Short-Term Credit Arrangements and Borrowings

6 Months Ended

Jun. 30, 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 have historically required 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 June 30, 2021, the total funded debt to total capitalization ratios for DTE Energy, DTE Electric, and DTE Gas were 0.64 to 1, 0.53 to 1, and 0.47 to 1, respectively, and were in compliance with this financial covenant.

In June 2021, DTE Energy amended its total funded debt to capitalization ratio requirement to no more than 0.70 to 1 starting with the third quarter of 2021 and ending December 2022. The amendment was a result of temporary balance sheet impacts resulting from the separation of DT Midstream on July 1, 2021.

Additionally in June 2021, DT Midstream entered into a $750 million secured revolving credit agreement. Letter of credit issuances and borrowings under the agreement are primarily for the general corporate purposes of DT Midstream to support its future operations and liquidity. Financial covenants under the agreement will be effective for DT Midstream beginning in the third quarter 2021.

For DTE Energy, availability under the DT Midstream secured revolving credit agreement was limited to $33 million, including an $8 million letter of credit issuance in June 2021 and additional credit up to $25 million, of which no amounts were drawn as of June 30, 2021. The facility and its available credit will not be retained by DTE Energy following the separation of DT Midstream on July 1, 2021.

The availability under these facilities as of June 30, 2021 is shown in the following table:


	DTE Energy		DTE Electric		DTE Gas		Total
	(In millions)
Unsecured revolving credit facility, expiring April 2025(a)	$	1,500	$	500	$	300	$	2,300
Unsecured Canadian revolving credit facility, expiring May 2023	89		—		—		89
Secured revolving credit facility, expiring June 2026(b)	33		—		—		33
Unsecured letter of credit facility, expiring in February 2023	150		—		—		150
Unsecured letter of credit facility, expiring in August 2021	110		—		—		110
Unsecured letter of credit facility(c)	50		—		—		50
	1,932		500		300		2,732
Amounts outstanding at June 30, 2021
Revolver borrowings	69		—		—		69

Letters of credit	230		—		—		230

	299		—		—		299
Net availability at June 30, 2021	$	1,633	$	500	$	300	$	2,433

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(a)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.

(b)For DT Midstream $750 million revolving credit facility, availability shown is limited to $33 million available to DTE Energy

(c)Uncommitted letter of credit facility with automatic renewal provision for each July and therefore no expiration.

DTE Energy has $9 million of other outstanding letters of credit which are used for various corporate purposes and are not included in the facilities described above.

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 June 30, 2021, the capacity under the facilities was $300 million. The amounts outstanding under the agreements were $18 million and $49 million at June 30, 2021 and December 31, 2020, respectively, and were fully offset by the posted collateral.