Vectren 2008 Annual Report Download - page 90

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following 2008 (in millions) is $80.0 in 2009, $10.0 in 2010, $30.0 in 2011, zero in 2012 and thereafter. Debt that
may be put to the Company within one year is classified as Long-term debt subject to tender in current liabilities.
Auction Rate Securities
On December 6, 2007, SIGECO closed on $17 million of auction rate tax-exempt long-term debt. The debt had a
life of 33 years, maturing on January 1, 2041. The initial interest rate was set at 4.50 percent but the rate was to
reset every 7 days through an auction process that began December 13, 2007. This new debt was collateralized
through the issuance of first mortgage bonds and the payment of interest and principal was insured through Ambac
Assurance Corporation (Ambac).
In February 2008, SIGECO provided notice to the current holders of approximately $103 million of tax-exempt
auction rate mode long-term debt, including the $17 million issued in December 2007, of its plans to convert that
debt from its current auction rate mode into a daily interest rate mode. In March 2008, the debt was tendered at 100
percent of the principal amount plus accrued interest. During March 2008, SIGECO remarketed approximately
$61.8 million of these instruments at interest rates that are fixed to maturity, receiving proceeds, net of issuance
costs, of approximately $60.0 million. The terms are $22.6 million at 5.15 percent due in 2023, $22.2 million at
5.35 percent due in 2030 and $17.0 million at 5.45 percent due in 2041. The remaining $41.3 million continues to
be held in treasury and is expected to be remarketed in 2009.
Utility Holdings and Indiana Gas Debt Calls
In 2006, the Company called at par $100.0 million of Utility Holdings senior unsecured notes originally due in
2031. The note had a stated interest rate of 7.25 percent.
Other Financing Transactions
As part of the integration of Miller into the Company’s consolidated financing model, $24.0 million of Miller’s
outstanding long-term debt was retired in the fourth quarter of 2006.
Other Company debt totaling $24.0 million in 2007 was retired as scheduled.
Future Long-Term Debt Sinking Fund Requirements and Maturities
The annual sinking fund requirement of SIGECO's first mortgage bonds is 1 percent of the greatest amount of
bonds outstanding under the Mortgage Indenture. This requirement may be satisfied by certification to the Trustee
of unfunded property additions in the prescribed amount as provided in the Mortgage Indenture. SIGECO intends
to meet the 2009 sinking fund requirement by this means and, accordingly, the sinking fund requirement for 2009 is
excluded from Current liabilities in the Consolidated Balance Sheets. At December 31, 2008, $1.0 billion of
SIGECO's utility plant remained unfunded under SIGECO's Mortgage Indenture. SIGECO’s gross utility plant
balance subject to the Mortgage Indenture approximated $2.3 billion at December 31, 2008.
Consolidated maturities of long-term debt during the five years following 2008 (in millions) are zero in 2009, $47.5
in 2010, $250.0 in 2011, $60.0 in 2012, and 105.0 in 2013.
Debt Guarantees
Vectren Corporation guarantees Vectren Capital’s long-term and short-term debt, which totaled $183 million and
$327 million, respectively, at December 31, 2008. Utility Holdings’ currently outstanding long-term and short-
term debt is jointly and severally guaranteed by Indiana Gas, SIGECO, and VEDO. Utility Holdings’ long-term
and short-term debt outstanding at December 31, 2008, totaled $823 million and $192 million, respectively.
Short-Term Borrowings
At December 31, 2008, the Company had $905 million of short-term borrowing capacity, including $520 million
for the Utility Group operations and $385 million for the wholly owned Nonutility Group and corporate operations,
of which approximately $328 million was available for the Utility Group operations and approximately $55 million
was available for wholly owned Nonutility Group and corporate operations, as reduced for approximately $3
million in outstanding letters of credit.