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BORROWINGS | 12 Months Ended
--- | ---
Dec. 31, 2012
BORROWINGS |
BORROWINGS | 10. BORROWINGS
|  | At December 31, 2011 |  | At December 31, 2012 |
--- | --- | --- | --- | --- | ---
|  | $ |  | $ |
Bank borrowings |  |  | 831,936,089 |  |  | 1,073,489,705 |
Analysis as: |  |  |  |  |  |  |
Short-term |  |  | 629,688,722 |  |  | 800,808,595 |
Long-term, current portion |  |  | 113,998,340 |  |  | 17,481,257 |
Subtotal for short-term |  |  | 743,687,062 |  |  | 818,289,852 |
Long-term, non-current portion |  |  | 88,249,027 |  |  | 214,562,973 |
Borrowings from non-banking financial institutions |  |  | — |  |  | 40,636,880 |
Analysis as: |  |  |  |  |  |  |
Short-term |  |  | — |  |  | 40,636,880 |
Total |  |  | 831,936,089 |  |  | 1,073,489,705 |
As of December 31, 2012, the Company had contractual bank credit facilities of $1,388,843,703, of which $214,562,973 has been drawn down with the due dates beyond December 31, 2013 and $706,602,827 has been drawn down with the due dates before December 31, 2013; and $467,677,902 was available for draw down upon demand. In addition, as of December 31, 2012, the Company also had non-binding bank credit facilities of $189,324,636, of which $134,720,502 has been drawn down with the due dates before December 31, 2013 and $54,604,134 was subject to banks' discretion upon request for additional drawn down. As of December 31, 2012, short-term borrowings of $324,748,289 and long-term borrowings of $71,593,182 were secured by property, plant and equipment with carrying amounts of $43,279,771, inventory of $31,819,267 and a prepaid land use right of $7,864,132. a) Short-term The Company's short-term borrowings consisted of the following:
|  | At December 31, 2011 |  | At December 31, 2012 |
--- | --- | --- | --- | --- | ---
|  | $ |  | $ |
Bank borrowings |  |  |  |  |  |  |
Short-term borrowings secured by restricted cash |  |  | 74,873,390 |  |  | 175,289,355 |
Short-term borrowings secured by inventory |  |  | 15,767,880 |  |  | 79,548,166 |
Short-term borrowings guaranteed by Dr. Shawn Qu |  |  | 33,328,470 |  |  | 66,349,563 |
Short-term borrowings secured by land use right and property, plant and equipment |  |  | 39,295,970 |  |  | 231,676,935 |
Bank notes |  |  | — |  |  | 21,825,595 |
Unsecured short-term borrowings |  |  | 466,423,012 |  |  | 226,118,981 |
Long-term Loans due within one year |  |  |  |  |  |  |
Secured by property, plant and equipment |  |  | 15,870,700 |  |  | 13,523,188 |
Secured by inventory |  |  | 15,600,000 |  |  | — |
Unsecured |  |  | 82,527,640 |  |  | 3,958,069 |
Subtotal |  |  | 743,687,062 |  |  | 818,289,852 |
Borrowings from non-banking financial institutions |  |  |  |  |  |  |
Short-term borrowings secured by related parties |  |  | — |  |  | 4,781,410 |
Bank notes |  |  | — |  |  | 35,855,470 |
Subtotal |  |  | — |  |  | 40,636,880 |
Total |  |  | 743,687,062 |  |  | 858,926,732 |
The average interest rate on short-term borrowings was 5.16% and 4.60% per annum for the years ended December 31, 2011 and 2012, 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, 2011 |  | At December 31, 2012 |
--- | --- | --- | --- | --- | ---
|  | $ |  | $ |
Unsecured |  |  | 4,761,210 |  |  | 142,969,791 |
Long-term borrowings secured by land use right and property, plant and equipment |  |  | 83,487,817 |  |  | 71,593,182 |
Total |  |  | 88,249,027 |  |  | 214,562,973 |
The average interest rate on long-term borrowings was 6.70% and 6.68% per annum for the years ended December 31, 2011 and 2012, respectively. Future principal repayment on the long-term bank loans are as follows:
2013 |  |  | 17,481,257 |
2014 |  |  | 75,732,288 |
2015 |  |  | 33,232,774 |
2016 and after |  |  | 105,597,911 |
Total |  |  | 232,044,230 |
Less: future principal repayment related to long-term loan, current portion |  |  | (17,481,257 | )
Total long-term portion |  | $ | 214,562,973 |
On June 25, 2009, CSI Solar Power Inc. entered into several loan agreements with a local Chinese commercial bank for the construction of solar wafer production lines. The total credit facility under those agreements is $14,318,677, which requires repayment of $4,772,880, $4,772,880, $3,181,927 and $1,590,960 in 2011, 2012, 2013 and 2014, respectively. Interest is due quarterly in arrears. The outstanding balance as of December 31, 2012 was $4,772,887 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 $141,261,201, or an equivalent RMB amounts, with two tranches. The first tranche has a credit limit of $69,333,970, which requires repayment within one year. The second tranche has a credit limit of $71,927,231. As of December 31, 2012, CSI Cells Co., Ltd. has drawn $34,667,091, from the first tranche in RMB, and $70,169,290 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, 836,381 at December 31, 2012, which requires repayment of $34,667,091, $53,233,522, and $16,935,768 in 2013, 2014 and 2015 respectively. The borrowing under the agreement is guaranteed by CSI Cells Co., Ltd, Canadian Solar Manufacturing (Luoyang) Inc., and Canadian Solar Manufacturing (Changshu) Inc. The agreement does not contain any financial covenants or restrictions. On November 11, 2010, Canadian Solar Manufacturing (Changshu) Inc. entered into a loan agreement with a local Chinese commercial bank for the expansion of solar module production lines. The total credit facility under this agreement is $47,728,900, which requires repayments of $15,909,603, $15,909,603 and $15,909,604 in 2012, 2013 and 2014, respectively. The outstanding balance as of December 31, 2012 was $13,523,188, 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 October 29, 2011, CSI Cells Co., Ltd. entered into a syndicated loan agreement with local Chinese commercial banks. The total credit facility under this agreement is $130,458,720, or an equivalent RMB amount, with two tranches. The first tranche has a credit limit of $27,046,320, which requires repayment within one year and for working capital purpose. The second tranche has a credit limit of $103,412,400 for the expansion of solar cell production capacity of CSI Cell Co., Ltd. As of December 31, 2012, CSI Cells Co., Ltd. has drawn $13,523,188, from the first tranche in RMB, and $71,593,182 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 $85,116,370 at December 31, 2012, which requires repayment of $13,523,188, $6,118,823, $6,118,823, $15,359,128 and $43,996,408 in 2013, 2014, 2015, 2016 and 2017 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 borrowing contains financial covenants which require that the ratio of liabilities to assets of CSI Cells Co, Ltd, shall not exceed 80%, the ratio of liabilities to assets of Canadian Solar Manufacturing (Changshu) Inc. and the Company shall not exceed 90%. As at December 31, 2012, the Company met all the requirements of the financial covenants. On June 26, 2012, Canadian Solar Japan K.K. entered into a loan agreement with a Japanese bank for working capital. The total credit facility under the agreement is $1,921,478, which has a maturity of 36 months, which requires the repayment of $776,142, $776,142 $369,194 in 2013, 2014 and 2015 respectively. The borrowing bears a fixed rate of 0.9% and does not contain any financial covenants or restrictions. On August 13, 2012, CSI entered into a loan agreement with a local Chinese bank for the acquisition of projects 16. The total credit facility under the agreement is $93,298,555, or an equivalent CAD amount, which has a maturity of 60 months. Interest is due quarterly in arrears. The outstanding balance as of December 31, 2012 was $70,064,205, which requires repayment of $14,012,841, $9,808,989, $ 21,019,262 and $ 25,223,113 in 2014, 2015, 2016 and 2017 respectively. The loan was guaranteed by CSI Solar Project 16 Inc., CSI Solar Power (China) Inc. and Canadian Solar Solutions Inc. The borrowing bears a floating interest rate equal to LIBOR+4.9%. The borrowing contains financial covenants which require that for any period ended Jun 30 and December 31 of each year, the ratio of liabilities to assets of the Company shall be no higher than 88%. As at December 31, 2012, the Company met the requirements of the financial covenants. c) Interest expense The Company capitalized interest costs incurred into the Company's property, plant and equipment or the Company's project assets as follows during the years ended December 31, 2010, 2011 and 2012:
|  | Years Ended December 31 |
--- | --- | --- | ---
|  | 2010 |  | 2011 |  | 2012 |
|  | $ |  | $ |  | $ |
Interest capitalized—project assets |  |  | — |  |  | — |  |  | 4,631,569 |
Interest capitalized—property, plant and equipment |  |  | 1,686,262 |  |  | 4,099,815 |  |  | 670,374 |
Interest expense |  |  | 22,164,363 |  |  | 43,843,586 |  |  | 53,304,640 |
Total interest incurred |  |  | 23,850,625 |  |  | 47,943,401 |  |  | 58,606,583 |

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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 Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 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 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. + Details
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