI and is guaranteed by SIGECO, Indiana Gas and VEDO.
Liens. As of June 30, 2021, Houston Electric’s assets were subject to liens securing approximately $5.0 billion of general mortgage bonds, including approximately $68 million held in trust to secure pollution control bonds that mature in 2028 for which CenterPoint Energy is obligated. The general mortgage bonds that are held in trust to secure pollution control bonds are not reflected in Houston Electric’s consolidated financial statements because of the contingent nature of the obligations. Houston Electric may issue additional general mortgage bonds on the basis of retired bonds, 70% of property additions or cash deposited with the trustee. As of March 15, 2021, no Houston Electric first mortgage bonds remained outstanding. Houston Electric could issue approximately $3.7 billion of additional general mortgage bonds on the basis of retired bonds and 70% of property additions as of June 30, 2021.
Other. As of June 30, 2021, certain financial institutions agreed to issue, from time to time, up to $20 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, 2021. As of June 30, 2021, such financial institutions had issued $1 million of letters of credit on behalf of Vectren and certain of its subsidiaries.