PG&E 2010 Annual Report Download - page 80

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Series 2009 A–D bonds, which currently bear interest at
variable rates, the Utility reimburses the letter of credit
providers for their payments to the trustee for these
bonds, or if a letter of credit provider fails to pay under its
respective letter of credit, the Utility is obligated to pay
the principal; premium, if any; and interest on those
bonds. All payments on the Series 1996 C, E, and F
bonds; the Series 1997 B bonds; and the Series 2009 A–D
bonds are made through draws on separate direct-pay
letters of credit for each series issued by a financial
institution.
The Utility has obtained credit support from insurance
companies for the Series 1996 A bonds and the Series
2004 A–D bonds such that if the Utility does not pay the
principal and interest on any series of these insured
bonds, the bond insurer for that series will pay the
principal and interest.
On April 8, 2010, the California Infrastructure and
Economic Development Bank issued $50 million of
tax-exempt pollution control bonds Series 2010 E due
November 1, 2026 and loaned the proceeds to the Utility.
The proceeds were used to refund the corresponding
related series of pollution control bonds issued in 2005
that were repurchased by the Utility in 2008. The Series
2010 E bonds bear interest at 2.25% per year through
April 1, 2012 and are subject to mandatory tender on
April 2, 2012 at a price of 100% of the principal amount
plus accrued interest. Thereafter, this series of bonds may
be remarketed in a fixed or variable rate mode. Interest is
currently payable semi-annually in arrears on April 1 and
October 1.
On September 20, 2010, the Utility repurchased $50
million principal amount of pollution control bonds
Series 2008 F and $45 million principal amount of
pollution control bonds Series 2008 G that were subject
to mandatory tender on the same date. The Utility, as
bondholder, will be both the payer and the recipient of
principal and interest payments until the bonds are
remarketed to the public. As of December 31, 2010, the
bonds have not been remarketed to the public.
All of the pollution control bonds were used to
finance or refinance pollution control and sewage and
solid waste disposal facilities at the Geysers geothermal
power plant or at the Utility’s Diablo Canyon nuclear
power plant and were issued as “exempt facility bonds”
within the meaning of the Internal Revenue Code of
1954, as amended. In 1999, the Utility sold the Geysers
geothermal power plant to Geysers Power Company, LLC
pursuant to purchase and sale agreements stating that
Geysers Power Company, LLC will use the bond-financed
facilities solely as pollution control facilities. The Utility
has no knowledge that Geysers Power Company, LLC
intends to cease using the bond-financed facilities solely
as pollution control facilities.
REPAYMENT SCHEDULE
PG&E Corporation’s and the Utility’s combined aggregate principal repayment amounts of long-term debt at
December 31, 2010 are reflected in the table below:
(in millions, except interest rates) 2011 2012 2013 2014 2015 Thereafter Total
Long-term debt:
PG&E Corporation
Average fixed interest rate – – – 5.75% – – 5.75%
Fixed rate obligations $ – $ – $ – $ 350 $ – $ – $ 350
Utility
Average fixed interest rate 4.20% 2.25% 6.25% 4.80% – 5.85% 5.67%
Fixed rate obligations $ 500 $ 50 (2) $ 400 $ 1,000 $ – $ 8,545 $ 10,495
Variable interest rate as of December 31, 2010 0.27% 0.28% – – – – 0.28%
Variable rate obligations $ 309 (1) $ 614 (3) $–$–$– $–$923
Less: current portion (809) – – – – – (809)
Total consolidated long-term debt $ – $ 664 $ 400 $ 1,350 $ – $ 8,545 $ 10,959
(1) These bonds, due from 2016 through 2026, are backed by direct-pay letters of credit that expire on October 29, 2011. The bonds will be subject to a
mandatory redemption unless the letter of credit is extended or replaced, or the issuer consents to the continuation of these series without a credit
facility. Accordingly, the bonds have been classified for repayment purposes in 2011.
(2) These bonds, due in 2026, are subject to mandatory tender on April 2, 2012 and may be remarketed in a fixed or variable rate mode. Accordingly,
the bonds have been classified for repayment purposes in 2012.
(3) These bonds, due in 2026, are backed by direct-pay letters of credit that expire on February 26, 2012. The bonds will be subject to a mandatory
redemption unless the letters of credit are extended or replaced. Accordingly, the bonds have been classified for repayment purposes in 2012.
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