CenterPoint Energy 2008 Annual Report Download - page 49

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Risk Factors Associated with Our Consolidated Financial Condition
If we are unable to arrange future financings on acceptable terms, our ability to refinance existing indebtedness
could be limited.
As of December 31, 2008, we had $10.7 billion of outstanding indebtedness on a consolidated basis, which
includes $2.6 billion of non-recourse transition bonds. As of December 31, 2008, approximately $953 million
principal amount of this debt is required to be paid through 2011. This amount excludes principal repayments of
approximately $669 million on transition bonds, for which a dedicated revenue stream exists. Our future financing
activities may be significantly affected by, among other things:
• the resolution of the true-up components, including, in particular, the results of appeals to the courts
regarding rulings obtained to date;
• CenterPoint Houston’s recovery of costs arising from Hurricane Ike;
• general economic and capital market conditions;
• credit availability from financial institutions and other lenders;
• investor confidence in us and the markets in which we operate;
• maintenance of acceptable credit ratings;
• market expectations regarding our future earnings and cash flows;
• market perceptions of our ability to access capital markets on reasonable terms;
• our exposure to RRI in connection with its indemnification obligations arising in connection with its
separation from us; and
• provisions of relevant tax and securities laws.
As of December 31, 2008, CenterPoint Houston had outstanding approximately $2.6 billion aggregate principal
amount of general mortgage bonds, including approximately $527 million held in trust to secure pollution control
bonds for which we are obligated, $600 million securing borrowings under a credit facility which was unutilized and
approximately $229 million held in trust to secure pollution control bonds for which CenterPoint Houston is
obligated. Additionally, CenterPoint Houston had outstanding approximately $253 million aggregate principal
amount of first mortgage bonds, including approximately $151 million held in trust to secure certain pollution
control bonds for which we are obligated. CenterPoint Houston may issue additional general mortgage bonds on the
basis of retired bonds, 70% of property additions or cash deposited with the trustee. Approximately $1.8 billion of
additional first mortgage bonds and general mortgage bonds in the aggregate could be issued on the basis of retired
bonds and 70% of property additions as of December 31, 2008. However, CenterPoint Houston has contractually
agreed that it will not issue additional first mortgage bonds, subject to certain exceptions. In January 2009,
CenterPoint Houston issued $500 million aggregate principal amount of general mortgage bonds in a public
offering.
Our current credit ratings are discussed in ―Management’s Discussion and Analysis of Financial Condition and
Results of Operations of CenterPoint Energy, Inc. and Subsidiaries — Liquidity and Capital Resources — Future
Sources and Uses of Cash — Impact on Liquidity of a Downgrade in Credit Ratings‖ in Item 7 of this report. These
credit ratings may not remain in effect for any given period of time and one or more of these ratings may be lowered
or withdrawn entirely by a rating agency. We note that these credit ratings are not recommendations to buy, sell or
hold our securities. Each rating should be evaluated independently of any other rating. Any future reduction or
withdrawal of one or more of our credit ratings could have a material adverse impact on our ability to access capital
on acceptable terms.