Revolving Credit Facilities, Lines Of Credit, Short-Term Borrowings, And Long-Term Debt

NOTE 4. REVOLVING CREDIT FACILITIES, LINES OF CREDIT, SHORT-TERM BORROWINGS, AND LONG-TERM DEBT (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Entergy Corporation has in place a credit facility that has a borrowing capacity of $3.5 billion and expires in June 2026. The facility includes fronting commitments for the issuance of letters of credit against $20 million of the total borrowing capacity of the credit facility. The commitment fee is currently 0.225% of the undrawn commitment amount. Commitment fees and interest rates on loans under the credit facility can fluctuate depending on the senior unsecured debt ratings of Entergy Corporation. The weighted average interest rate for the three months ended March 31, 2022 was 1.81% on the drawn portion of the facility. As of March 31, 2022, amounts outstanding and capacity available under the $3.5 billion credit facility are:


Capacity	Borrowings	Letters of Credit	Capacity Available
(In Millions)
$3,500	$150	$3	$3,347

Entergy Corporation’s credit facility requires Entergy to maintain a consolidated debt ratio, as defined, of 65% or less of its total capitalization. Entergy is in compliance with this covenant. If Entergy fails to meet this ratio, or if Entergy Corporation or one of the Utility operating companies (except Entergy New Orleans) defaults on other indebtedness or is in bankruptcy or insolvency proceedings, an acceleration of the Entergy Corporation credit facility’s maturity date may occur.

Entergy Corporation has a commercial paper program with a Board-approved program limit of up to $2 billion. As of March 31, 2022, Entergy Corporation had $1.343 billion of commercial paper outstanding. The weighted-average interest rate for the three months ended March 31, 2022 was 0.48%.

Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and Entergy Texas each had credit facilities available as of March 31, 2022 as follows:


Company	Expiration Date	Amount of Facility	Interest Rate (a)	Amount Drawn as of March 31, 2022	Letters of Credit Outstanding as of March 31, 2022
Entergy Arkansas	April 2022 (e)	$25 million (b)	3.00%	$—	$—
Entergy Arkansas	June 2026	$150 million (c)	1.58%	$—	$—
Entergy Louisiana	June 2026	$350 million (c)	1.71%	$—	$—
Entergy Mississippi	April 2022 (f)	$37.5 million (d)	1.96%	$—	$—
Entergy Mississippi	April 2022 (f)	$35 million (d)	1.96%	$—	$—
Entergy Mississippi	April 2022 (f)	$10 million (d)	1.96%	$—	$—
Entergy New Orleans	June 2024	$25 million (c)	2.08%	$—	$—
Entergy Texas	June 2026	$150 million (c)	1.71%	$—	$1.3 million

(a)The interest rate is the estimated interest rate as of March 31, 2022 that would have been applied to outstanding borrowings under the facility.

(b)Borrowings under this Entergy Arkansas credit facility may be secured by a security interest in its accounts receivable at Entergy Arkansas’s option.

(c)The credit facility includes fronting commitments for the issuance of letters of credit against a portion of the borrowing capacity of the facility as follows: $5 million for Entergy Arkansas; $15 million for Entergy Louisiana; $10 million for Entergy New Orleans; and $30 million for Entergy Texas.

(d)Borrowings under the Entergy Mississippi credit facilities may be secured by a security interest in its accounts receivable at Entergy Mississippi’s option.

(e)In April 2022, Entergy Arkansas extended the expiration of the credit facility to July 2022.

(f)In April 2022, Entergy Mississippi renewed its three existing short-term credit facilities, increased the aggregate amount available under the facilities to $95 million, and extended the expiration date of each credit facility to April 2023. Also in April 2022, Entergy Mississippi entered into a long-term credit facility in the amount of $150 million with an expiration date of July 2024. The interest rates for these facilities will be based on the Secured Overnight Financing Rate.

The commitment fees on the credit facilities range from 0.075% to 0.375% of the undrawn commitment amount for Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy Texas, and of the entire facility amount for Entergy New Orleans. Each of the credit facilities requires the Registrant Subsidiary borrower to maintain a debt ratio, as defined, of 65% or less of its total capitalization. Each Registrant Subsidiary is in compliance with this covenant.

In addition, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and Entergy Texas each entered into an uncommitted standby letter of credit facility as a means to post collateral to support its

obligations to MISO. Following is a summary of the uncommitted standby letter of credit facilities as of March 31, 2022:

Company

Amount of
Uncommitted Facility

Letter of Credit Fee

Letters of Credit
Issued as of
March 31, 2022
(a) (b)

Entergy Arkansas

$25 million

0.78%

$7.5 million

Entergy Louisiana

$125 million

0.78%

$11.0 million

Entergy Mississippi

$65 million

0.78%

$2.3 million

Entergy New Orleans

$15 million

1.00%

$1.0 million

Entergy Texas

$80 million

0.875%

$79.6 million

(a)As of March 31, 2022, letters of credit posted with MISO covered financial transmission right exposure of $0.3 million for Entergy Arkansas and $0.4 million for Entergy Mississippi. See Note 8 to the financial statements herein for discussion of financial transmission rights.

(b)As of March 31, 2022, in addition to the $2.3 million MISO letter of credit, Entergy Mississippi has $1 million of non-MISO letters of credit outstanding under this facility.

The short-term borrowings of the Registrant Subsidiaries are limited to amounts authorized by the FERC. The current FERC-authorized short-term borrowing limits for Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy are effective through October 2023. In addition to borrowings from commercial banks, these companies may also borrow from the Entergy System money pool and from other internal short-term borrowing arrangements. The money pool and the other internal borrowing arrangements are inter-company borrowing arrangements designed to reduce the Utility subsidiaries’ dependence on external short-term borrowings. Borrowings from internal and external short-term borrowings combined may not exceed the FERC-authorized limits. The following were the FERC-authorized limits for short-term borrowings and the outstanding short-term borrowings as of March 31, 2022 (aggregating both internal and external short-term borrowings) for the Registrant Subsidiaries:


	Authorized	Borrowings
	(In Millions)
Entergy Arkansas	$250	$—
Entergy Louisiana	$450	$—
Entergy Mississippi	$200	$22
Entergy New Orleans	$150	$—
Entergy Texas	$200	$171
System Energy	$200	$—

Vermont Yankee Credit Facility (Entergy Corporation)

In January 2019, Entergy Nuclear Vermont Yankee was transferred to NorthStar and its credit facility was assumed by Entergy Assets Management Operations, LLC (formerly Vermont Yankee Asset Retirement, LLC), Entergy Nuclear Vermont Yankee’s parent company that remains an Entergy subsidiary after the transfer. The credit facility has a borrowing capacity of $139 million and expires in December 2022. The commitment fee is currently 0.20% of the undrawn commitment amount. As of March 31, 2022, $139 million in cash borrowings were outstanding under the credit facility. The weighted average interest rate for the three months ended March 31, 2022 was 1.72% on the drawn portion of the facility. See Note 14 to the financial statements in the Form 10-K for discussion of the transfer of Entergy Nuclear Vermont Yankee to NorthStar.

Variable Interest Entities (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, and System Energy)

See Note 17 to the financial statements in the Form 10-K for a discussion of the consolidation of the nuclear fuel company variable interest entities (VIEs). To finance the acquisition and ownership of nuclear fuel, the nuclear fuel company VIEs have credit facilities and three of the four VIEs also issue commercial paper, details of which follow as of March 31, 2022:


Company	Expiration Date	Amount of Facility	Weighted Average Interest Rate on Borrowings (a)	Amount Outstanding as of March 31, 2022
		(Dollars in Millions)
Entergy Arkansas VIE	June 2024	$80	1.10%	$—
Entergy Louisiana River Bend VIE	June 2024	$105	1.14%	$30.8
Entergy Louisiana Waterford VIE	June 2024	$105	1.15%	$82.1
System Energy VIE	June 2024	$120	1.17%	$100

(a)Includes letter of credit fees and bank fronting fees on commercial paper issuances by the nuclear fuel company variable interest entities for Entergy Arkansas, Entergy Louisiana, and System Energy. The nuclear fuel company variable interest entity for Entergy Louisiana River Bend does not issue commercial paper, but borrows directly on its bank credit facility.

The commitment fees on the credit facilities are 0.100% of the undrawn commitment amount for the Entergy Arkansas, Entergy Louisiana, and System Energy VIEs. Each credit facility requires the respective lessee of nuclear fuel (Entergy Arkansas, Entergy Louisiana, or Entergy Corporation as guarantor for System Energy) to maintain a consolidated debt ratio, as defined, of 70% or less of its total capitalization. Each lessee is in compliance with this covenant.

The nuclear fuel company variable interest entities had notes payable that were included in debt on the respective balance sheets as of March 31, 2022 as follows:

Company

Description

Amount

Entergy Arkansas VIE

3.17% Series M due December 2023

$40 million

Entergy Arkansas VIE

1.84% Series N due July 2026

$90 million

Entergy Louisiana River Bend VIE

2.51% Series V due June 2027

$70 million

Entergy Louisiana Waterford VIE

3.22% Series I due December 2023

$20 million

System Energy VIE

2.05% Series K due September 2027

$90 million

In accordance with regulatory treatment, interest on the nuclear fuel company variable interest entities’ credit facilities, commercial paper, and long-term notes payable is reported in fuel expense.

Entergy Arkansas, Entergy Louisiana, and System Energy each has obtained financing authorization from the FERC that extends through October 2023 for issuances by its nuclear fuel company variable interest entities.

Debt Issuances

(Entergy Arkansas)

In March 2022, Entergy Arkansas issued $200 million of 4.20% Series mortgage bonds due April 2049. Entergy Arkansas expects to use the proceeds for general corporate purposes, including the repayment of borrowings from the Entergy System money pool.

(Entergy Louisiana)

In December 2021, Entergy Louisiana entered into a term loan credit agreement providing a $1.2 billion unsecured term loan due June 2023. The term loan bears interest at a variable interest rate based on an adjusted term Secured Overnight Financing Rate plus the applicable margin. The weighted average interest rate for the three months ended March 31, 2022 was 0.976%. Entergy Louisiana received the funds in January 2022 and used the proceeds for general corporate purposes, including storm restoration costs related to Hurricane Ida.

Entergy Texas Securitization Bonds

In January 2022, the PUCT authorized the issuance of securitization bonds to recover $242.9 million of Entergy Texas’ Hurricanes Laura and Delta and Winter Storm Uri restoration costs, plus carrying costs, plus $13.3 million relating to a system restoration regulatory asset, plus up-front qualified costs. In April 2022, Entergy Texas Restoration Funding II, LLC, a company wholly-owned and consolidated by Entergy Texas, issued $290.85 million of senior secured restoration bonds (securitization bonds), as follows:


			Amount
			(In Thousands)
Senior Secured Restoration Bonds:
Tranche A-1 (3.051%) due December 2028			$100,000
Tranche A-2 (3.697%) due December 2036			190,850
Total senior secured restoration bonds			$290,850

Although the principal amount of each tranche is not due until the dates given above, Entergy Texas Restoration Funding II expects to make principal payments on the securitization bonds over the next five years in the amounts of $12.3 million for 2022, $17.8 million for 2023, $18.3 million for 2024, $18.8 million for 2025, and $19.4 million for 2026. All of the expected principal payments for 2022-2026 are for Tranche A-1.

With the proceeds, Entergy Texas Restoration Funding II purchased from Entergy Texas the transition property, which is the right to recover from customers through a system restoration charge amounts sufficient to service the securitization bonds. Entergy Texas expects to use the proceeds to reduce its outstanding debt. The creditors of Entergy Texas do not have recourse to the assets or revenues of Entergy Texas Restoration Funding II, including the transition property, and the creditors of Entergy Texas Restoration Funding II do not have recourse to the assets or revenues of Entergy Texas. Entergy Texas has no payment obligations to Entergy Texas Restoration Funding II except to remit system restoration charge collections.

Fair Value

The book value and the fair value of long-term debt for Entergy Corporation and the Registrant Subsidiaries as of March 31, 2022 were as follows:


	Book Value of Long-Term Debt	Fair Value of Long-Term Debt (a)
	(In Thousands)
Entergy	$27,215,784	$26,731,277
Entergy Arkansas	$4,163,602	$4,101,516
Entergy Louisiana	$12,022,131	$11,959,123
Entergy Mississippi	$2,180,197	$2,152,275
Entergy New Orleans	$788,501	$775,566
Entergy Texas	$2,325,371	$2,254,487
System Energy	$805,353	$769,552

(a)Fair values were classified as Level 2 in the fair value hierarchy discussed in Note 8 to the financial statements herein.

The book value and the fair value of long-term debt for Entergy Corporation and the Registrant Subsidiaries as of December 31, 2021 were as follows:


	Book Value of Long-Term Debt	Fair Value of Long-Term Debt (a)
	(In Thousands)
Entergy	$25,880,901	$27,061,171
Entergy Arkansas	$3,958,862	$4,176,577
Entergy Louisiana	$10,914,346	$11,492,650
Entergy Mississippi	$2,179,989	$2,346,230
Entergy New Orleans	$788,165	$765,538
Entergy Texas	$2,354,148	$2,483,995
System Energy	$741,296	$743,040

(a)Fair values were classified as Level 2 in the fair value hierarchy discussed in Note 8 to the financial statements herein.

Revolving Credit Facilities, Lines Of Credit, Short-Term Borrowings, And Long-Term Debt

NOTE 4. REVOLVING CREDIT FACILITIES, LINES OF CREDIT, SHORT-TERM BORROWINGS, AND LONG-TERM DEBT (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Entergy Corporation has in place a credit facility that has a borrowing capacity of $3.5 billion and expires in June 2026. The facility includes fronting commitments for the issuance of letters of credit against $20 million of the total borrowing capacity of the credit facility. The commitment fee is currently 0.225% of the undrawn commitment amount. Commitment fees and interest rates on loans under the credit facility can fluctuate depending on the senior unsecured debt ratings of Entergy Corporation. The weighted average interest rate for the three months ended March 31, 2022 was 1.81% on the drawn portion of the facility. As of March 31, 2022, amounts outstanding and capacity available under the $3.5 billion credit facility are:


Capacity	Borrowings	Letters of Credit	Capacity Available
(In Millions)
$3,500	$150	$3	$3,347

Entergy Corporation’s credit facility requires Entergy to maintain a consolidated debt ratio, as defined, of 65% or less of its total capitalization. Entergy is in compliance with this covenant. If Entergy fails to meet this ratio, or if Entergy Corporation or one of the Utility operating companies (except Entergy New Orleans) defaults on other indebtedness or is in bankruptcy or insolvency proceedings, an acceleration of the Entergy Corporation credit facility’s maturity date may occur.

Entergy Corporation has a commercial paper program with a Board-approved program limit of up to $2 billion. As of March 31, 2022, Entergy Corporation had $1.343 billion of commercial paper outstanding. The weighted-average interest rate for the three months ended March 31, 2022 was 0.48%.

Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and Entergy Texas each had credit facilities available as of March 31, 2022 as follows:


Company	Expiration Date	Amount of Facility	Interest Rate (a)	Amount Drawn as of March 31, 2022	Letters of Credit Outstanding as of March 31, 2022
Entergy Arkansas	April 2022 (e)	$25 million (b)	3.00%	$—	$—
Entergy Arkansas	June 2026	$150 million (c)	1.58%	$—	$—
Entergy Louisiana	June 2026	$350 million (c)	1.71%	$—	$—
Entergy Mississippi	April 2022 (f)	$37.5 million (d)	1.96%	$—	$—
Entergy Mississippi	April 2022 (f)	$35 million (d)	1.96%	$—	$—
Entergy Mississippi	April 2022 (f)	$10 million (d)	1.96%	$—	$—
Entergy New Orleans	June 2024	$25 million (c)	2.08%	$—	$—
Entergy Texas	June 2026	$150 million (c)	1.71%	$—	$1.3 million