Debt Obligations

6 Months Ended

Jun. 30, 2015

Long-term debt



	June 30,			December 31,
$ in millions	2015			2014
First mortgage bonds due in September 2016 - 1.875%	$	445.0		$	445.0
Pollution control series due in January 2028 - 4.7%	—			35.3
Pollution control series due in January 2034 - 4.8%	100.0			179.1
Pollution control series due in September 2036 - 4.8%	100.0			100.0
Pollution control series due in November 2040 - rates from: 0.02% - 0.12% and 0.04% - 0.15% (a)	100.0			100.0
U.S. Government note due in February 2061 - 4.2%	18.0			18.1
Unamortized debt discount / premiums, net	(2.7		)	(2.8		)
Total long-term debt at subsidiary	760.3			874.7

Bank term loan due in May 2018 - rates from: 2.41% - 2.44% and 2.42% - 2.45% (a)	125.0			140.0
Senior unsecured bonds due in October 2016 - 6.5%	130.0			130.0
Senior unsecured bonds due in October 2019 - 6.75%	200.0			200.0
Senior unsecured bonds due in October 2021 - 7.25%	780.0			780.0
Note to DPL Capital Trust II due in September 2031 - 8.125% (b)	15.6			15.6
Unamortized debt discount / premiums, net	(0.6		)	(0.7		)
Total non-current portion of long-term debt	$	2,010.3		$	2,139.6

Current portion of long-term debt



	June 30,		December 31,
$ in millions	2015		2014
Pollution control series due in January 2028 - 4.7%	$	35.3	$	—
Pollution control series due in January 2034 - 4.8%	79.1		—
Bank term loan due in May 2018 - rates from: 2.41% - 2.44% and 2.42% - 2.45% (a)	35.0		20.0
U.S. Government note due in February 2061 - 4.2%	0.1		0.1
Total current portion of long-term debt	$	149.5	$	20.1


(a)	Range of interest rates for the six months ended June 30, 2015 and the twelve months ended December 31, 2014, respectively.


(b)	Note payable to related party. See Note 1: Related Party Transactions for additional information.

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

DP&L has an unsecured revolving credit agreement with a syndicated bank group. Prior to refinancing the facility on July 31, 2015, as discussed below, this facility had a $300.0 million borrowing limit, a five-year term expiring on May 10, 2018, a $100.0 million letter of credit sublimit and a feature that provides DP&L the ability to increase the size of the facility by an additional $100.0 million. At June 30, 2015, there were two letters of credit in the amount of $1.4 million outstanding, with the remaining $298.6 million available to DP&L. Fees associated with this letter of credit facility were not material during the six months ended June 30, 2015 or 2014. As discussed below, this agreement was refinanced in July 2015.

DP&L’s unsecured revolving credit agreement and DP&L’s amended standby letters of credit have two financial covenants. The first financial covenant measures Total Debt to Total Capitalization. The Total Debt to Total Capitalization ratio is calculated, at the end of each fiscal quarter, by dividing total debt at the end of the quarter by total capitalization at the end of the quarter. The second financial covenant ratio compares 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 above covenants were retained with some amendments in DP&L's revolving credit facility refinanced on July 31, 2015 discussed below. The DP&L amended standby letter of credit facilities were terminated on August 3, 2015.

On July 1, 2015, the $35.3 million of DP&L's 4.7% pollution control bonds due January 2028 and $41.3 million of DP&L's 4.8% pollution control bonds due January of 2034 were called at par and were redeemed with cash.

On July 31, 2015, DP&L refinanced its revolving credit facility, reducing the total size from $300.0 million to $175.0 million, with a $50.0 million letter of credit sublimit and a feature that provides DP&L the ability to increase the size of the facility by an additional $100.0 million. This refinancing extended the life of the facility from May 2018 to July 2020.

On August 3, 2015, DP&L called $100.0 million of variable rate pollution control bonds due November 2040 and $137.8 million of 4.8% pollution control bonds due January of 2034. These bonds were refinanced with $200.0 million of new pollution control bonds at variable rates of interest secured by first mortgage bonds in an equivalent amount, and the remaining $37.8 million was redeemed with cash on hand and a draw from the DP&L revolving line of credit.

As a result of these transactions, $35.3 million, $41.3 million and $37.8 million (total of $114.4 million) of long-term DP&L debt was reclassified to current as of June 30, 2015 as reflected in the tables above.

DPL has a revolving credit facility. This facility has a letter of credit sublimit and a feature that provides DPL the ability to increase the size of the facility. Prior to refinancing the facility on July 31, 2015, as discussed below, this facility was unsecured and had a borrowing limit of $100.0 million with a $100.0 million letter of credit sublimit, was able to be increased in size by DPL by an additional $50.0 million and had a five-year term expiring on May 10, 2018; with a springing maturity, meaning that if DPL had not refinanced its senior unsecured bonds due October 2016 before July 15, 2016, then the maturity of this facility would have been July 15, 2016. At June 30, 2015, there was one letter of credit in the amount of $2.3 million outstanding, with the remaining $97.7 million available to DPL. Fees associated with this facility were not material during the six months ended June 30, 2015 or 2014. As discussed below, this facility was refinanced in July 2015.

On July 31, 2015, DPL refinanced its revolving credit facility, increasing the total size from $100.0 million to $205.0 million, with a $200.0 million letter of credit sublimit and a feature that provides DPL the ability, under certain circumstances, to increase the size of the facility by an additional $95.0 million. This facility is secured by a pledge of common stock that DPL owns in DP&L, limited to the amount permitted to be pledged under certain Indentures dated October 3, 2011 and October 6, 2014 between DPL and Wells Fargo Bank, NA and U.S. Bank National Association, respectively, as Trustee and a limited recourse guarantee by DPLE secured by assets of DPLE. This refinancing extended the life of the facility from May 2018 to July 2020. DPL's new credit facility has a springing maturity feature providing that if, before July 1, 2019, DPL has not refinanced its senior unsecured bonds due October 2019 to have a maturity date that is at least six months later than July 31, 2020, then the maturity of this facility shall be July 1, 2019.

At the same time, DPL refinanced its term loan paying down the outstanding amount from $160.0 million to $125.0 million, extending the term to July of 2020, pushing back required principal payments to 2017, and providing a mechanism for DPL to request additional term loans to refinance existing indebtedness. This facility is secured by a pledge of common stock that DPL owns in DP&L, limited to the amount permitted to be pledged under certain Indentures dated October 3, 2011 and October 6, 2014 between DPL and Wells Fargo Bank, NA and U.S. Bank National Association, respectively, as Trustee and a limited recourse guarantee by DPLE secured by assets of DPLE. The new term loan has a springing maturity feature providing that if, before July 1, 2019, DPL has not refinanced its senior unsecured bonds due October 2019 to have a maturity date that is at least six months later than July 31, 2020, then the maturity of this facility shall be July 1, 2019. As a result of this refinancing, the portion of the term loan that is classified as current ($35.0 million) was redeemed with cash.

DPL’s revolving credit agreement and term loan have two financial covenants. The first financial covenant, a 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, an 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 above covenants were retained with some amendments in DPL's revolving credit facility refinanced on July 31, 2015.

DPL’s revolving credit agreement and term loan restrict dividend payments from DPL to AES and adjust the cost of borrowing under the facilities under certain credit rating scenarios.

Substantially all property, plant & equipment of DP&L is subject to the lien of the mortgage securing DP&L’s First and Refunding Mortgage.

THE DAYTON POWER AND LIGHT COMPANY [Member]

Debt Instrument [Line Items]

Debt Obligations

Long-term debt



	June 30,			December 31,
$ in millions	2015			2014
First mortgage bonds due in September 2016 - 1.875%	$	445.0		$	445.0
Pollution control series due in January 2028 - 4.7%	—			35.3
Pollution control series due in January 2034 - 4.8%	100.0			179.1
Pollution control series due in September 2036 - 4.8%	100.0			100.0
Pollution control series due in November 2040 - rates from: 0.02% - 0.12% and 0.04% - 0.15% (a)	100.0			100.0
U.S. Government note due in February 2061 - 4.2%	18.0			18.1
Unamortized debt discount	(0.3		)	(0.5		)
Total non-current portion of long-term debt	$	762.7		$	877.0

Current portion of long-term debt



	June 30,		December 31,
$ in millions	2015		2014
Pollution control series due in January 2028 - 4.7%	$	35.3	$	—
Pollution control series due in January 2034 - 4.8%	79.1		—
U.S. Government note due in February 2061 - 4.2%	0.1		0.1
Total current portion of long-term debt	$	114.5	$	0.1

(a)Range of interest rates for the six months ended June 30, 2015 and the twelve months ended December 31, 2014, respectively.

On July 1, 2015, the $35.3 million of 4.7% pollution control bonds due January 2028 and $41.3 million of the 4.8% pollution control bonds due January of 2034 became callable at par and were redeemed with cash.

On August 3, 2015, DP&L called $100.0 million of variable rate pollution control bonds due November 2040 and $137.8 million of 4.8% pollution control bonds due January of 2034. These bonds were refinanced with $200.0 million of new pollution control bonds at variable rates of interest secured by first mortgage bonds in an equivalent amount and the remaining $37.8 million of these bonds were redeemed with cash on hand and a draw from the DP&L revolving line of credit.

As a result of these transactions, $35.3 million, $41.3 million and $37.8 million (total of $114.4 million) of long-term debt was reclassified to current as of June 30, 2015 as reflected in the tables above.

DP&L’s unsecured revolving credit agreements and DP&L’s standby letter of credit have two financial covenants. The first financial covenant measures Total Debt to Total Capitalization. The Total Debt to Total Capitalization ratio is calculated, at the end of each fiscal quarter, by dividing total debt at the end of the quarter by total capitalization at the end of the quarter. The second financial covenant compares EBITDA to Interest Expense. 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 above covenants were retained with some amendments in DP&L's revolving credit facility refinanced on July 31, 2015. The DP&L amended standby letter of credit facilities were terminated on August 3, 2015.

Substantially all property, plant & equipment of DP&L is subject to the lien of the mortgage securing DP&L’s First and Refunding Mortgage.