Long-Term Debt and Financing Obligations

Outstanding long-term debt and financing obligations are as follows:



	December 31,
	2013			2012
	(In thousands)
Long-Term Debt:
Pollution Control Bonds (1):
7.25% 2009 Series A refunding bonds, due 2040 (7.46% effective interest rate)	$	63,500		$	63,500
4.50% 2012 Series A refunding bonds, due 2042 (4.63% effective interest rate)	59,235			59,235
7.25% 2009 Series B refunding bonds, due 2040 (7.49% effective interest rate)	37,100			37,100
1.875% 2012 Series A refunding bonds, due 2032 (2.35% effective interest rate)	33,300			33,300
Total Pollution Control Bonds	193,135			193,135
Senior Notes (2):
6.00% Senior Notes, net of discount, due 2035 (7.12% effective interest rate)	397,976			397,934
7.50% Senior Notes, net of discount, due 2038 (7.67% effective interest rate)	148,800			148,783
3.30% Senior Notes, net of discount, due 2022 (3.43% effective interest rate)	149,709			149,683
Total Senior Notes	696,485			696,400
RGRT Senior Notes (3):
3.67% Senior Notes, Series A, due 2015 (3.87% effective interest rate)	15,000			15,000
4.47% Senior Notes, Series B, due 2017 (4.62% effective interest rate)	50,000			50,000
5.04% Senior Notes, Series C, due 2020 (5.16% effective interest rate)	45,000			45,000
Total RGRT Senior Notes	110,000			110,000
Total long-term debt	999,620			999,535
Financing Obligations:
Revolving Credit Facility ($14,352 due in 2014) (4)	14,352			22,155
Total long-term debt and financing obligations	1,013,972			1,021,690
Current Portion (amount due within one year):
Short-term borrowings under the revolving credit facility	(14,352		)	(22,155		)
	$	999,620		$	999,535

_____________________


(1)	Pollution Control Bonds ("PCBs")

The Company has four series of tax exempt unsecured PCBs in aggregate principal amount of $193.1 million. The 1.875% 2012 Series A (El Paso Electric Company Four Corners Project) Pollution Control Refunding Revenue Bonds with an aggregate principal amount of $33.3 million are subject to mandatory tender for purchase in September 2017.


(2)	Senior Notes

The Senior Notes are unsecured obligations of the Company. They were issued pursuant to bond covenants that provide limitations on the Company’s ability to enter into certain transactions. The 6.00% senior notes have an aggregate principal amount of $400.0 million and were issued in May 2005. The proceeds, net of a $2.3 million discount, were used to fund the retirement of the Company's first mortgage bonds. The Company amortizes the loss associated with a cash flow hedge recorded in accumulated other comprehensive income to earnings as interest expense over the life of the 6.00% senior notes. See Note O, "Financial Instruments and Investments - Treasury Rate Locks". This amortization is included in the effective interest rate of the 6.00% senior notes.

The 7.50% senior notes have an aggregate principal amount of $150.0 million and were issued in June 2008. The proceeds, net of a $1.3 million discount, were used to repay short-term borrowings of $44.0 million, fund capital expenditures and for other general corporate purposes.

The 3.30% senior notes have an aggregate principal amount of $150.0 million and were issued in December 2012. The proceeds, net of a $0.3 million discount, were used to fund construction expenditures and for working capital and general corporate purposes.


(3)	RGRT Senior Notes

In 2010, the Company and RGRT, a Texas grantor trust through which the Company finances its portion of fuel for Palo Verde, entered into a note purchase agreement with various institutional purchasers. Under the terms of the Agreement, RGRT sold to the purchasers $110 million aggregate principal amount of senior notes (the "Notes"). The Company guarantees the payment of principal and interest on the Notes. In the Company’s financial statements, the assets and liabilities of the RGRT are reported as assets and liabilities of the Company.

RGRT will pay interest on the Notes on February 15, and August 15 of each year until maturity. RGRT may redeem the Notes, in whole or in part, at any time at a redemption price equal to 100% of the principal amount to be redeemed together with the interest on such principal amount accrued to the date of redemption, plus a make-whole amount based on the prevailing market interest rates. The agreement requires compliance with certain

covenants, including a total debt to capitalization ratio. The Company was in compliance with these requirements throughout 2013.

The sale of the Notes was made by RGRT in reliance on a private placement exemption from registration under the Securities Act of 1933, as amended.

The proceeds of $109.4 million, net of issuance costs, from the sale of the Notes was used by RGRT to repay amounts borrowed under the revolving credit facility and will enable future nuclear fuel financing requirements of RGRT to be met with a combination of the Notes and amounts borrowed from the revolving credit facility.


(4)	Revolving Credit Facility

On January 14, 2014, the Company and RGRT entered into a second amended and restated credit agreement related to the RCF with JP Morgan Chase Bank, N.A., as administrative agent and issuing bank, and Union Bank, N.A., as syndication agent, and various lending banks party thereto. Under the terms of the agreement, the Company has available $300 million and the ability to increase the RCF by up to $100 million (up to a total of $400 million) upon the satisfaction of certain conditions, more fully set forth in the agreement, including obtaining commitments from lenders or third party financial institutions. The RCF has a term ending January 2019. The Company may extend the maturity date up to two times, in each case for an additional one year period upon the satisfaction of certain conditions.

The RCF provides that amounts borrowed by the Company may be used for, among other things, working capital and general corporate purposes. Any amounts borrowed by RGRT may be used, among other things, to finance the acquisition and processing of nuclear fuel. Amounts borrowed by RGRT are guaranteed by the Company and the balance borrowed under the RCF is recorded as short-term borrowings on the balance sheet. The RCF is unsecured. The RCF requires compliance with certain covenants, including a total debt to capitalization ratio. The Company was in compliance with these requirements throughout 2013. As of December 31, 2013, the total amount borrowed by RGRT was $14.4 million for nuclear fuel under the RCF. As of December 31, 2013, no borrowings were outstanding under this facility for working capital and general corporate purposes. The weighted average interest rate on the RCF was 1.4% as of December 31, 2013.

As of December 31, 2013, the scheduled maturities for the next five years of long-term debt are as follows (in thousands):




2014	$	—
2015	15,000
2016	—
2017	83,300
2018	—

The $14.4 million outstanding on the RCF for nuclear fuel financing purposes is anticipated to be paid in 2014.