SHORT-TERM CREDIT ARRANGEMENTS

6 Months Ended

Jun. 30, 2012

SHORT-TERM CREDIT ARRANGEMENTS [Abstract]

SHORT-TERM CREDIT ARRANGEMENTS

(D) SHORT-TERM CREDIT ARRANGEMENTS

As of June 30, 2012, $95 million of borrowings were outstanding under a revolving credit agreement with a group of banks that will expire on November 30, 2016 (the UIL Holdings Credit Facility).  Under the UIL Holdings Credit Facility, UIL Holdings has outstanding standby letters of credit in the aggregate amount of $4.3 million, which expire on January 31, 2013 and June 16, 2013.  Available credit under the UIL Holdings Credit Facility at June 30, 2012 totaled $300.7 million for UIL Holdings and its subsidiaries in the aggregate.  UIL Holdings records borrowings under the UIL Holdings Credit Facility as short-term debt, but the UIL Holdings Credit Facility provides for longer term commitments from banks allowing UIL Holdings to borrow and reborrow funds, at its option, until its expiration, thus affording UIL Holdings flexibility in managing its working capital requirements.

As of June 30, 2012, UIL Holdings had no short-term borrowings outstanding under its money market loan arrangement.

On January 13, 2012, UI entered into a revolving credit agreement that expired on July 13, 2012 (the UI Credit Facility).  The borrowing limit under the UI Credit Facility was $105 million.    The UI Credit Facility was to provide additional liquidity for UI's obligation to either remarket or repay and cancel $103.5 million of pollution control revenue bonds, due to be remarketed in the municipal bond market on February 1, 2012.  The pollution control revenue bonds were repaid and cancelled with the issuance of senior unsecured notes that UI entered into with a group of institutional accredited investors on January 30, 2012, as discussed above.  Subsequently, the UI Credit Facility was terminated.