Borrowings and Other Financing Instruments

6 Months Ended

Jun. 30, 2019

Borrowings and Other Financing Instruments

Short-Term Borrowings

Short-Term Debt — Xcel Energy Inc. and its utility subsidiaries meet their short-term liquidity requirements primarily through the issuance of commercial paper and borrowings under their credit facilities and term loan agreements. Commercial paper and term loan borrowings outstanding for Xcel Energy were as follows:



(Amounts in Millions, Except Interest Rates)	Three Months Ended June 30, 2019			Year Ended Dec. 31, 2018
Borrowing limit	$	3,600		$	3,250
Amount outstanding at period end	1,597			1,038
Average amount outstanding	1,313			788
Maximum amount outstanding	1,597			1,349
Weighted average interest rate, computed on a daily basis	2.83		%	2.34		%
Weighted average interest rate at period end	2.74			2.97

Letters of Credit — Xcel Energy Inc. and its subsidiaries use letters of credit, generally with terms of one year, to provide financial guarantees for certain operating obligations. At June 30, 2019 and Dec. 31, 2018, there were $54 million and $49 million, respectively, of letters of credit outstanding under the credit facilities. The contract amounts of these letters of credit approximate their fair value and are subject to fees.

Credit Facilities — In order to use their commercial paper programs to fulfill short-term funding needs, Xcel Energy Inc. and its utility subsidiaries must have revolving credit facilities in place at least equal to the amount of their respective commercial paper borrowing limits and cannot issue commercial paper in an aggregate amount exceeding available capacity under these credit facilities. The lines of credit provide short-term financing in the form of notes payable to banks, letters of credit and back-up support for commercial paper borrowings.

Amended Credit Agreements — In June 2019, Xcel Energy Inc., NSP-Minnesota, NSP-Wisconsin, PSCo and SPS entered into amended five-year credit agreements with a syndicate of banks. The total borrowing limit under the amended credit agreements was increased to $3.1 billion. The amended credit agreements have substantially the same terms and conditions as the prior credit agreements with the following exceptions:


•	Maturity extended from June 2021 to June 2024.


•	Borrowing limit for Xcel Energy was increased from $1.0 billion to $1.25 billion


•	Borrowing limit for SPS was increased from $400 million to $500 million


•	Added swingline subfacility for Xcel Energy up to $75 million

Xcel Energy Inc., NSP-Minnesota, PSCo, and SPS each have the right to request an extension of the revolving credit facility termination date for two additional one year periods. NSP-Wisconsin has the right to request an extension of the revolving credit facility termination date for an additional one year period. All extension requests are subject to majority bank group approval.

As of June 30, 2019, Xcel Energy Inc. and its utility subsidiaries had the following committed credit facilities available:



(Millions of Dollars)	Credit Facility ^(a)		Outstanding ^(b)		Available
Xcel Energy Inc.	$	1,250	$	632	$	618
PSCo	700		231		469
NSP-Minnesota	500		213		287
SPS	500		2		498
NSP-Wisconsin	150		50		100
Total	$	3,100	$	1,128	$	1,972


^(a)	Expires in June 2024.


^(b)	Includes outstanding commercial paper and letters of credit.

All credit facility bank borrowings, outstanding letters of credit and outstanding commercial paper reduce the available capacity under the respective credit facilities. Xcel Energy Inc. and its subsidiaries had no direct advances on the credit facilities outstanding as of June 30, 2019 and Dec. 31, 2018.

Term Loan Agreement — In December 2018, Xcel Energy Inc. renewed its $500 million 364 Day Term Loan Agreement. No additional capacity remains as loans borrowed and repaid may not be redrawn. The loan is unsecured and matures Dec. 3, 2019. Xcel Energy has an option to request an extension through Dec. 2, 2020.

The term loan includes one financial covenant, requiring Xcel Energy’s consolidated funded debt to total capitalization ratio to be less than or equal to 65%. Interest is at a rate equal to either (i) the Eurodollar rate, plus 50.0 basis points, or (ii) an alternate base rate. Xcel Energy is also required to pay a commitment fee equal to 10 basis points per annum on any unborrowed portion.

As of June 30, 2019, Xcel Energy Inc.’s term loan borrowings were as follows:



(Millions of Dollars)	Limit		Amount Used		Available
Xcel Energy Inc.	$	500	$	500	$	—

Bilateral Credit Agreement

In March 2019, NSP-Minnesota entered into a one-year uncommitted bilateral credit agreement. The credit agreement is limited in use to support letters of credit.

As of June 30, 2019, NSP-Minnesota’s outstanding letters of credit under the Bilateral Credit Agreement were as follows:



(Millions of Dollars)	Limit		Amount Outstanding		Available
NSP-Minnesota	$	75	$	23	$	52

Long-Term Borrowings

During the six months ended June 30, 2019, Xcel Energy Inc. and its utility subsidiaries issued the following:


•	PSCo issued $400 million of 4.05% first mortgage bonds due Sept. 15, 2049.


•	Xcel Energy Inc. issued $130 million of 4.00% senior unsecured bonds due June 15, 2028.


•	SPS issued $300 million of 3.75% first mortgage bonds due June 15, 2049.

Forward Equity Agreements — In November 2018, Xcel Energy Inc. entered into forward sale agreements in connection with a completed $459 million public offering of 9.4 million shares of Xcel Energy common stock. The initial forward agreement was for 8.1 million shares with an additional agreement for 1.2 million shares that was exercised at the option of the banking counterparty. At June 30, 2019, the forward agreements could have been settled with physical delivery of 9.4 million common shares to the banking counterparty in exchange for cash of $452 million. The forward instruments could also have been settled at June 30, 2019 with delivery of approximately $100 million of cash or approximately 1.7 million shares of common stock to the counterparty, if Xcel Energy unilaterally elected net cash or net share settlement, respectively. The forward price used to determine amounts due at settlement is calculated based on the November 2018 public offering price for Xcel Energy’s common stock of $49.00, increased for the overnight bank funding rate, less a spread of 0.75% and less expected dividends on Xcel Energy’s common stock during the period the instruments are outstanding.

Xcel Energy may settle the agreements at any time up to the maturity date of February 7, 2020. Depending on settlement timing and form of settlement, cash proceeds are expected to be approximately $450 million.

Forward equity instruments were recognized within stockholders’ equity at fair value at execution of the agreements, and will not be subsequently adjusted until settlement.

Other Equity — Xcel Energy Inc. issued $19.4 million and $38.5 million of equity through DRIP during the six months ended June 30, 2019 and year ended Dec. 31, 2018, respectively. The program allows shareholders to elect dividend reinvestment in Xcel Energy Inc. common stock through a non-cash transaction.