Energy Transfer 2012 Annual Report Download - page 178

F - 33
Southern Union Junior Subordinated Notes
Southern Union has interest rate swap agreements that effectively fix the interest rate applicable to the floating rate on $525
million of the $600 million Junior Subordinated Notes due 2066. The interest rate on the remaining notes is a variable rate
based upon the three-month LIBOR rate plus 3.0175%. The balance of the variable rate portion of the Junior Subordinated
Notes was $75 million at an effective interest rate of 3.32% at December 31, 2012.
Panhandle Term Loans
In February 2012, Southern Union refinanced LNG Holdings’ $455 million term loan due March 2012 with an unsecured
three-year term loan facility due February 23, 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. The
effective interest rate of PEPL's term loan was 1.84% at December 31, 2012.
January 2013 Senior Notes Offering
In January 2013, ETP completed a public offering of $800 million aggregate principal amount of our 3.6% Senior Notes due
February 1, 2023 and $450 million aggregate principal amount of our 5.15% Senior Notes due February 1, 2043. We used
the net proceeds of approximately $1.24 billion from this offering to repay borrowings outstanding under our revolving credit
facility and for general partnership purposes.
In addition, in January 2013, Sunoco Logistics issued $350 million of 3.45% Senior Notes and $350 million of 4.95% Senior
Notes (the “2023 and 2043 Senior Notes”), due January 2023 and January 2043, respectively. The terms and conditions of
the 2023 and 2043 Senior Notes are comparable to those under Sunoco Logistics' existing Senior Notes. The net proceeds of
$691 million from the 2023 and 2043 Senior Notes were used to pay outstanding borrowings under the $350 million and $200
million Credit Facilities and for general partnership purposes.
Credit Facilities
ETP Credit Facility
The indebtedness under ETP’s revolving credit facility (the “ETP Credit Facility”) is unsecured and not guaranteed by any
of the Partnership’s subsidiaries and has equal rights to holders of our current and future unsecured debt. The indebtedness
under the ETP Credit Facility has the same priority of payment as our other current and future unsecured debt.
As of December 31, 2012, we had $1.40 billion outstanding under the ETP Credit Facility, and the amount available for future
borrowings was $1.03 billion taking into account letters of credit of $72 million. The weighted average interest rate on the
total amount outstanding as of December 31, 2012 was 1.71%.
ETP used approximately $2.0 billion of Sunoco's cash on hand to partially fund the cash portion of the Sunoco Merger
consideration. The remainder of the cash portion of the merger consideration, approximately $620 million, was funded with
borrowings under the ETP Credit Facility.
On October 27, 2011, we amended and restated the ETP Credit Facility to, among other things, (i) allow for borrowings of
up to $2.5 billion; (ii) extend the maturity date from July 20, 2012 to October 27, 2016 (which may be extended by one year
with lender approval); (iii) allow for an increase in the size of the credit facility to $3.75 billion (subject to obtaining lender
commitments for the additional borrowing capacity); and (iv) to adjust the interest rates and commitment fees to current
market terms. Following this amendment and based on our current ratings, the interest margin for LIBOR rate loans is 1.50%
and the commitment fee for unused borrowing capacity is 0.25%.
Southern Union Credit Facility
The Southern Union Credit Facility provides for a $700 million revolving credit facility which matures on May 20, 2016.
Borrowings under the Southern Union Credit Facility are available for working capital, other general company 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 on the credit ratings for Southern Union's senior unsecured notes. The weighted average
interest rate on the total amount outstanding as of December 31, 2012 was 1.84%.
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 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.
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