Debt

9 Months Ended

Sep. 30, 2011

Debt [Abstract]

Debt

Note 5 — Debt

Short-term Debt

At September 30, 2011, Cleco had no short-term debt outstanding compared to $150.0 million outstanding at December 31, 2010. The short-term debt outstanding at December 31, 2010, was a bank term loan Cleco Corporation entered into in February 2010.  The bank term loan had an interest rate of LIBOR plus 2.75% and was set to mature in February 2011.  In January 2011, Cleco extended the bank term loan to mature August 19, 2011 and lowered the interest rate to LIBOR plus 2.50% or ABR plus 1.50%.  On April 29, 2011, Cleco repaid the $150.0 million bank term loan.  As part of the repayment, Cleco paid $0.6 million for accrued interest on the term loan.

Cleco Power had no short-term debt outstanding at September 30, 2011, or December 31, 2010.

Long-term Debt

At September 30, 2011, Cleco’s long-term debt outstanding was $1.38 billion, of which $13.1 million was due within one year, compared to $1.41 billion outstanding at December 31, 2010, of which $12.3 million was due within one year.  The long-term debt due within one year at September 30, 2011, represents principal payments for the Cleco Katrina/Rita storm recovery bonds scheduled to be paid in the next twelve months.  For Cleco, long-term debt decreased $28.3 million primarily due to $12.3 million of scheduled Cleco Katrina/Rita storm recovery bond principal payments made in March and September 2011 and a $15.0 million decrease in credit facility draws outstanding.  

At September 30, 2011, Cleco Power’s long-term debt outstanding was $1.38 billion, of which $13.1 million was due within one year, compared to $1.40 billion outstanding at December 31, 2010, of which $12.3 million was due within one year.  The long-term debt due within one year at September 30, 2011, represents principal payments for the Cleco Katrina/Rita storm recovery bonds scheduled to be paid in the next twelve months.  For Cleco Power, long-term debt decreased $13.3 million primarily due to $12.3 million of scheduled Cleco Katrina/Rita storm recovery bond principal payments made in March and September 2011.  

The $32.0 million solid waste disposal facility bonds due in 2038, which were issued by the Rapides Finance Authority for the benefit of Cleco Power in October 2008, were required to be mandatorily tendered by the bondholders for purchase on October 1, 2011, pursuant to the terms of the indenture. On October 3, 2011, Cleco Power purchased all $32.0 million outstanding bonds at face value plus $1.0 million of accrued interest.  In connection with the purchase, the interest rate of the bonds was converted to a weekly mode and will reset each week based on the SIFMA (Securities Industry and Financial Markets Association) index. The initial interest rate of the bonds at October 3, 2011, was 0.16% per annum. The bonds were issued by the Rapides Finance Authority in connection with a loan agreement between the Rapides Finance Authority and Cleco Power.  The bonds remain outstanding and Cleco Power will report the bonds as a $32.0 million long-term liability and a corresponding $32.0 million long-term asset.  Interest expense will continue to be recorded with a corresponding amount recorded as interest income, excluding amortization of debt issuance costs. Cleco Power has the option to remarket the bonds for new terms and new interest rates, both to be determined by market conditions.

Credit Facilities

On October 7, 2011, Cleco Corporation amended its credit facility agreement.  Under the amended agreement, Cleco Corporation’s maximum capacity was increased from $200.0 million to $250.0 million, the maturity date was extended to October 7, 2016, and the borrowing costs were lowered to equal LIBOR plus 1.50%, plus facility fees of 0.25%.  At September 30, 2011, Cleco Corporation had no borrowings outstanding under its existing credit facility.

On October 7, 2011, Cleco Power amended its credit facility agreement.  Under the amended agreement, the maturity date was extended to October 7, 2016, and the borrowing costs were lowered to equal LIBOR plus 1.275%, plus facility fees of 0.225% and the borrowing capacity remained $300.0 million.  At September 30, 2011, Cleco Power had no borrowings outstanding under its existing credit facility.