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BANK BORROWINGS | 12 Months Ended
--- | ---
Dec. 31, 2011
BANK BORROWINGS |
BANK BORROWINGS |
10. BANK BORROWINGS
|  | At December 31, 2010 |  | At December 31, 2011 |
--- | --- | --- | --- | --- | ---
|  | $ |  | $ |
Bank borrowings |  |  | 609,978,254 |  |  | 831,936,089 |
Analysis as: |  |  |  |  |  |  |
Short-term |  |  | 489,380,618 |  |  | 629,688,722 |
Long-term, current portion |  |  | 51,139,457 |  |  | 113,998,340 |
Subtotal for short-term |  |  | 540,520,075 |  |  | 743,687,062 |
Long-term, non-current portion |  |  | 69,458,179 |  |  | 88,249,027 |
Total |  |  | 609,978,254 |  |  | 831,936,089 |
In the years ended December 31, 2010 and 2011, the maximum bank credit facilities granted to the Company were $1,331,189,998 and $1,852,007,255, respectively, of which $609,978,254 and $831,936,089 were drawn down and $721,211,744 and $1,020,071,166 were available, respectively. As of December 31, 2011, short-term borrowings of $86,534,550 and long-term borrowings of $83,487,817 were secured by property, plant and equipment with carrying amounts of $17,084,561, inventory of $62,470,425 and a prepaid land use right of $5,978,634. a) Short-term The Company's short-term bank borrowings consisted of the following:
|  | At December 31, 2010 |  | At December 31, 2011 |
--- | --- | --- | --- | --- | ---
|  | $ |  | $ |
Short-term borrowings guaranteed by Dr. Shawn Qu |  |  | 37,749,000 |  |  | 33,328,470 |
Short-term borrowings secured by restricted cash |  |  | 84,381,806 |  |  | 74,873,390 |
Short-term borrowings secured by land use right and property, plant and equipment |  |  | 53,286,488 |  |  | 39,295,970 |
Short-term borrowings secured by inventory |  |  | — |  |  | 15,767,880 |
Notes |  |  | 73,988,040 |  |  | — |
Unsecured short-term borrowings |  |  | 239,975,284 |  |  | 466,423,012 |
Long-term Loans due within one year |  |  |  |  |  |  |
Unsecured |  |  | 6,039,857 |  |  | 82,527,640 |
Secured by inventory |  |  | 30,000,000 |  |  | 15,600,000 |
Secured by property, plant and equipment |  |  | 15,099,600 |  |  | 15,870,700 |
Total |  |  | 540,520,075 |  |  | 743,687,062 |
The average interest rate on short-term borrowings was 3.59% and 5.16% per annum for the years ended December 31, 2010 and 2011, respectively. The borrowings are repayable within one year. b) Long-term The Company's long-term bank borrowings consisted of the following:
|  | At December 31, 2010 |  | At December 31, 2011 |
--- | --- | --- | --- | --- | ---
|  | $ |  | $ |
Unsecured |  |  | 9,059,783 |  |  | 4,761,210 |
Long-term borrowings secured by land use right and property, plant and equipment |  |  | 60,398,396 |  |  | 83,487,817 |
Total |  |  | 69,458,179 |  |  | 88,249,027 |
The average interest rate on long-term borrowings was 5.75% and 6.70% per annum for the years ended December 31, 2010 and 2011, respectively. Future principal repayment on the long-term bank loans are as follows:
2012 |  |  | 113,998,340 |
2013 |  |  | 16,664,235 |
2014 |  |  | 54,690,432 |
2015 and after |  |  | 16,894,360 |
Total |  |  | 202,247,367 |
Less: future principal repayment related to long-term loan, current portion |  |  | (113,998,340 | )
Total long-term portion |  | $ | 88,249,027 |
On June 25, 2009, CSI Solar Power Inc. entered into several loan agreements with a local Chinese commercial bank for the construction of solar module production lines. The total credit facility under those agreements is $14,283,630, which requires repayment of $4,761,210, $4,761,210, $3,174,140 and $1,587,070 in 2011, 2012, 2013 and 2014, respectively. Interest is due quarterly in arrears. The outstanding balance as of December 31, 2011 was $9,522,420 and was guaranteed by CSI Cells Co., Ltd. The borrowing bears a floating base interest rate published by People's Bank of China for borrowings with the same maturities and does not contain any financial covenants or restrictions. On January 20, 2010, CSI Solar Power Inc. was merged into Canadian Solar Manufacturing (Changshu) Inc., and the loan was transferred to Canadian Solar Manufacturing (Changshu) Inc. On May 31, 2010, CSI Cells Co., Ltd. entered into a syndicated loan agreement with local Chinese commercial banks for the expansion of solar cell production capacity. The total credit facility under this agreement is $140,915,945, or an equivalent RMB amount, with two tranches. The first tranche has a credit limit of $69,164,511, which requires repayment within one year. The second tranche has a credit limit of $71,751,434, As of December 31, 2011, CSI Cells Co., Ltd. has drawn $34,582,255 from the first tranche in RMB, and $69,997,722 from the second tranche in RMB. Both tranches bear the base interest rate published by People's Bank of China for the same maturity for RMB denominated borrowings. Interest under both tranches is due quarterly in arrears. Outstanding borrowings under this agreement were $104,579,977 at December 31, 2011, which requires repayment of $34,582,255, $53,103,362 and $16,894,360 in 2012, 2014, and 2015 respectively. The borrowing under the agreement is secured by the land use right and buildings of CSI Cells Co., Ltd and are guaranteed by CSI Solar Power (China) Inc., Canadian Solar Manufacturing (Luoyang) Inc. and Canadian Solar Manufacturing (Changshu) Inc. The agreement does not contain any financial covenants or restrictions. On September 29, 2010, Canadian Solar Manufacturing (Changshu) Inc. entered into a loan agreement with Standard Chartered Bank for working capital purposes. The total credit facility under the agreement is $30,000,000, which requires repayment of $14,400,000 and $15,600,000 in 2011 and 2012, respectively. Interest is due monthly in arrears. The outstanding balance as of December 31, 2011 was $15,600,000. The borrowing bears an interest rate of 4.5% and contains several financial covenants. As of December 31, 2011, CSI was not in compliance with one of the financial covenants, which required them to maintain consolidated net assets of no less than $590,000,000. Accordingly, the entire outstanding borrowing is immediately due and payable, at the option of the bank, and has been classified as a short-term borrowing as of December 31, 2011. On November 11, 2010, Canadian Solar Manufacturing (Changshu) Inc. entered into a loan agreement with a local Chinese bank for the expansion of solar module production lines. The total credit facility under this agreement is $47,612,100, which requires repayments of $15,870,700, $15,870,700 and $15,870,700 in 2012, 2013 and 2014, respectively. The outstanding balance as of December 31, 2011 was $29,360,795, which was secured by the land use right and buildings of Canadian Solar Manufacturing (Changshu) Inc. and guaranteed by CSI Cells Co., Ltd. and Canadian Solar Manufacturing (Luoyang) Inc. Interest is due quarterly in arrears. The borrowing bears a floating rate equal to 95% of the base interest rate published by People's Bank of China and does not contain any financial covenants or restrictions. On April 2, 2011, Canadian Solar Manufacturing (Changshu) Inc. entered into a loan agreement with a local Chinese bank for working capital purposes. The total credit facility under the agreement is $47,612,100, which has a maturity of 18 months. Interest is due quarterly in arrears. The outstanding balance as of December 31, 2011 was $47,612,100 and was guaranteed by CSI Cell Co., Ltd and Canadian Solar Manufacturing (Luoyang) Inc. The borrowing bears a floating rate equal to 90% of the base interest rate published by People's Bank of China and does not contain any financial covenants or restrictions. On June 27, 2011, Canadian Solar Manufacturing (Changshu) Inc. entered into a loan agreement with a local Chinese bank for working capital purposes. The total credit facility under the agreement is $31,741,140, which has a maturity of 14 months. Interest is due quarterly in arrears. The outstanding balance as of December 31, 2011 was $31,741,140 and was guaranteed by CSI Cell Co., Ltd and Canadian Solar Manufacturing (Luoyang) Inc. The borrowing bears a floating rate equal to 90% of the base interest rate published by People's Bank of China and does not contain any financial covenants or restrictions. c) Interest expense
|  | Years Ended December 31 |
--- | --- | --- | ---
|  | 2009 |  | 2010 |  | 2011 |
|  | $ |  | $ |  | $ |
Interest capitalized |  |  | 1,306,686 |  |  | 1,686,262 |  |  | 4,099,815 |
Interest expense |  |  | 9,458,983 |  |  | 22,164,363 |  |  | 43,843,586 |
Total interest incurred |  |  | 10,765,669 |  |  | 23,850,625 |  |  | 47,943,401 |

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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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