Borrowings and Other Financing Instruments

Short-Term Borrowings

Money Pool — Xcel Energy Inc. and its utility subsidiaries have established a money pool arrangement that allows for short-term investments in and borrowings between the utility subsidiaries. Xcel Energy Inc. may make investments in the utility subsidiaries at market-based interest rates; however, the money pool arrangement does not allow the utility subsidiaries to make investments in Xcel Energy Inc. Money pool borrowings for PSCo were as follows:



(Amounts in Millions, Except Interest Rates)	Three Months Ended Dec. 31, 2015
Borrowing limit	$	250
Amount outstanding at period end	—
Average amount outstanding	4
Maximum amount outstanding	34
Weighted average interest rate, computed on a daily basis	0.36		%
Weighted average interest rate at period end	N/A



(Amounts in Millions, Except Interest Rates)	Twelve Months Ended Dec. 31, 2015			Twelve Months Ended Dec. 31, 2014			Twelve Months Ended Dec. 31, 2013
Borrowing limit	$	250		$	250		$	250
Amount outstanding at period end	—			—			—
Average amount outstanding	1			4			—
Maximum amount outstanding	34			97			12
Weighted average interest rate, computed on a daily basis	0.41		%	0.25		%	0.36		%
Weighted average interest rate at period end	N/A			N/A			N/A

Commercial Paper — PSCo meets its short-term liquidity requirements primarily through the issuance of commercial paper and borrowings under its credit facility. Commercial paper borrowings for PSCo were as follows:



(Amounts in Millions, Except Interest Rates)	Three Months Ended Dec. 31, 2014
Borrowing limit	$	700
Amount outstanding at period end	14
Average amount outstanding	14
Maximum amount outstanding	68
Weighted average interest rate, computed on a daily basis	0.50		%
Weighted average interest rate at period end	0.60



(Amounts in Millions, Except Interest Rates)	Twelve Months Ended Dec. 31, 2015			Twelve Months Ended Dec. 31, 2014			Twelve Months Ended Dec. 31, 2013
Borrowing limit	$	700		$	700		$	700
Amount outstanding at period end	14			382			—
Average amount outstanding	95			167			38
Maximum amount outstanding	449			393			332
Weighted average interest rate, computed on a daily basis	0.51		%	0.31		%	0.34		%
Weighted average interest rate at period end	0.60			0.65			N/A

Letters of Credit — PSCo uses letters of credit, generally with terms of one year, to provide financial guarantees for certain operating obligations. At Dec. 31, 2015 and 2014, there were $4 million and $6 million of letters of credit outstanding, respectively, under the credit facility. The contract amounts of these letters of credit approximate their fair value and are subject to fees.

Credit Facility — In order to use its commercial paper program to fulfill short-term funding needs, PSCo 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 credit facility provides short-term financing in the form of notes payable to banks, letters of credit and back-up support for commercial paper borrowings.

Credit Agreement — PSCo has a five-year credit agreement with a syndicate of banks. The total size of the credit facility is $700 million and the credit facility matures in October 2019.

PSCo has the right to request an extension of the termination date for two additional one-year periods. All extension requests are subject to majority bank group approval.

Other features of PSCo’s credit facility include:


•	PSCo may increase its credit facility by up to $100 million.

•

The credit facility has a financial covenant requiring that the debt-to-total capitalization ratio be less than or equal to 65 percent. PSCo was in compliance as its debt-to-total capitalization ratio was 45 percent and 47 percent at Dec. 31, 2015 and 2014, respectively. If PSCo does not comply with the covenant, an event of default may be declared, and if not remedied, any outstanding amounts due under the facility can be declared due by the lender.


•	The credit facility has a cross-default provision that provides PSCo will be in default on its borrowings under the facility if PSCo or any of its subsidiaries whose total assets exceed 15 percent of PSCo’s consolidated total assets, default on certain indebtedness in an aggregate principal amount exceeding $75 million.


•	PSCo was in compliance with all financial covenants on its debt agreements as of Dec. 31, 2015 and 2014.


•	The interest rates under the line of credit are based on Eurodollar borrowing margins ranging from 87.5 to 175 basis points per year based on the applicable long-term credit ratings.


•	The commitment fees, also based on applicable long-term credit ratings, are calculated on the unused portion of the lines of credit at a range of 7.5 to 27.5 basis points per year.

At Dec. 31, 2015, PSCo had the following committed credit facility available (in millions):



Credit Facility ^(a)		Drawn ^(b)		Available
$	700	$	18	$	682


^(a)	This credit facility matures in October 2019.


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

All credit facility bank borrowings, outstanding letters of credit and outstanding commercial paper reduce the available capacity under the credit facility. PSCo had no direct advances on the credit facility outstanding at Dec. 31, 2015 and 2014.

Long-Term Borrowings

Generally, all real and personal property of PSCo is subject to the liens of its first mortgage indenture. 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 2015, PSCo issued $250 million of 2.9 percent first mortgage bonds due May 15, 2025. In 2014, PSCo issued $300 million of 4.30 percent first mortgage bonds due March 15, 2044.

During the next five years, PSCo has long-term debt maturities of $130 million, $300 million, $400 million and $400 million due in 2017, 2018, 2019 and 2020, respectively.

Deferred Financing Costs — Other assets included deferred financing costs of approximately $26.6 million and $26.5 million, net of amortization, at Dec. 31, 2015 and 2014, respectively. PSCo is amortizing these financing costs over the remaining maturity periods of the related debt.

Dividend Restrictions — PSCo’s dividends are subject to the FERC’s jurisdiction, which prohibits the payment of dividends out of capital accounts; payment of dividends is allowed out of retained earnings only.