PG&E 2012 Annual Report Download - page 81

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 4: DEBT (Continued)
(2) Includes a $1.0 billion sublimit for letters of credit and a $300 million commitment for loans that are made available on a same-day basis
and are repayable in full within 7 days.
(3) The Utility treats the amount of its outstanding commercial paper as a reduction to the amount available under its revolving credit facility.
For 2012, the average outstanding borrowings on PG&E Corporation’s revolving credit facility was $21 million
and the maximum outstanding balance during the year was $120 million. For 2012, the Utility’s average outstanding
commercial paper balance was $665 million and the maximum outstanding balance during the year was $1.4 billion.
Revolving Credit Facilities
PG&E Corporation has a $300 million revolving credit facility with a syndicate of lenders. The Utility has a
$3.0 billion revolving credit facility with a syndicate of lenders. The revolving credit facilities have terms of five years
and all amounts are due and payable on the facilities’ termination date, May 31, 2016. At PG&E Corporation’s and
the Utility’s request and at the sole discretion of each lender, the facilities may be extended for additional periods.
The revolving credit facilities may be used for working capital and other corporate purposes. The Utility’s revolving
credit facility may also be used for the repayment of commercial paper.
Provided certain conditions are met, PG&E Corporation and the Utility have the right to increase, in one or
more requests, given not more frequently than once a year, the aggregate lenders’ commitments under the revolving
credit facilities by up to $100 million and $500 million, respectively, in the aggregate for all such increases.
Borrowings under the revolving credit facilities (other than swingline loans) bear interest based, at PG&E
Corporation’s and the Utility’s election, on (1) a London Interbank Offered Rate (‘‘LIBOR’’) plus an applicable
margin or (2) the base rate plus an applicable margin. The base rate will equal the higher of the following: the
administrative agent’s announced base rate, 0.5% above the federal funds rate, or the one-month LIBOR plus an
applicable margin. Interest is payable quarterly in arrears, or earlier for loans with shorter interest periods. PG&E
Corporation and the Utility also will pay a facility fee on the total commitments of the lenders under the revolving
credit facilities. The applicable margins and the facility fees will be based on PG&E Corporation’s and the Utility’s
senior unsecured debt ratings issued by Standard & Poor’s Rating Services and Moody’s Investor Service. Facility fees
are payable quarterly in arrears.
The revolving credit facilities include usual and customary covenants for revolving credit facilities of this type,
including covenants limiting liens to those permitted under PG&E Corporation’s and the Utility’s senior note
indentures, mergers, sales of all or substantially all of PG&E Corporation’s and the Utility’s assets, and other
fundamental changes. In addition, the revolving credit facilities require that PG&E Corporation and the Utility
maintain a ratio of total consolidated debt to total consolidated capitalization of at most 65% as of the end of each
fiscal quarter. PG&E Corporation’s revolving credit facility agreement also requires that PG&E Corporation own,
directly or indirectly, at least 80% of the common stock and at least 70% of the voting capital stock of the Utility. At
December 31, 2012, PG&E Corporation and the Utility were in compliance with all covenants under their respective
revolving credit facilities.
Commercial Paper Program
The Utility has a $1.75 billion commercial paper program, the borrowings from which are used primarily to fund
temporary financing needs. Liquidity support for these borrowings is provided by available capacity under the
Utility’s revolving credit facilities, as described above. The commercial paper may have maturities up to 365 days and
ranks equally with the Utility’s other unsubordinated and unsecured indebtedness. Commercial paper notes are sold
at an interest rate dictated by the market at the time of issuance. At December 31, 2012, the average yield on
outstanding commercial paper was 0.36%.
Other Short-term Borrowings
In November 2011, the Utility issued $250 million principal amount of Floating Rate Senior Notes which were
due and repaid in November 2012. For the years ended December 31, 2012 and 2011, the average interest rate on
the Floating Rate Senior Notes was 0.92% and 0.94%, respectively.
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