Vectren 2008 Annual Report Download - page 89

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At December 31,
(In millions) 2008 2007
Vectren Capital Corp.
Fixed Rate Senior Unsecured Notes
2010, 4.99% 25.0 25.0
2010, 7.98% 22.5 22.5
2012, 5.13% 25.0 25.0
2012, 7.43% 35.0 35.0
2015, 5.31% 75.0 75.0
Total Vectren Capital Corp. 182.5 182.5
Other Long-Term Notes Payable 0.7 0.3
Total long-term debt outstanding 1,372.8 1,249.0
Current maturities of long-term debt (0.4) (0.3)
Debt subject to tender (80.0) -
Unamortized debt premium & discount - net (3.2) (3.3)
Treasury debt (41.3) -
Total long-term debt-net 1,247.9$ 1,245.4$
Utility Holdings 2008 Debt Issuance
In March 2008, Utility Holdings issued at par $125 million in 6.25 percent senior unsecured notes due April 1,
2039 (2039 Notes). The 2039 Notes are guaranteed by Utility Holdings’ three utilities: SIGECO, Indiana Gas, and
VEDO. These guarantees are full and unconditional and joint and several.
The 2039 Notes have no sinking fund requirements, and interest payments are due monthly. The notes may be
called by Utility Holdings, in whole or in part, at any time on or after April 1, 2013, at 100 percent of principal
amount plus accrued interest. During 2007, Utility Holdings entered into several interest rate hedges with an $80
million notional amount. Upon issuance of the notes, these instruments were settled resulting in the payment of
approximately $9.6 million, which was recorded as a Regulatory asset pursuant to existing regulatory orders. The
value paid is being amortized as an increase to interest expense over the life of the issue. The proceeds from the
sale of the 2039 Notes less settlement of the hedging arrangements and payments of issuance costs amounted to
approximately $111.1 million.
Utility Holdings 2006 Debt Issuance
In October 2006, Utility Holdings issued $100 million in 5.95 percent senior unsecured notes due October 1, 2036
(2036 Notes). The 30-year notes were priced at par. The 2036 Notes are guaranteed by Utility Holdings’ three
public utilities: SIGECO, Indiana Gas, and VEDO. These guarantees are full and unconditional and joint and
several. These notes, as well as the timely payment of principal and interest, are insured by a financial guaranty
insurance policy by Financial Guaranty Insurance Company (FGIC).
The 2036 Notes have no sinking fund requirements, and interest payments are due quarterly. The notes may be
called by Utility Holdings, in whole or in part, at any time on or after October 1, 2011, at 100 percent of principal
amount plus accrued interest. During the first and second quarters of 2006, Utility Holdings entered into several
interest rate hedges with a $100 million notional amount. Upon issuance of the notes, these instruments were
settled resulting in the payment of approximately $3.3 million, which was recorded as a Regulatory asset pursuant
to existing regulatory orders. The value paid is being amortized as an increase to interest expense over the life of
the issue. The proceeds from the sale of the 2036 Notes, settlement of the hedging arrangements, and payments of
issuance costs totaled approximately $92.8 million.
Long-Term Debt Put and Call Provisions
Certain long-term debt issues contain put and call provisions that can be exercised on various dates before maturity.
Other than certain instruments that can be put to the Company upon the death of the holder (death puts), these put
or call provisions are not triggered by specific events, but are based upon dates stated in the note agreements.
During 2008 the Company repaid approximately $1.6 million related to death puts. In 2007 and 2006, no debt was
put to the Company. Debt which may be put to the Company for reasons other than a death during the years