Exelon 2014 Annual Report Download - page 222

Combined Notes to Consolidated Financial Statements—(Continued)
(Dollars in millions, except per share data unless otherwise noted)
Nonrecourse Debt
Exelon and Generation have issued nonrecourse debt financing, in which approximately $2.7 billion of generating assets have been
pledged as collateral at December 31, 2014.
Denver Airport. In June 2011, Generation entered into a 20-year, $7 million solar loan agreement, fully amortizing by June 30,
2031 related to a solar construction project in Denver, Colorado. The agreement bears interest at a fixed rate of 5.50% annually with
interest payable annually. As of December 31, 2014, $7 million was outstanding.
CEU Upstream. In July 2011, Generation entered into a five year asset-based lending agreement associated with certain
Upstream gas properties that it owns. The borrowing base committed under the facility is $110 million and can increase to a total of
$500 million if the assets support a higher borrowing base and Generation is able to obtain additional commitments from lenders.
The facility was amended and extended through January 2019. Borrowings under this facility are secured by the Upstream gas
properties, and the lenders do not have recourse against Exelon or Generation in the event of a default. The agreement is scheduled
to expire on January 14, 2019, at a fixed rate of 2.41% annually with interest payable quarterly. As of December 31, 2014, $77
million was outstanding under the facility. The facility includes a provision that requires the Generation entities owning the Upstream
gas properties subject to the agreement to maintain a current ratio of one-to-one. As of December 31, 2014, Generation was in
compliance with this provision.
Sacramento PV Energy. In July 2011, a subsidiary of Generation entered into a 19-year, $41 million nonrecourse note to finance
a 30MW solar facility in Sacramento, California. The note bears interest at a variable rate equal to the six-month LIBOR plus 2.25%.
Interest is payable quarterly and is secured by the equity interests and assets of the subsidiary. The note is scheduled to mature on
December 31, 2030. As of December 31, 2014, $35 million was outstanding. The subsidiary also executed interest rate swaps with
an initial notional value of $30 million in order to convert the variable interest payments to fixed payments on 75% of the $41 million
facility amount, as required by the debt covenants. See Note 12—Derivative Financial Instruments for additional information
regarding interest rate swaps.
Holyoke Solar Cooperative. In October 2011, Generation entered into a 20-year, $10 million solar loan agreement, fully
amortizing by December 31, 2031 related to a solar construction project in Holyoke, Massachusetts. The agreement bears interest at
a fixed rate of 5.25% annually with interest payable monthly. As of December 31, 2014, $10 million was outstanding. The agreement
includes a provision that requires Generation to establish and maintain a reserve fund to be held by Holyoke Solar Cooperative. As
of December 31, 2014, Generation was in compliance with this provision.
Antelope Valley Solar Ranch One. In December 2011, the DOE Loan Programs Office issued a guarantee for up to $646 million
for a nonrecourse loan from the Federal Financing Bank to support the financing of the construction of the Antelope Valley facility.
The project became fully operational in the first half of 2014. The loan will mature on January 5, 2037. Interest rates on the loan are
fixed upon each advance at a spread of 37.5 basis points above U.S. Treasuries of comparable maturity. As of December 31, 2014,
$557 million was outstanding.
In addition, Generation has issued letters of credit to support its equity investment in the project. As of December 31, 2014,
Generation had $156 million in letters of credit outstanding related to the project. The letters of credit balance is expected to decline
over time as scheduled equity contributions for the project are made. Generation expects to contribute approximately $2 million in
additional equity contributions.
In connection with this agreement, on September 28, 2011, Generation entered into a floating-to-fixed interest rate swap with a
notional amount of $485 million to mitigate interest-rate risk associated with the financing. As Generation received additional loan
advances, it subsequently entered into a series of fixed-to-floating interest rate swaps to offset portions of the original interest rate
hedge. During the third quarter of 2014, the original interest rate swap was terminated, consistent with the agreements. See Note
12—Derivative Financial Instruments for additional information regarding the interest rate swaps associated with Antelope Valley.
Constellation Solar Horizons. In September 2012, a subsidiary of Generation entered into an 18-year $38 million nonrecourse
note to recover capital used to build a 16MW solar facility in Emmitsburg, Maryland. The note is schedule to mature on September 7,
2030. The note bears interest at a variable rate equal to the three-month LIBOR plus 2.25%. Interest is payable quarterly, and the
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