Duke Energy 2011 Annual Report Download - page 160

PART II
DUKE ENERGY CORPORATION •DUKE ENERGY CAROLINAS, LLC •DUKE ENERGY OHIO, INC. •DUKE ENERGY INDIANA, INC.
Combined Notes to Consolidated Financial Statements – (Continued)
Unsecured Debt.
In November 2011, Duke Energy issued $500 million of senior
notes, which carry a fixed interest rate of 2.15% and mature
November 15, 2016. Proceeds from the issuance will be used to
fund capital expenditures in Duke Energy’s unregulated businesses in
the U.S. and for general corporate purposes.
In August 2011, Duke Energy issued $500 million principal
amount of senior notes, which carry a fixed interest rate of 3.55%
and mature September 15, 2021. Proceeds from the issuance will
be used to repay a portion of Duke Energy’s commercial paper as it
matures, to fund capital expenditures in Duke Energy’s unregulated
businesses in the U.S. and for general corporate purposes.
In July 2010, International Energy issued $281 million
principal amount in Brazil, which carries an interest rate of 8.59%
plus IGP-M (Brazil’s monthly inflation index) non-convertible
debentures due July 2015. Proceeds of the issuance were used to
refinance Brazil debt related to DEIGP and for future debt maturities
in Brazil.
In March 2010, Duke Energy issued $450 million principal
amount of 3.35% senior notes due April 1, 2015. Proceeds from the
issuance were used to repay $274 million of borrowings under the
master credit facility and for general corporate purposes.
First Mortgage Bonds.
In December 2011, Duke Energy Carolinas issued $1 billion
principal amount of first mortgage bonds, of which $350 million
carry a fixed interest rate of 1.75% and mature December 15, 2016
and $650 million carry a fixed interest rate of 4.25% and mature
December 15, 2041. Proceeds from the issuances were used to
repay $750 million 6.25% senior unsecured notes which matured
January 15, 2012, with the remainder to fund capital expenditures
and for general corporate purposes.
In May 2011, Duke Energy Carolinas issued $500 million
principal amount of first mortgage bonds, which carry a fixed interest
rate of 3.90% and mature June 15, 2021. Proceeds from this
issuance were used to fund capital expenditures and for general
corporate purposes.
In July 2010, Duke Energy Indiana issued $500 million
principal amount of 3.75% first mortgage bonds due July 15, 2020.
Proceeds from the issuance were used to repay $123 million of
borrowings under Duke Energy’s master credit facility, to fund Duke
Energy Indiana’s ongoing capital expenditures and for general
corporate purposes.
In June 2010, Duke Energy Carolinas issued $450 million
principal amount of 4.30% first mortgage bonds due June 15,
2020. Proceeds from the issuance were used to fund Duke Energy
Carolinas’ ongoing capital expenditures and for general corporate
purposes.
Other Debt.
At December 31, 2011, Duke Energy Carolinas had $400
million principal amount of 5.625% senior unsecured notes due
November 2012 classified as Current maturities of long-term debt on
Duke Energy Carolinas’ Consolidated Balance Sheets. At
December 31, 2010, these notes were classified as Long-term Debt
on Duke Energy Carolinas’ Consolidated Balance Sheets. Duke
Energy Carolinas currently anticipates satisfying this obligation with
proceeds from additional borrowings.
At December 31, 2011, Duke Energy Carolinas had $750
million principal amount of 6.25% senior unsecured notes due
January 2012 classified as Current maturities of long-term debt on
Duke Energy Carolinas’ Consolidated Balance Sheets. At
December 31, 2010, these notes were classified as Long-term Debt
on Duke Energy Carolinas’ Consolidated Balance Sheets. As noted
above, in January 2012, Duke Energy Carolinas satisfied this
obligation with proceeds from borrowings under its December 2011
debt issuance.
At December 31, 2011, Duke Energy Ohio had $500 million
principal amount of 5.70% debentures due September 2012
classified as Current maturities of long-term debt on Duke Energy
Ohio’s Consolidated Balance Sheets. At December 31, 2010, these
notes were classified as Long-term Debt on Duke Energy Ohio’s
Consolidated Balance Sheets. Duke Energy Ohio currently anticipates
satisfying this obligation with proceeds from additional borrowings.
In April 2011, Duke Energy filed a registration statement
(Form S-3) with the SEC to sell up to $1 billion variable
denomination floating rate demand notes, called PremierNotes. The
Form S-3 states that no more than $500 million of the notes will be
outstanding at any particular time. The notes are offered on a
continuous basis and bear interest at a floating rate per annum
determined by the Duke Energy PremierNotes Committee, or its
designee, on a weekly basis. The interest rate payable on notes held
by an investor may vary based on the principal amount of the
investment. The notes have no stated maturity date, but may be
redeemed in whole or in part by Duke Energy at any time. The notes
arenon-transferableandmayberedeemedinwholeorinpartatthe
investor’s option. Proceeds from the sale of the notes will be used for
general corporate purposes. The balance as of December 31, 2011,
is $79 million. The notes reflect a short-term debt obligation of Duke
Energy and are reflected as Notes payable on Duke Energy’s
Consolidated Balance Sheets.
In September 2010, Duke Energy Carolinas converted $143
million of tax-exempt variable-rate demand bonds to tax-exempt term
bonds, which carry a fixed interest rate of 4.375% and mature
October 2031. Prior to the conversion, the bonds were held by Duke
Energy Carolinas as treasury bonds. In connection with the
conversion, the tax-exempt bonds were secured by a series of Duke
Energy Carolinas’ first mortgage bonds.
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