Electrons and protons emitted by a solar flare can be captured by the Earth's magnetic field. The resulting transient in the geomagnetic field can produce quasi-dc currents in electric power systems. These geomagnetically-induced currents (GIC) in excess of 100 amps have been measured in the transformer neutral leads. With the practice of using EHV and UHV lines for transmitting ac power over long distances and because the systems are more solidly grounded, the problems posed by GIC have become more severe. This paper presents the consequences of transformer half-cycle saturation on the operation of HVDC converter terminals. A detailed computer simulation of the Square Butte HVDC system reveals that the large values of GIC can cause enough distortion in the ac system voltage at the inverter end to prevent normal system operation. Moreover, the amount of harmonics generated could overload the ac as well as the dc-side filters.