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Long-term Debt and Finance Leases (Tables) | 12 Months Ended
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Dec. 31, 2023
Debt Disclosure [Abstract] |
Long-term Debt and Finance Leases | Long-term debt and finance leases consisted of the following:
| As of December 31, |  |
(In millions, except rates) | 2023 |  | 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 | 480 |  |  | 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
Tax-exempt bonds | 466 |  |  | 466 |  |  | 1.250 - 4.750
Subtotal recourse debt | 8,220 |  |  | 8,100 |  |  |
Non-recourse debt: |  |  |  |  |
Vivint Smart Home Senior Notes, due 2029 | 800 |  |  | — |  |  | 5.750
Vivint Smart Home Senior Secured Notes, due 2027 | 600 |  |  | — |  |  | 6.750
Vivint Smart Home Senior Secured Term Loan, due 2028 | 1,320 |  |  | — |  |  | SOFR + 3.51
Subtotal all non-recourse debt | 2,720 |  |  | — |  |  |
Subtotal long-term debt (including current maturities) | 10,940 |  |  | 8,100 |  |  |
Finance leases | 19 |  |  | 11 |  |  | various
Subtotal long-term debt and finance leases (including current maturities) | 10,959 |  |  | 8,111 |  |  |
Less current maturities | (620) |  |  | (63) |  |  |
Less debt issuance costs | (60) |  |  | (70) |  |  |
Discounts | (146) |  |  | (2) |  |  |
Total long-term debt and finance leases | $ | 10,133 |  |  | $ | 7,976 |  |  |
(a)As of the ex-dividend date of January 31, 2024, the Convertible Senior Notes were convertible at a price of $41.53, which is equivalent to a conversion rate of approximately 24.0763 shares of common stock per $1,000 principal amount Debt includes the following discounts:
|  | As of December 31,
(In millions) |  | 2023 |  | 2022
Senior Secured First Lien Notes, due 2024, 2025, 2027, 2029 and 2033 |  | $ | (10) |  |  | $ | (2) |
Vivint Smart Home Senior Notes, due 2029 |  | (103) |  |  | — |
Vivint Smart Home Senior Secured Notes, due 2027 |  | (12) |  |  | — |
Vivint Smart Home Senior Secured Term Loan, due 2028 |  | (21) |  |  | — |
Total discounts |  | $ | (146) |  |  | $ | (2) |
Consolidated Annual Maturities As of December 31, 2023, annual payments based on the maturities of NRG's debt and finance leases are expected to be as follows:
| (In millions)
2024 | $ | 620 |
2025 | 769 |
2026 | 16 |
2027 | 1,890 |
2028 | 2,145 |
Thereafter | 5,519 |
Total | $ | 10,959 |
Recourse Debt Revolving Credit Facility On February 14, 2023 (the “Revolving Credit Facility Sixth Amendment Effective Date”), the Company amended its Revolving Credit Facility to: (i) increase the existing revolving commitments thereunder by $600 million (the “Initial Incremental Commitment”), (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. On March 13, 2023 (the “Revolving Credit Facility Seventh Amendment Effective Date”), the Company further amended its Revolving Credit Facility to increase the existing revolving commitments by an additional $45 million (together with the Initial Incremental Commitment, the "Incremental Commitment"). After giving effect to the Incremental Commitment, the Company had a total of $4.305 billion of revolving commitments available under the Revolving Credit Facility. The full amount of the Initial Incremental Commitment was made available from and after the Revolving Credit Facility Sixth Amendment Effective Date and the full amount of the Incremental Commitment was made available from and after the Revolving Credit Facility Seventh Amendment Effective Date. A portion of the non-extended revolving commitments terminated on July 5, 2023, with the remaining portion thereof terminating on May 28, 2024, unless otherwise extended. The Revolving Credit Facility is guaranteed by NRG’s existing and future direct and indirect subsidiaries, with customary and agreed-upon exceptions for, among other exceptions, unrestricted subsidiaries, foreign subsidiaries, project subsidiaries, immaterial subsidiaries, captive insurance subsidiaries and securitization vehicles. The Revolving Credit Facility is also secured by a first priority (subject to certain customary permitted liens) perfected security interest in a substantial portion of the property and assets owned by NRG and its subsidiaries that are guarantors under the Revolving Credit Facility, subject to certain exceptions that include, among other things, the capital stock of certain specified subsidiaries, including unrestricted subsidiaries and certain excluded subsidiaries, equity interests in excess of 66% of the total outstanding voting equity interests of certain foreign subsidiaries, equity interests the pledge of which is prohibited by applicable agreements binding on such subsidiaries and other assets that may be designated by NRG as excluded from the collateral that, when taken together with all other assets so designated since the Revolving Credit Facility Sixth Amendment Effective Date, have an aggregate fair market value not exceeding $750 million. The Revolving Credit Facility is secured on a pari passu basis with certain interest rate, foreign currency and commodity hedging obligations of NRG, the Senior Secured First Lien Notes and certain other indebtedness. The collateral securing the Revolving Credit Facility will be released at the Company's request if both the senior unsecured long-term debt securities of the Company and the revolving loans under the Revolving Credit Facility are rated investment grade by any two of the three rating agencies and the satisfaction of certain other conditions, subject to reversion if such rating agencies withdraw such investment grade rating or downgrade such rating below investment grade (or, with respect to the revolving loans, crease to publish a rating). The Revolving Credit Facility contains customary covenants, which, among other things, require NRG to maintain a maximum first lien leverage ratio on a consolidated basis when amounts outstanding under the Revolving Credit Facility (subject to certain exceptions) exceed a certain threshold and limit, subject to certain exceptions, NRG’s ability to: •incur indebtedness and liens and enter into sale and lease-back transactions; •make investments, loans and advances; •return capital to shareholders; •repay material subordinated indebtedness; •consummate mergers, consolidations and asset sales; •enter into affiliate transactions; and •change its fiscal year-end. As of December 31, 2023, there were no outstanding borrowings and there were $883 million in letters of credit issued under the Revolving Credit Facility. Senior Notes 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 that guarantee indebtedness under the Revolving Credit Facility. 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, 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 and the satisfaction of certain other conditions, 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 proceeds from certain other financings, were used to fund the acquisition of Vivint Smart Home. Senior Note Redemptions During the year ended December 31, 2023, the Company redeemed $620 million in aggregate principal amount of its 3.875% Senior Notes, due 2032, for $509 million, which included the payment of $7 million of accrued interest, using cash on hand at an average early redemption percentage of 81%. In connection with the redemption, a $109 million gain on debt extinguishment was recorded, which included the write-off of previously deferred financing costs and other fees of $9 million. During the year ended December 31, 2021, the Company redeemed approximately $1.9 billion in aggregate principal amount of its Senior Notes for $1.9 billion using the proceeds of the 2032 Senior Notes and cash on hand, as detailed in the table below. In connection with the redemptions, a $77 million loss on debt extinguishment was recorded, which included the write-off of previously deferred financing costs of $12 million.
(In millions, except percentages) | Principal Repurchased |  | Cash Paid(a) |  | Average Early Redemption Percentage
7.250% Senior Notes, due 2026 | $ | 1,000 |  |  | $ | 1,056 |  |  | 103.625 | %
6.625% Senior Notes, due 2027 | 855 |  |  | 893 |  |  | 103.313 | %
Total | $ | 1,855 |  |  | $ | 1,949 |  |  |
(a)Includes accrued interest of $29 million for redemptions for the year ended December 31, 2021 2048 Convertible Senior Notes Accounting for Convertible Senior Notes — Upon issuance in 2018, the Convertible Senior Notes were separated into liability and equity components for accounting purposes. The carrying amount of the liability component was initially calculated by measuring the fair value of similar liabilities that do not have an associated convertible feature. The carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability component from the par value of the Convertible Senior Notes. This difference represented the debt discount that was amortized to interest expense over seven years, which was determined to be the expected life of the Convertible Senior Notes, using the effective interest rate method. The equity component was recorded in additional paid-in capital and was not remeasured as it continued to meet the conditions for equity classification. Following the adoption of ASU 2020-06 as of January 1, 2022, the Company no longer records the conversion feature of its convertible senior notes in equity. Instead, the Company combined the previously separated equity component with the liability component, which together is now classified as debt, thereby eliminating the subsequent amortization of the debt discount as interest expense. As a result of the provisions of the amended guidance, the Company recorded a $100 million decrease to additional paid-in capital, a $57 million decrease to debt discount, a $57 million increase to retained earnings, and a $14 million decrease to long-term deferred tax liabilities. Modification to Convertible Senior Notes — On February 22, 2022, the Company irrevocably elected to eliminate the right to settle conversions only in shares of the Company's common stock, such that any conversion after such date, the Company will pay cash per $1,000 principal amount and will settle in cash or a combination of cash and the Company's common stock for the remainder, if any, of the Company’s conversion obligation in excess of the aggregate principal amount. Convertible Senior Notes Features — As of December 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 $41.83 per common share, which is equivalent to a conversion rate of approximately 23.9079 shares of common stock per $1,000 principal amount of Convertible Senior Notes. As of December 31, 2022, the Convertible Senior Notes were convertible at a price of $43.46 per common share, which is equivalent to a conversion rate of approximately 23.0116 shares of common stock per $1,000 principal amount of Convertible Senior Notes. The net carrying amounts of the Convertible Senior Notes as of December 31, 2023 and December 31, 2022 were $572 million and $570 million, respectively. The Convertible Senior Notes mature on June 1, 2048, unless earlier repurchased, redeemed or converted in accordance with their terms. The Convertible Senior Notes are convertible at the option of the holders under certain circumstances. Prior to the close of business on the business day immediately preceding December 1, 2024, the Convertible Senior Notes will be convertible only upon the occurrence of certain events and during certain periods, including, among others, during any calendar quarter (and only during such calendar quarter) if the last reported sales price per share of the Company's common stock exceeds 130% of the conversion price for each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter. Thereafter during specified periods as follows: •from December 1, 2024 until the close of business on the second scheduled trading day immediately before June 1, 2025; and •from December 1, 2047 until the close of business on the second scheduled trading day immediately before the maturity date All conversions with a conversion date that occurs within the specific periods above will be settled after such period pursuant to the terms of the indenture. The following table details the interest expense recorded in connection with the Convertible Senior Notes, due 2048:
| For the years ended December 31,
($ In millions) | 2023 |  | 2022 |  | 2021
Contractual interest expense | $ | 16 |  |  | $ | 16 |  |  | $ | 16 |
Amortization of discount and deferred finance costs(a) | 2 |  |  | 1 |  |  | 15 |
Total | $ | 18 |  |  | $ | 17 |  |  | $ | 31 |
Effective Interest Rate | 3.18 | % |  | 3.01 | % |  | 5.34 | %
(a)Upon adoption of ASU 2020-06 on January 1, 2022, which resulted in the removal of the debt discount, no further debt discount amortization is being recorded Senior Notes Early Redemption As of December 31, 2023, NRG had the following outstanding issuances of senior notes with an early redemption feature, or Senior Notes: i.6.625% senior notes, issued August 2, 2016 and due January 15, 2027, or the 2027 Senior Notes; ii.5.750% senior notes, issued December 7, 2017 and due January 15, 2028, or the 2028 Senior Notes; iii.5.250% senior notes, issued May 24, 2019 and due June 15, 2029, or the 2029 Senior Notes; iv.3.375% senior notes, issued December 2, 2020 and due February 15, 2029, or the 3.375% 2029 Senior Notes; v.3.625% senior notes, issued December 2, 2020 and due February 15, 2031, or the 2031 Senior Notes; and vi.3.875% senior notes, issued August 23, 2021 and due February 15, 2032, or the 2032 Senior Notes. The indentures and the forms of notes provide, among other things, that the Senior Notes will be senior unsecured obligations of the Company. The indentures also provide for customary events of default, which include, among others: nonpayment of principal or interest; breach of other agreements in the indentures; defaults in failure to pay certain other indebtedness; the rendering of judgments to pay certain amounts of money against the Company and its subsidiaries; the failure of certain guarantees to be enforceable; and certain events of bankruptcy or insolvency. Generally, if an event of default occurs, the trustee or the holders of at least 25% or 30% (depending on the series of Senior Notes) in principal amount of the then outstanding series of Senior Notes may declare all of the Senior Notes of such series to be due and payable immediately. The terms of the indentures, among other things, limit the Company's ability and certain of its subsidiaries' ability to return capital to stockholders, grant liens on assets to lenders and incur additional debt. Interest is payable semi-annually on the Senior Notes until their maturity dates. 2027 Senior Notes The Company may redeem some or all of the 2027 Senior Notes at redemption prices expressed as percentages of principal amount as set forth in the following table, plus accrued and unpaid interest on the notes redeemed to the first applicable redemption date:
Redemption Period | Redemption Percentage
July 15, 2023 to July 14, 2024 | 101.104 | %
July 15, 2024 and thereafter | 100.000 | %
2028 Senior Notes The Company may redeem some or all of the 2028 Senior Notes at redemption prices expressed as percentages of principal amount as set forth in the following table, plus accrued and unpaid interest on the notes redeemed to the first applicable redemption date:
Redemption Period | Redemption Percentage
January 15, 2024 to January 14, 2025 | 101.917 | %
January 15, 2025 to January 14, 2026 | 100.958 | %
January 15, 2026 and thereafter | 100.000 | %
5.250% 2029 Senior Notes At any time prior to June 15, 2024, the Company may redeem all or a part of the 5.250% 2029 Senior Notes, at a redemption price equal to 100% of the principal amount of the notes redeemed, plus accrued and unpaid interest to the redemption date, plus a premium. The premium is the greater of: (i) 1% of the principal amount of the notes; or (ii) the excess of the principal amount of the note over the following: the present value of 102.625% of the note, plus interest payments due on the note through June 15, 2024 (excluding accrued but unpaid interest to the redemption date), computed using a discount rate equal to the Treasury Rate as of such redemption date plus 0.50% over the principal amount of the note. In addition, on or after June 15, 2024, the Company may redeem some or all of the notes at redemption prices expressed as percentages of principal amount as set forth in the following table, plus accrued and unpaid interest on the notes redeemed to the first applicable redemption date:
Redemption Period | Redemption Percentage
June 15, 2024 to June 14, 2025 | 102.625 | %
June 15, 2025 to June 14, 2026 | 101.750 | %
June 15, 2026 to June 14, 2027 | 100.875 | %
June 15, 2027 and thereafter | 100.000 | %
3.375% 2029 Senior Notes On or after February 15, 2024, the Company may redeem some or all of the notes at redemption prices expressed as percentages of principal amount as set forth in the following table, plus accrued and unpaid interest on the notes redeemed to the first applicable redemption date:
Redemption Period | Redemption Percentage
February 15, 2024 to February 14, 2025 | 101.688 | %
February 15, 2025 to February 14, 2026 | 100.844 | %
February 15, 2026 and thereafter | 100.000 | %
2031 Senior Notes At any time prior to February 15, 2026, the Company may redeem all or a part of the 2031 Senior Notes, at a redemption price equal to 100% of the principal amount of the notes redeemed, plus accrued and unpaid interest to the redemption date, plus a premium. The premium is the greater of: (i) 1% of the principal amount of the note; or (ii) the excess of the present value of 101.813% of the note, plus interest payments due on the note through February 15, 2026 (excluding accrued but unpaid interest to the redemption date), computed using a discount rate equal to the Treasury Rate as of such redemption date plus 0.50% over the principal amount of the note. In addition, on or after February 15, 2026, the Company may redeem some or all of the notes at redemption prices expressed as percentages of principal amount as set forth in the following table, plus accrued and unpaid interest on the notes redeemed to the first applicable redemption date:
Redemption Period | Redemption Percentage
February 15, 2026 to February 14, 2027 | 101.813 | %
February 15, 2027 to February 14, 2028 | 101.208 | %
February 15, 2028 to February 14, 2029 | 100.604 | %
February 15, 2029 and thereafter | 100.000 | %
2032 Senior Notes At any time prior to August 15, 2024, the Company may redeem up to 40% of the aggregate principal amount of the 2032 Senior Notes, at a redemption price equal to 103.875% of the principal amount of the notes redeemed, plus accrued and unpaid interest, with an amount equal to the net cash proceeds of certain equity offerings, provided that at least 50% of the aggregate principal amount remains outstanding immediately after the occurrence of such redemption. At any time prior to February 15, 2027, the Company may redeem all or a part of the 2032 Senior Notes, at a redemption price equal to 100% of the principal amount of the notes redeemed, plus accrued and unpaid interest to the redemption date, plus a premium. The premium is the greater of: (i) 1% of the principal amount of the notes; or (ii) the excess of (A) the present value of (1) the redemption price of the note at February 15, 2027 (such redemption price being set forth in the table appearing below in the column “Redemption Percentage (If Sustainability Performance Target has not been satisfied and/or confirmed by External Verifier)” unless the Sustainability Performance Target has been satisfied in respect of the year ended December 31, 2025 and the Company has provided confirmation thereof to the trustee together with a related confirmation by the External Verifier by the date that is at least 15 days prior to August 15, 2026 in which case the redemption price shall be as set forth in the column “Redemption Percentage (If Sustainability Performance Target has been satisfied and confirmed by External Verifier)”) plus (2) interest payments due on the note through February 15, 2027 (excluding accrued but unpaid interest to the redemption date) computed using a discount rate equal to the Treasury Rate as of such redemption date plus 0.50%, over (B) the principal amount of the note. In addition, on or after February 15, 2027, the Company may redeem some or all of the notes at redemption prices expressed as percentages of principal amount as set forth in the following table during the twelve-month period beginning on February 15 of the years indicated below, plus accrued and unpaid interest on the notes redeemed to the first applicable redemption date:
Year | Redemption Percentage (If Sustainability Performance Target has been satisfied and confirmed by External Verifier) |  | Redemption Percentage (If Sustainability Performance Target has not been satisfied and/or confirmed by External Verifier)
2027 | 101.938 | % |  | 102.188 | %
2028 | 101.292 | % |  | 101.458 | %
2029 | 100.646 | % |  | 100.729 | %
2030 and thereafter | 100.000 | % |  | 100.000 | %
Receivables Facility In 2020, NRG Receivables LLC, a bankruptcy remote, special purpose, indirect wholly owned subsidiary, ("NRG Receivables") entered into the Receivables Facility, subject to adjustments on a seasonal basis, with issuers of asset-backed commercial paper and commercial banks (the "Lenders"). The assets of NRG Receivables are first available to satisfy the claims of the Lenders before making payments on the subordinated note and equity issued by NRG Receivables. The assets of NRG Receivables are not available to the Company and its subsidiaries or creditors unless and until distributed by NRG Receivables. Under the Receivables Facility, certain indirect subsidiaries of the Company sell their accounts receivables to NRG Receivables, subject to certain terms and conditions. In turn, NRG Receivables grants a security interest in the purchased receivables to the Lenders as collateral for cash borrowings and issuances of letters of credit. Pursuant to the Performance Guaranty, the Company has guaranteed, for the benefit of NRG Receivables and the Lenders, the payment and performance by each indirect subsidiary of its respective obligations under the Receivables Facility. The accounts receivables remain on the Company's consolidated balance sheet and any amounts funded by the Lenders to NRG Receivables will be reflected as short-term borrowings. Cash flows from the Receivables Facility are reflected as financing activities in the Company's consolidated statements of cash flows. The Company continues to service the accounts receivables sold in exchange for a servicing fee. On June 22, 2023, NRG Receivables amended its existing Receivables Facility to, among other things, (i) extend the scheduled termination date to June 21, 2024, (ii) increase the aggregate commitments from $1.0 billion to $1.4 billion (adjusted seasonally) and (iii) add a new originator. On October 6, 2023, the Receivables Facility was further amended to replace the benchmark interest rate of the Receivable Facility's subordinated note from LIBOR to SOFR. The weighted average interest rate related to usage under the Receivables Facility as of December 31, 2023 was 0.841%. As of December 31, 2023, there were no outstanding borrowings and there were $1.0 billion in letters of credit issued under the Receivables Facility. Repurchase Facility In 2020, the Company entered into the Repurchase Facility related to the Receivables Facility. Under the Repurchase Facility, the Company can currently borrow up to $150 million, collateralized by a subordinated note issued by NRG Receivables to NRG Retail LLC in favor of the originating entities representing a portion of the balance of receivables sold to NRG Receivables under the Receivables Facility. In addition, in connection with the amendments to the Receivables Facility, on June 22, 2023, the Company and the originators thereunder renewed the existing uncommitted Repurchase Facility. Such renewal, among other things, extended the maturity date to June 21, 2024 and joined an additional originator to the Repurchase Facility. On October 6, 2023, the Repurchase Facility was further amended to reflect the concurrent amendment to the Receivables Facility's subordinated note. The Repurchase Facility has no commitment fee and borrowings will be drawn at SOFR + 1.55%. As of December 31, 2023, there were no outstanding borrowings under the Repurchase Facility. Bilateral Letter of Credit Facilities On May 19, 2023, May 30, 2023 and October 17, 2023 the Company increased the size of its bilateral letter of credit facilities by $25 million, $100 million and $50 million, respectively, to provide additional liquidity and to allow for the issuance of up to $850 million of letters of credit. These facilities are uncommitted. As of December 31, 2023, $671 million was issued under these facilities. Tax Exempt Bonds
|  | As of December 31, |  |
(In millions, except rates) |  | 2023 |  | 2022 |  | Interest Rate %
NRG Indian River Power 2020, tax exempt bonds, due 2040 |  | $ | 57 |  |  | $ | 57 |  |  | 1.250 |
NRG Indian River Power 2020, tax exempt bonds, due 2045 |  | 190 |  |  | 190 |  |  | 1.250 |
NRG Dunkirk 2020, tax exempt bonds, due 2042 |  | 59 |  |  | 59 |  |  | 4.250 |
City of Texas City, tax exempt bonds, due 2045 |  | 33 |  |  | 33 |  |  | 4.125 |
Fort Bend County, tax exempt bonds, due 2038 |  | 54 |  |  | 54 |  |  | 4.750 |
Fort Bend County, tax exempt bonds, due 2042 |  | 73 |  |  | 73 |  |  | 4.750 |
Total |  | $ | 466 |  |  | $ | 466 |  |  |
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. Pre-Capitalized Trust Securities Facility On August 29, 2023, the Company entered into a Facility Agreement (as defined below) with Alexander Funding Trust II, a newly-formed Delaware statutory trust (the “Trust”), in connection with the sale by the Trust of $500 million pre-capitalized trust securities redeemable July 31, 2028 (the “P-Caps”). The Trust invested the proceeds from the sale of the P-Caps in a portfolio of principal and interest strips of U.S. Treasury securities (the “Eligible Treasury Assets”). The P-Caps replaced the Company’s existing pre-capitalized trust securities redeemable 2023 issued by Alexander Funding Trust, which matured on November 15, 2023. In connection with the sale of the P-Caps, the Company and the guarantors named therein entered into a facility agreement, dated August 29, 2023 (the “Facility Agreement”), with the Trust and Deutsche Bank Trust Company Americas, as notes trustee (the “Notes Trustee”). Under the Facility Agreement, the Company has the right, from time to time, to issue to the Trust, and to require the Trust to purchase from the Company, on one or more occasions (the “Issuance Right”), up to $500 million aggregate principal amount of the Company’s 7.467% Senior Secured First Lien Notes due 2028 (the “P-Caps Secured Notes”) in exchange for all or a portion of the Eligible Treasury Assets corresponding to the portion of the Issuance Right under the Facility Agreement being exercised at such time. The Company pays to the Trust a facility fee equal to 3.13427% applied to the unexercised portion of the Issuance Right on a semi-annual basis. The P-Caps are to be redeemed by the Trust on July 31, 2028 or earlier upon an early redemption of the P-Caps Secured Notes. Following any distribution of P-Caps Secured Notes to the holders of the P-Caps, the Company may similarly redeem such P-Caps Secured Notes, in whole or in part, at the redemption price described in the P-Caps Indenture (as defined below), plus accrued but unpaid interest to, but excluding, the date of redemption. Any P-Caps Secured Notes outstanding and held by the Trust as a result of the exercise of the Issuance Right that remain outstanding will also mature on July 31, 2028. The Issuance Right will be exercised automatically in full if (i) the Company fails to pay the facility fee when due or any amount due and owing under the trust expense reimbursement agreement or fails to purchase and pay for any Eligible Treasury Assets that are due and not paid on their payment date and such failure is not cured within 30 days or (ii) upon certain bankruptcy events of the Company. The Company will be required to mandatorily exercise the Issuance Right if certain mandatory exercise events occur upon the terms and conditions set forth in the Facility Agreement. The P-Caps Secured Notes that may be sold to the Trust from time to time will be governed by the base indenture, dated August 29, 2023 (the “Base Indenture”), between the Company and the Notes Trustee, as supplemented by the supplemental indenture, dated August 29, 2023 (the “Supplemental Indenture” and, together with the Base Indenture, the “P-Caps Indenture”), among the Company, the guarantors named therein and the Notes Trustee. The P-Caps Secured Notes will, if sold to the Trust, be guaranteed on a first-priority basis by each of the Company’s subsidiaries that guarantee indebtedness under the Revolving Credit Facility. The P-Caps Secured Notes will, if sold to the Trust, be 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 the Company and the guarantors. The collateral securing the P-Caps Secured 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 downgrade such rating below investment grade or withdraw such investment grade rating. In connection with the issuance of the P-Caps, on August 29, 2023, the Company entered into a letter of credit facility agreement (the “LC Agreement”) with Deutsche Bank Trust Company Americas, as collateral agent (the “Collateral Agent”) and administrative agent, and certain financial institutions (the “LC Issuers”) for the issuance of letters of credit in an aggregate amount not to exceed $485 million. The LC Agreement replaced the Company’s existing letter of credit facility agreement, effective August 29, 2023. In addition, on August 29, 2023, the Trust entered into a pledge and control agreement (the “Pledge Agreement”), among the Company, the Trust and the Collateral Agent, under which the Company and the Trust agreed to grant a security interest over the Eligible Treasury Assets in favor of the Collateral Agent for the benefit of the LC Issuers. Pursuant to the LC Agreement and the Pledge Agreement, the Collateral Agent is entitled to withdraw Eligible Treasury Assets in the amount of any drawn letters of credit issued pursuant to the LC Agreement from the Company's and the Trust’s pledged accounts, following notice to the Company, in the event the Company has failed to reimburse such drawn amounts and the LC Issuers have the right to instruct the Collateral Agent to enforce the pledge over the Eligible Treasury Assets upon the occurrence of any event of default under the LC Agreement. 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. Acquired Vivint Smart Home Debt On March 10, 2023, in connection with the Vivint Smart Home acquisition, Vivint Smart Home's indirect wholly owned 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 Smart Home 2027 Senior Secured Notes Vivint Smart Home has outstanding $600 million aggregate principal amount of 6.750% senior secured notes due 2027 (the "Vivint Smart Home 2027 Senior Secured Notes"). The Vivint Smart Home 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 Smart Home. Interest on the Vivint Smart Home 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 Smart Home 2029 Senior Notes Vivint Smart Home has outstanding $800 million aggregate principal amount of 5.750% senior notes due 2029 (the "Vivint Smart Home 2029 Senior Notes"). The Vivint Smart Home 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 Smart Home. Interest on the Vivint Smart Home 2029 Senior Notes is paid semi-annually in arrears on January 15 and July 15 until the maturity date of July 15, 2029. Vivint Smart Home Senior Secured Credit Facilities The Vivint Smart Home senior secured credit agreement (the “Vivint Smart Home Credit Agreement”) provides for (i) a term loan facility in an initial aggregate principal amount of $1.4 billion (the “Vivint Smart Home Term Loan Facility”, and the loans thereunder, the “Vivint Smart Home Term Loans”) and (ii) a revolving credit facility in an initial aggregate principal amount of $370 million (the “Vivint Smart Home Revolving Credit Facility,” and the loans thereunder, the “Vivint Smart Home Revolving Loans”). All of APX’s obligations under the Vivint Smart Home 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 Smart Home Credit Agreement are secured by a first priority (subject to certain customary permitted liens) perfected security interest in (i) 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, (ii) 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 (iii) 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 (subject to customary exclusions and qualifications), in each case other than certain excluded assets and subject to the limitations and exclusions provided in the applicable collateral documents. The Vivint Smart Home 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 Smart Home 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. On June 9, 2023, Vivint Smart Home entered into an amendment to the Vivint Smart Home Credit Agreement which transitioned the benchmark rate applicable to the Vivint Smart Home Term Loans and the Vivint Smart Home Revolving Loans from LIBOR to SOFR. As of December 31, 2023, the aggregate outstanding principal amount of the Vivint Term Loans was $1.3 billion. As of December 31, 2023, Vivint Smart Home had no outstanding borrowings under the Vivint Smart Home Revolving Credit Facility. Vivint Smart Home Notes Early Redemption 2027 Senior Secured Notes APX may redeem some or all of the 2027 Senior Secured Notes at redemption prices expressed as percentages of principal amount as set forth in the following table, plus accrued and unpaid interest on the notes redeemed to the first applicable redemption date:
Redemption Period | Redemption Percentage
February 15, 2024 to February 14, 2025 | 101.688 | %
February 15, 2025 and thereafter | 100.000 | %
2029 Senior Notes At any time prior to July 15, 2024 and from time to time, APX may redeem the notes in whole or in part, at a redemption price equal to 100% of the principal amount of the notes redeemed, plus accrued and unpaid interest to the redemption date, plus a premium. The premium is the greater of: (i) 1% of the principal amount of the note; and (ii) the excess , if any, of (a) the present value at such redemption date of (i) the redemption price of such note at July 15, 2024, plus (ii) interest payments due on the note through July 15, 2024 (excluding accrued but unpaid interest to the redemption date), computed using a discount rate equal to the Treasury Rate as of such redemption date plus 0.50% over the then outstanding principal amount of such note. In addition, on or after July 15, 2024, APX may redeem some or all of the notes at redemption prices expressed as percentages of principal amount as set forth in the following table, plus accrued and unpaid interest on the notes redeemed to the first applicable redemption date:
Redemption Period | Redemption Percentage
July 15, 2024 to July 14, 2025 | 102.875 | %
July 15, 2025 to July 14, 2026 | 101.438 | %
July 15, 2026 and thereafter | 100.100 | %
Annual Payments Based On the Maturities of NRG's Debt | As of December 31, 2023, annual payments based on the maturities of NRG's debt and finance leases are expected to be as follows:
| (In millions)
2024 | $ | 620 |
2025 | 769 |
2026 | 16 |
2027 | 1,890 |
2028 | 2,145 |
Thereafter | 5,519 |
Total | $ | 10,959 |
Senior Note Redemptions |
(In millions, except percentages) | Principal Repurchased |  | Cash Paid(a) |  | Average Early Redemption Percentage
7.250% Senior Notes, due 2026 | $ | 1,000 |  |  | $ | 1,056 |  |  | 103.625 | %
6.625% Senior Notes, due 2027 | 855 |  |  | 893 |  |  | 103.313 | %
Total | $ | 1,855 |  |  | $ | 1,949 |  |  |
(a)Includes accrued interest of $29 million for redemptions for the year ended December 31, 2021 The Company may redeem some or all of the 2027 Senior Notes at redemption prices expressed as percentages of principal amount as set forth in the following table, plus accrued and unpaid interest on the notes redeemed to the first applicable redemption date:
Redemption Period | Redemption Percentage
July 15, 2023 to July 14, 2024 | 101.104 | %
July 15, 2024 and thereafter | 100.000 | %
The Company may redeem some or all of the 2028 Senior Notes at redemption prices expressed as percentages of principal amount as set forth in the following table, plus accrued and unpaid interest on the notes redeemed to the first applicable redemption date:
Redemption Period | Redemption Percentage
January 15, 2024 to January 14, 2025 | 101.917 | %
January 15, 2025 to January 14, 2026 | 100.958 | %
January 15, 2026 and thereafter | 100.000 | %
In addition, on or after June 15, 2024, the Company may redeem some or all of the notes at redemption prices expressed as percentages of principal amount as set forth in the following table, plus accrued and unpaid interest on the notes redeemed to the first applicable redemption date:
Redemption Period | Redemption Percentage
June 15, 2024 to June 14, 2025 | 102.625 | %
June 15, 2025 to June 14, 2026 | 101.750 | %
June 15, 2026 to June 14, 2027 | 100.875 | %
June 15, 2027 and thereafter | 100.000 | %
On or after February 15, 2024, the Company may redeem some or all of the notes at redemption prices expressed as percentages of principal amount as set forth in the following table, plus accrued and unpaid interest on the notes redeemed to the first applicable redemption date:
Redemption Period | Redemption Percentage
February 15, 2024 to February 14, 2025 | 101.688 | %
February 15, 2025 to February 14, 2026 | 100.844 | %
February 15, 2026 and thereafter | 100.000 | %
In addition, on or after February 15, 2026, the Company may redeem some or all of the notes at redemption prices expressed as percentages of principal amount as set forth in the following table, plus accrued and unpaid interest on the notes redeemed to the first applicable redemption date:
Redemption Period | Redemption Percentage
February 15, 2026 to February 14, 2027 | 101.813 | %
February 15, 2027 to February 14, 2028 | 101.208 | %
February 15, 2028 to February 14, 2029 | 100.604 | %
February 15, 2029 and thereafter | 100.000 | %
In addition, on or after February 15, 2027, the Company may redeem some or all of the notes at redemption prices expressed as percentages of principal amount as set forth in the following table during the twelve-month period beginning on February 15 of the years indicated below, plus accrued and unpaid interest on the notes redeemed to the first applicable redemption date:
Year | Redemption Percentage (If Sustainability Performance Target has been satisfied and confirmed by External Verifier) |  | Redemption Percentage (If Sustainability Performance Target has not been satisfied and/or confirmed by External Verifier)
2027 | 101.938 | % |  | 102.188 | %
2028 | 101.292 | % |  | 101.458 | %
2029 | 100.646 | % |  | 100.729 | %
2030 and thereafter | 100.000 | % |  | 100.000 | %
APX may redeem some or all of the 2027 Senior Secured Notes at redemption prices expressed as percentages of principal amount as set forth in the following table, plus accrued and unpaid interest on the notes redeemed to the first applicable redemption date:
Redemption Period | Redemption Percentage
February 15, 2024 to February 14, 2025 | 101.688 | %
February 15, 2025 and thereafter | 100.000 | %
In addition, on or after July 15, 2024, APX may redeem some or all of the notes at redemption prices expressed as percentages of principal amount as set forth in the following table, plus accrued and unpaid interest on the notes redeemed to the first applicable redemption date:
Redemption Period | Redemption Percentage
July 15, 2024 to July 14, 2025 | 102.875 | %
July 15, 2025 to July 14, 2026 | 101.438 | %
July 15, 2026 and thereafter | 100.100 | %
Schedule of Interest Expense, Convertible Senior Notes | The following table details the interest expense recorded in connection with the Convertible Senior Notes, due 2048:
| For the years ended December 31,
($ In millions) | 2023 |  | 2022 |  | 2021
Contractual interest expense | $ | 16 |  |  | $ | 16 |  |  | $ | 16 |
Amortization of discount and deferred finance costs(a) | 2 |  |  | 1 |  |  | 15 |
Total | $ | 18 |  |  | $ | 17 |  |  | $ | 31 |
Effective Interest Rate | 3.18 | % |  | 3.01 | % |  | 5.34 | %
(a)Upon adoption of ASU 2020-06 on January 1, 2022, which resulted in the removal of the debt discount, no further debt discount amortization is being recorded
Schedule of Tax Exempt Bonds | Tax Exempt Bonds
|  | As of December 31, |  |
(In millions, except rates) |  | 2023 |  | 2022 |  | Interest Rate %
NRG Indian River Power 2020, tax exempt bonds, due 2040 |  | $ | 57 |  |  | $ | 57 |  |  | 1.250 |
NRG Indian River Power 2020, tax exempt bonds, due 2045 |  | 190 |  |  | 190 |  |  | 1.250 |
NRG Dunkirk 2020, tax exempt bonds, due 2042 |  | 59 |  |  | 59 |  |  | 4.250 |
City of Texas City, tax exempt bonds, due 2045 |  | 33 |  |  | 33 |  |  | 4.125 |
Fort Bend County, tax exempt bonds, due 2038 |  | 54 |  |  | 54 |  |  | 4.750 |
Fort Bend County, tax exempt bonds, due 2042 |  | 73 |  |  | 73 |  |  | 4.750 |
Total |  | $ | 466 |  |  | $ | 466 |  |  |

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