Xcel Energy 2005 Annual Report Download - page 55

3. SHORT-TERM BORROWINGS
Notes Payable and Commercial Paper During 2005, Xcel Energy, PSCo and SPS resumed short-term borrowings in the commercial
paper market. Information regarding notes payable and commercial paper for the years ended Dec. 31, 2005 and 2004, is presented in the
following table:
(Millions of dollars, except interest rates) 2005 2004
Notes payable to banks $– $312.3
Commercial paper 746.1 –
Total short-term debt $746.1 $312.3
Weighted average interest rate at year-end 4.46% 4.15%
Credit Facilities On Dec. 1, 2005, PSCo entered into an agreement with Wells Fargo Bank, N.A. to provide PSCo a committed five-month,
$50 million seasonal revolving credit facility. The interest rate is based on either Wells Fargo Bank’s prime rate or the applicable London Interbank
Offered Rate (LIBOR), plus a borrowing margin as determined by PSCo’s credit worthiness. PSCo entered into this agreement to ensure adequate
liquidity for rising natural gas prices during the winter months. As of Dec. 31, 2005, PSCo had not borrowed against this facility.
In addition, on Dec. 12, 2005, PSCo entered into a $25 million good-until-canceled uncommitted credit line with KBC Bank to provide additional
short-term seasonal liquidity as a result of higher natural gas prices. As of Dec. 31, 2005, PSCo had not utilized this credit line.
4. LONG-TERM DEBT
Credit Facilities At Dec. 31, 2005, Xcel Energy and its utility subsidiaries had the following committed credit facilities available:
Credit
(Millions of dollars) Facility Available * Term Maturity
NSP-Minnesota $ 450 $190.3 Five year April 2010
PSCo $ 600 $258.9 Five year April 2010
SPS $ 250 $164.4 Five year April 2010
Xcel Energy – holding company $ 700 $356.0 Five year November 2009
Total $2,000 $969.6
* Net of credit facility borrowings, issued and outstanding letters of credit and commercial paper borrowings.
The lines of credit provide short-term financing in the form of notes payable to banks, letters of credit and backup support for commercial
paper borrowings. Each credit facility has one financial covenant requiring that the debt-to-total-capitalization ratio of each entity be less than
or equal to 65 percent with which all were in compliance. The interest rates under these lines of credit are based on either the agent bank’s
prime rate or the applicable LIBOR, plus a borrowing margin as determined by each entity’s credit worthiness.
Xcel Energy has a $700 million, five-year senior unsecured revolving credit facility that matures in November 2009. Xcel Energy has the
right to request an extension of the final maturity date by one year. The maturity extension is subject to majority bank group approval. As
of Dec. 31, 2005, Xcel Energy had no direct borrowings on this line of credit; however, the credit facility was used to provide backup for
$325.5 million of commercial paper outstanding and $18.5 million of letters of credit. As discussed in Note 13 to the Consolidated Financial
Statements, $35.2 million of letters of credit were outstanding at Dec. 31, 2005, of which $18.5 million were supported by the Xcel Energy
credit facility and are included in the above table.
Xcel Energy’s 2007 and 2008 series convertible senior notes are convertible into shares of Xcel Energy common stock at a conversion price
of $12.33 per share. Conversion is at the option of the holder at any time prior to maturity. In addition, Xcel Energy must make additional
payments of interest, referred to as protection payments, on the notes in an amount equal to any portion of regular quarterly per share
dividends on common stock that exceeds $0.1875 that would have been payable to the holders of the notes if such holders had converted
their notes on the record date for such dividend. On May 25, 2005, the board of directors of Xcel Energy voted to raise the quarterly dividend
on its common stock from $0.2075 to $0.2150. Consequently, as of Dec. 31, 2005, a total of $2.4 million in additional interest expense has
been recorded.
All property of NSP-Minnesota and NSP-Wisconsin and the electric property of PSCo are subject to the liens of their first mortgage indentures. In
addition, certain SPS payments under its pollution-control obligations are pledged to secure obligations of the Red River Authority of Texas.
Maturities of long-term debt are:
2006 $835.5 million
2007 $338.9 million
2008 $632.4 million
2009 $557.8 million
2010 $1,031.6 million
XCEL ENERGY 2005 ANNUAL REPORT 53
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS