Borrowings and Other Financing Instruments

9 Months Ended

Sep. 30, 2020

Borrowings and Other Financing Instruments

Short-Term Borrowings

Short-Term Debt — Xcel Energy Inc. and its utility subsidiaries meet their short-term liquidity requirements primarily through the issuance of commercial paper and borrowings under their credit facilities and term loan agreements.

Commercial paper and term loan borrowings outstanding for Xcel Energy were as follows:


(Amounts in Millions, Except Interest Rates)	Three Months Ended Sept. 30, 2020			Year Ended Dec. 31, 2019
Borrowing limit	$	3,600		$	3,600
Amount outstanding at period end	500			595
Average amount outstanding	1,195			1,115
Maximum amount outstanding	1,438			1,780
Weighted average interest rate, computed on a daily basis	0.81		%	2.72		%
Weighted average interest rate at period end	0.66			2.34

Letters of Credit — Xcel Energy Inc. and its subsidiaries use letters of credit, generally with terms of one year, to provide financial guarantees for certain operating obligations. At both Sept. 30, 2020 and Dec. 31, 2019, there were $20 million of letters of credit outstanding under the credit facilities. The contract amounts of these letters of credit approximate their fair value and are subject to fees.

Revolving Credit Facilities — In order to use commercial paper programs to fulfill short-term funding needs, Xcel Energy Inc. and its utility subsidiaries must have revolving credit facilities in place at least equal to the amount of their respective commercial paper borrowing limits and cannot issue commercial paper in an aggregate amount exceeding available capacity under these credit facilities. The lines of credit provide short-term financing in the form of notes payable to banks, letters of credit and back-up support for commercial paper borrowings.

As of Sept. 30, 2020, Xcel Energy Inc. and its utility subsidiaries had the following committed revolving credit facilities available:


(Millions of Dollars)	Credit Facility (a)		Drawn (b)		Available
Xcel Energy Inc.	$	1,250	$	—	$	1,250
PSCo	700		8		692
NSP-Minnesota	500		10		490
SPS	500		2		498
NSP-Wisconsin	150		—		150
Total	$	3,100	$	20	$	3,080

(a)Expires in June 2024.

(b)Includes outstanding commercial paper and letters of credit.

Xcel Energy Inc., NSP-Minnesota, PSCo, and SPS each have the right to request an extension of the revolving credit facility termination date for two additional one-year periods. NSP-Wisconsin has the right to request an extension of the revolving credit facility termination date for an additional one-year period. All extension requests are subject to majority bank group approval.

All credit facility bank borrowings, outstanding letters of credit and outstanding commercial paper reduce the available capacity under the respective credit facilities. Xcel Energy Inc. and its subsidiaries had no direct advances on the credit facilities outstanding as of Sept. 30, 2020 and Dec. 31, 2019.

Term Loan Agreements — In December 2019, Xcel Energy Inc. entered into a $500 million 364-Day Term Loan Agreement that matures Dec. 1, 2020. Xcel Energy has an option to request an extension through Nov. 30, 2021. The term loan includes one financial covenant, requiring Xcel Energy’s consolidated funded debt to total capitalization ratio to be less than or equal to 65 percent. Interest is at a rate equal to either the Eurodollar rate, plus 50.0 basis points, or an alternate base rate.

In September 2020, Xcel Energy Inc. repaid an incremental $700 million 364-Day Term Loan Agreement that was entered into in March 2020.

As of Sept. 30, 2020, Xcel Energy Inc.’s term loan borrowings were as follows:


(Millions of Dollars)	Limit		Amount Used		Available
Xcel Energy, Inc.	$	500	$	500	$	—

Bilateral Credit Agreement

In March 2019, NSP-Minnesota entered into a one-year uncommitted bilateral credit agreement. The credit agreement is limited in use to support letters of credit. In March 2020, NSP-Minnesota renewed its bilateral credit agreement for an additional one-year term.

As of Sept. 30, 2020, NSP-Minnesota’s outstanding letters of credit under the bilateral credit agreement were as follows:


(Millions of Dollars)	Limit		Amount Outstanding		Available
NSP-Minnesota	$	75	$	46	$	29

Long-Term Borrowings

During the nine months ended Sept. 30, 2020, Xcel Energy Inc. and its utility subsidiaries issued the following:

•Xcel Energy Inc. issued $600 million of 3.40% senior unsecured notes due June 1, 2030;

•PSCo issued $375 million of 2.70% first mortgage bonds due Jan. 15, 2051 and $375 million of 1.90% first mortgage bonds due Jan. 15, 2031;

•SPS issued $350 million of 3.15% first mortgage bonds due May 1, 2050;

•NSP-Wisconsin issued $100 million of 3.05% first mortgage bonds due May 1, 2051;

•NSP-Minnesota issued $700 million of 2.60% first mortgage bonds due June 1, 2051; and

•Xcel Energy Inc. issued $500 million of 0.50% senior unsecured notes due Oct. 15, 2023.

Forward Equity Agreements — In November 2019, Xcel Energy Inc. entered into forward sale agreements in connection with a completed $743 million public offering of 11.8 million shares of Xcel Energy common stock. The initial forward agreement was for 10.3 million shares with an additional agreement for 1.5 million shares that was exercised at the option of the banking counterparty.

At Sept. 30, 2020, the forward agreements could have been settled with physical delivery of 11.8 million common shares to the banking counterparty in exchange for cash of $722 million. The forward instruments could also have been settled at Sept. 30, 2020, with delivery of approximately $92 million of cash or approximately 1.3 million shares of common stock to the counterparty, if Xcel Energy unilaterally elected net cash or net share settlement, respectively.

The forward price used to determine amounts due at settlement is calculated based on the November 2019 public offering price for Xcel Energy’s common stock of $62.69, increased for the overnight bank funding rate, less a spread of 0.75% and less expected dividends on Xcel Energy’s common stock during the period the instruments are outstanding.

Xcel Energy may settle the agreements at any time up to the maturity date of Dec. 31, 2020. Depending on settlement timing, cash proceeds are expected to be approximately $720 million.

Forward equity instruments were recognized within stockholders’ equity at fair value at execution of the agreements and will not be subsequently adjusted until settlement.

Other Equity — Xcel Energy Inc. issued $30 million and $29 million of equity through the DRIP during the nine months ended Sept. 30, 2020 and 2019, respectively. The program allows shareholders to elect dividend reinvestment in Xcel Energy Inc. common stock through a non-cash transaction.