Progress Energy 2008 Annual Report Download - page 35

Progress Energy Annual Report 2008
33
All projected capital and investment expenditures are
subject to periodic review and revision and may vary
significantly depending on a number of factors including,
but not limited to, industry restructuring, regulatory
constraints, market volatility and economic trends.
CREDIT FACILITIES AND REGISTRATION STATEMENTS
At December 31, 2008 and 2007, we had committed lines of
credit used to support our commercial paper borrowings.
At December 31, 2008, we had $600 million of outstanding
borrowings under our credit facilities as shown in the
table below, of which $100 million was classified as long-
term debt. At December 31, 2007, we had no outstanding
borrowings under our credit facilities. We are required
to pay minimal annual commitment fees to maintain our
credit facilities.
The following table summarizes our RCAs and available
capacity at December 31, 2008:
(in millions) Total Outstanding(a) Reserved(b) Available
Parent
Five-year (expiring 5/3/12) $1,130 $ 600 $99 $431
PEC
Five-year (expiring 6/28/11) 450 –110 340
PEF
Five-year (expiring 3/28/11) 450 –371 79
Total credit facilities $2,030 $600 $580 $850
(a) In February 2009, the Parent repaid $100 million of its outstanding RCA borrowings.
(b) To the extent amounts are reserved for commercial paper or letters of credit
outstanding, they are not available for additional borrowings. At December 31,
2008, the Parent had a total amount of $30 million of letters of credit issued, which
were supported by the RCA.
All of the revolving credit facilities supporting the
credit were arranged through a syndication of financial
institutions. There are no bilateral contracts associated
with these facilities. See Note 11 for additional discussion
of our credit facilities.
The RCAs provide liquidity support for issuances of
commercial paper and other short-term obligations. We
expect to continue to use commercial paper issuances as
a source of liquidity as long as we maintain our current
short-term ratings. Fees and interest rates under the
Parent’s RCA are based upon the credit rating of the
Parent’s long-term unsecured senior noncredit-enhanced
debt, currently rated as Baa2 by Moody’s and BBB by
S&P. Fees and interest rates under PEC’s RCA are based
upon the credit rating of PEC’s long-term unsecured
senior noncredit-enhanced debt, currently rated as A3
by Moody’s and BBB+ by S&P. Fees and interest rates
under PEF’s RCA are based upon the credit rating of PEF’s
long-term unsecured senior noncredit-enhanced debt,
currently rated as A3 by Moody’s and BBB+ by S&P.
All of the credit facilities include a defined maximum total
debt-to-total capital ratio (leverage). We are currently in
compliance with these covenants and were in compliance
with these covenants at December 31, 2008. See Note 11
for a discussion of the credit facilities’ financial covenants.
At December 31, 2008, the calculated ratios pursuant to
the terms of the agreements are as disclosed in Note 11.
The Parent, as a well-known seasoned issuer, has on file
with the SEC a shelf registration statement under which
it may issue an unlimited number or amount of various
securities, including Senior Debt Securities, Junior
Subordinated Debentures, Common Stock, Preferred
Stock, Stock Purchase Contracts, Stock Purchase Units,
and Trust Preferred Securities and Guarantees.
PEC has on file with the SEC a shelf registration statement
under which it may issue an unlimited number or amount
of various long-term debt securities and preferred stock.
PEF has on file with the SEC a shelf registration statement
under which it may issue an unlimited number or amount
of various long-term debt securities and preferred stock.
Both PEC and PEF can issue first mortgage bonds
under their respective first mortgage bond indentures.
At December 31, 2008, PEC and PEF could issue up to
$4.1 billion and $1.7 billion of first mortgage bonds,
respectively, based on property additions and $1.5 billion
and $256 million, respectively, based upon retirements of
previously issued first mortgage bonds. On January 15,
2009, PEC issued $600 million of First Mortgage Bonds,
5.30% Series due 2019. A portion of the proceeds will be
used to repay the maturity of PEC’s $400 million 5.95%
Senior Notes, due March 1, 2009. Therefore, given the
effect of the January 2009 issuance and the application
of proceeds, PEC could issue up to $1.3 billion of first
mortgage bonds based upon retirements of previously
issued first mortgage bonds.
CAPITALIZATION RATIOS
The following table shows our capitalization ratios at
December 31:
2008 2007
Common stock equity 42.4% 45.6%
Preferred stock and minority interest 0.5% 1.0%
Total debt 57.1% 53.4%