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Debt Obligations

6 Months Ended

Jun. 30, 2020

Long-term Debt

The following table summarizes DPL's long-term debt.


	Interest		June 30,		December 31,
$ in millions	Rate	Maturity	2020		2019
First Mortgage Bonds	3.95%	2049	$	425.0	$	425.0
Tax-exempt First Mortgage Bonds - rates from 2.40% - 2.93% (a) and 1.15% - 2.47% (b)		2020	140.0		140.0
U.S. Government note	4.20%	2061	17.4		17.5
Unamortized deferred financing costs			(5.5)		(5.4)
Unamortized debt discounts and premiums, net			(2.6)		(2.7)
Total long-term debt at DP&L			574.3		574.4

Senior unsecured bonds	7.25%	2021	380.0		380.0
Senior unsecured bonds	4.13%	2025	415.0		—
Senior unsecured bonds	4.35%	2029	400.0		400.0
Note to DPL Capital Trust II (c)	8.125%	2031	15.6		15.6
Unamortized deferred financing costs			(11.9)		(5.9)
Unamortized debt discounts and premiums, net			(1.0)		(1.0)
Total long-term debt			1,772.0		1,363.1
Less: current portion			(379.2)		(139.8)
Long-term debt, net of current portion			$	1,392.8	$	1,223.3

(a)Range of interest rates for the six months ended June 30, 2020.

(b)Range of interest rates for the year ended December 31, 2019.

(c)Note payable to related party.

Lines of credit

At June 30, 2020 and December 31, 2019, DPL had outstanding borrowings on its line of credit of $0.0 million and $104.0 million, respectively. At June 30, 2020 and December 31, 2019, DP&L had outstanding borrowings on its line of credit of $0.0 million and $40.0 million, respectively.

Significant transactions

On July 31, 2020 DP&L issued $140.0 million of taxable First Mortgage Bonds and on August 3, 2020 used the proceeds to purchase at par value the $140.0 million of outstanding tax-exempt Ohio Air Quality Development Authority Collateralized Pollution Control Revenue Refunding Bonds that had been issued in 2015. The new taxable First Mortgage Bonds carry an interest rate of 3.20% and mature on July 31, 2040. As a result of this refinancing, the $140.0 million tax-exempt First Mortgage Bonds are presented as long-term debt as of June 30, 2020.

On June 19, 2020 DPL closed a $415.0 million issuance of senior unsecured notes. These notes carry an interest rate of 4.125% and mature on July 1, 2025. Proceeds from the issuance and cash on hand were used to redeem in-full the remaining balance of $380.0 million of DPL's 7.25% senior unsecured notes. These bonds were redeemed at par plus accrued interest and a make-whole premium of $30.8 million on July 20, 2020.

On June 1, 2020 DPL amended its secured revolving credit facility. As a result of the amendment, the borrowing limit was reduced from $125.0 million to $110.0 million, the Total Debt to EBITDA covenant was eliminated, the EBITDA to Interest Expense covenant was reduced from 2.25 to 1.00 to 1.70 to 1.00, increasing to 1.75 to 1.00 as

of September 30, 2022 and 2.00 to 1.00 as of December 31, 2022, and a trailing-twelve months minimum EBITDA covenant of $125.0 million was added, increasing to $130.0 million as of September 30, 2022 and $150.0 million as of December 31, 2022. Starting with the quarter ended September 30, 2021, the borrowing limit will be reduced by $5.0 million per quarter should DPL’s Total Debt to EBITDA ratio calculated for the period of four consecutive quarters exceed 7.00 to 1.00.

Long-term debt covenants and restrictions

DPL’s revolving credit agreement has two financial covenants. The first financial covenant, a minimum EBITDA, calculated at the end of each fiscal quarter for the four prior fiscal quarters, of $125.0 million is required, stepping up to $130.0 million on September 30, 2022 and $150.0 million on December 31, 2022. As of June 30, 2020, this financial covenant was in compliance.

The second financial covenant is an EBITDA to Interest Expense ratio that 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 ratio, per the agreement, is to be not less than 1.70 to 1.00, and steps up to 1.75 to 1.00 on September 30, 2022 and 2.00 to 1.00 as of December 31, 2022. As of June 30, 2020, this financial covenant was met with a ratio of 2.75 to 1.00.

DPL’s secured revolving credit agreement also restricts dividend payments from DPL to AES, such that DPL cannot make dividend payments unless at the time of, and/or as a result of the distribution, (i) DPL’s leverage ratio does not exceed 0.67 to 1.00 and DPL’s interest coverage ratio is not less than 2.50 to 1.00 or, if such ratios are not within the parameters, (ii) DPL’s senior long-term debt rating from two of the three major credit rating agencies is at least investment grade. As a result, as of June 30, 2020, DPL was prohibited from making a distribution to its shareholder or making a loan to any of its affiliates (other than its subsidiaries).

DP&L's unsecured revolving credit facility and Bond Purchase Agreement (financing document entered into in connection with the issuance of DP&L's First Mortgage Bonds, on July 31, 2020) has one financial covenant. The covenant measures Total Debt to Total Capitalization and 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. DP&L’s Total Debt to Total Capitalization ratio shall not be greater than 0.67 to 1.00. This financial covenant was met with a ratio of 0.48 to 1.00 as of June 30, 2020.

As of June 30, 2020, DPL and DP&L were in compliance with all debt covenants, including the financial covenants described above.

DP&L does not have any meaningful restrictions in its debt financing documents prohibiting dividends to its parent, DPL.

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

The following table summarizes DP&L's long-term debt.


	Interest			June 30,		December 31,
$ in millions	Rate		Maturity	2020		2019
First Mortgage Bonds	3.95	%	2049	$	425.0	$	425.0
Tax-exempt First Mortgage Bonds - rates from 2.40% - 2.93% (a) and 1.15% - 2.47% (b)			2020	140.0		140.0
U.S. Government note	4.20	%	2061	17.4		17.5
Unamortized deferred financing costs				(5.5)		(5.4)
Unamortized debt discounts and premiums, net				(2.6)		(2.7)
Total long-term debt				574.3		574.4
Less: current portion				(0.1)		(139.8)
Long-term debt, net of current portion				$	574.2	$	434.6

(a)Range of interest rates for the six months ended June 30, 2020.

(b)Range of interest rates for the year ended December 31, 2019.

Line of credit

At June 30, 2020 and December 31, 2019, DP&L had outstanding borrowings on its line of credit of $0.0 million and $40.0 million, respectively.

Significant transactions

Long-term debt covenants and restrictions

As of June 30, 2020, DP&L was in compliance with all debt covenants, including the financial covenants described above.

DP&L does not have any meaningful restrictions in its debt financing documents prohibiting dividends to its parent, DPL.

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