Debt Obligations

6 Months Ended

Jun. 30, 2011

Notes to Financial Statements [Abstract]

Debt Obligations

7. Debt Obligations

The following table sets forth the debt obligations of Southern Union and Panhandle at the dates indicated.

		June 30, 2011				December 31, 2010
		Carrying Amount		Fair Value		Carrying Amount		Fair Value
			(In thousands)
Long-Term Debt Obligations:
Southern Union:
7.60% Senior Notes due 2024		$	359,765	$	428,300	$	359,765	$	392,144
8.25% Senior Notes due 2029			300,000		377,403		300,000		332,922
7.24% to 9.44% First Mortgage Bonds
	due 2020 to 2027		19,500		23,558		19,500		21,473
7.20% Junior Subordinated Notes due 2066			600,000		575,280		600,000		609,743
Term Loan due 2013			250,000		252,491		250,000		249,915
Note Payable			8,019		8,019		8,297		8,297
			1,537,284		1,665,051		1,537,562		1,614,494
Panhandle:
6.05% Senior Notes due 2013			250,000		273,260		250,000		268,988
6.20% Senior Notes due 2017			300,000		346,413		300,000		322,893
8.125% Senior Notes due 2019			150,000		183,813		150,000		169,671
7.00% Senior Notes due 2029			66,305		70,068		66,305		69,911
7.00% Senior Notes due 2018			400,000		472,416		400,000		442,120
Term Loans due 2012			815,391		808,481		815,391		799,084
Net premiums on long-term debt			2,826		2,826		2,731		2,731
			1,984,522		2,157,277		1,984,427		2,075,398
Total Long-Term Debt Obligations			3,521,806		3,822,328		3,521,989		3,689,892
Credit Facilities			195,479		195,487		297,051		301,312
Total consolidated debt obligations			3,717,285	$	4,017,815		3,819,040	$	3,991,204
	Less current portion of long-term debt		816,272				1,083
	Less short-term debt		195,479				297,051
Total long-term debt		$	2,705,534			$	3,520,906

The fair value of the Company's term loans and credit facilities as of June 30, 2011 and December 31, 2010 were determined using the market approach, which utilized reported recent loan transactions for parties of similar credit quality and remaining life, as there is no active secondary market for loans of these types and sizes.

The fair value of the Company's other long-term debt as of June 30, 2011 and December 31, 2010 was also determined using the market approach, which utilized observable market data to corroborate the estimated credit spreads and prices for the Company's non-bank long-term debt securities in the secondary market.  Those valuations were based in part upon the reported trades of the Company's non-bank long-term debt securities where available and the actual trades of debt securities of similar credit quality and remaining life where no secondary market trades were reported for the Company's non-bank long-term debt securities. 

Interest Rate Swaps.The Company has entered into interest rate swap agreements that effectively fix the interest rate applicable to the floating rate on a portion of the $600 million Junior Subordinated Notes due 2066 (Junior Subordinated Notes). See Note 10 – Derivative Instruments and Hedging Activities – Interest Rate Contracts – Interest Rate Swaps for more information regarding these swap agreements.

Credit Facilities.During the second quarter of 2011, the Company entered into the Seventh Amended and Restated Revolving Credit Agreement with certain banks in the amount of $550 million (2011 Revolver).  The 2011 Revolver is an amendment, restatement and refinancing of the Company's $550 million Sixth Amended and Restated Revolving Credit Agreement (Revolver), which was otherwise scheduled to mature on May 28, 2013.  The 2011 Revolver will mature on May 20, 2016.  Borrowings under the 2011 Revolver are available for the Company's working capital, other general corporate purposes and letter of credit requirements.  The interest rate and commitment fee under the 2011 Revolver are calculated using a pricing grid, which is based upon the credit rating for the Company's senior unsecured notes.  The annualized interest rate and commitment fee rate bases for the 2011 Revolver at June 30, 2011 were LIBOR plus 162.5 basis points and 25 basis points, respectively.