Financing Activities

9 Months Ended

Sep. 30, 2019

8. Financing Activities

Credit Arrangements and Short-term Debt

(All Registrants)

The Registrants maintain credit facilities to enhance liquidity, provide credit support and act as a backstop to commercial paper programs. For reporting purposes, on a consolidated basis, the credit facilities and commercial paper programs of PPL Electric, LKE, LG&E and KU also apply to PPL and the credit facilities and commercial paper programs of LG&E and KU also apply to LKE. The amounts listed in the borrowed column below are recorded as "Short-term debt" on the Balance Sheets, except for amounts borrowed under LG&E's Term Loan Facility which were recorded as "Long-term debt due within one year" on the December 31, 2018 Balance Sheet. The following credit facilities were in place at:



	September 30, 2019									December 31, 2018
	Expiration Date	Capacity		Borrowed		Letters of Credit and Commercial Paper Issued		Unused Capacity		Borrowed		Letters of Credit and Commercial Paper Issued
PPL
U.K.
WPD plc
Syndicated Credit Facility (a)	Jan. 2023	£	210	£	165	£	—	£	46	£	157	£	—
WPD (South West)
Syndicated Credit Facility	July 2021	245		—		—		245		—		—
WPD (East Midlands)
Syndicated Credit Facility (b)	July 2021	300		—		—		300		38		—
WPD (West Midlands)
Syndicated Credit Facility (c)	July 2021	300		51		—		249		—		—
Uncommitted Credit Facilities (d)		100		36		4		60		—		4
Total U.K. Credit Facilities (e)		£	1,155	£	252	£	4	£	900	£	195	£	4
U.S.
PPL Capital Funding
Syndicated Credit Facility	Jan. 2024	$	1,450	$	—	$	981	$	469	$	—	$	669
Bilateral Credit Facility	Mar. 2020	100		—		15		85		—		15
Total PPL Capital Funding Credit Facilities		$	1,550	$	—	$	996	$	554	$	—	$	684

PPL Electric
Syndicated Credit Facility	Jan. 2024	$	650	$	—	$	1	$	649	$	—	$	1

LG&E
Syndicated Credit Facility	Jan. 2024	$	500	$	—	$	99	$	401	$	—	$	279
Term Loan Credit Facility		—		—		—		—		200		—
Total LG&E Credit Facilities		$	500	$	—	$	99	$	401	$	200	$	279

KU
Syndicated Credit Facility	Jan. 2024	$	400	$	—	$	2	$	398	$	—	$	235
Letter of Credit Facility (f)		—		—		—		—		—		198
Total KU Credit Facilities		$	400	$	—	$	2	$	398	$	—	$	433


(a)	The amounts borrowed at September 30, 2019 and December 31, 2018 were USD-denominated borrowings of $200 million for both periods, which bore interest at 2.94% and 3.17%. The unused capacity reflects the amounts borrowed in GBP of £164 million as of the date borrowed.


(b)	The amount borrowed at December 31, 2018 was GBP-denominated borrowings which equated to $48 million and bore interest at 1.12%.


(c)	The amount borrowed at September 30, 2019 was GBP-denominated borrowings which equated to $62 million and bore interest at 1.11%.


(d)	The amount borrowed at September 30, 2019 was GBP-denominated borrowings which equated to $44 million and bore interest at 1.59%.


(e)	At September 30, 2019, the unused capacity under the U.K. credit facilities was $1.1 billion.


(f)	KU's letter of credit facility was terminated in September 2019 in connection with the bond remarketings discussed below.

PPL, PPL Electric, LG&E and KU maintain commercial paper programs to provide an additional financing source to fund short-term liquidity needs, as necessary. Commercial paper issuances, included in "Short-term debt" on the Balance Sheets, are supported by the respective Registrant's credit facilities. The following commercial paper programs were in place at:



	September 30, 2019							December 31, 2018
	Weighted - Average Interest Rate	Capacity		Commercial Paper Issuances		Unused Capacity		Weighted - Average Interest Rate	Commercial Paper Issuances
PPL Capital Funding	2.52%	$	1,500	$	981	$	519	2.82%	$	669
PPL Electric		650		—		650			—
LG&E	2.29%	350		99		251		2.94%	279
KU	2.24%	350		2		348		2.94%	235
Total		$	2,850	$	1,082	$	1,768		$	1,183

(PPL Electric, LKE, LG&E, and KU)

See Note 12 for discussion of intercompany borrowings.

Long-term Debt

(PPL)

In June 2019, WPD plc executed and drew £50 million under a 5-year term loan facility due 2024 at a rate of 2.189%, to be reset quarterly as detailed in the terms of the agreement. The borrowing equated to $63 million at the time of drawdown, net of fees. The proceeds were used for general corporate purposes.

In September 2019, WPD (East Midlands) issued £250 million of 1.75% Senior Notes due 2031. WPD (East Midlands) received proceeds of £245 million, which equated to $301 million at the time of issuance, net of fees and a discount. The proceeds were used to repay short-term debt and for general corporate purposes.

(PPL, LKE and LG&E)

In April 2019, LG&E issued $400 million of 4.25% First Mortgage Bonds due 2049. LG&E received proceeds of $396 million, net of discounts and underwriting fees, which were used to repay commercial paper and LG&E's term loan.

In April 2019, the County of Jefferson, Kentucky remarketed $128 million of Pollution Control Revenue Bonds, 2001 Series A due 2033 previously issued on behalf of LG&E. The bonds were remarketed at a long-term rate and will bear interest at 1.85% through their mandatory purchase date of April 1, 2021.

In June 2019, the Louisville/Jefferson County Metro Government of Kentucky remarketed $31 million of Environmental Facilities Revenue Refunding Bonds, 2007 Series A due 2033 previously issued on behalf of LG&E. The bonds were remarketed at a long-term rate and will bear interest at 1.65% through their mandatory purchase date of June 1, 2021.

In June 2019, the Louisville/Jefferson Country Metro Government of Kentucky remarketed $35 million of Environmental Facilities Revenue Refunding Bonds, 2007 Series B due 2033 previously issued on behalf of LG&E. The bonds were remarketed at a long-term rate and will bear interest at 1.65% through their mandatory purchase date of June 1, 2021.

In June 2019, LG&E issued a notice to bondholders of its intention to convert the $40 million Louisville/Jefferson County Metro Government of Kentucky Pollution Control Revenue Bonds, 2005 Series A to a weekly interest rate, as permitted under the loan documents. The conversion was completed on August 1, 2019. In connection with the conversion, LG&E purchased these bonds from the remarketing agent and held them until September 17, 2019, at which time LG&E remarketed the bonds at a long-term rate that will bear interest at 1.75% through their mandatory purchase date of July 1, 2026.

(PPL, LKE and KU)

In April 2019, KU reopened its 4.375% First Mortgage Bonds due 2045 and issued an additional $300 million of this series. KU received proceeds of $303 million, including premiums and underwriting fees, which were used to repay commercial paper and for other general corporate purposes.

In September 2019, the County of Carroll, Kentucky remarketed $50 million of Environmental Facilities Revenue Bonds, 2004 Series A due 2034 previously issued on behalf of KU. The bonds were remarketed at a long-term rate and will bear interest at 1.75% through their mandatory purchase date of September 1, 2026.

In September 2019, the County of Carroll, Kentucky remarketed $96 million of Pollution Control Revenue Refunding Bonds, 2016 Series A due 2042 previously issued on behalf of KU. The bonds were remarketed at a long-term rate and will bear interest at 1.55% through their mandatory purchase date of September 1, 2026.

In September 2019, the County of Carroll, Kentucky remarketed $54 million of Environmental Facilities Revenue Refunding Bonds, 2006 Series B due 2034 previously issued on behalf of KU. The bonds were remarketed at a long-term rate and will bear interest at 1.20% through their mandatory purchase date of June 1, 2021.

In September 2019, the County of Carroll, Kentucky remarketed $78 million of Environmental Facilities Revenue Bonds, 2008 Series A due 2032 previously issued on behalf of KU. The bonds were remarketed at a long-term rate and will bear interest at 1.20% through their mandatory purchase date of June 1, 2021.

In September 2019, the County of Mercer, Kentucky remarketed $13 million of Solid Waste Disposal Facility Revenue Bonds, 2000 Series A due 2023 previously issued on behalf of KU. The bonds were remarketed at a long-term rate and will bear interest at 1.30% through the maturity date of May 1, 2023.

(PPL and PPL Electric)

In September 2019, PPL Electric issued $400 million of 3.00% First Mortgage Bonds due 2049. PPL Electric received proceeds of $390 million, net of a discount and underwriting fees, which were used to repay short-term debt and for general corporate purposes.

On October 31, 2019, PPL Electric gave notice of its intent to redeem all of the currently outstanding $100 million aggregate principal amount of its Senior Secured Bonds, 5.15% Series due 2020 on December 4, 2019.

(PPL)

Equity Securities

ATM Program

In February 2018, PPL entered into an equity distribution agreement, pursuant to which PPL may sell, from time to time, up to an aggregate of $1.0 billion of its common stock through an at-the-market offering program; including a forward sales component. The compensation paid to the selling agents by PPL may be up to 2% of the gross offering proceeds of the shares. There were no issuances under the ATM program for the nine months ended September 30, 2019.

Distributions

In August 2019, PPL declared a quarterly common stock dividend, payable October 1, 2019, of 41.25 cents per share (equivalent to $1.65 per annum). Future dividends, declared at the discretion of the Board of Directors, will depend upon future earnings, cash flows, financial and legal requirements and other factors.