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Debt | 12 Months Ended
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Dec. 31, 2017
Debt Disclosure [Abstract] |
DEBT | DEBT NON-RECOURSE DEBT — The following table summarizes the carrying amount and terms of non-recourse debt at our subsidiaries as of the periods indicated (in millions):
NON-RECOURSE DEBT | Weighted Average Interest Rate |  | Maturity |  | December 31,
2017 |  | 2016
Variable Rate: (1) |  |  |  |  |  |  |
Bank loans | 4.52% |  | 2018 – 2050 |  | $ | 2,488 |  |  | $ | 2,601 |
Notes and bonds | 8.06% |  | 2020 – 2026 |  | 900 |  |  | 471 |
Debt to (or guaranteed by) multilateral, export credit agencies or development banks (2) | 3.28% |  | 2023 – 2034 |  | 3,668 |  |  | 3,189 |
Fixed Rate: |  |  |  |  |  |  |
Bank loans | 4.54% |  | 2018 – 2040 |  | 993 |  |  | 767 |
Notes and bonds | 5.68% |  | 2019 – 2073 |  | 7,388 |  |  | 7,822 |
Debt to (or guaranteed by) multilateral, export credit agencies or development banks (2) | 5.35% |  | 2023 – 2034 |  | 271 |  |  | 328 |
Other | 5.81% |  | 2018 – 2061 |  | 26 |  |  | 30 |
Unamortized (discount) premium & debt issuance (costs), net |  |  |  |  | (394 | ) |  | (425 | )
Subtotal |  |  |  |  | $ | 15,340 |  |  | $ | 14,783 |
Less: Current maturities |  |  |  |  | (2,164 | ) |  | (1,052 | )
Noncurrent maturities |  |  |  |  | $ | 13,176 |  |  | $ | 13,731 |
_____________________________
(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, 2017. 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 2.49% to 8.00%. The debt agreements expire at various dates from 2018 through 2073.
(2) | Multilateral loans include loans funded and guaranteed by bilaterals, multilaterals, development banks and other similar institutions.
Non-recourse debt as of December 31, 2017 is scheduled to reach maturity as shown below (in millions):
December 31, | Annual Maturities
2018 | $ | 2,245 |
2019 | 796 |
2020 | 1,396 |
2021 | 1,833 |
2022 | 1,768 |
Thereafter | 7,696 |
Unamortized (discount) premium & debt issuance (costs), net | (394 | )
Total | $ | 15,340 |
As of December 31, 2017, AES subsidiaries with facilities under construction had a total of approximately $1.8 billion of committed but unused credit facilities available to fund construction and other related costs. Excluding these facilities under construction, AES subsidiaries had approximately $1.7 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, 2017, the Company's subsidiaries had the following significant debt transactions:
Subsidiary |  | Issuances |  | Repayments |  | Gain (Loss) on Extinguishment of Debt
IPALCO |  | $ | 608 |  |  | $ | (528 | ) |  | $ | (9 | )
Tietê |  | 585 |  |  | (293 | ) |  | (5 | )
Southland |  | 557 |  |  | — |  |  | — |
Gener |  | 335 |  |  | (426 | ) |  | (20 | )
AES Argentina |  | 310 |  |  | (181 | ) |  | 65 |
Los Mina |  | 303 |  |  | (275 | ) |  | (4 | )
Colon |  | 262 |  |  | — |  |  | — |
Masinloc |  | 160 |  |  | (51 | ) |  | — |
DPL |  | 103 |  |  | (249 | ) |  | (3 | )
Other |  | 285 |  |  | (547 | ) |  | (1 | )
Total |  | $ | 3,508 |  |  | $ | (2,550 | ) |  | $ | 23 |
Southland — In June 2017, AES Southland Energy LLC closed on $2 billion of aggregate principal long-term non-recourse debt financing to fund the Southland re-powering construction projects (“the Southland financing”). The Southland financing consists of $1.5 billion senior secured notes, amortizing through 2040, and $492 million senior secured term loan, amortizing through 2027. The long-term debt financing has a combined weighted average cost of approximately 4.5%. As of December 31, 2017, $557 million of the senior secured notes were outstanding under the Southland financing. AES Argentina — In February 2017, AES Argentina issued $300 million aggregate principal of unsecured and unsubordinated notes due in 2024. The net proceeds from this issuance were used for the prepayment of $75 million of non-recourse debt related to the construction of the San Nicolas Plant resulting in a gain on extinguishment of debt of approximately $65 million. Non-Recourse Debt Covenants, Restrictions and Defaults — The terms of the Company's non-recourse debt include certain financial and nonfinancial 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, 2017 and 2016, approximately $642 million and $535 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 $2.8 billion at December 31, 2017. The following table summarizes the Company's subsidiary non-recourse debt in default (in millions) as of December 31, 2017. Due to the defaults, these amounts are included in the current portion of non-recourse debt:
| Primary Nature of Default |  | December 31, 2017
Subsidiary | Default |  | Net Assets
Alto Maipo (Chile) | Covenant |  | $ | 618 |  |  | $ | 352 |
AES Puerto Rico | Covenant/Payment |  | 365 |  |  | 692 |
AES Ilumina | Covenant |  | 36 |  |  | 54 |
Total |  |  | $ | 1,019 |  |  |
The amounts in default related to Puerto Rico are covenant and payment defaults. In November 2017, AES Puerto Rico signed Forbearance and Standstill Agreements with their lenders to prevent the lenders from taking action against the Company due to these default events. These agreements will expire on March 22, 2018. All other defaults listed are not payment defaults. All of the subsidiary non-recourse defaults were triggered by failure to comply with 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. The AES Corporation's recourse debt agreements include cross-default clauses that will trigger if a subsidiary or group of subsidiaries for which the non-recourse debt is in default provides 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, 2017, the Company has no defaults which 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. RECOURSE DEBT — The following table summarizes the carrying amount and terms of recourse debt of the Company as of the periods indicated (in millions):
| Interest Rate |  | Final Maturity |  | December 31, 2017 |  | December 31, 2016
Senior Unsecured Note | LIBOR + 3.00% |  | 2019 |  | $ | — |  |  | $ | 240 |
Senior Unsecured Note | 8.00% |  | 2020 |  | 228 |  |  | 469 |
Senior Unsecured Note | 7.38% |  | 2021 |  | 690 |  |  | 966 |
Drawings on secured credit facility | LIBOR + 2.00% |  | 2021 |  | 207 |  |  | — |
Senior Secured Term Loan | LIBOR + 2.00% |  | 2022 |  | 521 |  |  | — |
Senior Unsecured Note | 4.88% |  | 2023 |  | 713 |  |  | 713 |
Senior Unsecured Note | 5.50% |  | 2024 |  | 738 |  |  | 738 |
Senior Unsecured Note | 5.50% |  | 2025 |  | 573 |  |  | 573 |
Senior Unsecured Note | 6.00% |  | 2026 |  | 500 |  |  | 500 |
Senior Unsecured Note | 5.13% |  | 2027 |  | 500 |  |  | — |
Term Convertible Trust Securities | 6.75% |  | 2029 |  | — |  |  | 517 |
Unamortized (discount) premium & debt issuance (costs), net |  |  |  |  | (40 | ) |  | (45 | )
Subtotal |  |  |  |  | $ | 4,630 |  |  | $ | 4,671 |
Less: Current maturities |  |  |  |  | (5 | ) |  | — |
Noncurrent maturities |  |  |  |  | $ | 4,625 |  |  | $ | 4,671 |
The following table summarizes the principal amounts due under our recourse debt for the next five years and thereafter (in millions):
December 31, | Net Principal Amounts Due
2018 | $ | 5 |
2019 | 5 |
2020 | 234 |
2021 | 902 |
2022 | 500 |
Thereafter | 3,024 |
Unamortized (discount) premium & debt issuance (costs), net | (40 | )
Total recourse debt | $ | 4,630 |
In August 2017, the Company issued $500 million aggregate principal amount of 5.125% senior notes due in 2027. The Company used these proceeds to redeem at par $240 million aggregate principal of its existing LIBOR + 3.00% senior unsecured notes due in 2019 and repurchased $217 million of its existing 8.00% senior unsecured notes due in 2020. As a result of the latter transactions, the Company recognized a loss on extinguishment of debt of $36 million. In May 2017, the Company closed on $525 million aggregate principal LIBOR + 2.00% secured term loan due in 2022. In June 2017, the Company used these proceeds to redeem at par all $517 million aggregate principal of its existing Term Convertible Securities. As a result of the latter transaction, the Company recognized a loss on extinguishment of debt of $6 million. In March 2017, the Company redeemed via tender offers $276 million aggregate principal of its existing 7.375% senior unsecured notes due in 2021 and $24 million of its existing 8.00% senior unsecured notes due in 2020. As a result of these transactions, the Company recognized a loss on extinguishment of debt of $47 million. In July 2016, the Company redeemed in full the $181 million balance of its 8.00% outstanding senior unsecured notes due 2017 using proceeds from its senior secured credit facility. As a result, the Company recognized a loss on extinguishment of debt of $16 million. In May 2016, the Company issued $500 million aggregate principal amount of 6.00% senior notes due 2026. The Company used these proceeds to redeem, at par, $495 million aggregate principal of its existing LIBOR + 3.00% senior unsecured notes due 2019. As a result of the latter transaction, the Company recognized a loss on extinguishment of debt of $4 million. In January 2016, the Company redeemed $125 million of its senior unsecured notes outstanding. The repayment included a portion of the 7.375% senior notes due in 2021, the 4.875% senior notes due in 2023, the 5.5% senior notes due in 2024, the 5.5% senior notes due in 2025 and the floating rate senior notes due in 2019. As a result of these transactions, the Company recognized a net gain on extinguishment of debt of $7 million. Recourse Debt Covenants and Guarantees — The Company's obligations under the senior secured credit facility and senior secured term loan 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 and senior secured term loan 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, evaluated quarterly, requiring the Company to maintain a minimum ratio of adjusted operating cash flow to interest charges on recourse debt of 1.3 times and a maximum ratio of recourse debt to adjusted operating cash flow of 7.5 times. The terms of the Company's senior unsecured notes and senior secured term loan 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 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. AES, at its option, may redeem the 6.75% Debentures which would result in the required redemption of the TECONS issued by AES Trust III for $50 per TECON. As of December 31, 2016, the sole assets of AES Trust III were the 6.75% Debentures. In June 2017, the Company redeemed the 6.75% Debentures and redeemed at par all remaining aggregate principal of its existing TECONs.

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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 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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