Debt Obligations

3 Months Ended

Mar. 31, 2013

5. Debt Obligations

Long-term debt



$ in millions	March 31, 2013		December 31, 2012

Pollution control series maturing in January 2028 - 4.7%	$	36.1	$	36.1
Pollution control series maturing in January 2034 - 4.8%		179.6		179.6
Pollution control series maturing in September 2036 - 4.8%		96.3		96.3
U.S. Government note maturing in February 2061 - 4.2%		18.3		18.3
Capital lease obligations		0.1		0.1
Total long-term debt at subsidiary		330.4		330.4

Bank term loan-maturing in August 2014 - variable rates: 2.46% - 2.47% and 2.22% - 2.47% (a)		425.0		425.0
Senior unsecured bonds maturing October 2016 - 6.5%		450.0		450.0
Senior unsecured bonds maturing October 2021 - 7.3%		800.0		800.0
Note to DPL Capital Trust II maturing in September 2031 - 8.125%		19.6		19.6
Total non-current portion - long-term debt - DPL	$	2,025.0	$	2,025.0

Current portion of long-term debt



$ in millions	March 31, 2013		December 31, 2012

First mortgage bonds maturing in October 2013 - 5.125%	$	479.7	$	484.5
Pollution control series maturing in November 2040 - variable rates: 0.10% - 0.16% and 0.04% - 0.26% (a)		100.0		100.0
U.S. Government note maturing in February 2061 - 4.2%		0.1		0.1
Capital lease obligations		0.3		0.3
Total current portion - long-term debt - DPL	$	580.1	$	584.9

(a) Range of interest rates for the three months ended March 31, 2013 and the twelve months ended December 31, 2012, respectively.

At March 31, 2013, maturities of long-term debt, including capital lease obligations, are as follows:



$ in millions

Due within one year	$	570.4
Due within two years		425.2
Due within three years		0.1
Due within four years		450.1
Due within five years		0.2
Thereafter		1,152.8
Total maturities		2,598.8

Unamortized premiums and discounts		6.3
Total long-term debt	$	2,605.1

Premiums or discounts recognized at the Merger date are amortized over the remaining life of the debt using the effective interest method.

On December 4, 2008, the OAQDA issued $100.0 million of collateralized, variable rate Revenue Refunding Bonds Series A and B due November 1, 2040. In turn, DP&L borrowed these funds from the OAQDA and issued corresponding First Mortgage Bonds to support repayment of the funds. The payment of principal and interest on each series of the bonds when due is backed by a standby letter of credit issued by JPMorgan Chase Bank, N.A. This standby letter of credit facility, which expires in December 2013, is irrevocable and has no subjective acceleration clauses. If the standby letter of credit expires, this would trigger a mandatory tender of all of the outstanding bonds, therefore, we have reflected these outstanding bonds as a current liability. DP&L is currently working to refinance this standby letter of credit. Though not yet finalized it is expected that the new facility will be for three to five years under terms that are substantially similar to those of the existing facility. We currently have secured all of the bank commitments necessary to extend this facility and intend to finalize the amendment during the second quarter of 2013. Fees associated with this standby letter of credit facility were not material during the three months ended March 31, 2013 and 2012.

On April 20, 2010, DP&L entered into a $200.0 million unsecured revolving credit agreement with a syndicated bank group. The agreement provides DP&L with the ability to increase the size of the facility by an additional $50.0 million. This agreement, originally for a three year term expiring on April 20, 2013, was extended through May 31, 2013 by an amendment dated April 11, 2013. DP&L had no outstanding borrowings under this credit facility at March 31, 2013 and December 31, 2012. Fees associated with this revolving credit facility were not material during the three months ended March 31, 2013 and 2012. This facility also contains a $50.0 million letter of credit sublimit. As of March 31, 2013, DP&L had no outstanding letters of credit against this facility.

On August 24, 2011, DP&L entered into a $200.0 million unsecured revolving credit agreement with a syndicated bank group. This agreement is for a four year term expiring on August 24, 2015 and provides DP&L with the ability to increase the size of the facility by an additional $50.0 million. DP&L had no outstanding borrowings under this credit facility at March 31, 2013 and December 31, 2012. Fees associated with this revolving credit facility were not material during the three months ended March 31, 2013 and 2012. This facility also contains a $50.0 million letter of credit sublimit. As of March 31, 2013, DP&L had no outstanding letters of credit against this facility.

Prior to the expiration of the DP&L amended revolving credit facility (that is now scheduled to expire on May 31, 2013) and in no case later than the end of the second quarter of 2013, DP&L intends to enter into a new $275.0 million to $350.0 million revolving credit facility and to extinguish both of the existing DP&L revolving credit facilities discussed above. It is expected that this new facility will have a three to five year term and an option to further increase the potential borrowing. The terms and conditions of this new revolving credit facility have not been finalized, but it is expected that they will be substantially similar to those of the existing DP&L revolving credit facilities. As of the date of filing of this quarterly report on Form 10-Q, DP&L has the bank commitments required to close the new DP&L revolving credit facility.

On March 1, 2011, DP&L completed the purchase of $18.7 million of electric transmission and distribution assets from the federal government that are located at the Wright-Patterson Air Force Base. DP&L financed the acquisition of these assets with a note payable to the federal government that is payable monthly over 50 years and bears interest at 4.2% per annum.

On August 24, 2011, DPL entered into a $125.0 million unsecured revolving credit agreement with a syndicated bank group. This agreement is for a three year term expiring on August 24, 2014. The size of the facility was reduced from $125.0 million to $75.0 million as part of an amendment dated October 19, 2012 that was negotiated between DPL and the syndicated bank group. DPL had no outstanding borrowings under this credit facility at March 31, 2013 and December 31, 2012. Fees associated with this revolving credit facility were not material during the three months ended March 31, 2013 and 2012. This facility may also be used to issue letters of credit up to the $75.0 million limit. As of March 31, 2013, DPL had no outstanding letters of credit against this facility.

On August 24, 2011, DPL entered into a $425.0 million unsecured term loan agreement with a syndicated bank group. This agreement is for a three year term expiring on August 24, 2014. DPL has borrowed the entire $425.0 million available under the facility at March 31, 2013 and December 31, 2012. Fees associated with this term loan were not material during the three months ended March 31, 2013 and 2012.

Prior to the end of the second quarter, DPL intends to enter into a new $75.0 million to $150.0 million revolving credit facility and to extinguish the existing $75.0 million facility. It is expected that this new facility will have a three to five year term and an option to further increase the potential borrowing. Contemporaneously, DPL intends to refinance a portion of its $425.0 million term loan, and repay the balance of the currently outstanding term loan with cash. The terms and conditions of this new revolving credit facility and new term loan have not been finalized, but it is expected they will be at market for these types of transactions. As of the date of filing this quarterly report on Form 10-Q, DPL has secured all of the bank commitments required to close the new DPL revolving credit facility and the new DPL term loan.

DPL’s unsecured revolving credit agreement and DPL’s unsecured term loan each have two financial covenants, one of which was changed as part of amendments dated October 19, 2012, to the facilities negotiated between DPL and the syndicated bank groups. The first financial covenant, originally a Total Debt to Capitalization ratio, was changed, effective September 30, 2012, to a Total Debt to EBITDA ratio. The Total Debt to EBITDA ratio is calculated, at the end of each fiscal quarter, by dividing total debt at the end of the current quarter by consolidated EBITDA for the four prior fiscal quarters.

The second financial covenant is an EBITDA to Interest Expense ratio. The EBITDA to Interest Expense ratio is calculated, at the end of each fiscal quarter, by dividing EBITDA for the four prior fiscal quarters by the consolidated interest charges for the same period.

The amendments, dated October 19, 2012, to the facilities negotiated between DPL and the syndicated bank groups, restrict dividend payments from DPL to AES and adjust the cost of borrowing under the facilities.

In connection with the closing of the Merger, DPL assumed $1,250.0 million of debt that Dolphin Subsidiary II, Inc., a subsidiary of AES, issued on October 3, 2011 to partially finance the Merger. The $1,250.0 million was issued in two tranches. The first tranche was $450.0 million of five year senior unsecured notes issued with a 6.50% coupon maturing on October 15, 2016. The second tranche was $800.0 million of ten year senior unsecured notes issued with a 7.25% coupon maturing on October 15, 2021.

Substantially all property, plant and equipment of DP&L is subject to the lien of the mortgage securing DP&L’s First and Refunding Mortgage, dated October 1, 1935, with the Bank of New York Mellon as Trustee.

DP&L [Member]

Debt Obligations

5. Debt Obligations

Long-term debt



$ in millions	March 31, 2013		December 31, 2012

Pollution control series maturing in January 2028 - 4.7%	$	35.3	$	35.3
Pollution control series maturing in January 2034 - 4.8%		179.1		179.1
Pollution control series maturing in September 2036 - 4.8%		100.0		100.0
U.S. Government note maturing in February 2061 - 4.2%		18.3		18.3
Capital lease obligation		0.1		0.1
Unamortized debt discount		(0.1)		(0.1)
Total non-current portion - long-term debt - DP&L	$	332.7	$	332.7

Current portion of long-term debt



$ in millions	March 31, 2013		December 31, 2012

First mortgage bonds maturing in October 2013 - 5.125%	$	470.0	$	470.0
Pollution control series maturing in November 2040 - variable rates: 0.10% - 0.16% and 0.04% - 0.26% (a)		100.0		100.0
U.S. Government note maturing in February 2061 - 4.2%		0.1		0.1
Capital lease obligations		0.3		0.3
Total current portion - long-term debt - DP&L	$	570.4	$	570.4

(a) Range of interest rates for the three months ended March 31, 2013 and the twelve months ended December 31, 2012, respectively.

At March 31, 2013, maturities of long-term debt, including capital lease obligations, are as follows:



$ in millions

Due within one year	$	570.4
Due within two years		0.2
Due within three years		0.1
Due within four years		0.1
Due within five years		0.1
Thereafter		332.3
Total maturities		903.2

Unamortized discounts		(0.1)
Total long-term debt	$	903.1

On April 20, 2010, DP&L entered into a $200.0 million unsecured revolving credit agreement with a syndicated bank group. The agreement provides DP&L with the ability to increase the size of the facility by an additional $50.0 million. This agreement, originally for a three year term expiring on April 20, 2013, was extended through May 31, 2013 by an amendment dated April 11, 2013 that was negotiated between DP&L and the syndicated bank group. DP&L had no outstanding borrowings under this credit facility at March 31, 2013 and December 31, 2012. Fees associated with this revolving credit facility were not material during the three months ended March 31, 2013 and 2012. This facility also contains a $50.0 million letter of credit sublimit. As of March 31, 2013, DP&L had no outstanding letters of credit against this facility.