Cleco

Cleco’s total indebtedness as of December 31, 2012 and 2011 was as follows.



	AT DEC. 31,
(THOUSANDS)	2012			2011
Bonds
Cleco Power’s senior notes, 5.375%, due 2013	$	75,000		$	75,000
Cleco Power’s senior notes, 4.95%, due 2015	50,000			50,000
Cleco Power’s senior notes, 6.65%, due 2018	250,000			250,000
Cleco Power’s senior notes, 4.33%, due 2027	50,000			—
Cleco Power’s senior notes, 6.50%, due 2035	295,000			295,000
Cleco Power’s senior notes, 5.942%, due 2040	250,000			250,000
Cleco Power’s senior notes, 5.988%, due 2041	100,000			100,000
Cleco Power’s pollution control revenue bonds, 5.875%, due 2029, callable after September 1, 2009	—			61,260
Cleco Power’s solid waste disposal facility bonds, 4.70%, due 2036, callable after November 1, 2016	60,000			60,000
Cleco Power’s solid waste disposal facility bonds, 5.25%, due 2037, mandatory tender on March 1, 2013	60,000			60,000
Cleco Katrina/Rita’s storm recovery bonds, 4.41%, due 2020	62,598			75,707
Cleco Katrina/Rita’s storm recovery bonds, 5.61%, due 2023	67,600			67,600
Total bonds	1,320,198			1,344,567
Other long-term debt
Cleco Corporation’s credit facility draws	25,000			10,000
Barge lease obligations, ending December 31, 2017	11,350			17,538
Gross amount of long-term debt	1,356,548			1,372,105
Less: long-term debt due within one year	88,969			24,258
Less: lease obligations classified as long-term debt due within one year	2,171			1,841
Unamortized premium and discount, net	(8,150		)	(8,950		)
Total long-term debt, net	$	1,257,258		$	1,337,056

The amounts payable under long-term debt agreements for each year through 2017 and thereafter are as follows.



(THOUSANDS)
Amounts payable under long-term debt agreements
2013	$	88,969
2014	$	14,876
2015	$	90,824
2016	$	16,814
2017	$	17,896
Thereafter	$	1,115,819

At December 31, 2012 and 2011, Cleco had no short-term debt outstanding.

At December 31, 2012, Cleco’s long-term debt outstanding was $1.35 billion, of which $91.1 million was due within one year, compared to $1.36 billion outstanding at December 31, 2011, of which $26.1 million was due within one year. The long-term debt due within one year at December 31, 2012, represents $75.0 million in senior notes due May 1, 2013, $14.0 million of principal payments for the Cleco Katrina/Rita storm recovery bonds and $2.1 million of capital lease payments.

For Cleco, long-term debt decreased $14.8 million from December 31, 2011, primarily due to redeeming $50.1 million of DeSoto Parish pollution control bonds in May 2012 and $13.1 million of scheduled Cleco Katrina/Rita storm recovery bond principal payments made in March and September 2012. Also contributing to the decrease was the redemption of $11.2 million of Rapides Parish pollution control bonds in January 2012 and a $6.2 million decrease in capital lease obligations. These decreases were partially offset by the issuance of $50.0 million senior unsecured notes in May 2012, a $15.0 million increase in credit facility draws outstanding, and debt premium amortizations of $0.8 million.

The amounts payable under the capital lease agreements for each year through 2017 and thereafter are as follows.



(THOUSANDS)
Amounts payable under capital lease agreements
2013	$	2,171
2014	$	2,305
2015	$	2,448
2016	$	2,607
2017	$	1,819

Cleco Power

Cleco Power’s total indebtedness as of December 31, 2012 and 2011, was as follows.



	AT DEC. 31,
(THOUSANDS)	2012			2011
Bonds
Senior notes, 5.375%, due 2013	$	75,000		$	75,000
Senior notes, 4.95%, due 2015	50,000			50,000
Senior notes, 6.65%, due 2018	250,000			250,000
Senior notes, 4.33%, due 2027	50,000			—
Senior notes, 6.50%, due 2035	295,000			295,000
Senior notes, 5.942%, due 2040	250,000			250,000
Senior notes, 5.988%, due 2041	100,000			100,000
Pollution control revenue bonds, 5.875%, due 2029, callable after September 1, 2009	—			61,260
Solid waste disposal facility bonds, 4.70%, due 2036, callable after November 1, 2016	60,000			60,000
Solid waste disposal facility bonds, 5.25%, due 2037, mandatory tender on March 1, 2013	60,000			60,000
Cleco Katrina/Rita’s storm recovery bonds, 4.41%, due 2020	62,598			75,707
Cleco Katrina/Rita’s storm recovery bonds, 5.61%, due 2023	67,600			67,600
Total bonds	1,320,198			1,344,567
Other long-term debt
Barge lease obligations, ending December 31, 2017	11,350			17,538
Gross amount of long-term debt	1,331,548			1,362,105
Less: long-term debt due within one year	88,969			24,258
Less: lease obligations classified as long-term debt due within one year	2,171			1,841
Unamortized premium and discount, net	(8,150		)	(8,950		)
Total long-term debt, net	$	1,232,258		$	1,327,056

The amounts payable under long-term debt agreements for each year through 2017 and thereafter are as follows.



(THOUSANDS)
Amounts payable under long-term debt agreements
2013	$	88,969
2014	$	14,876
2015	$	65,824
2016	$	16,814
2017	$	17,896
Thereafter	$	1,115,819

At December 31, 2012 and 2011, Cleco Power had no outstanding short-term debt.

At December 31, 2012, Cleco Power’s long-term debt outstanding was $1.32 billion, of which $91.1 million was due within one year, compared to $1.35 billion outstanding at December 31, 2011, of which $26.1 million was due within one year. The long-term debt due within one year at December 31, 2012, represents $75.0 million in senior notes due May 1, 2013, and $14.0 million of principal payments for the Cleco Katrina/Rita storm recovery bonds and $2.1 million of capital lease payments.

For Cleco Power, long-term debt decreased $29.8 million from December 31, 2011, primarily due to redeeming $50.1 million of DeSoto Parish pollution control bonds in May 2012 and $13.1 million of scheduled Cleco Katrina/Rita storm recovery bond principal payments made in March and September 2012. Also contributing to the decrease was the redemption of $11.2 million of Rapides Parish pollution control bonds in January 2012 and a $6.2 million decrease in capital lease obligations. These decreases were partially offset by the issuance of $50.0 million senior unsecured notes in May 2012 and debt premium amortizations of $0.8 million.

The amounts payable under the capital lease agreements for each year through 2017 and thereafter are as follows.



(THOUSANDS)
Amounts payable under capital lease agreements
2013	$	2,171
2014	$	2,305
2015	$	2,448
2016	$	2,607
2017	$	1,819

On January 25, 2012, Cleco Power redeemed at par $11.2 million of 5.875% Rapides Parish pollution control bonds due September 2029. As part of the redemption, Cleco Power paid $0.3 million of accrued interest on the redeemed notes.

On May 8, 2012, Cleco Power issued $50.0 million senior unsecured private placement notes at an interest rate of 4.33%. The maturity date of the notes is May 15, 2027. The proceeds were used primarily for the early redemption of $50.1 million of 5.875% DeSoto Parish pollution control bonds as described above.

On May 11, 2012, Cleco Power redeemed at par all $50.1 million of 5.875% DeSoto Parish pollution control bonds due September 2029. As part of the redemption, Cleco Power paid $0.6 million of accrued interest on the redeemed notes.

Interest Rate Derivatives

Treasury Rate Locks

On November 14, 2011, Cleco Power settled the $150.0 million treasury rate lock contract and extended the treasury rate lock contract at a notional amount of $100.0 million, with a pricing date of December 21, 2011, or the date of issuance of the debt, whichever was earlier. The 3.89% rate lock was based on the 30-year treasury note yield as of November 14, 2011, and two-thirds of the fair market value of the previous treasury rate lock. This treasury rate lock extension did not qualify for hedge accounting due to ineffectiveness resulting from the embedded loss related to the previous treasury rate lock. On December 16, 2011, Cleco Power issued $100.0 million senior unsecured private placement notes at an interest rate of 5.12%. The maturity date of the notes is December 16, 2041. The proceeds were used for general corporate purposes and for the repurchase of debt. On December 2, 2011, the pricing date of the notes, Cleco Power settled the treasury rate lock extension. At December 31, 2011, Cleco Power recorded $22.3 million in other comprehensive income and deferred $4.4 million in losses and ineffectiveness as a regulatory asset related to the settlement of the two treasury rate locks. During 2012, Cleco Power deferred an additional $2.4 million of losses and ineffectiveness related to the treasury rate locks as a regulatory asset.

As a result of management’s assessment that it is probable that the losses and ineffectiveness will be recovered through the rate-making process, Cleco Power will amortize the regulatory asset over the 30-year term of the related debt. The amount recorded in other comprehensive income, will also be amortized as interest expense over the 30-year term of the related debt issuance.

Forward Starting Interest Rate Swap

Also, on November 14, 2011, Cleco Power entered into a forward starting swap contract in order to mitigate the interest rate exposure on coupon payments related to a forecasted debt issuance. The notional amount of the forward starting swap is $50.0 million, with a pricing date of May 14, 2013, or the date of issuance of the debt, whichever is earlier. The forward starting swap meets the criteria of a cash flow hedge under the authoritative guidance as it relates to derivatives and hedging. The 3.05% swap was based on the 30-year treasury note yield as of November 14, 2011. At December 31, 2012, Cleco Power deferred $0.5 million of losses and ineffectiveness related to the forward starting swap contract as a regulatory asset.

Credit Facilities

At December 31, 2012, Cleco had two separate revolving credit facilities, one for Cleco Corporation and one for Cleco Power, with a maximum aggregate capacity of $550.0 million.

In October 2011, Cleco Corporation entered into a $250.0 million five-year revolving credit facility. The credit facility was set to mature on October 7, 2016, and provided for working capital and other needs. The borrowing costs are LIBOR plus 1.50% or ABR, plus facility fees of 0.25%. At December 31, 2012, Cleco Corporation had $25.0 million borrowings outstanding under its existing credit facility, leaving an available borrowing capacity of $225.0 million. The $25.0 million draws outstanding consisted of a $15.0 million draw and a $10.0 million draw. The $15.0 million draw matured and was renewed on January 17, 2013, and was subsequently repaid on February 4, 2013. The $10.0 million draw matured and was repaid on January 28, 2013. Under covenants contained in Cleco Corporation’s credit facility, Cleco is required to maintain total indebtedness equal to or less than 65% of total capitalization. At December 31, 2012, approximately $758.3 million of Cleco’s retained earnings was unrestricted. If Cleco Power defaults under the Cleco Power facility, then Cleco Corporation would be considered in default under the Cleco Corporation facility. At December 31, 2012, Cleco Corporation was in compliance with the covenants in its credit facility.

In October 2011, Cleco Power entered into a $300.0 million five-year revolving credit facility. The credit facility was set to mature on October 7, 2016, and provided for working capital and other needs. Cleco Power’s borrowing costs under this facility were equal to LIBOR plus 1.275%, or ABR, plus facility fees of 0.225% and the borrowing capacity remained $300.0 million. At December 31, 2012, Cleco Power had no borrowings outstanding under its existing credit facility. Under covenants contained in Cleco Power’s credit facility, Cleco Power is required to maintain total indebtedness equal to or less than 65% of total capitalization. At December 31, 2012, approximately $623.7 million of Cleco Power’s member’s equity was unrestricted. At December 31, 2012, Cleco Power was in compliance with the covenants in its credit facility.