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Financings | 3 Months Ended
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Mar. 31, 2012
Financings |
5: | FINANCINGS
Presented in the following table is a summary of major long-term debt transactions during the three months ended March 31, 2012:
|  | Principal (In Millions) |  |  | Interest Rate |  |  | Issue/Retirement Date |  |  | Maturity Date |
Debt Issuances |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
CMS ENERGY |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Senior notes |  | $ | 300 |  |  |  | 5.05% |  |  |  | March 2012 |  |  |  | March 2022 |
Term loan facility 1 ,3 |  |  | 30 |  |  |  | variable |  |  |  | February 2012 |  |  |  | December 2016 |
Total |  | $ | 330 |  |  |  |  |  |  |  |  |  |  |  |  |
Debt Retirements |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
CMS ENERGY |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Contingently convertible senior notes 2 |  | $ | 73 |  |  |  | 2.875% |  |  |  | January 2012 |  |  |  | December 2024 |
Trust Preferred Securities 4 |  |  | 29 |  |  |  | 7.75% |  |  |  | February 2012 |  |  |  | July 2027 |
CONSUMERS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
FMB |  |  | 300 |  |  |  | 5.00% |  |  |  | February 2012 |  |  |  | February 2012 |
Total |  | $ | 402 |  |  |  |  |  |  |  |  |  |  |  |  |
| 1 | In December 2011, CMS Energy entered into a $180 million term loan credit agreement that provides for delayed draws through July 20, 2012. Outstanding borrowings will bear interest at an annual interest rate of LIBOR plus 2.5 percent.
| 2 | CMS Energy's contingently convertible notes. See the "Contingently Convertible Securities" section in this Note for further discussion of the conversions.
| 3 | CMS Energy used these proceeds to retire the 7.75 percent Trust Preferred Securities.
| 4 | In January 2012, CMS Energy called all of its outstanding Trust Preferred Securities.
Revolving Credit Facilities: The following secured revolving credit facilities with banks were available at March 31, 2012:
|  |  |  |  |  |  |  |  |  |  | In Millions |
Expiration Date |  | Amount of Facility |  |  | Amount Borrowed |  |  | Letters of Credit Outstanding |  |  | Amount Available |
CMS ENERGY |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
March 31, 2016 1 |  | $ | 550 |  |  | $ | - |  |  | $ | 3 |  |  | $ | 547 |
CONSUMERS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
March 31, 2016 2 |  | $ | 500 |  |  | $ | - |  |  | $ | 1 |  |  | $ | 499 |
August 9, 2013 2,3 |  |  | 150 |  |  |  | - |  |  |  | - |  |  |  | 150 |
September 9, 2014 2 |  |  | 30 |  |  |  | - |  |  |  | 30 |  |  |  | - |
| 1 | Obligations under this facility are secured by Consumers common stock. CMS Energy's average borrowings during the three months ended March 31, 2012 totaled $20 million, with a weighted-average annual interest rate of 2.28 percent, representing LIBOR plus 2.00 percent.
| 2 | Obligations under this facility are secured by FMBs of Consumers.
| 3 | In April 2012, the expiration date was extended to April 2017.
Short-term Borrowings: Under Consumers' revolving accounts receivable sales program, Consumers may transfer up to $250 million of accounts receivable, subject to certain eligibility requirements. These transactions are accounted for as short-term secured borrowings. At March 31, 2012, $250 million of accounts receivable were eligible for transfer, and no accounts receivable had been transferred under the program. During the three months ended March 31, 2012, Consumers' average short-term borrowings totaled $32 million, with a weighted average annual interest rate of 0.9 percent. Contingently Convertible Securities: Presented in the following table are the significant terms of CMS Energy's contingently convertible securities at March 31, 2012:
Security |  | Maturity |  |  | Outstanding (In Millions) |  |  | Adjusted Conversion Price |  |  | Adjusted Trigger Price |
2.875% senior notes |  |  | 2024 |  |  | $ | 153 |  |  | $ | 12.40 |  |  | $ | 14.88 |
5.50% senior notes |  |  | 2029 |  |  |  | 172 |  |  |  | 14.08 |  |  |  | 18.31 |
During 20 of the last 30 trading days ended March 31, 2012, the adjusted trigger-price contingencies were met for both the contingently convertible senior notes, and as a result, the senior notes are convertible at the option of the note holders for the three months ended June 30, 2012. Presented in the following table are details about conversions of contingently convertible securities during the three months ended March 31, 2012:
Series |  | Conversion Date |  |  | Principal Converted (In Millions) |  |  | Conversion Value per $1,000 of principal |  |  | Shares of Common Stock Issued on Settlement |  |  | Cash Paid on Settlement (In Millions) |
2.875% senior notes due 2024 |  |  | January 2012 |  |  |  | 73 |  |  |  | 1,738.99 |  |  |  | 2,464,138 |  |  |  | 73 |
In March 2012, CMS Energy called all of its outstanding 2.875 percent contingently convertible senior notes. In April, holders tendered for conversion the remaining outstanding notes with a principal amount of $153 million. Notes settled as of April 25, 2012, with a principal amount of $102 million, had an average conversion value of $1,771.76 per $1,000 principal amount of convertible note. CMS Energy issued 3,584,558 shares of its common stock and paid $102 million cash on settlement of these conversions. The remaining tendered notes with a principal amount of $51 million will be settled in late April 2012. Dividend Restrictions: Under provisions of CMS Energy's senior notes indenture, at March 31, 2012, payment of common stock dividends by CMS Energy was limited to $1.2 billion. Under the provisions of its articles of incorporation, at March 31, 2012, Consumers had $454 million of unrestricted retained earnings available to pay common stock dividends to CMS Energy. Provisions of the Federal Power Act and the Natural Gas Act appear to restrict dividends payable by Consumers to the amount of Consumers' retained earnings. Several decisions from FERC suggest that under a variety of circumstances common stock dividends from Consumers would not be limited to amounts in Consumers' retained earnings. Any decision by Consumers to pay common stock dividends in excess of retained earnings would be based on specific facts and circumstances and would result only after a formal regulatory filing process. For the three months ended March 31, 2012, CMS Energy received $115 million of common stock dividends from Consumers.
Consumers Energy Company [Member] |
Financings |
5: | FINANCINGS
Presented in the following table is a summary of major long-term debt transactions during the three months ended March 31, 2012:
|  | Principal (In Millions) |  |  | Interest Rate |  |  | Issue/Retirement Date |  |  | Maturity Date |
Debt Issuances |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
CMS ENERGY |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Senior notes |  | $ | 300 |  |  |  | 5.05% |  |  |  | March 2012 |  |  |  | March 2022 |
Term loan facility 1 ,3 |  |  | 30 |  |  |  | variable |  |  |  | February 2012 |  |  |  | December 2016 |
Total |  | $ | 330 |  |  |  |  |  |  |  |  |  |  |  |  |
Debt Retirements |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
CMS ENERGY |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Contingently convertible senior notes 2 |  | $ | 73 |  |  |  | 2.875% |  |  |  | January 2012 |  |  |  | December 2024 |
Trust Preferred Securities 4 |  |  | 29 |  |  |  | 7.75% |  |  |  | February 2012 |  |  |  | July 2027 |
CONSUMERS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
FMB |  |  | 300 |  |  |  | 5.00% |  |  |  | February 2012 |  |  |  | February 2012 |
Total |  | $ | 402 |  |  |  |  |  |  |  |  |  |  |  |  |
| 1 | In December 2011, CMS Energy entered into a $180 million term loan credit agreement that provides for delayed draws through July 20, 2012. Outstanding borrowings will bear interest at an annual interest rate of LIBOR plus 2.5 percent.
| 2 | CMS Energy's contingently convertible notes. See the "Contingently Convertible Securities" section in this Note for further discussion of the conversions.
| 3 | CMS Energy used these proceeds to retire the 7.75 percent Trust Preferred Securities.
| 4 | In January 2012, CMS Energy called all of its outstanding Trust Preferred Securities.
Revolving Credit Facilities: The following secured revolving credit facilities with banks were available at March 31, 2012:
|  |  |  |  |  |  |  |  |  |  | In Millions |
Expiration Date |  | Amount of Facility |  |  | Amount Borrowed |  |  | Letters of Credit Outstanding |  |  | Amount Available |
CMS ENERGY |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
March 31, 2016 1 |  | $ | 550 |  |  | $ | - |  |  | $ | 3 |  |  | $ | 547 |
CONSUMERS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
March 31, 2016 2 |  | $ | 500 |  |  | $ | - |  |  | $ | 1 |  |  | $ | 499 |
August 9, 2013 2,3 |  |  | 150 |  |  |  | - |  |  |  | - |  |  |  | 150 |
September 9, 2014 2 |  |  | 30 |  |  |  | - |  |  |  | 30 |  |  |  | - |
| 1 | Obligations under this facility are secured by Consumers common stock. CMS Energy's average borrowings during the three months ended March 31, 2012 totaled $20 million, with a weighted-average annual interest rate of 2.28 percent, representing LIBOR plus 2.00 percent.
| 2 | Obligations under this facility are secured by FMBs of Consumers.
| 3 | In April 2012, the expiration date was extended to April 2017.
Short-term Borrowings: Under Consumers' revolving accounts receivable sales program, Consumers may transfer up to $250 million of accounts receivable, subject to certain eligibility requirements. These transactions are accounted for as short-term secured borrowings. At March 31, 2012, $250 million of accounts receivable were eligible for transfer, and no accounts receivable had been transferred under the program. During the three months ended March 31, 2012, Consumers' average short-term borrowings totaled $32 million, with a weighted average annual interest rate of 0.9 percent. Contingently Convertible Securities: Presented in the following table are the significant terms of CMS Energy's contingently convertible securities at March 31, 2012:
Security |  | Maturity |  |  | Outstanding (In Millions) |  |  | Adjusted Conversion Price |  |  | Adjusted Trigger Price |
2.875% senior notes |  |  | 2024 |  |  | $ | 153 |  |  | $ | 12.40 |  |  | $ | 14.88 |
5.50% senior notes |  |  | 2029 |  |  |  | 172 |  |  |  | 14.08 |  |  |  | 18.31 |
During 20 of the last 30 trading days ended March 31, 2012, the adjusted trigger-price contingencies were met for both the contingently convertible senior notes, and as a result, the senior notes are convertible at the option of the note holders for the three months ended June 30, 2012. Presented in the following table are details about conversions of contingently convertible securities during the three months ended March 31, 2012:
Series |  | Conversion Date |  |  | Principal Converted (In Millions) |  |  | Conversion Value per $1,000 of principal |  |  | Shares of Common Stock Issued on Settlement |  |  | Cash Paid on Settlement (In Millions) |
2.875% senior notes due 2024 |  |  | January 2012 |  |  |  | 73 |  |  |  | 1,738.99 |  |  |  | 2,464,138 |  |  |  | 73 |
In March 2012, CMS Energy called all of its outstanding 2.875 percent contingently convertible senior notes. In April, holders tendered for conversion the remaining outstanding notes with a principal amount of $153 million. Notes settled as of April 25, 2012, with a principal amount of $102 million, had an average conversion value of $1,771.76 per $1,000 principal amount of convertible note. CMS Energy issued 3,584,558 shares of its common stock and paid $102 million cash on settlement of these conversions. The remaining tendered notes with a principal amount of $51 million will be settled in late April 2012. Dividend Restrictions: Under provisions of CMS Energy's senior notes indenture, at March 31, 2012, payment of common stock dividends by CMS Energy was limited to $1.2 billion. Under the provisions of its articles of incorporation, at March 31, 2012, Consumers had $454 million of unrestricted retained earnings available to pay common stock dividends to CMS Energy. Provisions of the Federal Power Act and the Natural Gas Act appear to restrict dividends payable by Consumers to the amount of Consumers' retained earnings. Several decisions from FERC suggest that under a variety of circumstances common stock dividends from Consumers would not be limited to amounts in Consumers' retained earnings. Any decision by Consumers to pay common stock dividends in excess of retained earnings would be based on specific facts and circumstances and would result only after a formal regulatory filing process. For the three months ended March 31, 2012, CMS Energy received $115 million of common stock dividends from Consumers.

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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 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 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 129 -Paragraph 2, 4 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 3: 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 4: 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 + Details
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