DEBT OBLIGATIONS:

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



	Successor		Predecessor
	June 30, 2012		December 31, 2011
Long-Term Debt Obligations:
Southern Union:
7.60% Senior Notes due 2024	$	359,765	$	359,765
8.25% Senior Notes due 2029	300,000		300,000
7.24% to 9.44% First Mortgage Bonds due 2020 to 2027	19,500		19,500
7.20% Junior Subordinated Notes due 2066 ⁽¹⁾	600,000		600,000
Term Loan due 2013	—		250,000
Note Payable	7,465		7,746
Unamortized fair value adjustments	53,813		—
	1,340,543		1,537,011
Panhandle:
6.05% Senior Notes due 2013	250,000		250,000
6.20% Senior Notes due 2017	300,000		300,000
8.125% Senior Notes due 2019	150,000		150,000
7.00% Senior Notes due 2029	66,305		66,305
7.00% Senior Notes due 2018	400,000		400,000
Term Loan due 2012	—		797,386
Term Loan due 2015	455,000		—
Net premiums on long-term debt	—		2,924
Unamortized fair value adjustments	150,688		—
	1,771,993		1,966,615
Total Long-Term Debt Obligations	3,112,536		3,503,626
Credit Facilities	235,000		200,000
Note Payable — ETE	166,217		—
Total consolidated debt obligations	3,513,753		3,703,626
Less: Current portion of long term debt	853		343,254
Less: Short-term debt	401,217		200,000
Total long-term debt	$	3,111,683	$	3,160,372

Total fair value of consolidated debt obligations	$	3,542,118	$	3,964,549


⁽¹⁾	Effective November 1, 2011, the interest rate on the Junior Subordinated Notes changed to a variable rate based upon the three-month LIBOR rate plus 3.0175%, reset quarterly. See Interest Rate Swaps below for more information regarding the interest rate on these notes.

The fair value of the Company’s term loans and credit facilities as of June 30, 2012 and December 31, 2011 were determined using the market approach, which utilized Level 2 inputs consisting of 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, 2012 and December 31, 2011 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 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 9 – Derivative Instruments and Hedging Activities – Interest Rate Contracts – Interest Rate Swaps for more information regarding these swap agreements.

Credit Facilities. In March 2012, the Company entered into the Eighth Amended and Restated Revolving Credit Agreement with certain banks in the amount of $700 million (2012 Revolver). The 2012 Revolver is an amendment, restatement and refinancing of the Company’s $550 million Seventh Amended and Restated Revolving Credit Agreement. The 2012 Revolver is scheduled to mature on May 20, 2016. The Company entered into the 2012 Revolver in order to (i) obtain consent to the transactions contemplated by the Merger Agreement, the Citrus Merger Agreement and the Support Agreement; (ii) to increase the amount of the facility from $550 million to $700 million; and (iii) to modify certain covenants. Borrowings under the 2012 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 2012 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 2012 Revolver at 2012 were LIBOR plus 162.5 basis points and 25 basis points, respectively.

Term Loans. In March 2012, the Company retired the $250 million term loan due August 2013 and the $465 million term loan of its indirect wholly owned subsidiary, LNG Holdings, due June 2012 ($342.4 million of which was outstanding) utilizing a combination of the merger consideration received in connection with the Citrus Merger and drawdowns from its 2012 Revolver.

In February 2012, the Company refinanced LNG Holdings’ $455 million term loan due March 2012 with an unsecured three-year term loan facility due February 2015, with LNG Holdings as borrower and PEPL and Trunkline LNG as guarantors and a floating interest rate tied to LIBOR plus a margin based on the rating of PEPL’s senior unsecured debt.

Note Payable – ETE. On March 26, 2012, the Company received $221.2 million from ETE to pay certain expenses in connection with the Merger, including (i) payments made to employees related to outstanding awards of stock options, stock appreciation rights and RSUs; and (ii) payments to certain executives under applicable employment or change in control agreements, which provided for compensation when their employment was terminated in connection with a change in control. In connection with the receipt of the $221.2 million from ETE, on March 26, 2012, the Company entered into an interest-bearing promissory note payable on or before March 25, 2013. The interest rate under the promissory note is 3.75% and accrued interest is payable monthly in arrears.