10. Debt and Credit Agreements (All Registrants)

Short-Term Borrowings

Exelon, Pepco, DPL and ACE meet their short-term liquidity requirements primarily through the issuance of commercial paper and short-term notes. ComEd and BGE meet their short-term liquidity requirements primarily through the issuance of commercial paper. Generation and PECO meet their short-term liquidity requirements primarily through the issuance of commercial paper and borrowings from the Exelon intercompany money pool. PHI meets its short-term liquidity requirement primarily through the issuance of short-term notes and the Exelon intercompany money pool.

Commercial Paper

The Registrants had the following amounts of commercial paper borrowings outstanding as of June 30, 2017 and December 31, 2016:



Commercial Paper Borrowings	June 30, 2017		December 31, 2016
Exelon Corporate	$	—	$	—
Generation	569		620
ComEd	389		—
BGE	85		45
Pepco	—		23
DPL	25		—
ACE	42		—

Short-Term Loan Agreements

On January 13, 2016, PHI entered into a $500 million term loan agreement, which was amended on March 28, 2016. The net proceeds of the loan were used to repay PHI's outstanding commercial paper, and for general corporate purposes. Pursuant to the loan agreement, as amended, loans made thereunder bear interest at a variable rate equal to LIBOR plus 1%, and all indebtedness thereunder is unsecured. On March 23, 2017, the aggregate principal amount of all loans, together with any accrued but unpaid interest due under the loan agreement was fully repaid and the loan terminated. On March 23, 2017, Exelon Corporate entered into a similar type term loan for $500 million which expires on March 22, 2018. Pursuant to the loan agreement, loans made thereunder bear interest at a variable rate equal to LIBOR plus 1% and all indebtedness thereunder is unsecured. The loan agreement is reflected in Exelon’s Consolidated Balance Sheet within Short-Term borrowings.

Credit Agreements

On January 9, 2017, the credit agreement for Generation's $75 million bilateral credit facility was amended and restated to increase the facility size to $100 million and extend the maturity to January 2019. This facility will solely be used by Generation to issue letters of credit.

On May 26, 2016, Exelon Corporate, Generation, ComEd, PECO and BGE entered into amendments to each of their respective syndicated revolving credit facilities, which extended the maturity of each of the facilities to May 26, 2021. Exelon Corporate also increased the size of its facility from $500 million to $600 million. On May 26, 2016, PHI, Pepco, DPL and ACE entered into an amendment to their Second Amended and Restated Credit Agreement dated as of August 1, 2011, which (i) extended the maturity date of the facility to May 26, 2021, (ii) removed PHI as a borrower under the facility, (iii) decreased the size of the facility from $1.5 billion to $900 million and (iv) converted its financial covenant from a debt to capitalization leverage ratio to an interest coverage ratio. On May 26, 2017, each of the Registrants' respective syndicated revolving credit facilities had their maturity dates extended to May 26, 2022.

Long-Term Debt

Issuance of Long-Term Debt

During the six months ended June 30, 2017, the following long-term debt was issued:



Company	Type	Interest Rate		Maturity	Amount		Use of Proceeds
Exelon	Junior Subordinated Notes^(a)	3.50	%	June 1, 2022	$	1,150	Refinance Exelon's Junior Subordinated Notes issued in June 2014.
Generation	Albany Green Energy Project Financing	LIBOR + 1.25%		November 17, 2017	$	13	Albany Green Energy biomass generation development.
Generation	Energy Efficiency Project Financing	3.90	%	February 1, 2018	$	12	Funding to install energy conservation measures for the Naval Station Great Lakes project.
Generation	Energy Efficiency Project Financing	2.61	%	September 30, 2018	$	6	Funding to install energy conservation measures for the Pensacola project.
Generation	Energy Efficiency Project Financing	3.53	%	April 1, 2019	$	8	Funding to install energy conservation measures for the State Department project.
Generation	Energy Efficiency Project Financing	3.72	%	May 1, 2018	$	3	Funding to install energy conservation measures for the Smithsonian Zoo project.
Generation	Senior Notes	2.95	%	January 15, 2020	$	250	Repay outstanding commercial paper obligations and for general corporate purposes.
Generation	Senior Notes	3.40	%	March 15, 2022	$	500	Repay outstanding commercial paper obligations and for general corporate purposes.
Generation	ExGen Texas Power Nonrecourse Debt	LIBOR + 4.75%		September 18, 2021	$	6	Funding for general corporate purposes.
Pepco	Energy Efficiency Project Financing	3.30	%	December 15, 2017	$	1	Funding to install energy conservation measures for the DOE Germantown project.
Pepco	First Mortgage Bonds	4.15	%	March 15, 2043	$	200	Funding to repay outstanding commercial paper and for general corporate purposes.

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(a)	See the Junior Subordinated Notes discussion below for further information.

EGTP Nonrecourse Debt

In September 2014, EGTP, an indirect subsidiary of Exelon and Generation, issued $675 million aggregate principal amount of a nonrecourse senior secured term loan. The net proceeds were distributed to Generation for general business purposes. The loan is scheduled to mature on September 18, 2021. The term loan bears interest at a variable rate equal to LIBOR plus 4.75%, subject to a 1% LIBOR floor with interest payable quarterly. As of June 30, 2017, $662 million was outstanding. As part of the agreement, a revolving credit facility was established for the amount of $20 million available through, and scheduled to mature on September 18, 2019. In addition to the financing, EGTP entered into various interest rate swaps with an initial notional amount of approximately $505 million at an interest rate of 2.34% to hedge a portion of the interest rate exposure in connection with this financing, as required by the debt covenants. See Note 9 — Derivative Financial Instruments for additional information regarding interest rate swaps.

On May 2, 2017, EGTP entered into a consent agreement with its lenders, which resulted in the outstanding debt balance being classified as Long-term debt due within one year on Exelon's and Generation's Consolidated Balance Sheets. See Note 4 - Mergers, Acquisitions and Dispositions and Note 6 - Impairment of Long-Lived Assets for more information.

Junior Subordinated Notes

In June 2014, Exelon issued $1.15 billion of junior subordinated notes in the form of 23 million equity units at a stated amount of $50.00 per unit. Each equity unit represented an undivided beneficial ownership interest in Exelon’s $1.15 billion of 2.50% junior subordinated notes due in 2024 (“2024 notes”) and a forward equity purchase contract. As contemplated in the June 2014 equity unit structure, in April 2017, Exelon completed the remarketing of the 2024 notes into $1.15 billion of 3.497% junior subordinated notes due in 2022 (“Remarketing”). Exelon conducted the Remarketing on behalf of the holders of equity units and did not directly receive any proceeds therefrom. Instead, the former holders of the 2024 notes used debt remarketing proceeds towards settling the forward equity purchase contract with Exelon on June 1, 2017. Exelon issued approximately 33 million shares of common stock from treasury stock and received $1.15 billion upon settlement of the forward equity purchase contract. When reissuing treasury stock Exelon uses the average price paid to repurchase shares to calculate a gain or loss on issuance and records gains or losses directly to retained earnings. A loss on reissuance of treasury shares of $1.05 billion was recorded to retained earnings as of June 30, 2017. See Note 16 - Earnings Per Share and Equity for further information on the issuance of common stock.

BGE Redemption of Trust Preferred Securities

On August 1, 2017, BGE announced that it intends to redeem all of the outstanding shares of BGE Capital Trust II 6.20% Preferred Securities, which totaled $258 million at June 30, 2017. The securities will be redeemed on August 28, 2017, pursuant to the optional redemption provisions of the Indenture under which the securities were issued. The redemption will be made to stockholders of record as of the close of business on August 25, 2017. The redemption price per share is $25.19, which equals the stated value per share plus accrued and unpaid dividends to, but excluding, the redemption date. No dividends on the Securities being redeemed will accrue on or after the redemption date, nor will any interest accrue on amounts held to pay the redemption price.