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These excerpts taken from the PCG 8-K filed Oct 28, 2005. Pollution Control Bonds
On April 22, 2005, the Utility entered into an amendment to four reimbursement agreements totaling $620 million related to letters of credit aggregating $614 million that had been issued to support certain pollution control bonds issued on behalf of the Utility. In addition to reducing pricing and generally conforming the covenants and events of default to those in
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the $1 billion working capital facility (described below), the term of the amended agreements has been extended from three years to five years until April 22, 2010.
Pollution Control Bonds
Variable Rate and 5.35% Pollution Control Loan Agreements
Under pollution control loan agreements, the Utility is obligated to reimburse the CPCFA for funds received by the Utility from the issuance of the CPCFA’s pollution control bonds for the benefit of the Utility. The principal amount of these loan obligations totaled $814 million at December 31, 2004. Interest rates on $614 million of $814 million of the obligations are variable. For 2004, the average variable interest rates ranged from 1.19% to 1.21%. The interest rate on the remaining $200 million of the obligations is fixed at 5.35%.
The CPCFA pollution control bonds in the principal amount of $200 million are backed by bond insurance. The CPCFA pollution control bonds in the principal amount of $614 million are backed by letters of credit of $620 million. The Utility’s reimbursement obligations are supported by $820 million in First Mortgage Bonds that have been issued to the bond insurer and letter of credit banks. These bank agreements supplying the letters of credit include a covenant requiring the Utility to maintain, as of the end of each fiscal quarter ending after the Effective Date, a debt to capitalization ratio of at most 65%.
Drawings for interest due under the loan agreements are made under these letters of credit on each scheduled interest payment date, which is the first business day of each month. On the same day, the Utility pays the amount of the draw to the letter of credit banks per the terms of the reimbursements agreements. The letters of credit are then reinstated to the full amount of their initial commitments.
Pollution Control Bond Term Loan Facility and 3.5% Pollution Control Loan Agreements
On the Effective Date, the Utility entered into a $345 million term loan facility that was used to fund the Utility’s purchase, in lieu of redemption, of the CPCFA’s Pollution Control Revenue Bonds, 1992 Series A and B and 1993 Series A and B, or collectively the Old Bonds.
On June 29, 2004, the Utility entered into four separate loan agreements, each dated as of June 1, 2004, with the CPCFA, which issued $345 million aggregate principal amount of its Pollution Control Refunding Revenue Bonds, 2004 Series A ($70 million), 2004 Series B ($90 million), 2004 Series C ($85 million), and 2004 Series D ($100 million), or collectively the New Bonds, to refund the Old Bonds. The funds made available from the refund of Old Bonds were used to repay the $345 million term loan facility. Principal and interest payments on the New Bonds are backed by bond insurance and the Utility’s obligations under the new loan agreements are supported by $345 million of First Mortgage Bonds that are held by the trustee for the New Bonds.
Pollution Control Bond Bridge Facilities
During the Utility’s Chapter 11 proceeding, approximately $454 million in aggregate principal amount of pollution control bonds, which were issued for the Utility’s benefit and were credit enhanced with letters of credit were redeemed through draws on the letters of credit. On the Effective Date, the Utility executed bridge loans with new lenders who had purchased the $454 million reimbursement obligations owed by the Utility to the letter of credit issuers and entered into four separate amended and restated reimbursement agreements with new lenders. These reimbursement agreements include a covenant requiring the Utility to maintain, as of the end of each fiscal quarter ending after the Effective Date, a debt to capitalization ratio of at most 65%. The Utility intends to refinance the $454 million with long-term tax-exempt bonds or taxable debt. The outstanding balance of $454 million at December 31, 2004 under the amended and restated reimbursement agreements is due and payable on June 5, 2005. At the Utility’s request and at the sole discretion of each lender, each amended and restated reimbursement agreement may be extended for additional periods. On the Effective Date, the Utility supported its obligations under the amended and restated reimbursement agreement with $454 million of First Mortgage Bonds.
This excerpt taken from the PCG 10-K filed Feb 18, 2005. Pollution Control Bonds Variable Rate and 5.35% Pollution Control Loan Agreements Under pollution control loan agreements, the Utility is obligated to reimburse the CPCFA for funds received by the Utility from the issuance of the CPCFA's pollution control bonds for the benefit of the Utility. The principal amount of these loan obligations totaled $814 million at December 31, 2004. Interest rates on $614 million of $814 million of the obligations are variable. For 2004, the average variable interest rates ranged from 1.19% to 1.21%. The interest rate on the remaining $200 million of the obligations is fixed at 5.35%. The CPCFA pollution control bonds in the principal amount of $200 million are backed by bond insurance. The CPCFA pollution control bonds in the principal amount of $614 million are backed by letters of credit of $620 million. The Utility's reimbursement obligations are supported by $820 million in First Mortgage Bonds that have been issued to the bond insurer and letter of credit banks. These bank agreements supplying the letters of credit include a covenant requiring the Utility to maintain, as of the end of each fiscal quarter ending after the Effective Date, a debt to capitalization ratio of at most 65%. 100 Drawings for interest due under the loan agreements are made under these letters of credit on each scheduled interest payment date, which is the first business day of each month. On the same day, the Utility pays the amount of the draw to the letter of credit banks per the terms of the reimbursements agreements. The letters of credit are then reinstated to the full amount of their initial commitments. Pollution Control Bond Term Loan Facility and 3.5% Pollution Control Loan Agreements On the Effective Date, the Utility entered into a $345 million term loan facility that was used to fund the Utility's purchase, in lieu of redemption, of the CPCFA's Pollution Control Revenue Bonds, 1992 Series A and B and 1993 Series A and B, or collectively the Old Bonds. On June 29, 2004, the Utility entered into four separate loan agreements, each dated as of June 1, 2004, with the CPCFA, which issued $345 million aggregate principal amount of its Pollution Control Refunding Revenue Bonds, 2004 Series A ($70 million), 2004 Series B ($90 million), 2004 Series C ($85 million), and 2004 Series D ($100 million), or collectively the New Bonds, to refund the Old Bonds. The funds made available from the refund of Old Bonds were used to repay the $345 million term loan facility. Principal and interest payments on the New Bonds are backed by bond insurance and the Utility's obligations under the new loan agreements are supported by $345 million of First Mortgage Bonds that are held by the trustee for the New Bonds. Pollution Control Bond Bridge Facilities During the Utility's Chapter 11 proceeding, approximately $454 million in aggregate principal amount of pollution control bonds, which were issued for the Utility's benefit and were credit enhanced with letters of credit were redeemed through draws on the letters of credit. On the Effective Date, the Utility executed bridge loans with new lenders who had purchased the $454 million reimbursement obligations owed by the Utility to the letter of credit issuers and entered into four separate amended and restated reimbursement agreements with new lenders. These reimbursement agreements include a covenant requiring the Utility to maintain, as of the end of each fiscal quarter ending after the Effective Date, a debt to capitalization ratio of at most 65%. The Utility intends to refinance the $454 million with long-term tax-exempt bonds or taxable debt. The outstanding balance of $454 million at December 31, 2004 under the amended and restated reimbursement agreements is due and payable on June 5, 2005. At the Utility's request and at the sole discretion of each lender, each amended and restated reimbursement agreement may be extended for additional periods. On the Effective Date, the Utility supported its obligations under the amended and restated reimbursement agreement with $454 million of First Mortgage Bonds. 101 | EXCERPTS ON THIS PAGE:
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