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 SPS were as follows:



(Amounts in Millions, Except Interest Rates)	Three Months Ended Sept. 30, 2017			Year Ended Dec. 31, 2016
Borrowing limit	$	100		$	100
Amount outstanding at period end	—			—
Average amount outstanding	37			28
Maximum amount outstanding	100			100
Weighted average interest rate, computed on a daily basis	1.10		%	0.67		%
Weighted average interest rate at period end	N/A			N/A

Commercial Paper — SPS meets its short-term liquidity requirements primarily through the issuance of commercial paper and borrowings under its credit facility and the money pool. Commercial paper outstanding for SPS was as follows:



(Amounts in Millions, Except Interest Rates)	Three Months Ended Sept. 30, 2017			Year Ended Dec. 31, 2016
Borrowing limit	$	400		$	400
Amount outstanding at period end	—			50
Average amount outstanding	36			43
Maximum amount outstanding	106			140
Weighted average interest rate, computed on a daily basis	1.37		%	0.67		%
Weighted average interest rate at period end	N/A			0.95

Letters of Credit — SPS uses letters of credit, generally with terms of one year, to provide financial guarantees for certain operating obligations. As of Sept. 30, 2017 and Dec. 31, 2016, there were $2 million and $5 million, respectively, of letters of credit outstanding 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, SPS 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.

As of Sept. 30, 2017, SPS had the following committed credit facility available (in millions of dollars):



Credit Facility ^(a)		Drawn ^(b)		Available
$	400	$	3	$	397


^(a)	This credit facility expires in June 2021.


^(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. SPS had no direct advances on the credit facility outstanding as of Sept. 30, 2017 and Dec. 31, 2016.

Long-Term Borrowings

In August 2017, SPS issued $450 million of 3.70 percent first mortgage bonds due Aug. 15, 2047.

Debt Redemption

On Aug. 30, 2017, SPS reacquired $250 million of debt with a coupon rate of 8.75 percent and an original maturity date of Dec. 1, 2018. The redemption resulted in payment of an early redemption premium of $21.6 million which was deferred as a regulatory asset.