DEBT

Recourse Debt

During the first quarter of 2016, the Parent Company redeemed $125 million of its senior unsecured notes outstanding. The repayment included a portion of the 7.375% senior notes due in 2021, the 4.875% senior notes due in 2023, the 5.5% senior notes due in 2024, the 5.5% senior notes due in 2025 and the floating rate senior notes due in 2019.

As a result of these transactions, the Company recognized a net gain on extinguishment of debt of $7 million that is included in the Condensed Consolidated Statement of Operations.

In March 2015, the Company redeemed in full the $151 million balance of its 7.75% senior unsecured notes due October 2015 and the $164 million balance of its 9.75% senior unsecured notes due April 2016. As a result of these transactions, the Company recognized a loss on extinguishment of debt of $23 million for the three months ended March 31, 2015 that is included in the Condensed Consolidated Statement of Operations.

Non-Recourse Debt

During the three months ended March 31, 2016, the Company’s subsidiaries engaged in the following significant debt transactions:



Subsidiary	Issuances		Repayments		Gain (Loss) on Extinguishment of Debt
IPALCO	$	148	$	83	$	—
Other	161		259		(2		)
	$	309	$	342	$	(2	)

Non-recourse Debt in default — The following table summarizes the Company’s subsidiary non-recourse debt in default as of March 31, 2016 (in millions). Due to the defaults, these amounts are included in the current portion of non-recourse debt:



Subsidiary	Primary Nature of Default	Debt in Default		Net Assets
Maritza (Bulgaria)⁽¹⁾	Covenant	$	551	$	719
Kavarna (Bulgaria)	Covenant	138		83
Sogrinsk (Kazakhstan)	Covenant	6		8
		$	695

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⁽¹⁾ See Note 18—Subsequent Events for updates after March 31, 2016 impacting Maritza’s debt in default.

The above defaults are not payment defaults. All of the subsidiary non-recourse debt defaults were triggered by failure to comply with covenants and/or other conditions such as (but not limited to) failure to meet information covenants, complete construction or other milestones in an allocated time, meet certain minimum or maximum financial ratios, or other requirements contained in the non-recourse debt documents of the applicable subsidiary.

In the event that there is a default, bankruptcy or maturity acceleration at a subsidiary or group of subsidiaries that meets the applicable definition of materiality under the Parent Company’s corporate debt agreements, there could be a cross-default to the Company’s recourse debt. Materiality is defined in the Parent’s senior secured credit facility as having provided 20% or more of the total cash distributions from businesses to the Parent Company for the four most recently completed fiscal quarters. As of March 31, 2016, none of the defaults listed above individually or in the aggregate result in or are at risk of triggering a cross-default under the recourse debt of the Parent Company. In the event the Parent Company is not in compliance with the financial covenants of its senior secured credit facility, restricted payments will be limited to regular quarterly shareholder dividends at the then-prevailing rate. Payment and bankruptcy defaults would preclude the making of any restricted payments.