Short-term Borrowings and Long-term Debt [Text Block] |
Long-term Debt
Debt Transactions. In June 2020, Houston Electric issued $300 million aggregate principal amount of 2.90% general mortgage bonds maturing in 2050. Total proceeds, net of issuance expenses and fees, of approximately $296 million were used for general limited liability company purposes, including capital expenditures and the repayment of a portion of borrowings under the CenterPoint Energy money pool.
Debt Repayments. In April 2020, VCC repaid the aggregate principal amount of its $200 million variable term loan, and VUHI refinanced a $100 million 6.28% guaranteed senior note that matured in April 2020. In June 2020, VUHI repaid the aggregate principal amount of its $300 million variable term loan. In addition, in June 2020, CenterPoint Energy repaid $300 million of principal on its outstanding $1.0 billion variable rate term loan.
Credit Facilities. The Registrants had the following revolving credit facilities as of June 30, 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 June 30, 2020 (2) | | Termination Date | | | | | (in millions) | | | | | | | | | March 3, 2016 | | CenterPoint Energy | | $ | 3,300 |
| | 1.500% | | 65% | (3) | 52.4% | | March 3, 2022 | July 14, 2017 | | CenterPoint Energy (4) | | 400 |
| | 1.125% | | 65% | | 51.3% | | July 14, 2022 | July 14, 2017 | | CenterPoint Energy (5) | | 200 |
| | 1.250% | | 65% | | 56.8% | | July 14, 2022 | March 3, 2016 | | Houston Electric | | 300 |
| | 1.250% | | 65% | (3) | 53.9% | | March 3, 2022 | March 3, 2016 | | CERC | | 900 |
| | 1.125% | | 65% | | 50.7% | | 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 June 30, 2020.
The table below reflects the utilization of the Registrants’ respective revolving credit facilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | June 30, 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) | $ | — |
| | $ | 8 |
| | $ | 316 |
| | 0.38 | % | | $ | — |
| | $ | 6 |
| | $ | 1,633 |
| | 1.95 | % | CenterPoint Energy (2) | — |
| | — |
| | 232 |
| | 0.28 | % | | — |
| | — |
| | 268 |
| | 2.08 | % | CenterPoint Energy (3) | — |
| | — |
| | — |
| | — | % | | — |
| | — |
| | — |
| | — | % | Houston Electric | — |
| | — |
| | — |
| | — | % | | — |
| | — |
| | — |
| | — | % | CERC | — |
| | 1 |
| | 232 |
| | 0.26 | % | | — |
| | 1 |
| | 377 |
| | 1.94 | % | Total | $ | — |
| | $ | 9 |
| | $ | 780 |
| | | | $ | — |
| | $ | 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 June 30, 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 June 30, 2020, such financial institutions had issued $7 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 June 30, 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.
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