Notes to Consolidated Financial Statements

1. Description of TransCanada's Business
2. Accounting Policies
3. Accounting Changes
4. Segmented Information
5. Plant, Property and Equipment
6. Goodwill
7. Rate-Regulated Businesses
8. Joint Venture Investments
9. Intangibles and Other Assets
10. Notes Payable
11. Deferred Amounts
12. Income Taxes
13. Long-Term Debt
14. Long-Term Debt of Joint Ventures
15. Junior Subordinated Notes
16. Non-Controlling Interests
17. Common Shares
18. Preferred Shares
19. Asset Retirement Obligations
20. Employee Future Benefits
21. Risk Management and Financial Instruments
22. Changes in Operating Working Capital
23. Acquisitions and Dispositions
24. Commitments, Contingencies and Guarantees
25. United States Accounting Principles and Reporting

Note 14: Long-Term Debt of Joint Ventures

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  2011 2010
Outstanding loan amounts
(millions of dollars)
Maturity Dates Outstanding
December 31
(1)
Interest
Rate
(2)
Outstanding
December 31(1)
Interest
Rate(2)
NORTHERN BORDER PIPELINE COMPANY          
Senior Unsecured Notes
U.S. dollars (2011 and 2010 – US$175)
2016 to 2021 177 7.1% 174 7.1%
Bank Facility
U.S. dollars (2011 – US$62; 2010 – US$96)
2016 62 1.6% 94 0.5%
     
IROQUOIS GAS TRANSMISSION SYSTEM, L.P.          
Senior Unsecured Notes
U.S. dollars (2011 – US$169; 2010 – US$178)
2019 to 2027 171 6.1% 176 6.1%
     
BRUCE POWER L.P. AND BRUCE POWER A L.P.          
Capital Lease Obligations 2018 194 7.5% 207 7.5%
Term Loan 2031 88 7.1% 90 7.1%
     
TRANS QUÉBEC & MARITIMES PIPELINE INC.          
Bonds 2014 to 2017 87 4.2% 87 4.2%
Term Loan 2016 30 2.2% 35 1.6%
     
OTHER 2012 to 2016 13 4.0% 3 2.7%
    822   866  
Less: Current Portion of Long-Term Debt of Joint Ventures   33   65  
    789   801  
(1) Amounts outstanding represent TransCanada's proportionate share, except for Northern Border, which reflects a 50 per cent interest as a result of the Company fully consolidating TC PipeLines, LP.
(2) Interest rates are the effective interest rates except for those pertaining to long-term debt issued for TQM's regulated operations, in which case the weighted average interest rate is presented as required by the regulators. Weighted average and effective interest rates are stated as at the respective outstanding dates.

The long-term debt of joint ventures is non-recourse to TransCanada, except that TransCanada has provided certain pro-rata guarantees related to the capital lease obligations of Bruce Power. The security provided with respect to the debt of each joint venture is limited to the rights and assets of the joint venture and does not extend to the rights and assets of TransCanada, except to the extent of TransCanada's investment. TQM has two series of bonds which mature in 2014 and 2017, respectively. The bonds are secured by the pledge of a bond and promissory note of certain affiliated entities. All security interests with respect to the TQM bonds terminate on redemption or repayment of the series of bonds maturing in 2014.

Subject to meeting certain requirements, the Bruce Power capital lease agreements provide for a series of renewals commencing January 1, 2019. The first renewal is for a period of one year and each of 12 renewals thereafter is for a period of two years.

The Company's proportionate share of principal repayments for the next five years resulting from maturities and sinking fund obligations of the non-recourse joint venture debt is approximately as follows: 2012 – $15 million; 2013 – $8 million; 2014 – $44 million; 2015 – $7 million; and 2016 – $149 million.

The Company's proportionate share of principal payments for the next five years resulting from the capital lease obligations of Bruce Power is approximately as follows: 2012 – $18 million; 2013 – $20 million; 2014 – $22 million; 2015 – $26 million; and 2016 – $31 million.

In April 2010, Iroquois retired US$200 million of Series I bonds bearing interest at 9.16 per cent and issued US$150 million of bonds maturing in April 2020 and bearing interest at 4.96 per cent.

In September 2010, TQM retired $100 million of 7.53 per cent Series I bonds and $75 million of 3.906 per cent Series J bonds. In July 2010, TQM issued $100 million of bonds maturing in September 2017 and bearing interest at 4.25 per cent.

Sensitivity

A one per cent change in interest rates would have the following effect on Net Income assuming all other variables were to remain constant:

(millions of dollars) Increase Decrease 
Effect on interest expense of variable interest rate debt 1 (1)

Interest Expense of Joint Ventures

Year ended December 31 (millions of dollars) 2011  2010 2009 
Interest on long-term debt 34  39 51 
Interest on capital lease obligations 22  16 17 
Short-term interest and other financial charges (1) 4 (4)
  55  59 64 

The Company's proportionate share of the interest payments by joint ventures was $31 million in 2011 (2010 – $42 million; 2009 – $41 million), net of interest capitalized on construction projects.

The Company's proportionate share of interest payments from the capital lease obligations of Bruce Power was $15 million in 2011 (2010 – $16 million; 2009 – $17 million).