DEBT OBLIGATIONS:

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



	Successor		Predecessor
	September 30, 2012		December 31, 2011
Southern Union Credit Facility	$	251,000	$	200,000
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	7,306		7,746
Unamortized fair value adjustments	53,426		—
	1,339,997		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	142,874		—
	1,764,179		1,966,615
Note Payable — ETE	166,217		—
Total debt	3,521,393		3,703,626
Less: Current portion of long term debt	261,351		343,254
Less: Short-term debt ⁽²⁾	166,217		200,000
Total long-term debt	$	3,093,825	$	3,160,372


⁽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.


⁽²⁾	The Southern Union Credit Facility was included in short-term debt as of December 31, 2011, but not as of September 30, 2012. See discussion in "Credit Facilities" below.

Based on the estimated borrowing rates currently available to the Company and its subsidiaries for loans with similar terms and average maturities, the aggregate fair value of the Company's consolidated debt obligations at September 30, 2012 and December 31, 2011 was $3.55 billion and $3.96 billion, respectively. As of September 30, 2012 and December 31, 2011, the aggregate carrying amount of the Company's consolidated debt obligations was $3.52 billion and $3.70 billion, respectively. The fair value of the Company's consolidated debt obligations is a Level 2 valuation based on the observable inputs used for similar liabilities.

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 (Southern Union Credit Facility). The Southern Union Credit Facility is an amendment, restatement and refinancing of the Company’s $550 million Seventh Amended and Restated Revolving Credit Agreement. The Southern Union Credit Facility is scheduled to mature on May 20, 2016. The Company entered into the Southern Union Credit Facility 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 Southern Union Credit Facility 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 Southern Union Credit Facility are calculated using a pricing grid, which is based upon the credit rating for the Company’s senior unsecured notes. The annualized interest rate for the Southern Union Credit Facility was 1.83% at September 30, 2012.

On August 10, 2012, Southern Union entered into a First Amendment of the Southern Union Credit Facility. The Amendment provides for, among other things, (i) a revision to the change of control definition to permit equity ownership of Southern Union by ETP or any direct or indirect subsidiaries of ETP in addition to ETE or any direct or indirect subsidiary of ETE; and (ii) a waiver of any potential default that may result from the Holdco Transaction.

The Company previously classified borrowings under the Southern Union Credit Facility as short-term debt as the individual borrowings are generally for periods of 15 to 180 days. As of September 30, 2012, such borrowings have been classified as non-current based on the Company's expectation that such borrowings will be refinanced upon maturity. Therefore, the Southern Union Credit Facility is classified in the table above and in the consolidated balance sheet as short-term debt as of December 31, 2011 and as long-term debt as of September 30, 2012.

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 borrowings under the Southern Union Credit Facility.

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 restricted stock units; 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. A payment of $55.0 million to ETE was made in May 2012.

Panhandle 6.05% Senior Notes due 2013. Panhandle has $250 million of senior notes which mature within the next twelve months. Panhandle currently expects to refinance all or a portion of the debt upon maturity or, alternatively, to retire all or a portion of the debt with proceeds from repayment of the note receivable from Southern Union.

Interest Rate Swaps. The Company had 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 for more information regarding these swap agreements.