APS 2015 Annual Report Download - page 67

Table of Contents
Project), 2009 Series A. These bonds were classified as current maturities of long-term debt on our Consolidated Balance Sheets at
December 31, 2014.
On November 17, 2015, APS canceled all $32 million of the Navajo County, Arizona Pollution Control Corporation Revenue
Refunding Bonds (Arizona Public Service Company Cholla Project), 2009 Series B, purchased in connection with the mandatory tender
provision on May 30, 2014.
On December 8, 2015, APS redeemed at par and canceled all $32 million of the Navajo County, Arizona Pollution Control
Corporation Revenue Refunding Bonds (Arizona Public Service Company Cholla Project), 2009 Series C.
Available Credit Facilities. Pinnacle West and APS maintain committed revolving credit facilities in order to enhance liquidity
and provide credit support for their commercial paper programs.
At December 31, 2015, Pinnacle West had a $200 million revolving credit facility that matures in May 2019. Pinnacle West has
the option to increase the amount of the facility up to a maximum of $300 million upon the satisfaction of certain conditions and with
the consent of the lenders. At December 31, 2015, Pinnacle West had no outstanding borrowings under its credit facility, no letters of
credit outstanding and no commercial paper borrowings.
On September 2, 2015, APS replaced its $500 million revolving credit facility that would have matured in April 2018, with a
new $500 million facility that matures in September 2020.
At December 31, 2015, APS had two credit facilities totaling $1 billion, including the $500 million credit facility that matures in
September 2020 and a $500 million credit facility that matures in May 2019. APS may increase the amount of each facility up to a
maximum of $700 million each, for a total of $1.4 billion, upon the satisfaction of certain conditions and with the consent of the
lenders. Interest rates are based on APS’s senior unsecured debt credit ratings. These facilities are available to support APS’s $250
million commercial paper program, for bank borrowings or for issuances of letters of credit. At December 31, 2015, APS had no
outstanding borrowings or letters of credit under its revolving credit facilities.
See “Financial Assurances” in Note 10 for a discussion of APS’s separate outstanding letters of credit.
Other Financing Matters. See Note 3 for information regarding the PSA approved by the ACC.
See Note 16 for information related to the change in our margin and collateral accounts.
Debt Provisions
Pinnacle West’s and APS’s debt covenants related to their respective bank financing arrangements include maximum debt to
capitalization ratios. Pinnacle West and APS comply with this covenant. For both Pinnacle West and APS, this covenant requires that
the ratio of consolidated debt to total consolidated capitalization not exceed 65%. At December 31, 2015, the ratio was approximately
47% for Pinnacle West and 46% for APS. Failure to comply with such covenant levels would result in an event of default which,
generally speaking, would require the immediate repayment of the debt subject to the covenants and could "cross-default" other debt.
See further discussion of "cross-default" provisions below.
Neither Pinnacle West’s nor APS’s financing agreements contain "rating triggers" that would result in an acceleration of the
required interest and principal payments in the event of a rating downgrade. However, our bank credit agreements and term loan
facilities contain a pricing grid in which the interest rates we pay for borrowings thereunder are determined by our current credit ratings.
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