CenterPoint Energy 2014 Annual Report Download - page 118

(a) Short-term Borrowings
Inventory Financing
. NGD has asset management agreements associated with its utility distribution service in Arkansas, north Louisiana
and Oklahoma that extend through 2018. Pursuant to the provisions of the agreements, NGD sells natural gas and agrees to repurchase an
equivalent amount of natural gas during the winter heating seasons at the same cost, plus a financing charge. These transactions are accounted
for as a financing and they had an associated principal obligation of $53 million and $43 million as of December 31, 2014 and 2013
,
respectively.
(b) Long-term Debt
On March 17, 2014, CenterPoint Energy Houston Electric, LLC issued $600 million principal amount of 4.50%
General Mortgage Bonds
due 2044.
Debt Repayments. Approximately $44 million
aggregate principal amount of pollution control bonds issued on behalf of CenterPoint
Houston were redeemed on March 3, 2014 at 101% of their principal amount plus accrued interest. The bonds had an interest rate of 4.25%
,
were scheduled to mature in 2017 and were collateralized by general mortgage bonds of CenterPoint Houston.
Approximately $56 million
aggregate principal amount of pollution control bonds issued on behalf of CenterPoint Houston were purchased
by CenterPoint Houston on March 3, 2014 at 101%
of their principal amount plus accrued interest pursuant to the mandatory tender provisions
of the bonds. The bonds had an interest rate of 5.60% prior to CenterPoint Houston’
s purchase and have a variable rate thereafter. The bonds
mature in 2027 and are collateralized by general mortgage bonds of CenterPoint Houston. The purchased pollution control bonds may be
remarketed.
Approximately $84 million
aggregate principal amount of pollution control bonds issued on behalf of CenterPoint Houston were redeemed
on June 2, 2014 at 100% of their principal amount plus accrued interest. The bonds had an interest rate of 4.25%
, were scheduled to mature in
2017 and were collateralized by general mortgage bonds of CenterPoint Houston.
Transition and System Restoration Bonds. As of December 31, 2014
, CenterPoint Houston had special purpose subsidiaries consisting of
transition and system restoration bond companies, which it consolidates. The consolidated special purpose subsidiaries are wholly owned
bankruptcy remote entities that were formed solely for the purpose of purchasing and owning transition or system restoration property through
the issuance of transition bonds or system restoration bonds and activities incidental thereto. These transition bonds and system restoration bonds
are payable only through the imposition and collection of “transition” or “system restoration”
charges, as defined in the Texas Public Utility
Regulatory Act, which are irrevocable, non-bypassable charges payable by most of CenterPoint Houston’
s retail electric customers in order to
provide recovery of authorized qualified costs. CenterPoint Houston has no payment obligations in respect of the transition and system
restoration bonds other than to remit the applicable transition or system restoration charges it collects. Each special purpose entity is the sole
owner of the right to impose, collect and receive the applicable transition or system restoration charges securing the bonds issued by that entity.
Creditors of CenterPoint Energy or CenterPoint Houston have no recourse to any assets or revenues of the transition and system restoration bond
companies (including the transition and system restoration charges), and the holders of transition bonds or system restoration bonds have no
recourse to the assets or revenues of CenterPoint Energy or CenterPoint Houston.
Credit Facilities. As of December 31, 2014 and 2013
, CenterPoint Energy, CenterPoint Houston and CERC Corp. had the following
revolving credit facilities and utilization of such facilities (in millions):
CenterPoint Energy’s $1.2 billion
revolving credit facility, which is scheduled to terminate on September 9, 2019, can be drawn at the
London Interbank Offered Rate (LIBOR) plus 1.25% based on CenterPoint Energy’
s current credit ratings. The revolving credit facility contains
a financial covenant which limits CenterPoint Energy’
s consolidated debt (excluding transition and system restoration bonds) to an amount not
to exceed 65% of CenterPoint Energy’s consolidated capitalization. The financial covenant limit will temporarily increase from 65% to 70%
if
CenterPoint Houston experiences damage from a natural disaster in
108
December 31, 2014 December 31, 2013
Size of
Facility
Loans
Letters
of Credit
Commercial
Paper Loans
Letters
of Credit
Commercial
Paper
CenterPoint Energy
$
1,200
$
—
$
6
$
191
$
—
$
6
$
—
CenterPoint Houston
300
—
4
—
—
4
—
CERC Corp.
600
—
—
341
—
—
118
Total
$
2,100
$
—
$
10
$
532
$
—
$
10
$
118