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Debt | 12 Months Ended
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Dec. 31, 2020
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,
2020 |  | 2019
Variable Rate: |  |  |  |  |  |  |
Bank loans | 3.93% |  | 2021 – 2050 |  | $ | 3,494 |  |  | $ | 3,389 |
Notes and bonds | 3.11% |  | 2023 – 2030 |  | 800 |  |  | 1,056 |
Debt to (or guaranteed by) multilateral, export credit agencies or development banks (1) | 1.67% |  | 2023 – 2033 |  | 457 |  |  | 460 |
Fixed Rate: |  |  |  |  |  |  |
Bank loans | 4.72% |  | 2021 – 2040 |  | 2,965 |  |  | 2,900 |
Notes and bonds | 5.20% |  | 2021 – 2079 |  | 8,907 |  |  | 8,098 |
Debt to (or guaranteed by) multilateral, export credit agencies or development banks (1) | 3.41% |  | 2021 – 2023 |  | 34 |  |  | 1,110 |
Other | 4.20% |  | 2061 |  | 18 |  |  | 17 |
Unamortized (discount) premium & debt issuance (costs), net |  |  |  |  | (321) |  |  | (318) |
Subtotal |  |  |  |  | $ | 16,354 |  |  | $ | 16,712 |
Less: Current maturities (2) |  |  |  |  | (1,426) |  |  | (1,865) |
Noncurrent maturities (2) |  |  |  |  | $ | 14,928 |  |  | $ | 14,847 |
_____________________________ (1) Multilateral loans include loans funded and guaranteed by bilaterals, multilaterals, development banks and other similar institutions. (2) Excludes $4 million and $3 million (current) and $77 million 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, 2020 and 2019, respectively. 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 $2 billion on non-recourse debt outstanding at December 31, 2020. Non-recourse debt as of December 31, 2020 is scheduled to reach maturity as shown below (in millions):
December 31, | Annual Maturities
2021 | $ | 1,439 |
2022 | 516 |
2023 | 1,017 |
2024 | 1,307 |
2025 | 996 |
Thereafter | 11,400 |
Unamortized (discount) premium & debt issuance (costs), net | (321) |
Total | $ | 16,354 |
As of December 31, 2020, AES subsidiaries with facilities under construction had a total of approximately $215 million of committed but unused credit facilities available to fund construction and other related costs. Excluding these facilities under construction, AES subsidiaries had approximately $868 million 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, 2020, 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, Q4 |  | $ | 283 |  |  | $ | (125) |  |  | $ | (1) |
AES Brasil | Q2, Q3, Q4 |  | 375 |  |  | (1) |  |  | — |
Gener | Q1, Q2 |  | 90 |  |  | (8) |  |  | — |
DPL (2) | Q2, Q3 |  | 555 |  |  | (520) |  |  | (34) |
IPALCO | Q2 |  | 475 |  |  | (470) |  |  | (2) |
Mong Duong | Q2 |  | 150 |  |  | — |  |  | — |
Panama (3) | Q3 |  | 1,485 |  |  | (1,228) |  |  | (16) |
Cochrane | Q3 |  | 485 |  |  | (445) |  |  | (1) |
Angamos | Q3 |  | — |  |  | (309) |  |  | (5) |
_____________________________ (1)Issuances relate to the June 2017 long-term non-recourse debt financing to fund the Southland repowering construction projects. (2)Includes transactions at DPL and its subsidiary, DP&L. (3)Repayments relate to existing obligations at AES Panama, Changuinola, and Colon. Panama — In August 2020, AES Panama issued $1.4 billion aggregate principal of 4.375% senior secured notes and a $105 million term loan due in 2030 and 2023, respectively. The proceeds from the issuance were used to prepay $447 million, $171 million, and $610 million of outstanding indebtedness at AES Panama, Changuinola, and Colon, respectively. As a result of these transactions, the Company recognized a loss on extinguishment of debt of $16 million. 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. In July 2020, Cochrane issued $485 million aggregate principal of 6.25% senior secured notes due in 2034. The net proceeds from the issuance were used to prepay the outstanding principal of $445 million plus accrued interest on its senior secured facility agreement executed in 2019. 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. In June 2020, DPL issued $415 million aggregate principal of 4.125% senior secured notes due in 2025. In July 2020, the net proceeds from the issuance were used to prepay the outstanding principal of $380 million 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 $34 million. IPALCO — In April 2020, IPALCO issued $475 million aggregate principal of 4.25% senior secured notes due in 2030. The net proceeds from the issuance were used to prepay the outstanding principal of $405 million of its 3.45% senior unsecured notes and a $65 million term loan both due in July 2020. As a result of these transactions, the Company recognized a loss on extinguishment of debt of $2 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. As of December 31, 2020, Mong Duong met the held-for-sale criteria and the outstanding debt balances were reclassified to held-for-sale liabilities on the Consolidated Balance Sheet. 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. 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, 2020 and 2019, approximately $587 million and $372 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 $1.7 billion at December 31, 2020. The following table summarizes the Company's subsidiary non-recourse debt in default (in millions) as of December 31, 2020. Due to the defaults, these amounts are included in the current portion of non-recourse debt:
| Primary Nature of Default |  | December 31, 2020
Subsidiary | Debt in Default |  | Net Assets
AES Puerto Rico | Covenant |  | $ | 238 |  |  | $ | 171 |
AES Ilumina (Puerto Rico) | Covenant |  | 31 |  |  | 19 |
AES Jordan Solar | Covenant |  | 7 |  |  | 1 |
Total |  |  | $ | 276 |  |
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, 2020, 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 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, 2020 |  | December 31, 2019
Senior Unsecured Note | 4.00% |  | 2021 |  | — |  |  | 500 |
Senior Secured Term Loan | LIBOR + 1.75% |  | 2022 |  | — |  |  | 18 |
Senior Unsecured Note | 4.875% |  | 2023 |  | — |  |  | 613 |
Senior Unsecured Note | 4.50% |  | 2023 |  | — |  |  | 500 |
Drawings on revolving credit facility | LIBOR + 1.75% |  | 2024 |  | 70 |  |  | 180 |
Senior Unsecured Note | 5.50% |  | 2024 |  | — |  |  | 63 |
Senior Unsecured Note | 5.50% |  | 2025 |  | — |  |  | 544 |
Senior Unsecured Note | 3.30% |  | 2025 |  | 900 |  |  | — |
Senior Unsecured Note | 6.00% |  | 2026 |  | — |  |  | 500 |
Senior Unsecured Note | 1.375% |  | 2026 |  | 800 |  |  | — |
Senior Unsecured Note | 5.125% |  | 2027 |  | — |  |  | 500 |
Senior Unsecured Note | 3.95% |  | 2030 |  | 700 |  |  | — |
Senior Unsecured Note | 2.45% |  | 2031 |  | 1,000 |  |  | — |
Other (1) | CDI + 7.00% |  | 2026 |  | 18 |  |  | — |
Unamortized (discount) premium & debt issuance (costs), net |  |  |  |  | (41) |  |  | (22) |
Subtotal |  |  |  |  | $ | 3,447 |  |  | $ | 3,396 |
Less: Current maturities |  |  |  |  | (1) |  |  | (5) |
Noncurrent maturities |  |  |  |  | $ | 3,446 |  |  | $ | 3,391 |
_____________________________ (1)Represents project-level limited recourse debt at AES Holdings Brasil Ltda. 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
2021 | $ | 1 |
2022 | 3 |
2023 | 3 |
2024 | 74 |
2025 | 903 |
Thereafter | 2,504 |
Unamortized (discount) premium & debt issuance (costs), net | (41) |
Total recourse debt | $ | 3,447 |
During the first quarter of 2020, the Company drew $840 million on revolving lines of credit at the Parent Company, of which approximately $250 million was used to enhance our liquidity position due to the uncertain economic conditions surrounding the COVID-19 pandemic, and the remaining $590 million was used for other general corporate purposes. During the remainder of 2020, the Parent Company drew an additional $755 million and repaid $1.5 billion on these revolving lines of credit. The entire $250 million related to the COVID-19 pandemic was repaid during the second quarter of 2020. As of December 31, 2020, we had approximately $70 million of outstanding indebtedness on the Parent Company credit facility at a weighted average interest rate of 1.86%. In May 2020, the Company issued $900 million aggregate principal of 3.30% senior unsecured notes due in 2025 and $700 million of 3.95% senior unsecured notes due in 2030. The Company used the net proceeds from these issuances to purchase via tender offer a portion of the 4.00%, 4.50%, and 4.875% senior notes due in 2021, 2023, and 2023, respectively. Subsequent to the tender offers, the Company redeemed the remaining balance of its 4.00% and 4.875% senior notes due in 2021 and 2023, respectively, and $7 million of the remaining 4.50% senior notes due in 2023. As a result of these transactions, the Company recognized a loss on extinguishment of debt of $37 million. In December 2020, the Company issued $800 million aggregate principal of 1.375% senior unsecured notes due in 2026 and $1 billion aggregate principal of 2.45% senior unsecured notes due in 2031. The Company used the net proceeds from these issuances to purchase via tender offer the remaining balance of its 5.50%, 6.00%, and 5.125% senior notes due 2025, 2026, and 2027, respectively. Subsequent to the tender offers, the Company redeemed the remaining balance of its 4.50% and 5.50% notes due 2023 and 2024, respectively. As a result of these transactions, the Company recognized a loss on extinguishment of debt of $108 million. 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. Recourse Debt Covenants and Guarantees — The Company's obligations under the revolving credit facility and indentures governing the senior notes due 2025 and 2030 are currently unsecured following the achievement of two investment grade ratings and the release of security in accordance with the terms of the facility and the notes. If the Company’s credit rating falls below "Investment Grade" from at least two of Fitch Investors Service Inc., Standard & Poor’s Ratings Services or Moody’s Investors Service, Inc., as determined in accordance with the terms of the revolving credit facility and indenture dated May 15, 2020 (BBB-, or in the case of Moody’s Investor Services, Inc. Baa3), then the obligations under the revolving credit facility and the indentures governing the senior notes due 2025 and 2030 become, subject to certain exceptions, secured by (i) all of the capital stock of domestic subsidiaries owned directly by the Company or certain subsidiaries and 65% of the capital stock of certain foreign subsidiaries owned directly by the Company and certain subsidiaries,and (ii) certain intercompany receivables, certain intercompany notes and certain intercompany tax sharing agreements. The revolving credit facility is subject to mandatory prepayment under certain circumstances, including the sale of certain assets. In such a situation, a portion of the net cash proceeds from the sale must be applied pro rata to repay loans outstanding under the revolving credit facility and certain other indebtedness, if any, subject to customary reinvestment rights. The revolving 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 revolving 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 notes contain certain customary 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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