Debt and Capital Leases

This footnote should be read in conjunction with the complete description under Note 12, Debt and Capital Leases, to the Company's 2011 Form 10-K.

Long-term debt and capital leases consisted of the following:



	September 30, 2012		December 31, 2011		Interest rate % ^(a)
	(In millions, except rates)
NRG Recourse Debt:
Senior notes, due 2023	$	990	$	—	6.625
Senior notes, due 2021	1,128		1,200		7.875
Senior notes, due 2020	1,100		1,100		8.250
Senior notes, due 2019	800		800		7.625
Senior notes, due 2019	692		691		8.500
Senior notes, due 2018	1,200		1,200		7.625
Senior notes, due 2017	270		1,090		7.375
Term loan facility, due 2018	1,577		1,588		L+3.00
Indian River Power LLC, tax-exempt bonds, due 2040	57		57		6.000
Indian River Power LLC, tax-exempt bonds, due 2045	157		148		5.375
Dunkirk Power LLC, tax-exempt bonds, due 2042	59		59		5.875
Fort Bend County, tax-exempt bonds, due 2038	16		—		Weekly per SIFMA rate	^(b)
Subtotal NRG Recourse Debt	8,046		7,933
NRG Non-Recourse Debt:
Ivanpah Financing:
Solar Partners I, due 2014 and 2033	443		290		1.126 - 3.991
Solar Partners II, due 2014 and 2038	453		314		1.116 - 4.195
Solar Partners VIII, due 2014 and 2038	411		270		1.381 - 4.256
NRG Peaker Finance Co. LLC, bonds, due 2019	194		190		L+1.07
Agua Caliente Solar, LLC, due 2037	541		181		2.395 - 3.256
NRG West Holdings LLC, term loan, due 2023	294		159		L+2.25 - 2.75
NRG Energy Center Minneapolis LLC, senior secured notes, due 2013, 2017 and 2025	141		151		5.95 - 7.31
CVSR - High Plains Ranch II LLC, due 2037	548		—		0.611 - 2.639
South Trent Wind LLC, financing agreement, due 2020	73		75		L+2.50 - 2.625
Solar Power Partners - SPP Fund II/IIB LLC term loans, due 2017	15		17		L+3.50
Solar Power Partners - SPP Fund III LLC term loan, due 2024	40		42		L+3.50
NRG Solar Roadrunner LLC, due 2031	46		61		L+2.01
NRG Solar Blythe LLC, credit agreement, due 2028	26		27		L+2.50
NRG Solar Avra Valley LLC	40		—		L+2.25
Other	31		19		various
Subtotal NRG Non-Recourse Debt	3,296		1,796

Subtotal long-term debt	11,342		9,729
Capital leases:
Saale Energie GmbH, Schkopau capital lease, due 2021	—		103
Subtotal	11,342		9,832
Less current maturities	374		87
Total long-term debt and capital leases	$	10,968	$	9,745

(a) L+ equals LIBOR plus x%.

(b) Securities Industry and Financial Markets Association, or SIFMA

Issuance of 2023 Senior Notes

6.625% 2023 Senior Notes

On September 24, 2012, NRG issued $990 million aggregate principal amount at par of 6.625% Senior Notes due 2023, or the 2023 Senior Notes. The 2023 Senior Notes were issued under an Indenture, dated February 2, 2006, between NRG and Law Debenture Trust Company of New York, as trustee, as amended through a Supplemental Indenture, which is discussed in Note 12, Debt and Capital Leases, in the Company's 2011 Form 10-K. The Indenture and the form of the note provide, among other things, that the 2023 Senior Notes will be senior unsecured obligations of NRG.

The proceeds, net of issuance costs, of $978 million for the 2023 Senior Notes will be used to complete the tender offer of the 2017 Senior Notes, as discussed below. Interest is payable semi-annually beginning on March 15, 2013, until the maturity date of March 15, 2023.

Prior to September 15, 2015, NRG may redeem up to 35% of the aggregate principal amount of the 2023 Senior Notes with the net proceeds of certain equity offerings, at a redemption price of 106.625% of the principal amount. Prior to September 15, 2017, NRG may redeem all or a portion of the 2023 Senior Notes at a price equal to 100% of the principal amount plus a premium and accrued and unpaid interest. The premium is the greater of: (i) 1% of the principal amount of the notes; or (ii) the excess of the principal amount of the note over the following: the present value of 103.313% of the note, plus interest payments due on the note from the date of redemption through September 15, 2017, discounted at a Treasury rate plus 0.50%. In addition, on or after September 15, 2017, NRG may redeem some or all of the notes at redemption prices expressed as percentages of principal amount as set forth in the following table, plus accrued and unpaid interest on the notes redeemed to the first applicable redemption date:



Redemption Period	Redemption Percentage
September 15, 2017 to September 14, 2018	103.313	%
September 15, 2018 to September 14, 2019	102.208	%
September 15, 2019 to September 14, 2020	101.104	%
September 15, 2020 and thereafter	100.000	%

In connection with the 2023 Senior Notes, NRG entered into a registration payment arrangement. For the first 90-day period immediately following a registration default, additional interest will be paid in an amount equal to 0.25% per annum of the principal amount of 2023 Senior Notes outstanding, as applicable. The amount of interest paid will increase by an additional 0.25% per annum with respect to each subsequent 90-day period until all registration defaults are cured, up to a maximum amount of interest of 1.0% per annum of the principal amount of the 2023 Senior Notes outstanding, as applicable. The additional interest is paid on the next scheduled interest payment date and following the cure of the registration default, the additional interest payment will cease.

Redemption of 2017 Senior Notes

On September 24, 2012, the Company redeemed $820 million of the 2017 Senior Notes through a tender offer, at an early redemption percentage of 104.125%. On October 9, 2012, an additional $0.4 million was tendered at a redemption percentage of 101.125%, and on October 24, 2012, the remaining $270 million of the 2017 Senior Notes were called, at a redemption percentage of 103.688%. Accordingly, the $270 million still outstanding as of September 30, 2012 was reclassified to current portion of long-term debt on the consolidated balance sheet. A loss on the extinguishment of the 2017 Senior Notes of $41 million was recorded during the three months ended September 30, 2012, and an additional $10 million was recorded in October, 2012; these losses primarily consisted of the premiums paid on the redemption and the write-off of previously deferred financing costs.

Fort Bend County Tax-Exempt Bonds

On May 3, 2012, NRG executed a $54 million tax-exempt bond financing with a maturity date of May 1, 2038, issued by the Fort Bend County Industrial Development Corporation, or the Fort Bend County Tranche A Bonds. The Fort Bend County Tranche A Bonds will be used for the construction of a peaking unit with one or more components of a carbon capture system at the W.A. Parish Generating Station in Thompsons, TX, or W.A. Parish. The bonds initially bore weekly interest based on the SIFMA rate, and were enhanced by a letter of credit under the Company's 2011 Revolving Credit Facility covering amounts drawn. The proceeds drawn through September 30, 2012 were $16 million, and the remaining balance will be drawn over time as construction and other qualifying costs are paid.

On October 18, 2012, NRG fixed the rate on the Fort Bend County Tranche A Bonds at 4.75% payable semiannually, and the letter of credit was canceled and replaced with an NRG guarantee. Also, the holders no longer have the option to tender the bonds at any time; accordingly, the outstanding balance as of September 30, 2012 was reclassified to long-term debt on the consolidated balance sheet.

On October 18, 2012, NRG also executed an additional $73 million tax-exempt bond financing, with a maturity date of November 1, 2042, also issued by the Fort Bend County Industrial Development Corporation, or the Fort Bend County Tranche B Bonds. The Fort Bend County Tranche B Bonds will be used for environmental and maintenance upgrades at W.A. Parish. The bonds were issued at a fixed rate of 4.75% payable semiannually, and are supported by an NRG guarantee. The proceeds will be drawn over time as qualifying expenditures are paid.

NRG Repowering Holdings LLC

On January 25, 2012, NRG Repowering Holdings LLC, or NRG Repowering, terminated its revolving credit facility, repaid the $5 million then outstanding, and a supporting letter of credit issued by NRG was returned.

On January 25, 2012, NRG Repowering entered into a Credit and Reimbursement Agreement which provides for a $10 million working capital facility that can be used for general corporate purposes or to issue letters of credit, and an $80 million letter of credit facility. Interest on the letters of credit accrues at 3.5% and on loans under the working capital facility at the London Inter-Bank Offered Rate, or LIBOR, plus 3.50%. The facility is secured by NRG Repowering's investments in GenConn Energy LLC and South Trent Wind LLC, and matures January 25, 2015. As of September 30, 2012, NRG Repowering had issued a $10 million letter of credit under the working capital facility and $80 million in letters of credit under the letter of credit facility.

Alpine Financing

On March 16, 2012, NRG, through its wholly-owned subsidiary, NRG Solar Alpine LLC, or Alpine, entered into a credit agreement with a group of lenders, or the Alpine Financing Agreement, for a $166 million construction loan that will convert to a term loan upon completion of the project and a $68 million cash grant loan. The construction loan has an interest rate of LIBOR plus an applicable margin of 2.50% and the cash grant loan has an interest rate of LIBOR plus an applicable margin of 2.25%. The term loan has an interest rate of LIBOR plus an applicable margin of 2.50%, which escalates 0.25% on the fifth anniversary of the term conversion. The term loan, which is secured by all the assets of Alpine, matures on the 10^th anniversary of the term conversion and amortizes based upon a predetermined schedule. The cash grant loan matures upon the earlier of the receipt of the cash grant or February 2013. The Alpine Financing Agreement also includes a letter of credit facility on behalf of Alpine of up to $37 million. Alpine pays an availability fee of 100% of the applicable margin on issued letters of credit. As of September 30, 2012, $2 million was outstanding under the construction loan, nothing was outstanding under the cash grant loans, and $10 million in letters of credit in support of the project were issued.

Also related to the Alpine Financing Agreement, on March 16, 2012, Alpine entered into a series of fixed for floating interest rate swaps for at least 85% of the outstanding term loan amount, intended to hedge the risks associated with floating interest rates. Alpine will pay its counterparty the equivalent of a 2.74% fixed interest payment on a predetermined notional value, and Alpine will receive quarterly the equivalent of a floating interest payment based on a one month LIBOR calculated on the same notional value through December 31, 2012 and based on a three month LIBOR from December 31, 2012 through the term loan maturity date. All interest rate swap payments by Alpine and its counterparty are made monthly through December 31, 2012, and quarterly thereafter and the LIBOR rate is determined in advance of each interest period. The notional amount of the swap, which became effective March 31, 2012, and matures on December 31, 2029, was $141 million as of September 30, 2012 and will increase and amortize in proportion to the loan.

Roadrunner Financing

On March 20, 2012, NRG, through its wholly-owned subsidiary, NRG Roadrunner LLC, or Roadrunner, received proceeds of $21 million under its cash grant application. These proceeds were used to repay Roadrunner's cash grant loan of $17 million plus accrued interest. The remaining cash was returned to NRG under the terms of the accounts agreement.

CVSR Financing

On March 9, 2012, NRG, through its wholly-owned subsidiary, High Plains Ranch II LLC, completed its first borrowing of $138 million under the CVSR Financing Agreement with the Federal Financing Bank. As of September 30, 2012, $548 million was outstanding under the loan.

Avra Valley Financing

On August 30, 2012, NRG, through its wholly-owned subsidiary, NRG Solar Avra Valley LLC, or Avra Valley, entered into a credit agreement with a bank, or the Avra Valley Financing Agreement, for a $66 million construction loan that will convert to a term loan upon completion of the project and an $8 million cash grant loan. Both the construction and cash grant loans have interest rates of LIBOR plus an applicable margin of 2.25%. The term loan has an interest rate of LIBOR plus an applicable margin of 2.25%, which escalates 0.25% on the fifth, tenth, and fifteenth anniversary of the term conversion. The term loan, which is secured by all the assets of Avra Valley, matures on the 18th anniversary of the term conversion and amortizes based upon a predetermined schedule. The cash grant loan matures upon the earlier of three days after the receipt of the cash grant or May 2013. The Avra Valley Financing Agreement also includes a letter of credit facility on behalf of Avra Valley of up to $4 million. Avra Valley pays an availability fee of 100% of the applicable margin on issued letters of credit. As of September 30, 2012, $40 million was outstanding under the construction loan, nothing was outstanding under the cash grant loans, and no letters of credit in support of the project were issued.

Also related to the Avra Valley Financing Agreement, on August 30, 2012, Avra Valley entered into a fixed for floating interest rate swap for at least 90% of the outstanding term loan amount, intended to hedge the risks associated with floating interest rates. Avra Valley will pay its counterparty the equivalent of a 2.333% fixed interest payment on a predetermined notional value, and Avra Valley will receive quarterly the equivalent of a floating interest payment based on a 3 month LIBOR calculated on the same notional value through the term loan maturity date. All interest rate swap payments by Avra Valley and its counterparty are made quarterly and the LIBOR rate is determined in advance of each interest period. The original notional amount of the swap, which becomes effective November 30, 2012, and matures on November 30, 2030 is $59 million and will amortize in proportion to the loan.