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Financing | 12 Months Ended
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Dec. 31, 2016
Debt Disclosure [Abstract] |
Financing | Financing The Company’s financing strategy includes both short-term and long-term borrowings. The Company utilizes short-term revolving credit facilities, as well as cash flows from operations, to provide funds for both construction and operating expenditures. Depending on market and other conditions, the Company will periodically sell long-term debt or enter into term loan arrangements and use the proceeds to reduce borrowings under the revolving credit facilities. Each of the revolving credit facilities and the Company’s term loans contains one financial covenant, which requires the maintenance of debt-to-capital ratios of less than or equal to 65%, and generally include customary covenants, events of default, cross default provisions and change of control provisions. PNM must obtain NMPRC approval for any financing transaction having a maturity of more than 18 months. In addition, PNM files its annual short-term financing plan with the NMPRC. Financing Activities PNMR At January 1, 2014, PNMR had outstanding a one-year $100.0 million Term Loan Agreement (as amended and restated, the “PNMR Term Loan Agreement”) due in December 2014. In December 2014 and again in December 2015, PNMR entered into agreements each of which amended and restated the PNMR Term Loan Agreement and extended the maturity date for an additional year. The December 2015 amendment also increased the amount outstanding to $150.0 million. The PNMR Term Loan Agreement was repaid on December 21, 2016. On March 9, 2015, PNMR entered into a $150.0 million Term Loan Agreement (“PNMR 2015 Term Loan Agreement”) between PNMR, the lenders identified therein, and Wells Fargo Bank, National Association, as lender and administrative agent. The PNMR 2015 Term Loan Agreement bears interest at a variable rate, which was 1.55% at December 31, 2016, and must be repaid on or before March 9, 2018. In September 2015, PNMR entered into a hedging agreement whereby it effectively established a fixed interest rate of 1.927%, subject to change if there is a change in PNMR’s credit rating, for borrowings under the PNMR 2015 Term Loan Agreement for the period from January 11, 2016 through March 9, 2018. This hedge is accounted for as a cash-flow hedge and had a fair value loss of less than $0.1 million and a fair value gain of $0.1 million at December 31, 2016 and 2015, using Level 2 inputs under GAAP determined using forward LIBOR curves under the mid-market convention to discount cash flows over the remaining term of the swap agreements. At January 1, 2014, PNMR had an aggregate outstanding principal amount of $118.8 million of its 9.25% Senior Unsecured Notes, Series A, which were due on May 15, 2015. PNMR repaid all of the 9.25% Senior Unsecured Notes, Series A at the scheduled maturity, utilizing proceeds from the PNMR 2015 Term Loan Agreement and borrowings under the PNMR Revolving Credit Facility. As discussed in Note 16, NM Capital, a wholly owned subsidiary of PNMR, entered into a $125.0 million term loan agreement (the “BTMU Term Loan Agreement”) with BTMU, as lender and administrative agent, as of February 1, 2016. The BTMU Term Loan Agreement has a maturity date of February 1, 2021 and bears interest at a rate based on LIBOR plus a customary spread, which aggregated 3.64% at December 31, 2016. PNMR, as parent company of NM Capital, has guaranteed NM Capital’s obligations to BTMU. The BTMU Term Loan Agreement and the guaranty include customary covenants, including requirements for PNMR to not exceed a maximum debt-to-capital ratio of 65%, and customary events of default consistent with PNMR’s other term loan agreements. In addition, the BTMU Term Loan Agreement has a cross default provision and a change of control provision. NM Capital utilized the proceeds of the BTMU Term Loan Agreement to provide funding of $125.0 million (the “Westmoreland Loan”) to a ring-fenced, bankruptcy-remote, special-purpose entity that is a subsidiary of Westmoreland Coal Company to finance the purchase price of the stock of SJCC. The BTMU Term Loan Agreement provides that the amount outstanding thereunder must be reduced by at least $5.0 million quarterly beginning on November 1, 2016. NM Capital is also required to utilize the net proceeds of all amounts received under the Westmoreland Loan, after income taxes and fees, to make principal and interest payments on the BTMU Term Loan Agreement. The principal balance outstanding under the BTMU Term Loan Agreement was $92.2 million at December 31, 2016 and $82.8 million at February 21, 2017. Based on scheduled payments on the Westmoreland Loan, NM Capital estimates it will make principal payments of $42.0 million on the BTMU Term Loan Agreement in the twelve months ended December 31, 2017, including $9.4 million paid on February 1, 2017. On October 21, 2016, PNMR entered into letter of credit arrangements with JPMorgan Chase Bank, N.A. (the “JPM LOC Facility”) under which letters of credit aggregating $30.3 million were issued to replace letters of credit previously issued from available capacity under the PNMR Revolving Credit Facility. The letters of credit facilitate the posting of reclamation bonds, which SJCC is required to post in connection with permits relating to the operation of the San Juan mine (Note 16). On December 21, 2016, PNMR entered into two term loan agreements: (1) a $100.0 million term loan agreement (“PNMR 2016 One-Year Term Loan”) among PNMR, the lenders identified therein, and Wells Fargo Bank, National Association, as administrative agent, that matures on December 21, 2017; and (2) a $100.0 million term loan agreement (“PNMR 2016 Two-Year Term Loan”) among PNMR and JPMorgan Chase Bank, N.A., as lender and administrative agent, that matures on December 21, 2018. The proceeds of the term loans were used to repay the $150.0 million PNMR Term Loan Agreement and to reduce borrowings under the PNMR Revolving Credit Facility. The PNMR 2016 One-Year Term Loan and the PNMR 2016 Two-Year Term Loan bear interest at variable rates, which were 1.60% and 1.69% at December 31, 2016. PNM On March 5, 2014, PNM entered into a $175.0 million Term Loan Agreement (the “PNM 2014 Term Loan Agreement”) among PNM and BTMU, as lender and administrative agent. On March 5, 2014, PNM used a portion of the funds borrowed under the PNM 2014 Term Loan Agreement to repay all amounts outstanding under a $75.0 million term loan and other short-term amounts outstanding. The PNM 2014 Term Loan Agreement was repaid on August 12, 2015. On December 22, 2014, PNM entered into a $125.0 million multi-draw term loan facility (the “PNM Multi-draw Term Loan”) with JPMorgan Chase Bank, N.A., as lender and administrative agent, that had a maturity date of June 21, 2016. At December 31, 2014, outstanding borrowings under the PNM Multi-draw Term Loan were $100.0 million. PNM drew the remaining capacity of $25.0 million on May 8, 2015. The PNM Multi-draw Term Loan was repaid on May 20, 2016. At January 1, 2014, PNM had a $39.3 million series of outstanding Senior Unsecured Notes, Pollution Control Revenue Bonds, which have a final maturity of June 1, 2043. These PCRBs were subject to mandatory tender for remarketing on June 1, 2015 and were successfully remarketed on that date. The notes now bear interest at 2.40%, continue to have an outstanding amount of $39.3 million, and are subject to mandatory tender for remarketing on June 1, 2020. On August 11, 2015, PNM issued $250.0 million aggregate principal amount of its 3.850% Senior Unsecured Notes due 2025. The notes will mature on August 1, 2025. Portions of the proceeds from the offering were used to repay the existing $175.0 million PNM 2014 Term Loan Agreement and to repay outstanding borrowings under the PNM Revolving Credit Facility, the PNM New Mexico Credit Facility, and PNM’s intercompany loan from PNMR. On May 20, 2016, PNM entered into a $175.0 million term loan agreement (the “PNM 2016 Term Loan Agreement”) between PNM and JPMorgan Chase Bank, N.A., as lender and administrative agent. The PNM 2016 Term Loan Agreement bears interest at a variable rate, which was 1.36% at December 31, 2016, and has a maturity date of November 17, 2017. PNM used a portion of the proceeds of the PNM 2016 Term Loan Agreement to prepay without penalty the $125.0 million outstanding under the PNM Multi-draw Term Loan, which had a scheduled maturity of June 21, 2016. On September 27, 2016, PNM participated in the issuance and sale of an aggregate of $146.0 million of PCRBs by the City of Farmington, New Mexico. The proceeds from the sale were utilized to refund an aggregate of $146.0 million of outstanding PCRBs previously issued by the City of Farmington. The arrangements governing the PCRBs result in PNM reflecting the bonds as debt on its financial statements. The PCRBs issued consist of the 2016 Series A in the aggregate principal amount of $46.0 million and the 2016 Series B in the aggregate principal amount of $100.0 million. Both series bear interest at a rate of 1.875% for the period from September 27, 2016 through September 30, 2021, have a mandatory tender for remarketing on October 1, 2021, and a final maturity on April 1, 2033. PNM has a shelf registration statement, which will expire in May 2017, with capacity for the issuance of up to $250.0 million of senior unsecured notes. TNMP On December 9, 2013, TNMP entered into an agreement (the “TNMP 2013 Bond Purchase Agreement”), which provided that TNMP would issue $80.0 million aggregate principal amount of 4.03% first mortgage bonds, due 2024 (the “Series 2014A Bonds”) on or about June 27, 2014, subject to satisfaction of certain conditions. TNMP issued the Series 2014A Bonds on June 27, 2014. TNMP used $50.0 million of the proceeds to repay the full outstanding amount of a term loan and used the remaining $30.0 million of proceeds to reduce short-term debt. On December 17, 2015, TNMP entered into an agreement (the “TNMP 2015 Bond Purchase Agreement”), which provided that TNMP would issue $60.0 million aggregate principal amount of 3.53% first mortgage bonds, due 2026 (the “Series 2016A Bonds”) on or about February 10, 2016, subject to satisfaction of certain conditions. TNMP issued the Series 2016A Bonds on February 10, 2016 and used the proceeds to reduce short-term debt and intercompany debt. Borrowing Arrangements Between PNMR and its Subsidiaries PNMR has one-year intercompany loan agreements with its subsidiaries. Individual subsidiary loan agreements vary in amount up to $100.0 million and have either reciprocal or non-reciprocal terms. Interest charged to the subsidiaries is equivalent to interest paid by PNMR on its short-term borrowings or the money-market interest rate if PNMR does not have any short-term borrowings outstanding. As of December 31, 2016 and 2015, TNMP had outstanding borrowings of $4.6 million and $11.8 million from PNMR. At February 21, 2017, TNMP had borrowings of $7.4 million from PNMR. PNM had no outstanding borrowings from PNMR at December 31, 2016 or February 21, 2017. Short-term Debt Currently, the PNMR Revolving Credit Facility has a financing capacity of $300.0 million and the PNM Revolving Credit Facility has a financing capacity of $400.0 million. In November 2016, PNMR and PNM entered into agreements to extend the maturity of both facilities from October 31, 2020 to October 31, 2021. However, one lender, whose current commitment is $10.0 million under the PNMR Revolving Credit Facility and $40.0 million under the PNM Revolving Credit Facility, did not agree to extend its commitment beyond October 31, 2020. Unless one or more of the other current lenders or a new lender assumes the commitments of the non-extending lender, the financing capacities will be reduced to $290.0 million for the PNMR Revolving Credit Facility and $360.0 million for the PNM Revolving Credit Facility from November 1, 2020 through October 31, 2021. The TNMP Revolving Credit Facility is a $75.0 million revolving credit facility, which is secured by $75.0 million aggregate principal amount of TNMP first mortgage bonds and matures on September 18, 2018. On January 8, 2014, PNM entered into a $50.0 million unsecured revolving credit facility (the “PNM New Mexico Credit Facility”) by and among PNM, the lenders identified therein, U.S. Bank National Association, as administrative agent, and BOKF, NA dba Bank of Albuquerque, as Syndication Agent. The nine participating lenders are all banks that have a significant presence in New Mexico and PNM’s service territory or are headquartered in New Mexico. The PNM New Mexico Credit Facility expires on January 8, 2018 and contains covenants and conditions similar to those in the PNM Revolving Credit Facility. At December 31, 2016, interest rates on outstanding borrowings were 1.98% for the PNMR Revolving Credit Facility, 1.82% for the PNM Revolving Credit Facility, and 1.81% for the PNM New Mexico Credit Facility. The TNMP Revolving Credit Facility had no borrowings outstanding at December 31, 2016. Short-term debt outstanding consists of:
|  | December 31,
Short-term Debt |  | 2016 |  | 2015
|  | (In thousands)
PNM: |  |  |  |
PNM Revolving Credit Facility |  | $ | 35,000 |  |  | $ | — |
PNM New Mexico Credit Facility |  | 26,000 |  |  | — |
|  | 61,000 |  |  | — |
TNMP Revolving Credit Facility |  | — |  |  | 59,000 |
PNMR: |  |  |  |
PNMR Revolving Credit Facility |  | 126,100 |  |  | 41,600 |
PNMR Term Loan Agreement |  | — |  |  | 150,000 |
PNMR 2016 One-Year Term Loan |  | $ | 100,000 |  |  |
|  | $ | 287,100 |  |  | $ | 250,600 |
In addition to the above borrowings, PNMR, PNM, and TNMP had letters of credit outstanding of $6.2 million, $2.5 million, and $0.1 million at December 31, 2016 that reduce the available capacity under their respective revolving credit facilities. In addition, PNMR had $30.3 million of letters of credit outstanding under the JPM LOC Facility. At February 21, 2017, PNMR, PNM, and TNMP had $149.5 million, $366.2 million, and $66.9 million of availability under their respective revolving credit facilities, including reductions of availability due to outstanding letters of credit, and PNM had $25.0 million availability under the PNM New Mexico Credit Facility. Total availability at February 21, 2017, on a consolidated basis, was $607.6 million for PNMR. At February 21, 2017, PNMR had invested cash of $1.5 million. PNM and TNMP had no invested cash at February 21, 2017. Long-Term Debt Information concerning long-term debt outstanding and unamortized (premiums), discounts, and debt issuance costs is as follows:
|  | December 31, 2016 |  | December 31, 2015
|  | Principal |  | Unamortized Discounts, (Premiums), and Issuance Costs, net |  | Principal |  | Unamortized Discounts, (Premiums), and Issuance Costs, net
|  | (In thousands)
PNM Debt |  |  |  |  |  |  |  |
Senior Unsecured Notes, Pollution Control Revenue Bonds: |  |  |  |  |  |  |  |
4.875% due 2033 |  | $ | — |  |  | $ | — |  |  | $ | 146,000 |  |  | $ | 721 |
1.875% due 2033, mandatory tender at October 1, 2021 |  | 146,000 |  |  | 1,807 |  |  | — |  |  | — |
6.25% due 2038 |  | 36,000 |  |  | 239 |  |  | 36,000 |  |  | 251 |
4.75% due 2040, mandatory tender at June 1, 2017 |  | 37,000 |  |  | 25 |  |  | 37,000 |  |  | 82 |
5.20% due 2040, mandatory tender at June 1, 2020 |  | 40,045 |  |  | 147 |  |  | 40,045 |  |  | 190 |
5.90% due 2040 |  | 255,000 |  |  | 2,131 |  |  | 255,000 |  |  | 2,222 |
6.25% due 2040 |  | 11,500 |  |  | 96 |  |  | 11,500 |  |  | 100 |
2.54% due 2042, mandatory tender at June 1, 2017 |  | 20,000 |  |  | 67 |  |  | 20,000 |  |  | 199 |
2.40% due 2043, mandatory tender at June 1, 2020 |  | 39,300 |  |  | 340 |  |  | 39,300 |  |  | 456 |
5.20% due 2043, mandatory tender at June 1, 2020 |  | 21,000 |  |  | 75 |  |  | 21,000 |  |  | 96 |
Senior Unsecured Notes: |  |  |  |  |  |  |  |
7.95% due 2018 |  | 350,000 |  |  | 995 |  |  | 350,000 |  |  | 1,718 |
7.50% due 2018 |  | 100,025 |  |  | 197 |  |  | 100,025 |  |  | 320 |
5.35% due 2021 |  | 160,000 |  |  | 780 |  |  | 160,000 |  |  | 943 |
3.85% due 2025 |  | 250,000 |  |  | 2,574 |  |  | 250,000 |  |  | 2,874 |
PNM Multi-draw Term Loan due 2016 |  | — |  |  | — |  |  | 125,000 |  |  | 21 |
PNM 2016 Term Loan Agreement due 2017 |  | 175,000 |  |  | 28 |  |  | — |  |  | — |
|  | 1,640,870 |  |  | 9,501 |  |  | 1,590,870 |  |  | 10,193 |
Less current maturities |  | 232,000 |  |  | 120 |  |  | 125,000 |  |  | 21 |
|  | 1,408,870 |  |  | 9,381 |  |  | 1,465,870 |  |  | 10,172 |
TNMP Debt |  |  |  |  |  |  |  |
First Mortgage Bonds: |  |  |  |  |  |  |  |
9.50% due 2019, Series 2009A |  | 172,302 |  |  | 1,857 |  |  | 172,302 |  |  | 2,682 |
6.95% due 2043, Series 2013A |  | 93,198 |  |  | (18,773 | ) |  | 93,198 |  |  | (19,490 | )
4.03% due 2024, Series 2014A |  | 80,000 |  |  | 792 |  |  | 80,000 |  |  | 897 |
3.53% due 2026, Series 2016A |  | 60,000 |  |  | 749 |  |  | — |  |  | — |
|  | 405,500 |  |  | (15,375 | ) |  | 345,500 |  |  | (15,911 | )
Less current maturities |  | — |  |  | — |  |  | — |  |  | — |
|  | 405,500 |  |  | (15,375 | ) |  | 345,500 |  |  | (15,911 | )
PNMR Debt |  |  |  |  |  |  |  |
PNMR 2015 Term Loan Agreement due 2018 |  | 150,000 |  |  | 84 |  |  | 150,000 |  |  | 140 |
BTMU Term Loan Agreement |  | 92,207 |  |  | 1,634 |  |  | — |  |  | — |
PNMR 2016 Two-Year Term Loan due 2018 |  | 100,000 |  |  | 21 |  |  | — |  |  | — |
|  | 342,207 |  |  | 1,739 |  |  | 150,000 |  |  | 140 |
Less current maturities |  | 42,025 |  |  | 557 |  |  | — |  |  | — |
|  | 300,182 |  |  | 1,182 |  |  | 150,000 |  |  | 140 |
Total Consolidated PNMR Debt |  | 2,388,577 |  |  | (4,135 | ) |  | 2,086,370 |  |  | (5,578 | )
Less current maturities |  | 274,025 |  |  | 677 |  |  | 125,000 |  |  | 21 |
|  | $ | 2,114,552 |  |  | $ | (4,812 | ) |  | $ | 1,961,370 |  |  | $ | (5,599 | )
Reflecting mandatory tender dates, long-term debt matures as follows:
| PNMR |  | PNM |  | TNMP |  | PNMR Consolidated
| (In thousands)
2017 | $ | 42,025 |  |  | $ | 232,000 |  |  | $ | — |  |  | $ | 274,025 |
2018 | 257,700 |  |  | 450,025 |  |  | — |  |  | 707,725 |
2019 | 12,310 |  |  | — |  |  | 172,302 |  |  | 184,612 |
2020 | 25,900 |  |  | 100,345 |  |  | — |  |  | 126,245 |
2021 | 4,272 |  |  | 306,000 |  |  | — |  |  | 310,272 |
Thereafter | — |  |  | 552,500 |  |  | 233,198 |  |  | 785,698 |
Total | $ | 342,207 |  |  | $ | 1,640,870 |  |  | $ | 405,500 |  |  | $ | 2,388,577 |

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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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