Long-term Debt

Obligations in the form of senior notes and borrowings under the revolving credit facility are as follows:



	June 30, 2013			December 31, 2012
Senior notes	$	2,400		$	1,965
Revolving loans	535			192
Total	2,935			2,157
Less: current portion	—			—
Long-term debt	$	2,935		$	2,157
Availability under revolving credit facility:
Total credit facility limit	$	1,200		$	1,150
Revolving loans	(535		)	(192		)
Letters of credit	(13		)	(12		)
Total available	$	652		$	946

Long-term debt maturities as of June 30, 2013 for each of the next five years are as follows:



Years Ending December 31,	Amount
2013 (remainder)	$	—
2014	—
2015	—
2016	—
2017	—
Thereafter	2,935
Total	$	2,935

Revolving Credit Facility. The weighted average interest rate on the total amounts outstanding under the Partnership’s revolving credit facility was 2.20% and 2.88% as of June 30, 2013 and 2012, respectively.

In May 2013, RGS entered into the Sixth Amended and Restated Credit Agreement to increase the commitment to $1.2 billion with a $300 million uncommitted incremental facility and extended the maturity date to May 21, 2018. The material differences between the Fifth and Sixth Amended and Restated Credit Agreement include:


•	A 75 bps decrease in pricing, with an additional 50 bps decrease upon the achievement of an investment grade rating.


•	No limitation on the maximum amount that the loan parties may invest in joint ventures existing on the date of the credit agreement so long as the Partnership is in pro forma compliance with the financial covenants.


•	The addition of a “Restricted Subsidiary” structure such that certain designated subsidiaries are not subject to the credit facility covenants and do not guarantee the obligations thereunder or pledge their assets in support thereof.


•	The addition of provisions such that upon the achievement of an investment grade rating by the Partnership, the collateral package will be released; the facility will become unsecured; and the covenant package will be significantly reduced;


•	An eight-quarter increase in the permitted Total Leverage Ratio; and


•	After March 2015, an increase in the permitted Total Leverage Ratio for the two fiscal quarters following any $50 million or greater acquisition.

The new credit agreement and the guarantees are senior to the Partnership’s and the guarantors’ secured obligations, including the Series A Preferred Units, to the extent of the value of the assets securing such obligations. As of June 30, 2013, the Partnership was in compliance with all of the financial covenants contained within the new credit agreement.

The Partnership treated the May 2013 amendment of the revolving credit facility as a modification of an existing revolving credit agreement and, therefore, wrote off debt issuance costs of less than $1 million to interest expense, net in the period from January 1, 2013 to June 30, 2013. In addition, the Partnership capitalized $7 million of loan fees which will be amortized over the remaining term.

Senior Notes. In April 2013, in conjunction with the closing of the SUGS Acquisition, the Partnership and Finance Corp. issued $600 million senior notes in a private placement (the “2023 4.5% Notes”). The 2023 4.5% Notes bear interest at 4.5% payable semi-annually in arrears on May 1 and November 1, commencing November 1, 2013 and the 2023 4.5% Notes mature on November 1, 2023.

At any time prior to August 1, 2023, we may redeem some or all of the 2023 4.5% Notes at a price equal to 100% of the principal amount plus a make-whole premium and accrued interest. On or after August 1, 2023, we may redeem some or all of the 2023 4.5% Notes at a price equal to 100% plus accrued interest.

Upon a change of control, as defined in the indenture, followed by a ratings decline within 90 days, each holder of the 2023 4.5% Notes will be entitled to require us to purchase all or a portion of its notes at a purchase price of 101% of the principal amount plus accrued interest and liquidated damages, if any. Our ability to purchase the notes upon a change of control will be limited by the terms of our debt agreements, including our revolving credit facility.

The 2023 4.5% Notes contain various covenants that limit, among other things, our ability, and the ability of certain of our subsidiaries, to:


•	incur additional indebtedness;


•	pay distributions on, or repurchase or redeem equity interest;


•	make certain investments;


•	incur liens;


•	enter into certain types of transactions with affiliates; and


•	sell assets, consolidate or merge with or into other companies.

If the 2023 4.5% Notes achieve investment grade ratings by both Moody’s and S&P and no default or event or default has occurred and is continuing, we will no longer be subject to many of the foregoing covenants.

The 2023 4.5% Notes are jointly and severally guaranteed by all of our consolidated subsidiaries, other than Finance Corp. and a minor subsidiary. PEPL Holdings provided a guarantee of collection with respect to the payment of the principal amounts of the senior notes issued by us. The senior notes and the guarantees are unsecured and rank equally with all of our and the guarantors’ existing and future unsecured obligations. The senior notes and the guarantees will be senior in right of payment to any of our and the guarantor’s future obligations that are, by their terms, expressly subordinated in right of payment to the notes and the guarantees. The senior notes and the guarantees will be effectively subordinated to our and the guarantors’ secured obligations, including our revolving credit facility, to the extent of the value of the assets securing such obligations.

In June 2013, the Partnership redeemed all of the $163 million outstanding 9.375% Senior Notes due 2016 for $178 million cash, inclusive of accrued and unpaid interest of $7 million and other fees and expenses.

At June 30, 2013, the Partnership was in compliance with all covenants.

Finance Corp. has no operations and will not have revenues other than as may be incidental as co-issuer of the Senior Notes. Since the guarantees are fully unconditional and joint and several of its subsidiaries, except for a few minor subsidiaries, the Partnership has not included condensed consolidated financial information of guarantors of the Senior Notes.