Borrowings and Other Financing Instruments
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Dec. 31, 2012
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Borrowings and Other Financing Instruments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Borrowings and Other Financing Instruments |
Short-Term Borrowings Commercial Paper — NSP-Wisconsin meets its short-term liquidity requirements primarily through the issuance of commercial paper and borrowings under its credit facility. The following tables present commercial paper outstanding for NSP-Wisconsin:
Letters of Credit — NSP-Wisconsin may use letters of credit, generally with terms of one year, to provide financial guarantees for certain operating obligations. At Dec. 31, 2012 and 2011, there were no letters of credit outstanding. Credit Facility — In order to use its commercial paper program to fulfill short-term funding needs, NSP-Wisconsin must have a revolving credit facility in place at least equal to the amount of its commercial paper borrowing limit and cannot issue commercial paper in an aggregate amount exceeding available capacity under this credit facility. The line of credit provides short-term financing in the form of notes payable to banks, letters of credit and back-up support for commercial paper borrowings. At Dec. 31, 2012, NSP-Wisconsin had the following committed credit facility available (in millions):
All credit facility bank borrowings, outstanding letters of credit and outstanding commercial paper reduce the available capacity under the credit facility. NSP-Wisconsin had no direct advances on the credit facility outstanding at Dec. 31, 2012 and 2011. Amended Credit Agreement— In July 2012, NSP-Wisconsin entered into an amended five-year credit agreement with a syndicate of banks, replacing the previous four-year credit agreement. The amended credit agreement has substantially the same terms and conditions as the prior credit agreement with an improvement in pricing and an extension of maturity from March 2015 to July 2017. The Eurodollar borrowing margin on the line of credit was reduced from a range of 100 to 200 basis points per year, to a range of 87.5 to 175 basis points per year based on applicable long-term credit ratings. The commitment fees, calculated on the unused portion of the line of credit, were reduced from a range of 10 to 35 basis points per year, to a range of 7.5 to 27.5 basis points per year, also based on applicable long-term credit ratings. NSP-Wisconsin has the right to request an extension of the revolving termination date for an additional one-year period, subject to majority bank group approval. Other features of NSP-Wisconsin's credit facility include:
Intercompany Borrowing Arrangement — Prior to entering into its credit facility, NSP-Wisconsin had an intercompany borrowing arrangement with NSP-Minnesota, with interest charged at NSP-Minnesota's short-term borrowing rate. The borrowing arrangement terminated in the first quarter 2011, during which time there were no borrowings. The following table presents the intercompany borrowing arrangement with NSP-Minnesota at Dec. 31, 2010:
Other Short-Term Borrowings—The following table presents the notes payable of Clearwater Investments, Inc., a NSP-Wisconsin subsidiary, to Xcel Energy Inc.:
Long-Term Borrowings and Other Financing Instruments Generally, all real and personal property of NSP-Wisconsin is subject to the liens of its first mortgage indentures. Additionally, debt premiums, discounts and expenses are amortized over the life of the related debt. The premiums, discounts and expenses associated with refinanced debt are deferred and amortized over the life of the related new issuance, in accordance with regulatory guidelines. In October 2012, NSP-Wisconsin issued $100 million of 3.70 percent first mortgage bonds due Oct. 1, 2042. During the next five years, NSP-Wisconsin has long-term debt maturities of $1.2 million due in 2013. Deferred Financing Costs — Other assets included deferred financing costs of approximately $3.6 million and $2.6 million, net of amortization, at Dec. 31, 2012 and 2011, respectively. NSP-Wisconsin is amortizing these financing costs over the remaining maturity periods of the related debt. Dividend Restrictions — NSP-Wisconsin's dividends are subject to the FERC's jurisdiction under the Federal Power Act, which prohibits the payment of dividends out of capital accounts; payment of dividends is allowed out of retained earnings only. The most restrictive dividend limitation for NSP-Wisconsin is imposed by its state regulatory commission. NSP-Wisconsin cannot pay annual dividends in excess of approximately $31.8 million if its calendar year average equity-to-total capitalization ratio is or falls below the state commission authorized level of 52.5 percent. NSP-Wisconsin's calendar year average equity-to-total capitalization ratio was 52.6 percent at Dec. 31, 2012. |