**
 

 

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

 

 

**Form 10-K**

 

 

**(Mark One)**
****☒********
**ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the fiscal year ended December 31, 2019**

**or**

 
****☐********
**TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the transition period from                         to                        **

**Commission File Number 333-177662-01**

 

 

**CenterPoint Energy Transition Bond Company IV, LLC**

**(Exact name of registrant as specified in its charter)**

 

 

**CenterPointEnergy Houston Electric, LLC**

**(Exact name of depositor and sponsor as specified in its charter)**

 

 

 
**Delaware** **45-3687039**
**(State or other jurisdiction of**

**incorporation or organization)**
 
**(I.R.S. Employer**

**Identification Number)**
**1111 Louisiana, Suite 4664B** **Houston, Texas 77002** **(713) 207-5776****(Address and zip code of principal executive offices)** **(Registrant’s telephone number, including area code)**
**Securities registered pursuant to Section 12(b) of the Act: None**

**Securities registered pursuant to Section 12(g) of the Act: None**

 

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the SecuritiesAct.    Yes  ☐    No  ☒ 

Indicate by check mark if the registrantis not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ☐     No  ☒ 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of theSecurities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90days.    Yes  ☒     No  ☐ 

Indicate by check mark whether theregistrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for suchshorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐ 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, anon-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reportingcompany” and “emerging growth company” in Rule 12b-2 of the Exchange Act. 

 
Large accelerated filer ☐  Accelerated filer ☐Non-accelerated filer ☒  Smaller reporting company ☐   Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extendedtransition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ 

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of theAct).    Yes  ☐    No  ☒ 

The aggregate market value of themember’s equity held by non-affiliates of the registrant as of June 28, 2019: None 

Documents incorporated by reference: A portion of the proxy statement relating to the 2020 Annual Meeting of Shareholders of CenterPointEnergy, Inc. is incorporated by reference in Item 11 of Part III of this report. 

 

 

 
**

**PART I**

**Item 1. Business.**

Omitted pursuantto General Instruction J of Form 10-K.

**Item 1A. Risk Factors.**

Omitted pursuant to General Instruction J of Form 10-K.

**Item 1B. Unresolved Staff Comments.**

None. 

**Item 2. Properties.**

Omitted pursuant to General Instruction J of Form 10-K.

**Item 3. Legal Proceedings.**

Omittedpursuant to General Instruction J of Form 10-K.

**Item 4. Mine Safety Disclosures.**

Not applicable. 

**PART II**

**Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.**

Omitted pursuant to General Instruction J of Form 10-K.

**Item 6. Selected Financial Data.**

Omitted pursuant to General Instruction J of Form 10-K.

**Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.**

Omitted pursuant to General Instruction J of Form 10-K.

**Item 7A. Quantitative and Qualitative Disclosures about Market Risk.**

Omitted pursuant to General Instruction J of Form 10-K.

**Item 8. Financial Statements and Supplementary Data.**

Omitted pursuant to General Instruction J of Form 10-K.

**Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures.**

Omitted pursuant to General Instruction J of Form 10-K.

**Item 9A. Controls and Procedures.**

Omitted pursuant to General Instruction J of Form 10-K.

**Item 9B. Other Information.**

None.

**PART III**

**Item 10. Directors, Executive Officers and Corporate Governance.**

As of the date of this report on Form 10-K, CenterPoint Energy Transition Bond Company IV, LLC (the“Issuing Entity”) has five managers. For as long as necessary under applicable Rating Agency criteria (as such term is defined in the Issuing Entity’s Amended and Restated Limited Liability Company Agreement (the “LLCAgreement”)) in order to maintain a rating of “AAA” (or the equivalent thereof) for the Issuing Entity’s Series 2012 Senior Secured Transition Bonds, the Issuing Entity shall have at least two individuals who are IndependentManagers (as such term is defined in the LLC Agreement). In the event that two Independent Managers are not necessary under applicable Rating Agency criteria in order to maintain such a rating, the Issuing Entity shall have at least one individualwho is an Independent Manager. Currently, Messrs. Angelo and O’Connor serve as the Independent Managers of the Issuing Entity. 

Independent Manager is defined in the LLC Agreement as a manager of the Issuing Entity who is not, and within the previous five years was not(except solely by virtue of such Person’s serving as, or affiliation with any other Person serving as, a special member or an independent director or manager, as applicable, of CenterPoint Energy Houston Electric, LLC (“HoustonElectric”), the Issuing Entity or any bankruptcy remote special purpose entity that is an Affiliate of Houston Electric or the Issuing Entity), (i) a stockholder, member, partner, director, officer, employee, Affiliate, customer, supplier,creditor or independent contractor of, or any Person that has received any benefit in any form whatsoever from (other than in such Manager’s capacity as a ratepayer or customer of Houston Electric in the ordinary course of business), or anyPerson that has provided any service in any form whatsoever to, or any major creditor (or any Affiliate of any major creditor) of, the Issuing Entity, Houston Electric or any of their Affiliates, or (ii) any Person owning beneficially, directlyor indirectly, any outstanding shares of common stock, any limited liability company interests or any partnership interests, as applicable, of the Issuing Entity, Houston Electric, or any of their Affiliates, or of any major creditor (or anyAffiliate of any major creditor) of any of the foregoing, or a stockholder, member, partner, director, officer, employee, Affiliate, customer, supplier, creditor or independent contractor of, or any Person that has received any benefit in any formwhatever from (other than in such Person’s capacity as a ratepayer or customer of Houston Electric in the ordinary course of business), or any Person that has provided any service in any form whatever to, such beneficial owner or any of suchbeneficial owner’s Affiliates, or (iii) a member of the immediate family of any person described above; provided that the indirect or beneficial ownership of stock through a mutual fund or similar diversified investment vehicle withrespect to which the owner does not have discretion or control over the investments held by such diversified investment vehicle shall not preclude such owner from being an Independent Manager. For purposes of this definition, “majorcreditor” shall mean a natural person or business entity to which the Issuing Entity, Houston Electric or any of their Affiliates has outstanding indebtedness for borrowed money or credit on open account in a sum sufficiently large as wouldreasonably be expected to influence the judgment of the proposed Independent Manager adversely to the interests of the Issuing Entity when the interests of that Person are adverse to those of the Issuing Entity. Capitalized terms used in thisparagraph have the meanings assigned to them in the LLC Agreement. 

The following are the managers of the Issuing Entity as of the date of this report on Form 10-K:

 

**Name**
  **Age**   
**Background**

Xia Liu
   50   
Manager and President of the Issuing Entity since April 2019. Executive Vice President and Chief Financial Officer of Houston Electric andCenterPoint Energy, Inc. since April 2019. Executive Vice President, Chief Financial Officer and Treasurer of Georgia Power Company, a subsidiary of the Southern Company, from October 2017 to April 2019. Vice President, Chief Financial Officer andTreasurer of Gulf Power Company, formerly a subsidiary of the Southern Company, from July 2015 to October 2017. Senior Vice President, Finance and Treasurer from 2014 to 2015. Vice President, Finance and Assistant Treasurer from 2010 to 2014.

Ms. Liu currently serves on the Board of Directors of Enable GP, LLC, the general partner of Enable Midstream Partners, LP. Ms. Liu is also a managerof the following subsidiaries of Houston Electric: CenterPoint Energy Transition Bond Company III, LLC (since April 2019); and CenterPoint Energy Restoration Bond Company, LLC (since April 2019).

Kristie Colvin
   56   
Manager and Senior Vice President and Chief Accounting Officer of the Issuing Entity since September 2014. Senior Vice President and ChiefAccounting Officer of Houston Electric and CenterPoint Energy, Inc. since August 2015 and September 2014, respectively. Division Vice President Finance, Regulated Operations of Houston Electric and CenterPoint Energy, Inc. from July 2010 untilSeptember 2014. Senior Director, Financial Planning and Performance Measurement of CenterPoint Energy, Inc. from August 2007 through June 2010.

Ms. Colvin is also a manager of the following subsidiaries of Houston Electric: CenterPoint Energy Transition Bond Company III, LLC (since September2014); and CenterPoint Energy Restoration Bond Company, LLC (since September 2014).

Carla A. Kneipp
   48   
Manager and Vice President and Treasurer of the Issuing Entity. Vice President and Treasurer of Houston Electric and CenterPoint Energy,Inc. since May 2014. Vice President Investor Relations of CenterPoint Energy, Inc. from August 2012 to May 2014. Vice President Internal Audit of CenterPoint Energy, Inc. from May 2007 to August 2012.

Ms. Kneipp is also a manager of the following subsidiaries of Houston Electric: CenterPoint Energy Transition Bond Company III, LLC (since July 2014); andCenterPoint Energy Restoration Bond Company, LLC (since July 2014).

Bernard J. Angelo
   50   
Manager of the Issuing Entity. Senior Vice President of Global Securitization Services, LLC since April 1997. Director or manager, as thecase may be, of Ameriquest Funding II Reo Subsidiary LLC (November 2000—March 2009); Ameriquest Mortgage Securities Inc. (January 2000—March 2009); Argent Securities Inc. (May 2002—March 2009); ATAX TEBS 1, LLC (since September 2010);Bay View Deposit Corporation (since November 2004); BCF Funding II LLC (since February 2005); Carmax Auto Funding LLC (since August 2003); CEC Funding LLC (since February 2005); Daimler Trust Leasing LLC (since January 2009); Ford Credit AutoReceivables Two LLC (since January 2001); Hamilton Floating Rate Fund I, LLC (October 2005—January 2011); Hexagon ABS Corp. (February 2005—November 2006); J.G. Wentworth Receivables III LLC (since September 1997); National City MortgageCapital LLC (since August 2005); PG&E Energy Recovery Funding LLC (October 2004—December 2012); Prosper Funding LLC (since March 2012); RS TEBS, Inc. (since May 2010); SunTrust Auto Receivables, LLC (May 2007—November 2010); VentureLending & Leasing IV, LLC (October 2004—June 2009); Venture Lending & Leasing V, LLC (June 2006—May 2009); and World Omni Auto Receivables LLC (since March 2003).

Mr. Angelo is also a manager of the following subsidiaries of Houston Electric: CenterPoint Energy Transition Bond Company III, LLC (since February 2008);and CenterPoint Energy Restoration Bond Company, LLC (since November 2009).

Timothy O’Connor
   48   Manager of the Issuing Entity. Senior Vice President of Global Securitization Services, LLC since April 2002. Director of California Petroleum Corporation since September 2009.
**Code of Conduct**

The Issuing Entity is a wholly-owned subsidiary of Houston Electric which in turn is an indirect subsidiary of CenterPoint Energy, Inc.(“CenterPoint Energy”). CenterPoint Energy has adopted a code of ethics for its Chief Executive Officer and Senior Financial Officers, which group consists of its Chief Financial Officer, Chief Accounting Officer, Treasurer and AssistantController. CenterPoint Energy has also adopted an Ethics and Compliance Code applicable to all directors, officers and employees, including those of its subsidiaries. CenterPoint Energy maintains a corporate governance page on its websitewhich includes key information 

about its corporate governance initiatives, including its Ethics and Compliance Code and its Code of Ethics for Chief Financial Officer and Senior Financial Officers. The corporate governancepage can be found at *http://investors.centerpointenergy.com/governance.*

**Item 11. Executive Compensation.**

Other than the annual independent managers fee of $3,500 paid to Global Securitization Services, LLC, the Issuing Entity does not pay anycompensation to its executive officers or managers. 

The information required by this item with respect to Houston Electric isincorporated herein by reference to the material under *Compensation Discussion and Analysis* of the definitive proxy statement of CenterPoint Energy for its 2020 annual meeting of shareholders filed with the Securities and Exchange Commissionon March 13, 2020. 

**Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.**

None. 

**Item 13. Certain Relationshipsand Related Transactions, and Director Independence.**

None. 

**Item 14. Principal Accountant Fees and Services.**

Omitted pursuant to General Instruction J of Form 10-K.

**PART IV**

**Item 15. Exhibits, Financial Statement Schedules.**

 
 (a)
Documents filed as a part of this report: 

 
 1.
Financial Statements. 

Not applicable. 

 
 2.
Financial Statement Schedules. 

Not applicable. 

 
 3.
Exhibits required by Item 601 of Regulation S-K (exhibits marked withan asterisk are filed herewith and the others are incorporated by reference): 

 
3.1  Certificate of Formation of CenterPoint Energy Transition Bond Company IV, LLC (the “Issuing Entity”) filed with the Delaware Secretary of State on October 14, 2011.3.2  Amended and Restated Limited Liability Company Agreement of the Issuing Entity dated as of January 19, 2012.4.1  Indenture dated as of January 19, 2012 between the Issuing Entity and Deutsche Bank Trust Company Americas, as trustee, providing for the issuance of Senior Secured Transition Bonds.4.2  First Supplemental Indenture dated as of January 19, 2012 between the Issuing Entity and Deutsche Bank Trust Company Americas, as trustee, providing for the issuance of the Issuing Entity’s 2012 Senior Secured Transition Bonds.4.3  Form of 2012 Senior Secured Transition Bond (included in Exhibit 4.2).*31.1  Certification. *33.1  Report on assessment of compliance with servicing criteria for asset-backed securities for CenterPoint Energy Houston Electric, LLC. *33.2  Assertion of compliance with applicable servicing criteria for Deutsche Bank Trust Company Americas. *34.1  Attestation report on assessment of compliance with servicing criteria for asset-backed securities of Deloitte & Touche LLP on behalf of CenterPoint Energy Houston Electric, LLC. *34.2  Attestation report on assessment of compliance with servicing criteria for asset-backed securities of KPMG LLP on behalf of Deutsche Bank Trust Company Americas. *35.1  Servicer compliance statement. 99.1  Transition Property Sale Agreement dated as of January 19, 2012 between the Issuing Entity and CenterPoint Energy Houston Electric, LLC, as seller.99.2  Transition Property Servicing Agreement dated as of January 19, 2012 between the Issuing Entity and CenterPoint Energy Houston Electric, LLC, as servicer.99.3  Administration Agreement dated as of January 19, 2012 between the Issuing Entity and CenterPoint Energy Houston Electric, LLC, as administrator.
 (b)
Exhibits required by this Form and Item 601 of Regulation S-K (exhibitsmarked with an asterisk are filed herewith): 

 
3.1  Certificate of Formation of the Issuing Entity filed with the Delaware Secretary of State on October 14, 2011 (incorporatedby reference to exhibit 3.3 included as an exhibit to the Issuing Entity’s Registration Statement on Form S-3 (Reg.No. 333-177662-01) dated November 2, 2011).3.2  Amended and Restated Limited Liability Company Agreement of the Issuing Entity dated as of January 19, 2012 (incorporated byreference to exhibit 3.1 included as an exhibit to the Issuing Entity’s Current Report on Form 8-K dated January 11, 2012).4.1  Indenture dated as of January 19, 2012 between the Issuing Entity and Deutsche Bank Trust Company Americas, as trustee, providing for the issuance of Senior Secured Transition Bonds (incorporated by reference to exhibit 4.1 included as an exhibit to the Issuing Entity’sCurrent Report on Form 8-K dated January 11, 2012).4.2  First Supplemental Indenture dated as of January 19, 2012 between the Issuing Entity and Deutsche Bank Trust Company Americas, as trustee, providing for the issuance of the Issuing Entity’s 2012 Senior Secured Transition Bonds (incorporated by reference to exhibit 4.2 included as anexhibit to the Issuing Entity’s Current Report on Form 8-K dated January 11, 2012).4.3  Form of 2012 Senior Secured Transition Bond (included as Exhibit A to the First Supplement Indenture filed as Exhibit 4.2) (incorporatedby reference to exhibit 4.2 included as an exhibit to the Issuing Entity’s Current Report on Form 8-K dated January 11, 2012).*31.1  Certification. *33.1  Report on assessment of compliance with servicing criteria for asset-backed securities for CenterPoint Energy Houston Electric, LLC. *33.2  Assertion of compliance with applicable servicing criteria for Deutsche Bank Trust Company Americas. *34.1  Attestation report on assessment of compliance with servicing criteria for asset-backed securities of Deloitte & Touche LLP on behalf of CenterPoint Energy Houston Electric, LLC. *34.2  Attestation report on assessment of compliance with servicing criteria for asset-backed securities of KPMG LLP on behalf of Deutsche Bank Trust Company Americas. *35.1  Servicer compliance statement. 99.1  Transition Property Sale Agreement dated as of January 19, 2012 between the Issuing Entity and CenterPoint Energy Houston Electric, LLC, as seller (incorporated by reference to exhibit 10.1 included as an exhibit to the Issuing Entity’s Current Report on Form8-K dated January 11, 2012).99.2  Transition Property Servicing Agreement dated as of January 19, 2012 between the Issuing Entity and CenterPoint Energy Houston Electric, LLC, as servicer (incorporated by reference to exhibit 10.2 included as an exhibit to the Issuing Entity’s Current Report on Form8-K dated January 11, 2012).99.3  Administration Agreement dated as of January 19, 2012 between the Issuing Entity and CenterPoint Energy Houston Electric, LLC, as administrator (incorporated by reference to exhibit 10.3 included as an exhibit to the Issuing Entity’s Current Report on Form 8-K dated January 11, 2012).
 
 (c)
Not applicable. 

**Item 16. Form 10-K Summary.**

None. 

**Item 1112(b). SignificantObligors of Pool Assets.**

None. 

**Item 1114(b)(2). Credit Enhancement and Other Support, Except for Certain Derivatives Instruments.**

None. 

**Item 1115(b). Certain DerivativesInstruments.**

None. 

**Item 1117. Legal Proceedings.**

None. 

**Item 1119. Affiliations andCertain Relationships and Related Transactions.**

The Issuing Entity is a wholly-owned subsidiary of CenterPoint Energy HoustonElectric, LLC. 

**Item 1122. Compliance with Applicable Servicing Criteria.**

See Exhibits 33.1, 33.2, 34.1 and 34.2 under Item 15. 

**Item 1123. Servicer Compliance Statement.**

See Exhibit 35.1 under Item 15. 

**SIGNATURES**

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed onits behalf by the undersigned, thereunto duly authorized, in the City of Houston, the State of Texas, on the 25th day of March, 2020. 

 
CENTERPOINT ENERGY TRANSITION BOND COMPANY IV, LLC, as Issuing EntityBy: CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC, as servicerBy: /s/ Carla A. Kneipp Name: Carla A. Kneipp Title: 
Vice President and Treasurer

(Senior officerin charge of the servicing function of the servicer)

**Supplemental Information to be Furnished With Reports Filed Pursuant to Section 15(d) of the Act by RegistrantsWhich Have Not Registered Securities Pursuant to Section 12 of the Act.**

No such annual report, proxy statement, form of proxy or other proxysoliciting material has been sent to the Registrant’s security holders. The Registrant will not be sending an annual report or any proxy material to its security holders subsequent to the filing of this report on Form 10-K.