OG&E 2013 Annual Report Download - page 66

11. Long-Term Debt
A summary of the Company’s long-term debt is included in the
Consolidated Statements of Capitalization. At December 31, 2013,
the Company was in compliance with all of its debt agreements.
OG&E Industrial Authority Bonds
OG&E has tax-exempt pollution control bonds with optional redemption
provisions that allow the holders to request repayment of the bonds on
any business day. The bonds, which can be tendered at the option of
the holder during the next 12 months, are as follows:
Amount
Series Date Due (In millions)
0.18% – 0.34% Garfield Industrial Authority, January 1, 2025 $÷47.0
0.10% – 0.39% Muskogee Industrial Authority, January 1, 2025 32.4
0.10% – 0.30% Muskogee Industrial Authority, June 1, 2027 56.0
Total (redeemable during next 12 months) $135.4
All of these bonds are subject to an optional tender at the request
of the holders, at 100 percent of the principal amount, together with
accrued and unpaid interest to the date of purchase. The bond holders,
on any business day, can request repayment of the bond by delivering
an irrevocable notice to the tender agent stating the principal amount of
the bond, payment instructions for the purchase price and the business
day the bond is to be purchased. The repayment option may only be
exercised by the holder of a bond for the principal amount. When a ten-
der notice has been received by the trustee, a third party remarketing
agent for the bonds will attempt to remarket any bonds tendered for
purchase. This process occurs once per week. Since the original issuance
of these series of bonds in 1995 and 1997, the remarketing agent has
successfully remarketed all tendered bonds. If the remarketing agent is
unable to remarket any such bonds, OG&E is obligated to repurchase
such unremarketed bonds. As OG&E has both the intent and ability to
refinance the bonds on a long-term basis and such ability is supported
by an ability to consummate the refinancing, the bonds are classified as
long-term debt in the Company’s Consolidated Financial Statements.
OG&E believes that it has sufficient liquidity to meet these obligations.
Issuance of Long-Term Debt
On May 8, 2013, OG&E issued $250 million of 3.9% senior notes due
May 1, 2043. The proceeds from the issuance were added to OG&E’s
general funds and were used to repay short-term debt, fund capital
expenditures, general corporate expenses and for working capital pur-
poses. OG&E expects to issue additional long-term debt from time to
time when market conditions are favorable and when the need arises.
Long-Term Debt Maturities
Maturities of the Company’s long-term debt during the next five years
consist of $100.2 million, $0.2 million, $110.2 million, $125.1 million and
$250.1 million in years 2014, 2015, 2016, 2017 and 2018, respectively.
The Company has previously incurred costs related to debt
refinancings. Unamortized loss on reacquired debt is classified as a
Non-Current Regulatory Asset, unamortized debt expense is classified
as Deferred Charges and Other Assets and the unamortized premium
and discount on long-term debt is classified as Long-Term Debt, respec-
tively, in the Consolidated Balance Sheets and are being amortized
over the life of the respective debt.
12. Short-Term Debt and Credit Facilities
The Company borrows on a short-term basis, as necessary, by the
issuance of commercial paper and by borrowings under its revolving
credit agreements. The short-term debt balance was $439.6 million
and $430.9 million at December 31, 2013 and 2012, respectively,
at a weighted-average interest rate of 0.30 percent and 0.43 percent,
respectively. The following table provides information regarding the
Company’s revolving credit agreements and available cash at
December 31, 2013.
Weighted-
Aggregate Amount Average
(In millions) Commitment Outstanding (A) Interest Rate Maturity
Revolving credit agreements
and available cash
OGE Energy(B) $÷«750.0 $439.6 0.30% 12/13/17
OG&E(C) 400.0 2.1 0.53% 12/13/17
1,150.0 441.7 0.30%
Cash 6.8 N/A N/A N/A
Total $1,156.8 $441.7 0.30%
(A) Includes direct borrowings under the revolving credit agreements, commercial paper borrowings
and letters of credit at December 31, 2013.
(B) This bank facility is available to back up OGE Energy’s commercial paper borrowings and to provide
revolving credit borrowings. This bank facility can also be used as a letter of credit facility.
(C) This bank facility is available to back up OG&E’s commercial paper borrowings and to provide
revolving credit borrowings. This bank facility can also be used as a letter of credit facility.
(D) Represents the weighted-average interest rate for the outstanding borrowings under the revolving
credit agreements, commercial paper borrowings and letters of credit.
(E) In December 2011, the Company and OG&E entered into unsecured five-year revolving credit
agreements to total in the aggregate $1,150.0 million ($750.0 million for the Company and
$400.0 million for OG&E). Each of the credit facilities contain an option, which may be exercised
up to two times, to extend the term for an additional year, subject to consent of a specified
percentage of the lenders. Effective July 29, 2013, the Company and OG&E utilized one of
these one-year extensions, and received consent from all of the lenders, to extend the maturity
of their credit agreements to December 13, 2017.
Effective May 1, 2013, Enable entered into a $1.4 billion, five-year
senior unsecured revolving credit facility in accordance with the terms
of the Master Formation Agreement and Enogex LLC’s $400.0 million
revolving credit facility was terminated.
The Company’s ability to access the commercial paper market
could be adversely impacted by a credit ratings downgrade or major
market disruptions. Pricing grids associated with the Company’s credit
facilities could cause annual fees and borrowing rates to increase if
an adverse rating impact occurs. The impact of any future downgrade
could include an increase in the costs of the Company’s short-term
borrowings, but a reduction in the Company’s credit ratings would not
result in any defaults or accelerations. Any future downgrade could also
lead to higher long-term borrowing costs and, if below investment grade,
would require the Company to post collateral or letters of credit.
60 OGE Energy Corp.
(E)
(E)
(D)
(D)