DEBT AND CREDIT AGREEMENTS

12 Months Ended

Dec. 31, 2019

DEBT

Long-term debt matures more than one year from the date of the financial statements. The following table presents the components of Long-Term Debt, Net on the Consolidated Balance Sheets:



			December 31,
($ in millions)	Interest Rate	Maturity Date	2019		2018
Notes
2011 Notes	5.15%	2021	$	250	$	250
2012 Notes	3.85%	2023	150		150
2014 Notes	5.00%	2044	150		150
2015 Notes	3.05%	2025	300		300
2018 Notes	4.85%	2048	300		300
Tax-Exempt Local Furnishings Bonds ⁽¹⁾
2010 Pima A	5.25%	2040	100		100
2012 Pima A	4.50%	2030	16		16
2013 Pima A	4.00%	2029	91		91
Tax-Exempt Pollution Control Bonds ⁽²⁾
2009 Pima A	4.95%	2020	80		80
2009 Coconino A	5.13%	2032	—		15
2012 Apache A	4.50%	2030	177		177
Total Long-Term Debt ⁽³⁾			1,614		1,629
Less Unamortized Discount and Debt Issuance Costs			12		14
Less Current Maturities of Long-Term Debt			80		—
Total Long-Term Debt, Net			$	1,522	$	1,615


⁽¹⁾	The 2010 Pima A bonds can be redeemed at par on or after October 2020. TEP has the option to redeem the remaining bonds at par on dates ranging from first quarter of 2022 to first quarter of 2023.


⁽²⁾	The 2009 Pima A bonds mature in October 2020. The 2012 Apache A bonds may be redeemed at par in the first quarter of 2022.


⁽³⁾	As of December 31, 2019, all of TEP's debt is unsecured.

Issuances and Redemptions

Fixed Rate Debt

In November 2019, TEP redeemed at par a series of fixed rate tax-exempt bonds with an aggregate principal amount of $15 million prior to the maturity of the bonds.

In November 2018, TEP issued and sold $300 million aggregate principal amount of senior unsecured notes. TEP may redeem the notes prior to June 1, 2048, with a make-whole premium plus accrued interest. On or after June 1, 2048, TEP may redeem the notes at par plus accrued interest.

Variable Rate Debt

In December 2018, TEP redeemed at par a series of variable rate tax-exempt bonds with an aggregate principal amount of $37 million prior to the maturity of the bonds. The bonds were backed by an LOC issued pursuant to the 2010 Reimbursement Agreement which expired in February 2019. In connection with the redemption of the related bonds, the $37 million LOC and the associated 2010 Reimbursement Agreement were terminated.

In November 2018, TEP redeemed at par a series of variable rate tax-exempt bonds with an aggregate principal amount of $100 million prior to the maturity of the bonds. The bonds were subject to mandatory tender for purchase in November 2018.

Maturities

Long-term debt matures on the following dates:



(in millions)	Long-Term Debt ⁽¹⁾
2020	$	80
2021	250
2022	—
2023	150
2024	—
Thereafter	1,134
Total	$	1,614


⁽¹⁾	Total long-term debt excludes $10 million of related unamortized debt issuance costs and $2 million of unamortized original issue discount.

CREDIT AGREEMENTS

Amounts borrowed under credit agreements are recorded in Borrowings Under Credit Agreements on the Consolidated Balance Sheets.

2019 Credit Agreement

In December 2019, TEP entered into an unsecured credit agreement with a maturity date of December 2020 that provides for term loans. Terms are as follows:



							Weighted Average Interest Rate
	Capacity		Borrowed ⁽¹⁾		Available		Weighted Average Interest Rate		Pricing
(in millions)	December 31, 2019
Term Loan	$	225	$	165	$	60	4.75	%	LIBOR + 0.550%	or ABR + 0.00%


⁽¹⁾	All amounts borrowed will be due and payable by December 2020.

The 2019 Credit Agreement is intended to supplement TEP's liquidity during a period of increased capital spending and to provide funds: (i) to complete the purchase of Gila River Unit 2 Generating Station; (ii) to make payments for the construction of the Oso Grande project; and (iii) for other general corporate purposes. Amounts paid or repaid may not be reborrowed. As of February 12, 2020, no amount was available as the term loan had been fully drawn. See Note 3 and Note 9 for additional information on the purchase of Gila River Unit 2 and Oso Grande, respectively.

2015 Credit Agreement

In October 2015, TEP entered into an unsecured credit agreement with a maturity date of October 2022 that provides for revolving credit commitments and LOC facilities. Terms are as follows:



	Capacity		Sub-Limit LOC		Borrowed		Available		Weighted Average Interest Rate		Pricing ⁽¹⁾
(in millions)	December 31, 2019
Revolver and LOC	$	250	$	50	$	—	$	250	—	%	LIBOR + 1.000%	or ABR + 0.00%



(in millions)	December 31, 2018
Revolver and LOC	$	250	$	50	$	—	$	250	—	%	LIBOR + 1.000%	or ABR + 0.00%


⁽¹⁾	Interest rates and fees are based on a pricing grid tied to TEP's credit rating.

Amounts borrowed under the 2015 Credit Agreement will be used for working capital and other general corporate purposes. LOCs will be issued from time to time to support energy procurement, hedging transactions, and other business activities.

In January 2020, TEP delivered $12 million in LOCs pursuant to TEP taking ownership of Oso Grande under the build-transfer agreement. As of February 12, 2020, there was $173 million available under the revolving credit commitments and LOC facilities.