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Debt | 12 Months Ended
--- | ---
Dec. 31, 2013
Debt Disclosure [Abstract] |
DEBT | DEBT Non-Recourse Debt The following table summarizes the carrying amount and terms of non-recourse debt as of December 31, 2013 and 2012:
NON-RECOURSE DEBT | Weighted Average Interest Rate |  | Maturity |  | December 31, |
2013 |  | 2012 |
|  |  |  |  | (in millions) |
VARIABLE RATE:(1) |  |  |  |  |  |  |  |
Bank loans | 3.30 | % |  | 2014 – 2029 |  | $ | 2,783 |  |  | $ | 3,556 |  |
Notes and bonds | 10.51 | % |  | 2014 – 2040 |  | 1,845 |  |  | 1,887 |  |
Debt to (or guaranteed by) multilateral, export credit agencies or development banks(2) | 2.46 | % |  | 2014 – 2034 |  | 2,446 |  |  | 1,711 |  |
Other | 4.62 | % |  | 2014 – 2043 |  | 349 |  |  | 349 |  |
FIXED RATE: |  |  |  |  |  |  |  |
Bank loans | 5.06 | % |  | 2014 – 2023 |  | 477 |  |  | 209 |  |
Notes and bonds | 6.25 | % |  | 2014 – 2073 |  | 7,164 |  |  | 6,448 |  |
Debt to (or guaranteed by) multilateral, export credit agencies or development banks(2) | 4.65 | % |  | 2014 – 2027 |  | 164 |  |  | 411 |  |
Other | 6.55 | % |  | 2014 – 2061 |  | 152 |  |  | 188 |  |
SUBTOTAL |  |  |  |  | 15,380 |  | (3) | 14,759 |  | (3)
Less: Current maturities |  |  |  |  | (2,062 | ) |  | (2,494 | ) |
TOTAL |  |  |  |  | $ | 13,318 |  |  | $ | 12,265 |  |
(1) | The interest rate on variable rate debt represents the total of a variable component that is based on changes in an interest rate index and of a fixed component. The Company has interest rate swaps and option agreements in an aggregate notional principal amount of approximately $3.6 billion on non-recourse debt outstanding at December 31, 2013. These agreements economically fix the variable component of the interest rates on the portion of the variable-rate debt being hedged so that the total interest rate on that debt has been fixed at rates ranging from approximately 4.09% to 8.98% and 5.85% to 8.75% for swaps and options, respectively. These agreements expire at various dates from 2014 through 2030.
(2) | Multilateral loans include loans funded and guaranteed by bilaterals, multilaterals, development banks and other similar institutions.
(3) | Non-recourse debt of $658 million as of December 31, 2013 was excluded from non-recourse debt and included in current and noncurrent liabilities of held for sale and discontinued businesses in the accompanying Consolidated Balance Sheets. There were no amounts excluded in 2012.
Non-recourse debt as of December 31, 2013 is scheduled to reach maturity as set forth in the table below:
December 31, | Annual Maturities
| (in millions)
2014 | $ | 2,062 |
2015 | 692 |
2016 | 2,422 |
2017 | 792 |
2018 | 1,444 |
Thereafter | 7,968 |
Total non-recourse debt | $ | 15,380 |
As of December 31, 2013, AES subsidiaries with facilities under construction had a total of approximately $2.9 billion of committed but unused credit facilities available to fund construction and other related costs. Excluding these facilities under construction, AES subsidiaries had approximately $1.4 billion in a number of available but unused committed credit lines to support their working capital, debt service reserves and other business needs. These credit lines can be used for borrowings, letters of credit, or a combination of these uses. Significant transactions During the year ended December 31, 2013, we had the following significant debt transactions at our subsidiaries:
• | Tietê issued new debt of $496 million partially offset by repayments of $396 million;
• | El Salvador issued new debt of $310 million partially offset by repayments of $301 million;
• | Sul issued new debt of $153 million partially offset by repayments of $44 million;
• | Mong Duong drew $471 million under its construction loan facility;
• | DPL terminated its $425 million term loan and replaced it with a new $200 million term loan, and had additional repayments of $53 million;
• | DP&L issued $445 million of first mortgage bonds to partially repay $470 million of existing bonds which were repaid at par on October 1, 2013;
• | IPL issued new debt of $170 million partially offset by repayments of $110 million;
• | Masinloc refinanced its senior debt facility of $500 million and incurred a loss on extinguishment of debt of $43 million. See Note 20—Other Income and Expense for further information;
• | Jordan drew $180 million under its construction loan facility;
• | Cochrane drew $210 million under its construction loan facility;
• | Gener issued $450 million of junior subordinated capital notes to pay Gener's outstanding notes due March 2014 and development of new projects, among other purposes; and
• | Changuinola issued new debt of $420 million partially offset by repayments of $412 million.
Non-Recourse Debt Covenants, Restrictions and Defaults The terms of the Company’s non-recourse debt include certain financial and non-financial covenants. These covenants are limited to subsidiary activity and vary among the subsidiaries. These covenants may include but are not limited to maintenance of certain reserves, minimum levels of working capital and limitations on incurring additional indebtedness. As of December 31, 2013 and 2012, approximately $492 million and $560 million, respectively, of restricted cash was maintained in accordance with certain covenants of the non-recourse debt agreements, and these amounts were included within “Restricted cash” and “Debt service reserves and other deposits” in the accompanying Consolidated Balance Sheets. Various lender and governmental provisions restrict the ability of certain of the Company’s subsidiaries to transfer their net assets to the Parent Company. Such restricted net assets of subsidiaries amounted to approximately $2.2 billion at December 31, 2013. The following table summarizes the Company’s subsidiary non-recourse debt in default or accelerated as of December 31, 2013 and is included in the current portion of non-recourse debt:
| Primary Nature of Default |  | December 31, 2013
Subsidiary | Default |  | Net Assets
|  |  | (in millions)
Maritza | Covenant |  | $ | 850 |  |  | $ | 714 |
Kavarna | Covenant |  | 205 |  |  | 90 |
Total |  |  | $ | 1,055 |  |  |
In addition to the defaults listed in the table above, Sonel and Kribi in Cameroon and Saurashtra in India have been classified as discontinued operations. As of December 31, 2013, Sonel, Kribi, and Saurashtra had debt in default of $257 million, $247 million and $21 million; and net assets of $387 million, $3 million and $2 million, respectively. For further information please see Note 23 — Discontinued Operations and Held-for-Sale Businesses. The defaults are not payment defaults, but are instead technical defaults triggered by failure to comply with other covenants and/or other conditions such as (but not limited to) failure to meet information covenants, complete construction or other milestones in an allocated time, meet certain minimum or maximum financial ratios, or other requirements contained in the non-recourse debt documents of the Company. In addition, in the event that there is a default, bankruptcy or maturity acceleration at a subsidiary that meets the applicable definition of materiality under the corporate debt agreements of The AES Corporation, there could be a cross-default to the Company’s recourse debt. At December 31, 2013, none of the defaults listed above results in a cross-default under the recourse debt of the Company. RECOURSE DEBT The following table summarizes the carrying amount and terms of recourse debt of the Company as of December 31, 2013 and 2012:
| Interest Rate |  | Final Maturity |  | December 31,
RECOURSE DEBT | 2013 |  | 2012
|  |  |  |  | (in millions)
Senior Unsecured Note | 7.75% |  | 2014 |  | 110 |  |  | 500 |
Senior Unsecured Note | 7.75% |  | 2015 |  | 356 |  |  | 500 |
Senior Unsecured Note | 9.75% |  | 2016 |  | 369 |  |  | 535 |
Senior Unsecured Note | 8.00% |  | 2017 |  | 1,150 |  |  | 1,500 |
Senior Secured Term Loan | LIBOR + 2.75% |  | 2018 |  | 799 |  |  | 807 |
Senior Unsecured Note | 8.00% |  | 2020 |  | 625 |  |  | 625 |
Senior Unsecured Note | 7.38% |  | 2021 |  | 1,000 |  |  | 1,000 |
Senior Unsecured Note | 4.88% |  | 2023 |  | 750 |  |  | — |
Term Convertible Trust Securities | 6.75% |  | 2029 |  | 517 |  |  | 517 |
Unamortized discounts |  |  |  |  | (7 | ) |  | (22 | )
SUBTOTAL |  |  |  |  | 5,669 |  |  | 5,962 |
Less: Current maturities |  |  |  |  | (118 | ) |  | (11 | )
Total |  |  |  |  | $ | 5,551 |  |  | $ | 5,951 |
The table below summarizes the principal amounts due, net of unamortized discounts, under our recourse debt for the next five years and thereafter:
December 31, | Net Principal Amounts Due
| (in millions)
2014 | $ | 118 |
2015 | 364 |
2016 | 368 |
2017 | 1,158 |
2018 | 764 |
Thereafter | 2,897 |
Total recourse debt | $ | 5,669 |
On April 30, 2013, the Company issued $500 million aggregate principal amount of 4.875% senior notes due 2023. On May 17, 2013, the Company issued an additional $250 million aggregate principal amount of 4.875% senior notes due 2023 to form a single series with the notes issued on April 30, 2013. After this offering, the Company completed the redemption of $928 million aggregate principal of its existing 7.75% senior notes due 2014, 7.75% senior notes due 2015, 9.75% senior notes due 2016, and 8.0% senior notes due 2017 through respective tender offers in May 2013. In June 2013, the Company redeemed an additional $122 million of its 7.75% senior notes due 2014 as per the optional redemption provisions of the senior note indentures. As a result of these transactions, the Company voluntarily reduced outstanding principal by $300 million and extended maturities of an additional $750 million to 10 years. The Company recognized a loss on extinguishment of debt of $163 million on these transactions that is included in the Consolidated Statement of Operations. On July 26, 2013, the Company entered into an amendment No. 3 to the senior secured credit facility dated as of July 29, 2010 that amended the terms and conditions of the senior secured credit facility, including the following changes:
• | the final maturity date of the senior secured credit facility is extended to July 26, 2018 from January 29, 2015;
• | the interest rate margin applicable to the senior secured credit facility is based on the credit rating assigned to the loans under the senior secured credit facility, with pricing at LIBOR + 2.25% as of December 31, 2013;
• | there is an undrawn fee of 0.50% per annum; and
• | the subsidiary guarantors party to the senior secured credit facility are released from their obligations under the old senior secured credit facility and have no obligations under the amended senior secured credit facility.
The aggregate commitment for the senior secured credit facility remains $800 million. There were no draws on this credit facility as of December 31, 2013 and 2012. Recourse Debt Covenants and Guarantees The Company’s obligations under the senior secured credit facilities are, subject to certain exceptions, secured by:
(i) | all of the capital stock of domestic subsidiaries owned directly by the Company and 65% of the capital stock of certain foreign subsidiaries owned directly or indirectly by the Company; and
(ii) | certain intercompany receivables, certain intercompany notes and certain intercompany tax sharing agreements.
The senior secured credit facilities are subject to mandatory prepayment under certain circumstances, including the sale of certain assets. In such a situation, the net cash proceeds from the sale must be applied pro rata to repay the term loan using 60% of net cash proceeds, reduced to 50% when and if the parent’s recourse debt to cash flow ratio is less than 5:1. The lenders have the option to waive their pro rata redemption. The senior secured credit facility contains customary covenants and restrictions on the Company’s ability to engage in certain activities, including, but not limited to, limitations on other indebtedness, liens, investments and guarantees; limitations on restricted payments such as shareholder dividends and equity repurchases; restrictions on mergers and acquisitions, sales of assets, leases, transactions with affiliates and off-balance sheet or derivative arrangements; and other financial reporting requirements. The senior secured credit facility also contains financial covenants requiring the Company to maintain certain financial ratios including a cash flow to interest coverage ratio, calculated quarterly, which provides that a minimum ratio of the Company’s adjusted operating cash flow to the Company’s interest charges related to recourse debt of 1.3× must be maintained at all times and a recourse debt to cash flow ratio, calculated quarterly, which provides that the ratio of the Company’s total recourse debt to the Company’s adjusted operating cash flow must not exceed a maximum of 7.5×. The terms of the Company’s senior unsecured notes and senior secured credit facility contain certain covenants including, without limitation, limitation on the Company’s ability to incur liens or enter into sale and leaseback transactions. TERM CONVERTIBLE TRUST SECURITIES Between 1999 and 2000, AES Trust III, a wholly owned special purpose business trust and a VIE, issued approximately 10.35 million of $50 par value Term Convertible Preferred Securities (“TECONS”) with a semi annual coupon payment of $3.375 for total proceeds of $517 million and concurrently purchased $517 million of 6.75% Junior Subordinated Convertible Debentures due 2029 (the “6.75% Debentures”) issued by AES. The Company consolidates AES Trust III in its consolidated financial statements and classifies the TECONS as recourse debt on its Consolidated Balance Sheet. The Company’s obligations under the 6.75% Debentures and other relevant trust agreements, in aggregate, constitute a full and unconditional guarantee by the Company of the TECON Trusts’ obligations. As of December 31, 2013 and 2012, the sole assets of AES Trust III are the 6.75% Debentures. AES, at its option, can redeem the 6.75% Debentures which would result in the required redemption of the TECONS issued by AES Trust III, currently for $50 per TECON. The TECONS must be redeemed upon maturity of the 6.75% Debentures. The TECONS are convertible into the common stock of AES at each holder’s option prior to October 15, 2029 at the rate of 1.4216, representing a conversion price of $35.17 per share. The maximum number of shares of common stock AES would be required to issue should all holders decide to convert their securities would be 14.7 million shares. Dividends on the TECONS are payable quarterly at an annual rate of 6.75%. The Trust is permitted to defer payment of dividends for up to 20 consecutive quarters, provided that the Company has exercised its right to defer interest payments under the corresponding debentures or notes. During such deferral periods, dividends on the TECONS would accumulate quarterly and accrue interest, and the Company may not declare or pay dividends on its common stock. AES has not exercised the option to defer any dividends at this time and all dividends due under the Trust have been paid.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 19, 20, 22 -Article 5 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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