Short-Term Credit Arrangements and Borrowings

3 Months Ended

Mar. 31, 2021

Short-Term Credit Arrangements and Borrowings

SHORT-TERM CREDIT ARRANGEMENTS AND BORROWINGS

DTE Energy, DTE Electric, and DTE Gas have unsecured revolving credit agreements that can be used for general corporate borrowings, but are intended to provide liquidity support for each of the companies’ commercial paper programs. Borrowings under the revolvers are available at prevailing short-term interest rates. DTE Energy also has other facilities to support letter of credit issuance.

The unsecured revolving credit agreements require DTE Energy, DTE Electric, and DTE Gas to maintain a total funded debt to capitalization ratio of no more than 0.65 to 1. In the agreements, "total funded debt" means all indebtedness of each respective company and their consolidated subsidiaries, including finance lease obligations, hedge agreements, and guarantees of third parties’ debt, but excluding contingent obligations, nonrecourse and junior subordinated debt, and certain equity-linked securities and, except for calculations at the end of the second quarter, certain DTE Gas short-term debt. "Capitalization" means the sum of (a) total funded debt plus (b) "consolidated net worth," which is equal to consolidated total equity of each respective company and their consolidated subsidiaries (excluding pension effects under certain FASB statements), as determined in accordance with accounting principles generally accepted in the United States of America. At March 31, 2021, the total funded debt to total capitalization ratios for DTE Energy, DTE Electric, and DTE Gas were 0.60 to 1, 0.53 to 1, and 0.47 to 1, respectively, and were in compliance with this financial covenant.

The availability under these facilities as of March 31, 2021 is shown in the following table:


	DTE Energy		DTE Electric		DTE Gas		Total
	(In millions)
Unsecured letter of credit facility, expiring in February 2023	$	150	$	—	$	—	$	150
Unsecured letter of credit facility, expiring in August 2021	110		—		—		110
Unsecured term loan, expiring in November 2021(a)	—		200		—		200
Unsecured Canadian revolving credit facility, expiring May 2023	88		—		—		88
Unsecured revolving credit facility, expiring April 2025(b)	1,500		500		300		2,300
	1,848		700		300		2,848
Amounts outstanding at March 31, 2021

Letters of credit	212		—		—		212

Revolver borrowings	52		—		—		52
	264		—		—		264
Net availability at March 31, 2021	$	1,584	$	700	$	300	$	2,584

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(a)No amounts have been drawn as of March 31, 2021 and the loan will terminate if nothing is drawn by April 30, 2021. Commitment fees are not material.

(b)Total availability of $102 million expires in April 2024, including $67 million at DTE Energy, $22 million at DTE Electric, and $13 million at DTE Gas. All other availability expires in April 2025.

DTE Energy has $59 million of other outstanding letters of credit which are used for various corporate purposes and are not included in the facilities described above. These letters of credit include a $50 million uncommitted letter of credit facility entered into by DTE Energy in July 2020, of which the full amount has been drawn. The facility expires in July 2021 with an automatic renewal provision.

In conjunction with maintaining certain exchange-traded risk management positions, DTE Energy may be required to post collateral with its clearing agents. DTE Energy has demand financing agreements with its clearing agents, including an agreement for up to $100 million with an indefinite term and an agreement for up to $150 million currently contracted through 2022 and subject to renewal. The $100 million agreement, as amended, also allows for up to $50 million of additional margin financing provided that DTE Energy posts a letter of credit for the incremental amount. Both agreements allow the right of setoff with posted collateral. At March 31, 2021, the capacity under the facilities was $300 million. The amounts outstanding under the agreements were $74 million and $49 million at March 31, 2021 and December 31, 2020, respectively, and were fully offset by the posted collateral.