Note 7 - Long-term Debt

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Long-term Debt [Text Block]

Note 7 — Long-term Debt

This footnote should be read in conjunction with the complete description under Note 10 —  Long-term Debt, to the consolidated financial statements included in the Company's 2018 Form 10-K. Long-term debt consisted of the following:

	September 30, 2019			December 31, 2018			September 30, 2019, interest rate % (a)		Letters of Credit Outstanding at September 30, 2019
	(In millions, except rates)
2019 Convertible Notes	$	-		$	220			3.500
2020 Convertible Notes		45			45			3.250
2024 Senior Notes		500			500			5.375
2025 Senior Notes		600			600			5.750
2026 Senior Notes		350			350			5.000
Clearway Energy LLC and Clearway Energy Operating LLC Revolving Credit Facility, due 2023 (b)		-			-			L+1.75		52
Project-level debt:
Agua Caliente Borrower 2, due 2038 (c)(d)		38			39			5.430		17
Alpine, due 2022 (c)		121			127			L+2.00		16
Alta Wind I - V lease financing arrangements, due 2034 and 2035		859			886			5.696 - 7.015		29
Buckthorn Solar, due 2025		130			132			L+1.750		26
CVSR, due 2037 (c)		696			720			2.339 - 3.775		—
CVSR Holdco Notes, due 2037 (c)		182			188			4.680		13
Duquesne, due 2059		95			-			4.620
El Segundo Energy Center, due 2023		303			352			L+1.75 - L+2.375		138
Energy Center Minneapolis Series D, E, F, G, H Notes, due 2025-2037		328			328			various		—
Laredo Ridge, due 2028		86			89			L+2.125		10
Kansas South, due 2030 (c)		25			26			L+2.00		2
Kawailoa Solar Holdings LLC, due 2026		134			-			L+1.375		5
Marsh Landing, due 2023 (c)		223			263			L+2.125		27
Oahu Solar Holdings LLC, due 2026		157			-			L+1.375		11
Repowering Partnership Holdco LLC, due 2020		298			-			L+0.85		29
South Trent Wind, due 2028		44			50			L+1.350		12
Tapestry, due 2031		159			151			L+1.375		19
Utah Solar Portfolio, due 2022		260			267			L+2.625		13
Viento, due 2023		42			146			L+2.00		14
Walnut Creek, due 2023		189			222			L+1.75		82
Other		315			343			various		24
Subtotal project-level debt:		4,684			4,329
Total debt		6,179			6,044
Less current maturities		(1,965	)		(535	)
Less net debt issuance costs		(71	)		(61	)
Less discounts (e)		-			(1	)
Total long-term debt	$	4,143		$	5,447

^(a)   As of September 30, 2019, L+ equals 3 month LIBOR plus x%, except for Viento, due 2023 and Kansas South, due 2030 where L+ equals 6 month LIBOR plus 2.00% and Utah Solar Portfolio, Kawailoa Solar Holdings LLC, Oahu Solar Holdings LLC, Repowering Partnership Holdco LLC where L+ equals 1 month LIBOR plus x%

^(b)   Applicable rate is determined by the borrower leverage ratio, as defined in the credit agreement

^(c)   Entities affected by PG&E Bankruptcy, see further discussion below

(d)	The Company repaid the debt on October 21, 2019, as further described below
(e)	Discounts relate to the 2020 Convertible Notes

The financing arrangements listed above contain certain covenants, including financial covenants that the Company is required to be in compliance with during the term of the respective arrangement. As of  September 30, 2019, the Company was not in compliance with certain covenants impacted by the PG&E Bankruptcy, as discussed below. The discussion below describes material changes to or additions of long-term debt for the nine months ended September 30, 2019.

Clearway Energy LLC and Clearway Energy Operating LLC Revolving Credit Facility

As of  September 30, 2019, there were no outstanding borrowings under the revolving credit facility and the Company had $52 million of letters of credit outstanding. The Company had $40 million outstanding under the revolving credit facility and a total of $71 million in letters of credit outstanding as of November 6, 2019.

2019 Convertible Notes Open Market Repurchases

In January 2019, the Company repurchased a combined aggregate principal amount of $50 million of the 2019 Convertible Notes in open market transactions. The repurchases were funded through a partial repayment of the intercompany note between Clearway Energy Operating LLC and Clearway Energy, Inc. The 2019 Convertible Notes matured on February 1, 2019 and the Company paid off the remaining balance of an aggregate principal amount of $170 million.

Project - level Debt

PG&E Bankruptcy

As discussed in Note 1 — Nature of Business, on January 29, 2019, PG&E filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Northern District of California, or the Bankruptcy Court. Certain subsidiaries of the Company listed in the table above are parties to financing agreements consisting of non-recourse project-level debt and, in certain cases, non-recourse holding company debt. The PG&E bankruptcy filing has triggered defaults under the PPAs with PG&E and such related project-level financing agreements. As a result, the Company recorded approximately $1.3 billion of principal, net of the related unamortized debt issuance costs, with final maturity dates ranging from 2023 - 2038, as short-term debt as of September 30, 2019. In addition, distributions from these projects to Clearway Operating LLC are prohibited under the related debt agreements. As of November 6, 2019, the Company has entered into forbearance agreements for certain project-level financing arrangements, and continues to seek forbearance agreements for its other project-level financing arrangements affected by the PG&E Bankruptcy.

Agua Caliente Borrower 2 debt Repayment 

On October 21, 2019, the Company, through Agua Caliente Borrower 2 LLC, repaid $40 million of the outstanding notes balance, including accrued interest and premiums, issued under the Agua Caliente Holdco Financing Agreement.  The repayment was funded with Company's existing liquidity.

Repowering Partnership Holdco LLC

On June 14, 2019, as part of the Repowering Partnership, Repowering Partnership Holdco LLC entered into a financing agreement for non-recourse debt for a total commitment amount of $352 million related to the construction for the repowering activities at Wildorado and Elbow Creek. The debt consists of a construction loan at an interest rate of LIBOR plus 0.85% that matures on March 31, 2020. The construction loan is expected be paid at final completion with proceeds from the tax equity investor. Interest on the construction loan is payable monthly in arrears. The Company borrowings were utilized to repay $109 million of the outstanding balance, including accrued interest, under the Viento financing agreement, to reimburse Clearway Renew LLC for previous contributions into the Repowering Partnership and pay construction invoices.

Duquesne University

On May 1, 2019, as part of the Duquesne University district energy system acquisition, ECP Uptown Campus LLC issued non-recourse debt of $95 million, excluding financing fees. The debt consists of senior notes at an interest rate of 4.62% that mature on May 1, 2059. Interest on the notes are payable semi-annually in arrears. The proceeds of the debt, along with cash on hand, were utilized to fund the purchase price of the acquisition.

Oahu Solar Holdings LLC

Due to the Company consolidating the Oahu Partnership, as further described in Note 4 — Investments Accounted for by the Equity Method and Variable Interest Entities, the Company assumed non-recourse debt of $143 million related to Oahu Solar Holdings, LLC. The debt consists of a construction loan and an ITC bridge loan with a total commitment amount of $162 million, both at an interest rate of LIBOR plus 1.375%. The construction loan will convert to a term loan upon completion of certain milestones with an expected maturity of  October 2026, and the ITC bridge loan will be paid at term conversion with the final proceeds from the tax equity investor. Interest on the construction loan and ITC bridge loan is payable monthly in arrears and will convert to quarterly payments once the construction loan converts to a term loan.

Kawailoa Solar Holdings LLC

Due to the Company consolidating the Kawailoa Partnership, as further described in Note 4 —  Investments Accounted for by the Equity Method and Variable Interest Entities, the Company assumed non-recourse debt of $120 million related to Kawailoa Solar Holdings, LLC. The debt consists of a construction loan and an ITC bridge loan, with a total commitment amount of $137 million both at an interest rate of LIBOR plus 1.375%. The construction loan will convert to a term loan upon completion of certain milestones with an expected maturity of  October 2026, and the ITC bridge loan will be paid at term conversion with the final proceeds from the tax equity investor. Interest on the construction loan and ITC bridge loan is payable monthly in arrears and will convert to quarterly payments once the construction loan converts to a term loan.

South Trent Refinancing

On June 14, 2019, the Company, through South Trent Wind LLC, refinanced $49 million of non-recourse debt due 2020 at interest rate of LIBOR plus 1.625% by issuing $46 million of new non-recourse financing due 2028 at an interest rate of LIBOR plus 1.350%. 

Tapestry Refinancing

On April 29, 2019, the Company, through Tapestry Wind LLC, refinanced $147 million of non-recourse debt due 2021 at interest rate of LIBOR plus 1.75% by issuing $164 million of new non-recourse financing due 2031 at an interest rate of LIBOR plus 1.375%.