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Financings And Capitalization

12 Months Ended

Dec. 31, 2020

Presented in the following table is CMS Energy’s long-term debt at December 31:


In Millions
	Interest Rate (%)		Maturity	2020			2019
CMS Energy, including Consumers
CMS Energy, parent only
Senior notes	5.050		2022		$	—		$	300
	3.875		2024		250			250
	3.600		2025		250			250
	3.000		2026		300			300
	2.950		2027		275			275
	3.450		2027		350			350
	4.700		2043		250			250
	4.875		2044		300			300



					$	1,975		$	2,275

Term loan facility	variable	1	2021		200			—




Junior subordinated notes2	4.750		2050		500			—
	3.750		2050		400			—
	5.625		2078		200			200
	5.875		2078		280			280
	5.875		2079		630			630


					$	2,010		$	1,110
Total CMS Energy, parent only					$	4,185		$	3,385
Consumers					8,197			7,322
CMS Enterprises, including subsidiaries
Term loan facility	variable	3	2025		85			92
EnerBank
Certificates of deposit	1.621	4	2021-2028		2,805			2,389
Total principal amount outstanding					$	15,272		$	13,188
Current amounts					(1,486)			(1,111)
Unamortized discounts					(33)			(27)
Unamortized issuance costs					(119)			(99)
Total long-term debt					$	13,634		$	11,951

1At December 31, 2020, the interest rate on the balance of this term loan facility was 0.600 percent, based on an interest rate of one-week LIBOR plus 0.500 percent.

2These unsecured obligations rank subordinate and junior in right of payment to all of CMS Energy’s existing and future senior indebtedness.

3A subsidiary of CMS Enterprises issued non‑recourse debt to finance the acquisition of a wind generation project in Northwest Ohio. The interest rate for the debt is three-month LIBOR plus 1.500 percent through October 2022 and three-month LIBOR plus 1.750 percent thereafter. At December 31, 2020 and 2019, the interest rate was 1.754 percent and 3.445 percent, respectively. The same subsidiary of CMS Enterprises entered into interest rate swaps with the lending banks to fix the interest charges associated with the debt, at a rate of 4.702 percent through October 2022 and 4.952 percent thereafter. Principal and interest payments are made quarterly. For information about the interest rate swaps, see Note 6, Fair Value Measurements.

4The weighted-average interest rate for EnerBank’s certificates of deposit was 1.621 percent at December 31, 2020 and 2.445 percent at December 31, 2019. EnerBank’s primary deposit product consists of brokered certificates of deposit with varying maturities and having a face value of $1,000.

Presented in the following table is Consumers’ long-term debt at December 31:


In Millions
	Interest Rate (%)		Maturity		2020			2019
Consumers
First mortgage bonds	3.770		2020			$	—		$	100
	2.850		2022			—			375
	5.300		2022			—			250
	0.350		2023			300			—
	3.375		2023			325			325
	3.125		2024			250			250
	3.190		2024			52			52
	3.680		2027			100			100
	3.390		2027			35			35
	3.800		2028			300			300
	3.180		2032			100			100
	5.800		2035			175			175
	3.520		2037			335			335
	4.010		2038			215			215
	6.170		2040			50			50
	4.970		2040			50			50
	4.310		2042			263			263
	3.950		2043			425			425
	4.100		2045			250			250
	3.250		2046			450			450
	3.950		2047			350			350
	4.050		2048			550			550
	4.350		2049			550			550
	3.750		2050			300			300
	3.100		2050			550			550
	3.500		2051			575			—
	3.860		2052			50			50
	4.280		2057			185			185
	2.500		2060			525			—
	4.350		2064			250			250
	variable	1	2069			76			76
	variable	1	2070			134			—
	variable	1	2070			127			—




						$	7,897		$	6,961

Tax-exempt revenue bonds	variable		2035			—			35
	1.800	2	2049			75			75
						$	75		$	110

Securitization bonds	3.250	3	2025-2029	4		225			251




Total principal amount outstanding						$	8,197		$	7,322
Current amounts						(364)			(202)
Unamortized discounts						(29)			(23)
Unamortized issuance costs						(62)			(49)
Total long-term debt						$	7,742		$	7,048

1The variable-rate bonds bear interest quarterly at a rate of three-month LIBOR minus 0.300 percent, subject to a zero-percent floor (zero percent at December 31, 2020). The holders of these variable-rate bonds may put them to Consumers for redemption on certain dates prior to their stated maturity, including dates within one year of December 31, 2020.

2The interest rate on these tax‑exempt revenue bonds will reset on October 1, 2024.

3The weighted-average interest rate for Consumers’ securitization bonds issued through its subsidiary, Consumers 2014 Securitization Funding, was 3.250 percent at December 31, 2020 and 3.220 percent at December 31, 2019.

4Principal and interest payments are made semiannually.

Financings: Presented in the following table is a summary of major long-term debt issuances during the year ended December 31, 2020:


	Principal (In Millions)			Interest Rate		Issuance Date	Maturity Date
CMS Energy, parent only
Term loan facility1		$	300	variable		February	February 2021
Junior subordinated notes2		500		4.750	%	May	June 2050
Junior subordinated notes3		400		3.750	%	November	December 2050




Total CMS Energy, parent only		$	1,200
Consumers
Term loan facility		$	300	variable		January	January 2021
First mortgage bonds		575		3.500	%	March	August 2051
First mortgage bonds		525		2.500	%	May	May 2060
First mortgage bonds		134		variable		May	May 2070
First mortgage bonds		127		variable		October	October 2070
First mortgage bonds		300		0.350	%	December	June 2023


Total Consumers		$	1,961
Total CMS Energy		$	3,161

1In December 2020, CMS Energy repaid $100 million of this facility and, in February 2021, amended the facility by extending its maturity date to November 2021.

2These unsecured obligations rank subordinate and junior in right of payment to all of CMS Energy’s existing and future senior indebtedness. On June 1, 2030, and every five years thereafter, the notes will reset to an interest rate equal to the five-year treasury rate plus 4.116 percent.

3These unsecured obligations rank subordinate and junior in right of payment to all of CMS Energy’s existing and future senior indebtedness. On December 1, 2030, and every five years thereafter, the notes will reset to an interest rate equal to the five-year treasury rate plus 2.900 percent.

Presented in the following table is a summary of major long-term debt retirements during the year ended December 31, 2020:


	Principal (In Millions)			Interest Rate		Retirement Date	Maturity Date
CMS Energy, parent only
Senior notes1		$	300	5.050	%	December	March 2022





Total CMS Energy, parent only		$	300
Consumers
First mortgage bonds		$	100	3.770	%	April	October 2020
First mortgage bonds		250		5.300	%	June	September 2022
First mortgage bonds		375		2.850	%	September	May 2022
Term loan facility		300		variable		December	January 2021




Total Consumers		$	1,025
Total CMS Energy		$	1,325

1CMS Energy retired these senior notes at a premium and recorded a loss on extinguishment of $16 million in other expense on its consolidated statements of income.

In July 2020, Consumers purchased, in lieu of redemption, $35 million of variable-rate tax-exempt revenue bonds due April 2035. At December 31, 2020, Consumers held the variable-rate tax-exempt revenue bonds and may remarket the bonds or replace them with debt instruments of an equivalent value.

In September 2020, proceeds from the sale of a Class A membership interest in Aviator Wind to a tax equity investor and additional contributions from the Class B membership interest (of which CMS Enterprises owns 51 percent) were used to retire $492 million of debt assumed through the purchase of the VIE. For more information, see Note 21, Variable Interest Entities.

First Mortgage Bonds: Consumers secures its first mortgage bonds by a mortgage and lien on substantially all of its property. Consumers’ ability to issue first mortgage bonds is restricted by certain provisions in the First Mortgage Bond Indenture and the need for regulatory approvals under federal law. Restrictive issuance provisions in the First Mortgage Bond Indenture include achieving a two-times interest coverage ratio and having sufficient unfunded net property additions.

Regulatory Authorization for Financings: Consumers is required to maintain FERC authorization for financings. Its current authorization terminates on July 31, 2022. Any long-term issuances during the authorization period are exempt from FERC’s competitive bidding and negotiated placement requirements.

Securitization Bonds: Certain regulatory assets held by Consumers’ subsidiary, Consumers 2014 Securitization Funding, collateralize Consumers’ securitization bonds. The bondholders have no recourse to Consumers’ assets except for those held by the subsidiary that issued the bonds. Consumers collects securitization surcharges to cover the principal and interest on the bonds as well as certain other qualified costs. The surcharges collected are remitted to a trustee and are not available to creditors of Consumers or creditors of Consumers’ affiliates other than the subsidiary that issued the bonds.

Debt Maturities: At December 31, 2020, the aggregate annual maturities for long-term debt for the next five years, based on stated maturities or earlier put dates, were:


In Millions
	2021			2022			2023			2024			2025
CMS Energy, including Consumers
Long-term debt
CMS Energy, parent only		$	200		$	—		$	—		$	250		$	250
Consumers		364			28			654			332			31
CMS Enterprises, including subsidiaries		7			8			9			10			51
EnerBank		915			572			477			325			244
Total CMS Energy		$	1,486		$	608		$	1,140		$	917		$	576
Consumers
Long-term debt		$	364		$	28		$	654		$	332		$	31

Credit Facilities: The following credit facilities with banks were available at December 31, 2020:


In Millions
Expiration Date	Amount of Facility			Amount Borrowed			Letters of Credit Outstanding			Amount Available
CMS Energy, parent only
June 5, 20231		$	550		$	—		$	18		$	532
CMS Enterprises, including subsidiaries
September 25, 20252		$	39		$	—		$	39		$	—
September 30, 20253		18			—			8			10
Consumers4
June 5, 2023		$	850		$	—		$	7		$	843
November 19, 2022		250			—			1			249
April 18, 2022		30			—			30			—

1During the year ended December 31, 2020, CMS Energy’s average borrowings totaled $1 million with a weighted-average interest rate of 1.888 percent.

2This letter of credit facility is available to Aviator Wind Equity Holdings. For more information regarding the acquisition of Aviator Wind Equity Holdings, see Note 21, Variable Interest Entities.

3Under this facility, $8 million is available solely for the purpose of issuing letters of credit. Obligations under this facility are secured by the collateral accounts with the lending bank. There were no borrowings under this facility during the year ended December 31, 2020.

4Obligations under these facilities are secured by first mortgage bonds of Consumers. During the year ended December 31, 2020, Consumers’ average borrowings totaled less than $1 million with a weighted-average interest rate of 1.425 percent.

Short-term Borrowings: Under Consumers’ commercial paper program, Consumers may issue, in one or more placements, investment-grade commercial paper notes with maturities of up to 365 days at market interest rates. These issuances are supported by Consumers’ revolving credit facilities and may have an aggregate principal amount outstanding of up to $500 million. While the amount of outstanding commercial paper does not reduce the available capacity of the revolving credit facilities, Consumers

does not intend to issue commercial paper in an amount exceeding the available capacity of the facilities. At December 31, 2020, there were no commercial paper notes outstanding under this program.

In December 2020, Consumers renewed a short-term credit agreement with CMS Energy, permitting Consumers to borrow up to $350 million. For more information on the intercompany credit agreement between CMS Energy and Consumers, see Note 20, Related-Party Transactions—Consumers.

Dividend Restrictions: At December 31, 2020, payment of dividends by CMS Energy on its common stock was limited to $5.5 billion under provisions of the Michigan Business Corporation Act of 1972.

Under the provisions of its articles of incorporation, at December 31, 2020, Consumers had $1.6 billion of unrestricted retained earnings available to pay dividends on its common stock to CMS Energy. Provisions of the Federal Power Act and the Natural Gas Act appear to restrict dividends payable by Consumers to the amount of Consumers’ retained earnings. Several decisions from FERC suggest that, under a variety of circumstances, dividends from Consumers on its common stock would not be limited to amounts in Consumers’ retained earnings. Any decision by Consumers to pay dividends on its common stock in excess of retained earnings would be based on specific facts and circumstances and would be subject to a formal regulatory filing process.

For the year ended December 31, 2020, Consumers paid $637 million in dividends on its common stock to CMS Energy.

Capitalization: The authorized capital stock of CMS Energy consists of:

•350 million shares of CMS Energy Common Stock, par value $0.01 per share

•10 million shares of CMS Energy Preferred Stock, par value $0.01 per share

Issuance of Common Stock: In 2018 and 2020, CMS Energy entered into equity offering programs under which it may sell, from time to time, shares of CMS Energy common stock. Under both programs, CMS Energy may sell its common stock in privately negotiated transactions, in “at the market” offerings, through forward sales transactions, or otherwise.

During 2018 and 2019, CMS Energy entered into forward sales contracts having an aggregate sales price of $250 million, the maximum allowed under the 2018 program. In 2020, CMS Energy settled the forward contracts under this program by issuing 4,879,022 shares of common stock at a weighted-average price of $48.86 per share, resulting in net proceeds of $238 million.

Under the 2020 program, CMS Energy may sell shares of its common stock having an aggregate sales price of up to $500 million. Presented in the following table are details of CMS Energy’s forward sales contracts under this program at December 31, 2020:


			Forward Price Per Share
Contract Date	Maturity Date	Number of Shares	Initial			December 31, 2020
September 15, 2020	December 31, 2021	846,759		$	61.04		$	60.53
December 22, 2020	June 22, 2022	115,595		61.81			61.81

These contracts allow CMS Energy to either physically settle the contracts by issuing shares of its common stock at the then-applicable forward sale price specified by the agreement or net settle the contracts through the delivery or receipt of cash or shares. CMS Energy may settle the contracts at any time through their maturity dates, and presently intends to physically settle the contracts by delivering shares of its common stock.

The initial forward price in the forward equity sale contracts includes a deduction for commissions and will be adjusted on a daily basis over the term based on an interest rate factor and decreased on certain dates by certain predetermined amounts to reflect expected dividend payments. No amounts are recorded on CMS Energy’s consolidated balance sheets until settlements of the forward equity sale contracts occur. If CMS Energy had elected to net share settle the contracts as of December 31, 2020, CMS Energy would have been required to deliver 6,666 shares.

Preferred Stock of Subsidiary: Consumers’ preferred stock is traded on the New York Stock Exchange under the symbol CMS-PB. Presented in the following table are details of Consumers’ preferred stock at December 31, 2020 and 2019:


	Par Value			Optional Redemption Price			Number of Shares Authorized	Number of Shares Outstanding
Cumulative, with no mandatory redemption		$	100		$	110	7,500,000	373,148

Consumers Energy Company

Debt Instrument [Line Items]

Financings and Capitalization