CREDIT FACILITIES AND LONG-TERM DEBT

9 Months Ended

Sep. 30, 2011

CREDIT FACILITIES AND LONG-TERM DEBT

NOTE 5 CREDIT FACILITIES AND LONG-TERM DEBT

(unaudited)	September 30,		December 31,
(millions of dollars)	2011		2010

Senior Credit Facility due 2011 and 2016		367.0		483.0
4.65% Senior Notes due 2021		349.4		-
6.89% Series C Senior Notes due 2012		3.5		3.9
3.82% Series D Senior Notes due 2017		27.0		27.0
		746.9		513.9
Less: current portion of long-term debt		300.8		483.8
		446.1		30.1

On September 30, 2011, the Partnership’s senior credit facility consisted of a $300.0 million senior term loan maturing December 12, 2011 and a $500.0 million senior revolving credit facility, maturing July 13, 2016 (Senior Credit Facility). On June 17, 2011, $175.0 million was repaid on the senior term loan, and at September 30, 2011, $300.0 million remained outstanding under the senior term loan (December 31, 2010 – $475 million). At September 30, 2011, there was $67.0 million drawn under the senior revolving credit facility (December 31, 2010 – $8.0 million). The interest rate on the Senior Credit Facility averaged 0.9 percent and 0.8 percent for the three and nine months ended September 30, 2011 (2010 – 1.04 percent and 0.94 percent). After hedging activity, the interest rate incurred on the Senior Credit Facility averaged 3.4 percent and 2.7 percent for the three and nine months ended September 30, 2011 (2010 – 4.23 percent and 4.24 percent). Prior to hedging activities, the interest rate was 1.1 percent at September 30, 2011 (December 31, 2010 – 0.8 percent). On July 13, 2011, the Partnership closed an amendment to its Senior Credit Facility increasing the senior revolving credit facility from $250.0 million to $500.0 million with a London Interbank Offered Rate (LIBOR)-based interest rate plus a margin, and extending the maturity date of the senior revolving credit facility to July 2016 from December 2011. The senior revolving credit facility has a feature whereby at any time, so long as no event of default has occurred and is continuing, the Partnership may request an increase in the senior revolving credit facility of up to $250.0 million, but no lender has any obligation to increase their respective share of the facility. The Partnership’s $300.0 million senior term loan is expected to be refinanced with fixed or floating rate debt at or prior to its maturity.

On June 17, 2011, the Partnership closed a $350.0 million public debt offering of 10-year, senior unsecured notes with an interest rate of 4.65 percent. Proceeds were used to repay funds borrowed under the Partnership’s bridge loan facility and to partially repay borrowings under our existing Senior Credit Facility. The senior notes mature June 15, 2021. The indenture for the notes contains customary investment grade covenants.

On May 3, 2011, the Partnership entered into an agreement with SunTrust Robinson Humphrey, Inc., as Arranger, for a 364-day senior unsecured bridge facility for up to $400.0 million to fund the Acquisitions. Borrowings under the bridge facility bore interest based, at the Partnership’s election, on the LIBOR or the prime rate plus, in either case, an applicable margin. On May 3, 2011, the Partnership drew $61.0 million to partially fund the Acquisitions. See Note 4 for more details on the Acquisitions. On June 17, 2011, the Partnership repaid the $61.0 million, and the bridge facility was cancelled. The interest rate incurred on the bridge facility averaged 1.7 percent.

At September 30, 2011, the Partnership was in compliance with its financial covenants, in addition to the other covenants, which include restrictions on entering into mergers, consolidations and sales of assets, granting liens, material amendments to the Partnership Agreement, incurring additional debt and distributions to unitholders.

The principal repayments required on our long-term debt as at September 30, 2011 were as follows:

(unaudited)
(millions of dollars)
2011			300.4
2012			3.1
2013			3.5
2014			3.6
2015			3.7
Thereafter			432.6
			746.9