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v3.23.1

Long-term Debt and Finance Leases | 3 Months Ended
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Mar. 31, 2023
Debt Disclosure [Abstract] |
Long-term Debt and Finance Leases | Long-term Debt and Finance Leases Long-term debt and finance leases consisted of the following:
(In millions, except rates) | March 31, 2023 |  | December 31, 2022 |  | Interest rate %
Recourse debt: |  |  |  |  |
Senior Notes, due 2027 | $ | 375 |  |  | $ | 375 |  |  | 6.625
Senior Notes, due 2028 | 821 |  |  | 821 |  |  | 5.750
Senior Notes, due 2029 | 733 |  |  | 733 |  |  | 5.250
Senior Notes, due 2029 | 500 |  |  | 500 |  |  | 3.375
Senior Notes, due 2031 | 1,030 |  |  | 1,030 |  |  | 3.625
Senior Notes, due 2032 | 1,100 |  |  | 1,100 |  |  | 3.875
Convertible Senior Notes, due 2048(a) | 575 |  |  | 575 |  |  | 2.750
Senior Secured First Lien Notes, due 2024 | 600 |  |  | 600 |  |  | 3.750
Senior Secured First Lien Notes, due 2025 | 500 |  |  | 500 |  |  | 2.000
Senior Secured First Lien Notes, due 2027 | 900 |  |  | 900 |  |  | 2.450
Senior Secured First Lien Notes, due 2029 | 500 |  |  | 500 |  |  | 4.450
Senior Secured First Lien Notes, due 2033 | 740 |  |  | — |  |  | 7.000
Revolving Credit Facility | 725 |  |  | — |  |  | SOFR + 1.720
Receivables Facility | 150 |  |  | — |  |  | various
Repurchase Facility | 75 |  |  | — |  |  | SOFR + 1.300
Tax-exempt bonds | 466 |  |  | 466 |  |  | 1.250 - 4.750
Subtotal recourse debt | 9,790 |  |  | 8,100 |  |  |
Non-recourse debt: |  |  |  |  |
Vivint Senior Secured Notes, due 2027 | 600 |  |  | — |  |  | 6.750
Vivint Senior Notes, due 2029 | 800 |  |  | — |  |  | 5.750
Vivint Senior Secured Term Loan, due 2028 | 1,330 |  |  | — |  |  | various
Subtotal all Vivint non-recourse debt | 2,730 |  |  | — |  |  |
Subtotal long-term debt (including current maturities) | 12,520 |  |  | 8,100 |  |  |
Finance leases | 19 |  |  | 11 |  |  | various
Subtotal long-term debt and finance leases (including current maturities) | 12,539 |  |  | 8,111 |  |  |
Less current maturities | (971) |  |  | (63) |  |  |
Less debt issuance costs | (75) |  |  | (70) |  |  |
Discounts | (161) |  |  | (2) |  |  |
Total long-term debt and finance leases | $ | 11,332 |  |  | $ | 7,976 |  |  |
(a)As of the ex-dividend date of April 28, 2023, the Convertible Senior Notes were convertible at a price of $42.57, which is equivalent to a conversion rate of approximately 23.4925 shares of common stock per $1,000 principal amount Recourse Debt Issuance of 2033 Senior Secured First Lien Notes On March 9, 2023, the Company issued $740 million of aggregate principal amount of 7.000% senior secured first lien notes due 2033 (the "2033 Senior Secured First Lien Notes"). The 2033 Senior Secured First Lien Notes are senior secured obligations of NRG and are guaranteed by certain of its subsidiaries. The 2033 Senior Secured First Lien Notes are secured by a first priority security interest in the same collateral that is pledged for the benefit of the lenders under the Revolving Credit Facility and existing senior secured notes, which collateral consists of a substantial portion of the property and assets owned by the Company and the guarantors. The collateral securing the 2033 Senior Secured First Lien Notes will be released at the Company’s request if the senior unsecured long-term debt securities of the Company are rated investment grade by any two of the three rating agencies, subject to reversion if such rating agencies withdraw such investment grade rating or downgrade such rating below investment grade. Interest is paid semi-annually beginning on September 15, 2023 until the maturity date of March 15, 2033. The proceeds of the 2033 Senior Secured First Lien Notes, along with cash on hand and other proceeds, were used to fund the acquisition of Vivint. 2048 Convertible Senior Notes As of March 31, 2023, the Convertible Senior Notes were convertible, under certain circumstances, into cash or a combination of cash and the Company’s common stock at a price of $43.01 per common share, which is equivalent to a conversion rate of approximately 23.2527 shares of common stock per $1,000 principal amount of Convertible Senior Notes. The net carrying amounts of the Convertible Senior Notes as of March 31, 2023 and December 31, 2022 were $571 million and $570 million, respectively. The Convertible Senior Notes mature on June 1, 2048, unless earlier repurchased, redeemed or converted in accordance with their terms. The Convertible Senior notes are convertible at the option of the holders under certain circumstances. Prior to the close of business on the business day immediately preceding December 1, 2024, the Convertible Senior Notes will be convertible only upon the occurrence of certain events and during certain periods, and thereafter during specified periods as follows: •from December 1, 2024 until the close of business on the second scheduled trading day immediately before June 1, 2025; and •from December 1, 2047 until the close of business on the second scheduled trading day immediately before the maturity date The following table details the interest expense recorded in connection with the Convertible Senior Notes, due 2048:
| Three months ended March 31, |  |
($ In millions) | 2023 |  | 2022 |  |  |  |
Contractual interest expense | $ | 4 |  |  | $ | 4 |  |  |  |  |
Amortization of discount and deferred finance costs | 1 |  |  | — |  |  |  |  |
Total | $ | 5 |  |  | $ | 4 |  |  |  |  |
Effective Interest Rate | 0.77 | % |  | 0.76 | % |  |  |  |
Revolving Credit Facility On February 14, 2023, the Company amended its Revolving Credit Facility to: (i) increase the existing revolving commitments thereunder by $600 million, (ii) extend the maturity date of a portion of the revolving commitments thereunder to February 14, 2028, (iii) transition the benchmark rate applicable to revolving loans from LIBOR to SOFR and (iv) make certain other amendments to the terms of the Revolving Credit Facility for purposes of, among other things, providing additional flexibility. For further discussion, see Note 13, Long-term Debt and Finance Leases, of the Company’s 2022 Form 10-K. On March 13, 2023, the Company amended its Revolving Credit Facility to, among other things, increase the existing revolving commitments by $45 million. As of March 31, 2023, there were outstanding borrowings of $725 million and there were $1.1 billion in letters of credit issued under the Revolving Credit Facility. As of April 30, 2023, there were outstanding borrowings of $650 million and $994 million in letters of credit issued under the Revolving Credit Facility. Dunkirk Bonds On April 3, 2023, NRG remarketed $59 million in aggregate principal amount of 4.25% tax-exempt refinancing bonds of the Chautauqua County Capital Resource Corporation (the "Dunkirk Bonds"). The Dunkirk Bonds are guaranteed on a first-priority basis by each of NRG's current and future subsidiaries that guarantee indebtedness under the Revolving Credit Facility. The Dunkirk Bonds are secured by a first priority security interest in the same collateral that is pledged for the benefit of the lenders under the Revolving Credit Facility, which consists of a substantial portion of the property and assets owned by NRG and the guarantors. The collateral securing the Dunkirk Bonds will, at the request of NRG, be released if NRG satisfies certain conditions, including receipt of an investment grade rating on its senior, unsecured debt securities from two out of the three rating agencies, subject to reversion if those rating agencies withdraw their investment grade rating of the Dunkirk Bonds or any of NRG's senior, unsecured debt securities or downgrade such ratings below investment grade. The Dunkirk Bonds are subject to mandatory tender and purchase on April 3, 2028 and have a final maturity date of April 1, 2042. Non-recourse Debt The following are descriptions of certain indebtedness of NRG's subsidiaries. All of NRG's non-recourse debt is secured by the assets in the subsidiaries as further described below. Vivint Acquired Debt On March 10, 2023, in connection with the Vivint acquisition, Vivint's wholly owned indirect subsidiary, APX Group, Inc. ("APX"), retained its 6.750% senior secured notes due 2027, 5.750% senior notes due 2029, senior secured term loan credit agreement and senior secured revolving credit facility. Vivint 2027 Senior Secured Notes As of March 31, 2023, Vivint had outstanding $600 million aggregate principal amount of 6.750% senior secured notes due 2027 (the "Vivint 2027 Senior Secured Notes"). The Vivint 2027 Senior Secured Notes are senior secured obligations of APX and are guaranteed by APX Group Holdings, Inc., each of APX's existing and future wholly owned U.S. restricted subsidiaries (subject to customary exclusions and qualifications) and Vivint. Interest on the Vivint 2027 Senior Secured Notes is paid semi-annually in arrears on February 15 and August 15 until the maturity date of February 15, 2027. Vivint 2029 Senior Notes As of March 31, 2023, Vivint had outstanding $800 million aggregate principal amount of 5.750% senior notes due 2029 (the "Vivint 2029 Senior Notes"). The Vivint 2029 Senior Notes are senior unsecured obligations of APX and are guaranteed by APX Group Holdings, Inc., each of APX's existing and future wholly owned U.S. restricted subsidiaries (subject to customary exclusions and qualifications) and Vivint. Interest on the Vivint 2029 Senior Notes is paid semi-annually in arrears on January 15 and July 15 until the maturity date of July 15, 2029. Vivint Senior Secured Credit Facilities The Vivint senior secured credit agreement (the “Vivint Credit Agreement”) provides for (i) a term loan facility in an aggregate principal amount of $1.4 billion (the “Vivint Term Loan Facility”, and the loans thereunder, the “Vivint Term Loans”) and (ii) a revolving credit facility in an aggregate principal amount of $370 million (the “Vivint Revolving Credit Facility,” and the loans thereunder, the “Vivint Revolving Loans”). All of APX’s obligations under the Vivint Credit Agreement are guaranteed by APX Group Holdings, Inc. and each of APX’s existing and future wholly-owned U.S. restricted subsidiaries (subject to customary exclusions and qualifications). The obligations under the Vivint Credit Agreement are secured by a first priority perfected security interest in (1) substantially all of the present and future tangible and intangible assets of APX, and the guarantors, including without limitation equipment, subscriber contracts and communication paths, intellectual property, general intangibles, investment property, material intercompany notes and proceeds of the foregoing, subject to permitted liens and other customary exceptions, (2) substantially all personal property of APX and the guarantors consisting of accounts receivable arising from the sale of inventory and other goods and services (including related contracts and contract rights, inventory, cash, deposit accounts, other bank accounts and securities accounts), inventory and intangible assets to the extent attached to the foregoing books and records of APX and the guarantors, and the proceeds thereof, subject to permitted liens and other customary exceptions, in each case held by APX and the guarantors and (3) a pledge of all of the capital stock of APX, each of its subsidiary guarantors and each restricted subsidiary of APX and its subsidiary guarantors, in each case other than excluded assets and subject to the limitations and exclusions provided in the applicable collateral documents. The Vivint Credit Agreement contains customary covenants, which, among other things, require APX to maintain a maximum first lien net leverage ratio when amounts outstanding under the Vivint Revolving Facility exceed a certain threshold and restrict, subject to certain exceptions, APX and its restricted subsidiaries’ ability to: •incur or guarantee additional debt or issue disqualified stock or preferred stock; •pay dividends and make other distributions on, or redeem or repurchase, capital stock; •make certain investments; •incur certain liens; •enter into transactions with affiliates; •merge or consolidate; •materially change the nature of their business; •enter into agreements that restrict the ability of restricted subsidiaries to make dividends or other payments to APX or grant liens on their assets; •designate restricted subsidiaries as unrestricted subsidiaries; •amend, prepay, redeem or purchase certain material contractually subordinated debt; and •transfer or sell certain assets. As of March 31, 2023, the aggregate outstanding principal amount of the Vivint Term Loans was $1.3 billion. As of March 31, 2023, Vivint had $11 million in letters of credit issued under the Vivint Revolving Credit Facility and there were no Vivint Revolving Loans outstanding. As of May 4, 2023, there were $10 million in letters of credit issued under the Vivint Revolving Credit Facility.

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