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Debt | 12 Months Ended
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Dec. 31, 2015
Debt Disclosure [Abstract] |
DEBT | DEBT NON-RECOURSE DEBT — The next table summarizes the carrying amount (in millions) and terms of non-recourse debt as of the periods indicated:
NON-RECOURSE DEBT | Weighted Average Interest Rate |  | Maturity |  | December 31,
2015 |  | 2014
VARIABLE RATE:(1) |  |  |  |  |  |  |
Bank loans | 4.37 | % |  | 2016 – 2033 |  | $ | 2,352 |  |  | $ | 1,893 |
Notes and bonds | 14.98 | % |  | 2016 – 2022 |  | 1,474 |  |  | 1,912 |
Debt to (or guaranteed by) multilateral, export credit agencies or development banks(2) | 2.39 | % |  | 2021 – 2034 |  | 3,078 |  |  | 2,375 |
Other | 12.65 | % |  | 2016 – 2043 |  | 47 |  |  | 668 |
FIXED RATE: |  |  |  |  |  |  |
Bank loans | 5.11 | % |  | 2016 – 2032 |  | 558 |  |  | 750 |
Notes and bonds | 5.54 | % |  | 2016 – 2073 |  | 7,948 |  |  | 7,654 |
Debt to (or guaranteed by) multilateral, export credit agencies or development banks(2) | 5.39 | % |  | 2023 – 2034 |  | 309 |  |  | 259 |
Other | 8.66 | % |  | 2016 – 2049 |  | 26 |  |  | 89 |
SUBTOTAL |  |  |  |  | 15,792 |  |  | 15,600 |
Less: Current maturities |  |  |  |  | (2,529 | ) |  | (1,982 | )
TOTAL |  |  |  |  | $ | 13,263 |  |  | $ | 13,618 |
(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 $3.2 billion on non-recourse debt outstanding at December 31, 2015. 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 2.87% to 8.24%. These agreements expire at various dates from 2016 through 2033.
(2) | Multilateral loans include loans funded and guaranteed by bilaterals, multilaterals, development banks and other similar institutions.
Non-recourse debt (in millions) as of December 31, 2015 is scheduled to reach maturity as presented in the table below:
December 31, | Annual Maturities
2016 | $ | 2,529 |
2017 | 1,022 |
2018 | 1,359 |
2019 | 950 |
2020 | 1,431 |
Thereafter | 8,501 |
Total non-recourse debt | $ | 15,792 |
As of December 31, 2015, AES subsidiaries with facilities under construction had a total of approximately $2.6 billion of committed but unused credit facilities available to fund construction and other related costs. Excluding these facilities under construction, AES subsidiaries had approximately $2.4 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, 2015, we had the following significant debt transactions at our subsidiaries:
• | Gener issued new debt of $1.1 billion, offset by repayments of $423 million which includes a loss on extinguishment of debt of $19 million;
• | IPALCO issued new debt of $847 million, offset by repayments of $602 million which includes a loss on extinguishment of debt of $22 million;
• | Sul issued new debt of $513 million, offset by repayments of $486 million which includes a loss on extinguishment of debt of $4 million;
• | Eletropaulo issued new debt of $354 million; offset by repayments of $211 million;
• | DPL issued new debt of $325 million; more than offset by repayments of $475 million which includes a loss on extinguishment of debt of $2 million;
• | Panama issued new debt of $300 million, offset by repayments of $287 million which includes a loss on extinguishment of debt of $15 million;
• | Mong Duong drew $203 million under its construction loan facility;
• | Tietê issued new debt of $153 million, more than offset by repayments of $226 million;
• | Andres issued new debt of $180 million, offset by repayments of $176 million which includes a loss on extinguishment of debt of $11 million; and
• | Itabo made repayments of $123 million which includes a loss on extinguishment of debt of $8 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 and financial ratios, minimum levels of working capital and limitations on incurring additional indebtedness. As of December 31, 2015 and 2014, approximately $513 million and $245 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 billion at December 31, 2015. The following table summarizes the Company's subsidiary non-recourse debt in default (in millions) as of December 31, 2015. Due to the defaults, these amounts are included in the current portion of non-recourse debt:
| Primary Nature of Default |  | December 31, 2015
Subsidiary | Default |  | Net Assets
Maritza (Bulgaria) | Covenant |  | $ | 559 |  |  | $ | 657 |
Sul (Brazil) | Covenant |  | 333 |  |  | 439 |
Kavarna (Bulgaria) | Covenant |  | 140 |  |  | 74 |
Sogrinsk (Kazakhstan) | Covenant |  | $ | 6 |  |  | 8 |
Total |  |  | $ | 1,038 |  |  |
As of December 31, 2015, none of the defaults are payment defaults. All of the subsidiary non-recourse defaults were triggered by failure to comply with other covenants and/or 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 applicable subsidiary. In the event that there is a default, bankruptcy or maturity acceleration at a subsidiary or group of subsidiaries 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. Materiality is defined in the Parent's senior secured credit facility as having provided 20% or more of the Parent Company's total cash distributions from businesses for the four most recently completed fiscal quarters. As of December 31, 2015, none of the defaults listed above individually or in the aggregate result in or are at risk of triggering a cross-default under the recourse debt of the Parent Company. In the event the Parent Company is not in compliance with the financial covenants of its senior secured revolving credit facility, restricted payments will be limited to regular quarterly shareholder dividends at the then-prevailing rate. Payment defaults and bankruptcy defaults would preclude the making of any restricted payments. Interest Expense — Interest expense for the year ended December 31, 2015 was reduced by $64 million related to the reversal of a monetary correction previously recognized as interest expense at Eletropaulo. This interest expense was on a contingent regulatory liability that was also reversed in the current period. Interest expense for the year ended December 31, 2014 was reduced by approximately $48 million related to reversing contingent interest accruals associated with disputed purchased energy obligations at Sul for which it was determined, based on developments during 2014, that the likelihood of an unfavorable outcome for the payment of interest on the disputed obligations was no longer probable. Interest expense for the year ended December 31, 2013 was reduced by approximately $34 million related to the recognition of ineffectiveness on derivative interest rate swaps accounted for as cash flow hedges. RECOURSE DEBT — The table below summarizes the carrying amount (in millions) and terms of recourse debt of the Company as of the periods indicated:
RECOURSE DEBT | Interest Rate |  | Final Maturity |  | December 31, 2015 |  |  | December 31, 2014
Senior Unsecured Note | 7.75% |  | 2015 |  | $ | — |  |  | $ | 151 |
Senior Unsecured Note | 9.75% |  | 2016 |  | — |  |  | 164 |
Senior Unsecured Note | 8.00% |  | 2017 |  | 181 |  |  | 525 |
Senior Unsecured Note | LIBOR + 3% |  | 2019 |  | 775 |  |  | 775 |
Senior Unsecured Note | 8.00% |  | 2020 |  | 469 |  |  | 625 |
Senior Unsecured Note | 7.38% |  | 2021 |  | 1,000 |  |  | 1,000 |
Senior Unsecured Note | 4.88% |  | 2023 |  | 750 |  |  | 750 |
Senior Unsecured Note | 5.50% |  | 2024 |  | 750 |  |  | 750 |
Senior Unsecured Note | 5.50% |  | 2025 |  | 575 |  |  | — |
Term Convertible Trust Securities | 6.75% |  | 2029 |  | 517 |  |  | 517 |
Unamortized (Discounts)/Premiums |  |  |  |  | (2 | ) |  | 1 |
SUBTOTAL |  |  |  |  | 5,015 |  |  | 5,258 |
Less: Current maturities |  |  |  |  | — |  |  | (151 | )
Total |  |  |  |  | $ | 5,015 |  |  | $ | 5,107 |
The table below summarizes the principal amounts due, net of unamortized discounts, under our recourse debt for the next five years and thereafter in millions:
December 31, | Net Principal Amounts Due
2016 | $ | — |
2017 | 181 |
2018 | — |
2019 | 774 |
2020 | 469 |
Thereafter | 3,591 |
Total recourse debt | $ | 5,015 |
In April 2015, the Company issued $575 million aggregate principal amount of 5.50% senior notes due 2025. Concurrent with this offering, the Company redeemed via tender offers $344 million aggregate principal of its existing 8.00% senior unsecured notes due 2017, and $156 million of its existing 8.00% senior unsecured notes due 2020. As a result of the latter transaction, the Company recognized a loss on extinguishment of debt of $82 million that is included in the Consolidated Statement of Operations. In March 2015, the Company redeemed in full the $151 million balance of its 7.75% senior unsecured notes due October 2015 and the $164 million balance of its 9.75% senior unsecured notes due April 2016. As a result of these transactions, the Company recognized a loss on extinguishment of debt of $23 million that is included in the Consolidated Statement of Operations. In February 2014, the Company redeemed in full the $110 million balance of its 7.75% senior unsecured notes due March 2014. On March 7, 2014, the Company issued $750 million aggregate principal amount of 5.50% senior notes due 2024. Concurrent with this offering, the Company redeemed via tender offers $625 million aggregate principal of its existing 8.00% senior unsecured notes due 2017. As a result of the latter transaction, the Company recognized a loss on extinguishment of debt of $132 million that is included in the Consolidated Statements of Operations. On May 20, 2014, the Company issued $775 million aggregate principal amount of senior unsecured floating rate notes due June 2019. The notes bear interest at a rate of 3% above three-month LIBOR, reset quarterly. Concurrent with this offering, the Company repaid $767 million of its existing senior secured term loan due 2018. As a result of the latter transaction, the Company recognized a loss on extinguishment of debt of $10 million that is included in the Consolidated Statement of Operations. On June 16, 2014, the Company repaid in full the remaining balance of approximately $29 million of its senior secured term loan due 2018. On July 25, 2014, the Company issued two notices to call $320 million aggregate principal amount of unsecured notes, $160 million of which was used to retire notes due in 2015 and $160 million of which was used to retire notes due in 2016. The Company closed these transactions on August 25, 2014. As a result of this transaction, the Company recognized a loss on extinguishment of debt of $40 million that is included in the Consolidated Statement of Operations. Recourse Debt Covenants and Guarantees — The Company's obligations under the senior secured credit facility 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 facility is 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, if any, 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 — In 1999, 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 quarterly coupon payment of $0.844 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, 2015 and 2014, 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 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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