Short-Term Credit Arrangements and Borrowings

3 Months Ended

Mar. 31, 2020

Short-Term Credit Arrangements and Borrowings

SHORT-TERM CREDIT ARRANGEMENTS AND BORROWINGS

DTE Energy, DTE Electric, and DTE Gas have unsecured revolving credit agreements that can be used for general corporate borrowings, but are intended to provide liquidity support for each of the companies’ commercial paper programs. Borrowings under the revolvers are available at prevailing short-term interest rates. In addition, DTE Energy entered into a $500 million unsecured term loan in March 2020 with terms consistent with the unsecured revolving credit agreements. DTE Energy has drawn the full $500 million available under this term loan, which expires in March 2021. DTE Energy also has other facilities to support letter of credit issuance.

The agreements require DTE Energy, DTE Electric, and DTE Gas to maintain a total funded debt to capitalization ratio of no more than 0.65 to 1. In the agreements, "total funded debt" means all indebtedness of each respective company and their consolidated subsidiaries, including finance lease obligations, hedge agreements, and guarantees of third parties’ debt, but excluding contingent obligations, nonrecourse and junior subordinated debt, and certain equity-linked securities and, except for calculations at the end of the second quarter, certain DTE Gas short-term debt. "Capitalization" means the sum of (a) total funded debt plus (b) "consolidated net worth," which is equal to consolidated total equity of each respective company and their consolidated subsidiaries (excluding pension effects under certain FASB statements), as determined in accordance with accounting principles generally accepted in the United States of America. At March 31, 2020, the total funded debt to total capitalization ratios for DTE Energy, DTE Electric, and DTE Gas were 0.59 to 1, 0.53 to 1, and 0.47 to 1, respectively, and were in compliance with this financial covenant.

The availability under the facilities in place at March 31, 2020 is shown in the following table:



	DTE Energy		DTE Electric		DTE Gas		Total
	(In millions)
Unsecured letter of credit facility, expiring in February 2021	$	150	$	—	$	—	$	150
Unsecured letter of credit facility, expiring in August 2021	110		—		—		110
Unsecured term loan, expiring in March 2021	500		—		—		500
Unsecured revolving credit facility, expiring April 2024	1,500		500		300		2,300
	2,260		500		300		3,060
Amounts outstanding at March 31, 2020
Commercial paper issuances	107		71		3		181
Letters of credit	231		—		—		231
Unsecured term loan	500		—		—		500
Revolver borrowings	300		—		150		450
	1,138		71		153		1,362
Net availability at March 31, 2020	$	1,122	$	429	$	147	$	1,698

In April 2020, DTE Electric entered into a $200 million unsecured term loan, of which DTE Electric has drawn the full $200 million available, and a $200 million unsecured term loan, of which no amount has been drawn. In addition, in April 2020, DTE Gas entered into a $100 million unsecured term loan, of which DTE Gas has drawn the full $100 million available. All three loans expire in April 2021 and have terms consistent with the unsecured revolving credit agreements.

DTE Energy has $9 million of other outstanding letters of credit which are used for various corporate purposes and are not included in the facilities described above.

In conjunction with maintaining certain exchange traded risk management positions, DTE Energy may be required to post collateral with its clearing agent. DTE Energy has a demand financing agreement for up to $100 million with its clearing agent. The agreement, as amended, also allows for up to $50 million of additional margin financing provided that DTE Energy posts a letter of credit for the incremental amount and allows the right of setoff with posted collateral. At March 31, 2020, the capacity under this facility was $150 million. The amount outstanding under this agreement was $96 million and $114 million at March 31, 2020 and December 31, 2019, respectively, and was fully offset by the posted collateral.