Borrowings and Other Financing Instruments

Short-Term Borrowings

Money Pool — Xcel Energy Inc. and its utility subsidiaries have established a money pool arrangement that allows for short-term investments in and borrowings between the utility subsidiaries. Xcel Energy Inc. may make investments in the utility subsidiaries at market-based interest rates; however, the money pool arrangement does not allow the utility subsidiaries to make investments in Xcel Energy Inc. Money pool borrowings for SPS were as follows:



(Amounts in Millions, Except Interest Rates)	Three Months Ended Sept. 30, 2014			Twelve Months Ended Dec. 31, 2013
Borrowing limit	$	100		$	100
Amount outstanding at period end	—			38
Average amount outstanding	1			46
Maximum amount outstanding	22			100
Weighted average interest rate, computed on a daily basis	0.26		%	0.15		%
Weighted average interest rate at period end	N/A			0.25

Commercial Paper — SPS meets its short-term liquidity requirements primarily through the issuance of commercial paper and borrowings under its credit facility. Commercial paper outstanding for SPS was as follows:



(Amounts in Millions, Except Interest Rates)	Three Months Ended Sept. 30, 2014			Twelve Months Ended Dec. 31, 2013
Borrowing limit	$	300		$	300
Amount outstanding at period end	—			84
Average amount outstanding	43			32
Maximum amount outstanding	106			140
Weighted average interest rate, computed on a daily basis	0.26		%	0.30		%
Weighted average interest rate at period end	N/A			0.27

Letters of Credit — SPS uses letters of credit, generally with terms of one year, to provide financial guarantees for certain operating obligations. At Sept. 30, 2014 and Dec. 31, 2013, there were $41.0 million and $25.5 million of letters of credit outstanding, respectively, under the credit facility. The contract amounts of these letters of credit approximate their fair value and are subject to fees.

Credit Facility — In order to use its commercial paper program to fulfill short-term funding needs, SPS must have a revolving credit facility in place at least equal to the amount of its commercial paper borrowing limit and cannot issue commercial paper in an aggregate amount exceeding available capacity under this credit facility. The line of credit provides short-term financing in the form of notes payable to banks, letters of credit and back-up support for commercial paper borrowings.

At Sept. 30, 2014, SPS had the following committed credit facility available (in millions of dollars):



Credit Facility ^(a)		Drawn ^(b)		Available
$	300.0	$	41.0	$	259.0


^(a)	Credit facility has been amended to expire in October 2019.


^(b)	Includes outstanding letters of credit.

All credit facility bank borrowings, outstanding letters of credit and outstanding commercial paper reduce the available capacity under the credit facility. SPS had no direct advances on the credit facility outstanding at Sept. 30, 2014 and Dec. 31, 2013.

Amended Credit Agreement — On Oct. 14, 2014, SPS entered into an amended five-year credit agreement with a syndicate of banks. The amended credit agreement has substantially the same terms and conditions as the prior credit agreement with an increased borrowing limit and an extension of maturity from July 2017 to October 2019. The borrowing limit for SPS has been increased to $400 million from $300 million. The Eurodollar borrowing margin on the line of credit ranges from 87.5 to 175 basis points per year based on applicable long-term credit ratings. The commitment fee, calculated on the unused portion of the line of credit, ranges from 7.5 to 27.5 basis points per year, also based on applicable long-term credit ratings.

SPS has the right to request an extension of the revolving termination date for two additional one-year periods, subject to majority bank group approval.

Long-Term Borrowings

In June 2014, SPS issued $150 million of 3.30 percent first mortgage bonds due June 15, 2024.

In connection with SPS’ issuance of $150 million of 3.30 percent first mortgage bonds due June 15, 2024, SPS issued $250 million of collateral 8.75 percent first mortgage bonds due Dec. 1, 2018 to the trustee under its senior unsecured indenture in order to secure its previously issued Series G Senior Notes, 8.75 percent due Dec. 1, 2018, equally and ratably with SPS’ first mortgage bonds as required by the terms of such Series G Senior Notes.