CenterPoint Energy 2010 Annual Report Download - page 78

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56
Debt Financing Transactions. In January 2010, we purchased $290 million principal amount of pollution control
bonds issued on our behalf at 101% of their principal amount plus accrued interest pursuant to the mandatory tender
provisions of the bonds. Prior to the purchase, the pollution control bonds had a fixed rate of interest of 5.125%. The
purchase reduced temporary investments and leverage while providing us with the flexibility to finance future
capital needs in the tax-exempt market through a remarketing of these bonds.
In January 2010, CERC Corp. redeemed $45 million of its outstanding 6% convertible subordinated debentures
due 2012 at 100% of the principal amount plus accrued and unpaid interest to the redemption date.
In September 2010, we repaid $200 million principal amount of 7.25% senior notes on their maturity date.
In January 2011, CERC Corp. issued $250 million aggregate principal amount of senior notes due 2021 with an
interest rate of 4.50% and $300 million aggregate principal amount of senior notes due 2041 with an interest rate of
5.85%. The proceeds from the issuance of the notes were used for the repayment of $550 million of CERC Corp.’s
7.75% senior notes at their maturity in February 2011.
Also in January 2011, CERC Corp. issued an additional $343 million aggregate principal amount of 4.50% senior
notes due 2021 and provided cash consideration of $114 million in exchange for $397 million aggregate principal
amount of its 7.875% senior notes due 2013. The premium of $58 million paid on exchanged notes has been
deferred and will be amortized to interest expense over the life of the 4.50% senior notes due 2021.
Equity Financing Transactions. During the year ended December 31, 2010, we received net proceeds of
approximately $315 million from the issuance of 25.3 million common shares in an underwritten public offering,
proceeds of approximately $79 million from the sale of approximately 5.4 million common shares to our defined
contribution plan and proceeds of approximately $15 million from the sale of approximately 1.0 million common
shares to participants in our enhanced dividend reinvestment plan. In January 2011, we suspended the issuance of
common shares to our defined contribution plan and our enhanced dividend reinvestment plan. Common shares for
the two plans are now being purchased on the open market.
Credit and Receivables Facilities. In September 2010, CERC amended its 364-day receivables facility to extend
the termination date to September 14, 2011. Availability under CERC’s receivables facility ranges from
$160 million to $375 million, reflecting seasonal changes in receivables balances. As of December 31, 2009 and
2010, the facility size was $150 million and $160 million, respectively. As of both December 31, 2009 and 2010,
there were no advances under the receivables facility.
As of February 15, 2011, we had the following facilities (in millions):
Date Executed
Company
Type of
Facility
Size of
Facility
Amount
Utilized at
February 15,
2011 (1)
Termination Date
June 29, 2007
CenterPoint Energy
Revolver
$ 1,156
$ 20 (2)
June 29, 2012
June 29, 2007
CenterPoint Houston
Revolver
289
4 (2)
June 29, 2012
June 29, 2007
CERC Corp.
Revolver
915
248 (3)
June 29, 2012
September 15, 2010
CERC
Receivables
375
—
September 14, 2011
________
(1) Based on the debt (excluding transition and system restoration bonds) to earnings before interest, taxes,
depreciation and amortization (EBITDA) covenant contained in our $1.2 billion credit facility, we would
have been permitted to utilize the full capacity of our credit facilities of $2.4 billion at December 31, 2010.
Amounts advanced under CERC’s receivables facility are not treated as outstanding indebtedness in the debt
to EBITDA covenant calculation.
(2) Represents outstanding letters of credit.
(3) Represents commercial paper that is backstopped by CERC Corp.’s revolving credit facility.