Debt and Credit Facilities

The following table provides maturity dates or ranges, year-to-date weighted average interest rates and amounts outstanding for our various debt securities and facilities for the periods presented. We fully and unconditionally guarantee all debt issued by AGL Capital. For additional information on our debt and credit facilities, see Note 8 to our consolidated financial statements and related notes included in Item 8 of our 2014 Form 10-K.



		September 30, 2015								September 30, 2014
Dollars in millions	Year(s) due	Weighted average interest rate ⁽¹⁾		Outstanding			December 31, 2014			Weighted average interest rate ⁽¹⁾		Outstanding
Short-term debt
Commercial paper - AGL Capital ⁽²⁾	2015	0.5	%	$	450		$	590		0.3	%	$	292
Commercial paper - Nicor Gas ⁽²⁾	2015	0.4		436			585			0.2		389
Total short-term debt		0.4	%	$	886		$	1,175		0.3	%	$	681
Current portion of long-term debt	2016	5.9	%	$	425		$	200		5.0	%	$	200
Long-term debt - excluding current portion
Senior notes	2016-2043	4.8	%	$	2,325		$	2,625		5.0	%	$	2,625
First mortgage bonds	2019-2038	5.9		375			500			5.6		500
Gas facility revenue bonds	2022-2033	0.9		200			200			0.9		200
Medium-term notes	2017-2027	7.8		181			181			7.8		181
Total principal long-term debt		4.7	%	3,081			3,506			4.9	%	3,506
Unamortized fair value adjustment of long-term debt ⁽³⁾	n/a	n/a		71			80			n/a		83
Unamortized debt premium, net	n/a	n/a		16			16			n/a		16
Unamortized debt issuance costs	n/a	n/a		(18		)	(21		)	n/a		(21		)
Total non-principal long-term debt		n/a		69			75			n/a		78
Total long-term debt - excluding current portion				$	3,150		$	3,581				$	3,584
Total debt				$	4,461		$	4,956				$	4,465


(1)	Interest rates are calculated based on the daily weighted average balance outstanding for the nine months ended September 30.


(2)	As of September 30, 2015, the effective interest rates on our commercial paper borrowings were 0.5% for AGL Capital and 0.4% for Nicor Gas.


(3)	See Note 5 herein for additional information on our fair value measurements.

Commercial Paper Programs

We maintain commercial paper programs at AGL Capital and at Nicor Gas that consist of short-term, unsecured promissory notes used in conjunction with cash from operations to fund our seasonal working capital requirements. Working capital needs fluctuate during the year and are generally highest during the injection period in advance of the Heating Season. Nicor Gas’ commercial paper program supports working capital needs at Nicor Gas, while all of our other subsidiaries and SouthStar participate in AGL Capital’s commercial paper program. During the first nine months of 2015, our commercial paper maturities ranged from 1 to 58 days, and at September 30, 2015, remaining terms to maturity ranged from 1 to 34 days. During the first nine months of 2015, we had no commercial paper issuances with original maturities over three months. Total borrowings and repayments during the first nine months of 2015 netted to a payment of $289 million.

Senior Notes

On January 15, 2015, $200 million of senior notes matured and were repaid using the proceeds from commercial paper borrowings.

Interest Rate Swaps

On January 23, 2015, we executed $800 million in notional value of 10 year and 30 year fixed-rate, forward-starting interest rate swaps to hedge potential interest rate volatility prior to anticipated issuances of senior notes during the fourth quarter of 2015 and in 2016. These debt issuances will be used to reduce our commercial paper for the amount that was borrowed to repay our senior notes that matured in January 2015 and to fund upcoming debt maturities as well as increased capital expenditures associated with utility investments, including infrastructure programs, and construction of our new pipeline projects. We have designated the forward-starting interest rate swaps, which will be settled on the debt issuance dates, as cash flow hedges. We performed a qualitative assessment of effectiveness as of September 30, 2015 and concluded that the hedges remain highly effective.

Financial and Non-Financial Covenants

The AGL Credit Facility and the Nicor Gas Credit Facility each include a financial covenant that requires us to maintain a ratio of total debt to total capitalization of no more than 70% at the end of any month; however, our goal is to maintain these ratios at levels between 50% and 60%, except for temporary increases related to the timing of acquisition and financing activities. The following table contains our debt-to-capitalization ratios for the dates presented, which are below the maximum allowed.



	AGL Resources						Nicor Gas
	September 30, 2015		December 31, 2014		September 30, 2014		September 30, 2015		December 31, 2014		September 30, 2014
Debt covenants ⁽¹⁾	52	%	55	%	53	%	56	%	62	%	57	%


(1)	As defined in our credit facilities, includes standby letters of credit and performance/surety bonds and excludes accumulated OCI items related to non-cash pension adjustments, welfare benefits liability adjustments and accounting for cash flow hedges.

The credit facilities contain certain non-financial covenants that, among other things, restrict liens and encumbrances, loans and investments, acquisitions, dividends and other restricted payments, asset dispositions, mergers and consolidations, and other matters customarily restricted in such agreements.

Default Provisions

Our credit facilities and other financial obligations include provisions that, if not complied with, could require early payment or similar actions. The most important default events include the following:


•	a maximum leverage ratio;


•	insolvency events and/or nonpayment of scheduled principal or interest payments;


•	acceleration of other financial obligations; and


•	change of control provisions.

We have no triggering events in our debt instruments that are tied to changes in our specified credit ratings or our stock price and have not entered into any transaction that requires us to issue equity based on credit ratings or other triggering events. We were in compliance with all existing debt provisions and covenants, both financial and non-financial, for all periods presented.

Subsequent Event

On October 30, 2015, we entered into agreements to amend and extend the AGL Credit Facility and Nicor Gas Credit Facility. Under the terms of these agreements, we extended the maturity dates of the AGL Credit Facility and Nicor Gas Credit Facility to November 9, 2018 and December 14, 2018, respectively. We also modified the event of default triggered by a change of control upon the closing of the proposed merger with Southern Company and we made similar changes to our Bank Rate Mode Covenants Agreement.