Long-Term Debt

12 Months Ended

Dec. 31, 2018

24. LONG-TERM DEBT

Bonds, notes and debentures are at fixed interest rates and are unsecured unless noted below. Included are certain bankers’ acceptances and commercial paper where the Company has the intention and the unencumbered ability to refinance the obligations for a period greater than one year.

Long-term debt as at December 31, 2018, consisted of the following:

	Weighted average interest rate (1)
millions of Canadian dollars	2018	2017	Maturity	2018		2017
Emera
Bankers acceptances, LIBOR loans	Variable	Variable	2020	$	339	$	133
Unsecured fixed rate notes	3.50%	3.50%	2019-2023		725		725
Fixed to floating subordinated notes (USD)	6.75%	6.75%	2076		1,637		1,505
				$	2,701	$	2,363
Emera US Finance LP
Unsecured senior notes (USD)	3.60%	3.60%	2019 - 2046	$	4,434	$	4,077
TECO Finance (2)
Variable rate notes (USD)		Variable	2018	$	-	$	314
Fixed rate notes and bonds (USD)	5.15%	5.15%	2020		409		376
				$	409	$	690
Tampa Electric (3)
Fixed rate notes and bonds (USD)	4.64%	4.75%	2021 - 2049	$	3,126	$	2,410
PGS
Fixed rate notes and bonds (USD)	4.66%	5.06%	2021 - 2049	$	425	$	328
NMGC
Fixed rate notes and bonds (USD)	4.53%	4.53%	2021 - 2026	$	368	$	339
NMGI
Fixed rate notes and bonds (USD)	3.41%	3.41%	2019 - 2024	$	273	$	251
NSPI
Discount notes	Variable	Variable	2023	$	516	$	364
Medium term fixed rate notes	5.73%	5.73%	2025 - 2097		1,965		1,965
Fixed rate debenture	9.75%	9.75%	2019		95		95
				$	2,576	$	2,424
Emera Maine
LIBOR loans and demand loans	Variable	Variable	2023	$	28	$	51
Secured fixed rate mortgage bonds (USD)	9.74%	9.74%	2020-2022		68		63
Unsecured senior fixed rate notes (USD)	4.23%	4.15%	2022 -2048		382		294
				$	478	$	408
EBP
Senior secured credit facility	3.08%	3.08%	2022	$	248	$	248
GBPC
Amortizing fixed rate notes (USD)	3.83%	3.77%	2021-2022	$	114	$	78
Senior notes (USD)	7.07%	7.07%	2020-2023		68		88
				$	182	$	166
ICDU
Fixed rate note (USD)	4.00%	-	2023	$	24	$	-
BLPC & ECI
Secured senior notes (USD)	Variable	Variable	2021		159		168
Secured fixed rate senior notes (4)	4.74%	5.06%	2020 - 2035	$	99	$	76
				$	258	$	244
Adjustments
Fair market value adjustment - TECO Energy acquisition (5)				$	22	$	31
Debt issuance costs					(113)		(98)
Amount due within one year					(1,119)		(741)
				$	(1,210)	$	(808)
Long-Term Debt				$	14,292	$	13,140
(1) Weighted average interest rate of fixed rate long-term debt.
(2) TECO Energy is a full and unconditional guarantor of TECO Finance’s securities, and no subsidiaries of TECO Energy guarantee TECO Finance’s securities.
(3) A substantial part of Tampa Electric’s tangible assets are pledged as collateral to secure its first mortgage bonds. There are currently no bonds outstanding under Tampa Electric’s first mortgage bond indenture.
(4) Notes are issued and payable in either USD, BBD or East Caribbean Dollar (XCD).
(5) On acquisition of TECO Energy, Emera recorded a fair market value adjustment on the unregulated long-term debt acquired. The fair market value adjustment is amortized over the remaining term of the debt.

The Company’s total long-term revolving credit facilities, outstanding borrowings and available capacity as at December 31 were as follows:

millions of Canadian dollars	Maturity		2018		2017
Emera – revolving credit facility (1)	June 2020	$	900	$	900
NSPI - revolving credit facility (1)	October 2023		600		600
Emera Maine – revolving credit facility	February 2023		109		100
BLPC – revolving credit facility	2021 - 2022		26		24
Total			1,635		1,624
Less:
Borrowings under credit facilities			899		598
Letters of credit issued inside credit facilities			77		44
Use of available facilities			976		642
Available capacity under existing agreements		$	659	$	982
(1) Advances on the revolving credit facility can be made by way of overdraft on accounts up to $50 million.

Debt Covenants

Emera and its subsidiaries have debt covenants associated with their credit facilities. Covenants are tested regularly and the Company is in compliance with covenant requirements. Emera’s significant covenants are listed below:

			As at
	Financial Covenant	Requirement	December 31, 2018
Emera
Syndicated credit facilities	Debt to capital ratio	Less than or equal to 0.70 to 1	0.60 : 1

Recent Financing Activity

Emera

On May 16, 2018, Emera filed a $750 million debt and preferred equity shelf prospectus, providing the Company with access to raise long-term debt and preferred equity. On May 31, 2018, preferred shares were issued under this base shelf prospectus for gross proceeds of $300 million (refer to note 27). As at December 31, 2018 the Company has $450 million available for issuance under this prospectus, which expires on June 16, 2020.

Emera Florida and New Mexico

On October 4, 2018, TEC completed a $375 million USD 30-year senior notes issuance. The notes bear interest at a rate of 4.45 per cent and have a maturity date of June 15, 2049. Proceeds from this issuance were used to repay a $300 million USD 1-year term credit facility. Refer to note 22.

On June 7, 2018, TEC completed a $350 million USD 30-year senior notes issuance. The notes bear interest at a rate of 4.30 per cent and maturity date of June 15, 2048.

On April 10, 2018, TECO Energy/Finance repaid a $250 million USD note upon maturity. The note was repaid using funds from existing credit facilities and cash on hand.

NSPI

On October 31, 2018, NSPI amended its operating credit facility to extend the maturity from October 2021 to October 2023. There were no other changes in commercial terms.

Emera Maine

On November 15, 2018, Emera Maine completed a $50 million USD 30-year senior notes issuance. The notes bear interest at a rate of 4.71 per cent and will mature on November 15, 2048. Proceeds from this issuance were used for general corporate purposes.

On February 28, 2018, Emera Maine extended the maturity date of its $80 million USD operating credit facility from September 25, 2019 to February 28, 2023. There were no other changes in commercial terms.

ECI

On January 12, 2018, a wholly owned indirect subsidiary of ECI entered into a five year $18 million Bahamian dollar loan agreement with an interest rate of 4.00 per cent and maturity date of January 12, 2023.

EBP

On October 31, 2018, Emera Brunswick Pipeline amended its Credit Agreement to extend the maturity from February 2021 to February 2022. There were no other changes in commercial terms.

Long-Term Debt Maturities

As at December 31, long-term debt maturities, including capital lease obligations, for each of the next five years and in aggregate thereafter are as follows:

millions of Canadian dollars		2019		2020		2021		2022		2023		Thereafter		Total
Emera	$	225	$	339	$	-	$	-	$	500	$	1,637	$	2,701
Emera US Finance LP		682		-		1,023		-		-		2,729		4,434
TECO Finance		-		409		-		-		-		-		409
Tampa Electric		-		-		315		307		-		2,504		3,126
PGS		-		-		64		34		-		327		425
NMGC		-		-		273		-		-		95		368
NMGI		69		-		-		-		-		204		273
NSPI		95		-		-		-		516		1,965		2,576
Emera Maine		-		41		-		123		28		286		478
EBP		-		-		-		248		-		-		248
GBPC		17		50		37		33		45		-		182
ICDU		-		-		-		-		24		-		24
BLPC & ECI		31		59		30		13		25		100		258
Total	$	1,119	$	898	$	1,742	$	758	$	1,138	$	9,847	$	15,502