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Debt | 12 Months Ended
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Dec. 31, 2019
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,
2019 |  | 2018
Variable Rate: |  |  |  |  |  |  |
Bank loans | 4.25% |  | 2020 – 2050 |  | $ | 3,389 |  |  | $ | 2,600 |
Notes and bonds | 3.99% |  | 2020 – 2030 |  | 1,056 |  |  | 821 |
Debt to (or guaranteed by) multilateral, export credit agencies or development banks (1) | 1.73% |  | 2023 – 2033 |  | 460 |  |  | 3,292 |
Fixed Rate: |  |  |  |  |  |  |
Bank loans | 5.19% |  | 2020 – 2040 |  | 2,900 |  |  | 1,684 |
Notes and bonds | 5.51% |  | 2020 – 2079 |  | 8,098 |  |  | 7,346 |
Debt to (or guaranteed by) multilateral, export credit agencies or development banks (1) | 6.09% |  | 2023 – 2029 |  | 1,110 |  |  | 246 |
Other | 4.20% |  | 2061 |  | 17 |  |  | 24 |
Unamortized (discount) premium & debt issuance (costs), net |  |  |  |  | (318 | ) |  | (368 | )
Subtotal |  |  |  |  | $ | 16,712 |  |  | $ | 15,645 |
Less: Current maturities (2) |  |  |  |  | (1,865 | ) |  | (1,659 | )
Noncurrent maturities (2) |  |  |  |  | $ | 14,847 |  |  | $ | 13,986 |
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(1) | Multilateral loans include loans funded and guaranteed by bilaterals, multilaterals, development banks and other similar institutions.
(2) | Excludes $3 million (current) and $67 million (noncurrent) finance lease liabilities included in the respective non-recourse debt line items on the Consolidated Balance Sheet as of December 31, 2019. See Note 14—Leases for further information.
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 that economically fix the variable component of the interest rates on the portion of the variable rate debt being hedged in an aggregate notional principal amount of approximately $1.8 billion on non-recourse debt outstanding at December 31, 2019. Non-recourse debt as of December 31, 2019 is scheduled to reach maturity as shown below (in millions):
December 31, | Annual Maturities
2020 | $ | 1,883 |
2021 | 1,648 |
2022 | 999 |
2023 | 1,125 |
2024 | 1,180 |
Thereafter | 10,195 |
Unamortized (discount) premium & debt issuance (costs), net | (318 | )
Total | $ | 16,712 |
As of December 31, 2019, AES subsidiaries with facilities under construction had a total of approximately $470 million of committed but unused credit facilities available to fund construction and other related costs. Excluding these facilities under construction, AES subsidiaries had approximately $1.1 billion in various 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, 2019, the Company's subsidiaries had the following significant debt transactions:
Subsidiary | Transaction Period |  | Issuances |  | Repayments |  | Gain (Loss) on Extinguishment of Debt
Southland (1) | Q1, Q2, Q3, Q4 |  | $ | 930 |  |  | $ | (210 | ) |  | $ | (1 | )
Gener | Q1, Q2, Q4 |  | 1,000 |  |  | (697 | ) |  | (29 | )
DPL (2) | Q2 |  | 825 |  |  | (835 | ) |  | (43 | )
Tietê | Q2 |  | 561 |  |  | (533 | ) |  | (3 | )
Mong Duong (3) | Q3 |  | 1,120 |  |  | (1,081 | ) |  | (31 | )
Colon | Q3 |  | 610 |  |  | (579 | ) |  | (28 | )
Cochrane | Q4 |  | 875 |  |  | (833 | ) |  | (24 | )
TEGTEP | Q4 |  | 280 |  |  | (248 | ) |  | (1 | )
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(1) | Issuances relate to the June 2017 long-term non-recourse debt financing to fund the Southland re-powering construction projects, a non-recourse bridge loan in September 2019, and long-term non-recourse debt financing issued in December 2019 to settle the bridge loan.
(2) | Includes transactions at DPL and its subsidiary, DP&L.
(3) | Non-cash transaction via an equity affiliate. See below for further information.
Cochrane — In November 2019, Cochrane issued $430 million aggregate principal of 5.50% senior unsecured notes due in 2027 and entered into a $445 million 6.25% senior secured facility agreement due in 2034. The net proceeds from the issuance and draw down were used to prepay the outstanding principal of $833 million under its variable rate notes due in 2030. As a result of these transactions, the Company recognized a loss on extinguishment of debt of $24 million. Gener — In March 2019, Gener issued $550 million aggregate principal of 7.125% senior unsecured notes due in 2079. The net proceeds from the issuance were used to purchase via tender offer the outstanding principal of $450 million of its 8.375% senior unsecured notes due in 2073. In October 2019, Gener issued $450 million aggregate principal of 6.35% senior unsecured notes due in 2079. The net proceeds from the issuance were used to fund the acquisition of Los Cururos, purchase via tender offer $73 million and $55 million aggregate principal of its senior unsecured notes due in 2021 and 2025, respectively, and prepay the remaining outstanding principal of $119 million of its senior unsecured notes due in 2021. As a result of these transactions, the Company recognized a loss on extinguishment of debt of $29 million. Mong Duong — In August 2019, Mong Duong refinanced $1.1 billion aggregate principal of its existing senior secured notes due in 2029 with variable interest rates ranging from LIBOR + 2.25% to LIBOR + 4.15% in exchange for a fixed rate loan with a newly formed SPV, accounted for as an equity affiliate, due in 2029 with interest rates that vary from 4.41% to 7.18%. This refinancing was a non-cash transaction as the SPV acquired all of the outstanding rights and obligations of the original Mong Duong lenders. As a result of these transactions, the Company recognized a loss on extinguishment of debt of $31 million. DP&L — In June 2019, DP&L issued $425 million aggregate principal of 3.95% First Mortgage Bonds due in 2049. The net proceeds from the issuance were used to prepay the outstanding principal of $435 million under its variable rate $445 million credit agreement due in 2022. DPL — In April 2019, DPL issued $400 million aggregate principal of 4.35% senior unsecured notes due in 2029. The net proceeds from the issuance were used to redeem $400 million of the $780 million aggregate principal outstanding of its 7.25% senior unsecured notes due in 2021. As a result of these transactions, the Company recognized a loss on extinguishment of debt of $43 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, 2019 and 2018, approximately $372 million and $627 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 $1.2 billion at December 31, 2019. The following table summarizes the Company's subsidiary non-recourse debt in default (in millions) as of December 31, 2019. Due to the defaults, these amounts are included in the current portion of non-recourse debt:
| Primary Nature of Default |  | December 31, 2019
Subsidiary | Default |  | Net Assets
AES Puerto Rico | Covenant |  | $ | 287 |  |  | $ | 151 |
AES Ilumina (Puerto Rico) | Covenant |  | 33 |  |  | 19 |
AES Jordan Solar (1) | Covenant |  | 5 |  |  | 4 |
Total |  |  | $ | 325 |  |
_____________________________
(1) | Classified as current held-for-sale liability on the Consolidated Balance Sheets.
The above defaults are not payment defaults. In Puerto Rico, the subsidiary non-recourse debt defaults were triggered by failure to comply with covenants or other requirements contained in the non-recourse debt documents due to the bankruptcy of the offtaker. 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, 2019, the Company had no defaults which resulted in or were 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, 2019 |  | December 31, 2018
Senior Unsecured Note | 4.00% |  | 2021 |  | 500 |  |  | 500 |
Senior Secured Term Loan | LIBOR + 1.75% |  | 2022 |  | 18 |  |  | 366 |
Senior Unsecured Note | 4.875% |  | 2023 |  | 613 |  |  | 713 |
Senior Unsecured Note | 4.50% |  | 2023 |  | 500 |  |  | 500 |
Drawings on secured credit facility | LIBOR + 1.75% |  | 2024 |  | 180 |  |  | — |
Senior Unsecured Note | 5.50% |  | 2024 |  | 63 |  |  | 63 |
Senior Unsecured Note | 5.50% |  | 2025 |  | 544 |  |  | 544 |
Senior Unsecured Note | 6.00% |  | 2026 |  | 500 |  |  | 500 |
Senior Unsecured Note | 5.125% |  | 2027 |  | 500 |  |  | 500 |
Unamortized (discount) premium & debt issuance (costs), net |  |  |  |  | (22 | ) |  | (31 | )
Subtotal |  |  |  |  | $ | 3,396 |  |  | $ | 3,655 |
Less: Current maturities |  |  |  |  | (5 | ) |  | (5 | )
Noncurrent maturities |  |  |  |  | $ | 3,391 |  |  | $ | 3,650 |
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
2020 | $ | 5 |
2021 | 505 |
2022 | 8 |
2023 | 1,113 |
2024 | 243 |
Thereafter | 1,544 |
Unamortized (discount) premium & debt issuance (costs), net | (22 | )
Total recourse debt | $ | 3,396 |
In September 2019, the Company prepaid $343 million aggregate principal of its LIBOR + 1.75% existing senior secured term loan due in 2022 and $100 million of its 4.875% senior unsecured notes due in 2023. As a result of these transactions, the Company recognized a loss on extinguishment of debt of $5 million. In December 2018, the Company prepaid $150 million aggregate principal of its existing senior secured term loan due in 2022. As a result of the transaction, the Company recognized a loss on extinguishment of debt of $1 million. In March 2018, the Company purchased via tender offers $671 million aggregate principal of its existing 5.50% senior unsecured notes due in 2024 and $29 million of its existing 5.50% senior unsecured notes due in 2025. As a result of these transactions, the Company recognized a loss on extinguishment of debt of $44 million. In March 2018, the Company issued $500 million aggregate principal of 4.00% senior notes due in 2021 and $500 million of 4.50% senior notes due in 2023. The Company used the proceeds from these issuances to purchase via tender offer in full the $228 million balance of its 8.00% senior notes due in 2020 and the $690 million balance of its 7.375% senior notes due in 2021. As a result of these transactions, the Company recognized a loss on extinguishment of debt of $125 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 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, if any, using 60% of net cash proceeds, reduced to 50% when and if the Parent Company'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 2.5 times and a maximum ratio of recourse debt to adjusted operating cash flow of 5.75 times. The terms of the Company's senior unsecured notes and senior secured term loan contain certain covenants including limitations on the Company's ability to incur liens or enter into sale and leaseback transactions.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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