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BORROWINGS

12 Months Ended

Dec. 31, 2017

BORROWINGS

BORROWINGS

14. BORROWINGS

		At December 31, 2016			At December 31, 2017
		$			$
Bank borrowings			1,960,893			2,043,974
​	​	​	​	​	​	​	​
Analysis as:
Short-term			902,348			829,035
Long-term, current portion			675,857			860,954
​	​	​	​	​	​	​	​
Subtotal for short-term			1,578,205			1,689,989
Long-term, non-current portion			382,688			353,985
​	​	​	​	​	​	​	​
Borrowings from non-banking institutions			132,595			318,122
​	​	​	​	​	​	​	​
Analysis as:
Short-term			—			270
Long-term, current portion			21,828			267,496
​	​	​	​	​	​	​	​
Subtotal for short-term			21,828			267,766
Long-term, non-current portion			110,767			50,356
​	​	​	​	​	​	​	​
Total			2,093,488			2,362,096
​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​

        As of December 31, 2017, the Company had contractual credit facilities of $3,477,650 and $455,507 was available for draw down upon demand. In addition, as of December 31, 2017, the Company also had non-binding credit facilities of $485,869.

        As of December 31, 2017, short-term borrowings of $1,582,100 and long-term borrowings of $266,133 were secured by property, plant and equipment with carrying amounts of $206,689, inventories of $111,437, prepaid land use rights of $52,513, equity of $789,204, restricted cash of $219,377, accounts receivable of $253,164 and project assets and solar power systems of $1,546,819.

a) Short-term

        The Company's short-term borrowings consist of the following:

		At December 31, 2016			At December 31, 2017
		$			$
Bank borrowings
Short-term bank borrowings secured by restricted cash			266,685			267,507
Short-term bank borrowings secured by inventories			46,408			7,652
Short-term bank borrowings secured by prepaid land use rights and property, plant and equipment			211,263			248,502
Short-term bank borrowings secured by project assets and solar power systems			82,079			2,700
Unsecured short-term borrowings			295,913			302,674
Long-term borrowings due within one year
Long-term borrowings due within one year secured by prepaid land use rights and property, plant and equipment			16,919			8,313
Long-term borrowings due within one year secured by project assets and solar power systems			630,696			690,283
Long-term bank borrowings due within one year secured by equity			18,765			151,000
Unsecured long-term borrowings due within one year			9,477			11,358
​	​	​	​	​	​	​	​
			1,578,205			1,689,989
Borrowings from non-banking institutions
Short-term borrowings secured by project assets			—			270
Long-term borrowings due within one year secured by project assets			2,640			205,873
Unsecured long-term borrowings due within one year			19,188			61,623
​	​	​	​	​	​	​	​
			21,828			267,766
​	​	​	​	​	​	​	​
Total			1,600,033			1,957,755
​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​

        The average interest rate on short-term borrowings was 3.45% and 3.31% per annum for the years ended December 31, 2016 and 2017, respectively. Certain long-term borrowings were classified as current liabilities because these borrowings are associated with certain solar power projects that are expected to be sold within one year.

b) Long-term

        The Company's long-term borrowings consist of the following:

			At December 31, 2016			At December 31, 2017
			$			$
	Bank borrowings
	Unsecured long-term bank borrowings			—			87,852
	Long-term bank borrowings secured by project assets and solar power systems			27,100			24,640
	Long-term bank borrowings secured by property, plant and equipment			15,588			83,329
	Long-term bank borrowings secured by equity			340,000			150,000
	Long-term borrowings secured by inventory			—			8,164
​	​	​	​	​	​	​	​	​
				382,688			353,985
	Borrowings from non-banking institutions
	Long-term borrowings secured by project assets and solar power systems			49,767			—
	Unsecured long-term borrowings			61,000			50,356
​	​	​	​	​	​	​	​	​
				110,767			50,356
​	​	​	​	​	​	​	​	​
	Total			493,455			404,341
​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​

        The average interest rate on long-term borrowings was 3.75% and 3.06% per annum for the years ended December 31, 2016 and 2017, respectively.

        Future principal repayments on the long-term borrowings are as follows:

2018			1,128,450
2019			332,956
2020			42,775
2021			12,873
2022			5,637
Thereafter			10,100
​	​	​	​	​
Total			1,532,791
Less: future principal repayment related to long-term borrowings, current portion			(1,128,450	)
​	​	​	​	​
Total long-term portion		$	404,341
​	​	​	​	​
​	​	​	​	​

        On June 20, 2013, Canadian Solar New Energy (Tumushuke) Co. Ltd., the Company's 100% owned subsidiary, entered into a loan agreement, denominated in RMB, with China Development Bank, Suzhou Branch ("CDB"). The total credit facility under this agreement is $41,312 and used to finance the project costs. The outstanding borrowing under this agreement equaled $24,946 at December 31, 2017, which requires repayment semi-annually and matures in 2026. The loan is secured by solar power systems. As at December 31, 2017, the Company met all the requirements of the financial covenants.

        On August 28, 2013, CSI Solar Power Group Co., Ltd. (formerly "CSI Solar Power (China) Inc.") entered into a financing agreement, denominated in RMB, with CDB, pursuant to which CDB agreed to provide long-term financing of $7,652 for the construction of solar power projects in Suzhou National New and High-tech Industrial Development Zone. The outstanding borrowing under this agreement equaled $3,826 at December 31, 2017, which requires repayment semi-annually and matures in 2021. The loan is secured by project assets and guaranteed by Canadian Solar Manufacturing (Changshu) Inc. As at December 31, 2017, the Company met all the requirements of the financial covenants.

        On June 25, 2014, CSI-GCL (Yan Cheng) Solar Manufacturing Co., Ltd. ("YCSM") entered into a financing agreement, denominated in RMB, with local Chinese state-owned companies, which agreed to provide long-term construction financing of $64,277 for the construction of solar power projects and production line construction in Yancheng, Jiangsu. The facility is free of securities, financial covenants or restrictions. The total outstanding borrowings under this agreement equaled $52,924 at December 31, 2017, which requires repayment of $19,944, $26,093 and $6,887 in 2018, 2019 and 2020, respectively.

        On November 25, 2015, Recurrent entered into a facility agreement for $150,000 with Ping An Bank, China (Shanghai) Pilot Free Trade Zone Branch, to finance its project development and operation. The outstanding borrowing under this agreement was $150,000 at December 31, 2017, which requires full repayment in 2019. The loan is secured by 100% LLC interests of Recurrent and guaranteed by CSI and CSI Solar Power Group Co., Ltd. As at December 31, 2017, the Company was in compliance with all requirements of the financial covenants.

        On January 6, 2016, Canadian Solar Manufacturing (Luoyang) Inc. entered into a loan agreement, denominated in RMB, with a local Chinese state-owned company, which agreed to provide long-term working capital financing of approximately $9,182. The total outstanding borrowings under this agreement equaled $8,446 at December 31, 2017, which require full repayment in 2019. The agreement does not contain any financial covenants or restrictions.

        On January 28, 2016, Canadian Solar Solutions Inc. and Canadian Solar Manufacturing Vietnam Co., Ltd. entered into a loan agreement of $60,000 with International Finance Corporation ("IFC"), a member of World Bank Group, to fund the construction of solar cell and module production facilities in Vietnam and other countries approved by IFC. The outstanding borrowing under this agreement was $15,025 at December 31, 2017, which requires repayment of $5,008, $5,008 and $5,009 in 2018, 2019 and 2020, respectively. The loan is secured by accounts receivable, inventory and property, plant and equipment. As at December 31, 2017, the Company was in compliance with all requirements of the financial covenants.

        On March 23, 2016, CSI Cells Co., Ltd. entered into a financing agreement, denominated in RMB, with a local Chinese state-owned company, which agreed to provide long-term working capital financing of approximately $47,290. The total outstanding borrowings under this agreement were $24,512 at December 31, 2017, which require repayment of $15,923, $2,813 and $5,776 in 2018, 2019 and 2020, respectively. The agreement does not contain any financial covenants or restrictions.

        On September 28, 2016, Canadian Solar Projects K.K entered into a financing agreement with Sumitomo Mitsui Banking Corporation, denominated in JPY, which agreed to provide revolving long-term working capital financing of approximately $87,852. The total outstanding borrowings under this agreement was $87,852 at December 31, 2017. The borrowing is unsecured and guaranteed by CSI and does not contain any financial covenants or restrictions.

        On January 13, 2017, Canadian Solar Manufacturing (Thailand) Co., Ltd entered into a syndicated credit facility, denominated in U.S. dollars, arranged by Siam Commercial Bank Public Company Limited, and China Minsheng Banking Corporation Ltd is one of the lenders. The total credit facility under this agreement is $210,000 and to finance the construction of solar cell and module manufacturing facilities in Thailand. The outstanding borrowings under this agreement was $67,215 at December 31, 2017, which requires quarterly repayments and matures in 2022. The loan is secured by prepaid land use rights, property, plant and equipment, and guaranteed by CSI Solar Power Group Co., Ltd. The borrowing also contains some financial covenants measured by liabilities. As of December 31, 2017, the Company met all the requirements of financial covenants.

        On March 29, 2017, Canadian Solar Manufacturing (Luoyang) Inc. entered into an entrusted loan agreement, denominated in RMB, with Ping An International Financial Leasing Co., Ltd. and a Chinese bank, which agreed to provide two-year working capital financing of approximately $2,619. The total outstanding borrowings under this agreement equaled $1,660 at December 31, 2017, which requires repayment of $1,319 and $341 in 2018 and 2019, respectively. The loan is unsecured and guaranteed by CSI Solar Power Group Co., Ltd. and Canadian Solar Manufacturing (Changshu) Inc. The agreement does not contain any financial covenants or restrictions.

        On March 31, 2017, Canadian Solar Sun Energy (Suzhou) Co., Ltd entered into a financing agreement, denominated in RMB, with Bank of Jiangsu, which agreed to provide long-term construction financing of $21,426 for enhancement of solar module manufacturing in in Suzhou, Jiangsu. The outstanding borrowing under this agreement was $9,183 at December 31, 2017, which requires repayment of $3,306, $3,306 and $2,571 in 2018, 2019 and 2020, respectively. The loan is secured by property, plant and equipment and guaranteed by CSI Solar Power Group Co., Ltd. The agreement does not contain any financial covenants or restrictions.

        On July 1, 2017, Canadian Solar Japan K.K. entered into a financing agreement with Mizuho Bank, Ltd, denominated in JPY, which agreed to provide revolving long-term working capital financing of approximately $8,164. The total outstanding borrowings under this agreement equaled $8,164 at December 31, 2017. The loan is secured by inventory and accounts receivable. The agreement does not contain any financial covenants or restrictions.

        The long-term borrowings disclosed above bear floating interest rates from nil to 7.485% per annum.

c) Interest expense

        The Company capitalized interest costs incurred on borrowings obtained to finance construction of solar power projects or property, plant and equipment until the asset is ready for its intended use. The interests incurred during the years ended December 31, 2015, 2016 and 2017 are as follows:

		Years Ended December 31
		2015			2016			2017
		$			$			$
Interest capitalized—project assets			102			47,881			13,274
Interest capitalized—solar power systems			23,328			3,113			—
Interest capitalized—property, plant and equipment			912			819			1,010
Interest expense			54,148			69,723			117,971
​	​	​	​	​	​	​	​	​	​	​
Total interest incurred			78,490			121,536			132,255
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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 470
-URI http://asc.fasb.org/topic&trid=2208564

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