XML 31 R13.htm IDEA: XBRL DOCUMENT v3.21.2
Debt Obligations
 9 Months Ended
Sep. 30, 2021
Debt Instrument [Line Items]  
Long-term Debt Long-term Debt
Long-term debt is as follows:
InterestSeptember 30,December 31,
$ in millionsRateMaturity20212020
First Mortgage Bonds3.95%2049$425.0 $425.0 
First Mortgage Bonds3.20%2040140.0 140.0 
U.S. Government note4.20%206117.2 17.4 
Unamortized deferred financing costs(5.5)(5.7)
Unamortized debt discounts, net(2.5)(2.6)
Total long-term debt at AES Ohio
574.2 574.1 
Senior unsecured bonds4.125%2025415.0 415.0 
Senior unsecured bonds4.35%2029400.0 400.0 
Note to DPL Capital Trust II (a)8.125%203115.6 15.6 
Unamortized deferred financing costs(8.8)(10.2)
Unamortized debt discounts, net(0.9)(0.9)
Total long-term debt1,395.1 1,393.6 
Less: current portion(0.2)(0.2)
Long-term debt, net of current portion$1,394.9 $1,393.4 

(a)Note payable to related party.

Lines of credit
As of September 30, 2021 and December 31, 2020, the DPL Credit Agreement had outstanding borrowings of $80.0 million and $80.0 million, respectively. As of September 30, 2021 and December 31, 2020, the AES Ohio Credit Agreement had outstanding borrowings of $140.0 million and $20.0 million, respectively.

Significant transactions
On July 31, 2020, AES Ohio issued $140.0 million of taxable First Mortgage Bonds and on August 3, 2020 used the proceeds to purchase at par value the $140.0 million of outstanding tax-exempt Ohio Air Quality Development Authority (OAQDA) Collateralized Pollution Control Revenue Refunding Bonds that had been issued in 2015. The new taxable First Mortgage Bonds carry an interest rate of 3.20% and mature on July 31, 2040. The OAQDA Revenue bonds have not been legally cancelled and can be re-issued at the discretion of AES Ohio at any time. These bonds will be held in trust while we continue to evaluate market conditions and explore suitable long-term financing alternatives. Accordingly, as of September 30, 2021 and December 31, 2020, the $140.0 million variable rate OAQDA Revenue bonds are not treated as being outstanding in the Condensed Consolidated Balance Sheet.

On June 19, 2020, DPL closed a $415.0 million issuance of senior unsecured notes. These notes carry an interest rate of 4.125% and mature on July 1, 2025. Proceeds from the issuance and cash on hand were used to redeem in-full the remaining balance of $380.0 million of DPL's 7.25% senior unsecured notes. These bonds were redeemed at par plus accrued interest and a make-whole premium of $30.8 million on July 20, 2020.

DPL agreed to register the 2025 DPL Senior Unsecured Bonds under the Securities Act by filing an exchange offer registration statement or, under specified circumstances, a shelf registration statement with the SEC pursuant to a Registration Rights Agreement dated June 19, 2020. DPL filed a registration statement on Form S-4 with respect to the 2025 DPL Senior Unsecured Bonds with the SEC on March 15, 2021, and this registration statement was declared effective on March 31, 2021. The exchange offer closed on May 5, 2021.

On June 1, 2020, the DPL Credit Agreement was amended. As a result of the amendment, the borrowing limit was reduced from $125.0 million to $110.0 million, the Total Debt to EBITDA covenant was eliminated, the EBITDA to Interest Expense covenant was reduced from 2.25 to 1.00 to 1.70 to 1.00, increasing to 1.75 to 1.00 as of September 30, 2022 and 2.00 to 1.00 as of December 31, 2022, and a trailing-twelve months minimum EBITDA covenant of $125.0 million was added, increasing to $130.0 million as of September 30, 2022 and $150.0 million as of December 31, 2022. Starting with the quarter ended September 30, 2021, the borrowing limit will be reduced by $5.0 million per quarter should DPL’s Total Debt to EBITDA ratio calculated for the period of four consecutive quarters exceed 7.00 to 1.00.
Long-term debt covenants and restrictions
The DPL Credit Agreement has two financial covenants. The first financial covenant, a minimum EBITDA, calculated at the end of each fiscal quarter for the four prior fiscal quarters, of $125.0 million is required, stepping up to $130.0 million on September 30, 2022 and $150.0 million on December 31, 2022. As of September 30, 2021, DPL was in compliance with this financial covenant.

The second financial covenant is an EBITDA to Interest Expense ratio that is calculated, at the end of each fiscal quarter, by dividing EBITDA for the four prior fiscal quarters by the consolidated interest charges for the same period. The ratio, per the agreement, is to be not less than 1.70 to 1.00, and steps up to 1.75 to 1.00 on September 30, 2022 and 2.00 to 1.00 as of December 31, 2022. As of September 30, 2021, DPL was in compliance with this financial covenant.

The DPL Credit Agreement also restricts dividend payments from DPL to AES, such that DPL cannot make dividend payments unless at the time of, and/or as a result of the distribution, (i) DPL’s leverage ratio does not exceed 0.67 to 1.00 and DPL’s interest coverage ratio is not less than 2.50 to 1.00 or, if such ratios are not within the parameters, (ii) DPL’s senior long-term debt rating from two of the three major credit rating agencies is at least investment grade. As a result, as of September 30, 2021, DPL was prohibited from making a distribution to its shareholder or making a loan to any of its affiliates (other than its subsidiaries).

Starting with the quarter ended September 30, 2021, the borrowing limit on the DPL Credit Agreement will be reduced by $5.0 million per quarter should the Total Debt to EBITDA ratio for the period of four consecutive quarters exceed 7.00 to 1.00. As of September 30, 2021, DPL exceeded this ratio and the borrowing limit was reduced from $110.0 million to $105.0 million.

The AES Ohio Credit Agreement and Bond Purchase Agreement (financing document entered into in connection with the issuance of AES Ohio's First Mortgage Bonds, on July 31, 2020) has one financial covenant. The covenant measures Total Debt to Total Capitalization and is calculated, at the end of each fiscal quarter, by dividing total debt at the end of the quarter by total capitalization at the end of the quarter. AES Ohio’s Total Debt to Total Capitalization ratio shall not be greater than 0.67 to 1.00. As of September 30, 2021, AES Ohio was in compliance with this financial covenant.

As of September 30, 2021, DPL and AES Ohio were in compliance with all debt covenants, including the financial covenants described above.

AES Ohio does not have any meaningful restrictions in its debt financing documents prohibiting dividends and return of capital payments to its parent, DPL.

Substantially all property, plant & equipment of AES Ohio is subject to the lien of the mortgage securing AES Ohio’s First and Refunding Mortgage.
Subsidiaries [Member]  
Debt Instrument [Line Items]  
Long-term Debt Long-term Debt
Long-term debt is as follows:
InterestSeptember 30,December 31,
$ in millionsRateMaturity20212020
First Mortgage Bonds3.95 %2049$425.0 $425.0 
First Mortgage Bonds3.20 %2040140.0 140.0 
U.S. Government note4.20 %206117.2 17.4 
Unamortized deferred financing costs(5.5)(5.7)
Unamortized debt discounts, net(2.5)(2.6)
Total long-term debt574.2 574.1 
Less: current portion(0.2)(0.2)
Long-term debt, net of current portion$574.0 $573.9 

Line of credit
As of September 30, 2021 and December 31, 2020, the AES Ohio Credit Agreement had outstanding borrowings on its line of credit of $140.0 million and $20.0 million, respectively.

Significant transactions
On July 31, 2020, AES Ohio issued $140.0 million of taxable First Mortgage Bonds and on August 3, 2020 used the proceeds to purchase at par value the $140.0 million of outstanding tax-exempt Ohio Air Quality Development Authority (OAQDA) Collateralized Pollution Control Revenue Refunding Bonds that had been issued in 2015. The new taxable First Mortgage Bonds carry an interest rate of 3.20% and mature on July 31, 2040. The OAQDA Revenue bonds have not been legally cancelled and can be re-issued at the discretion of AES Ohio at any time. These bonds will be held in trust while we continue to evaluate market conditions and explore suitable long-term financing alternatives. Accordingly, as of September 30, 2021 and December 31, 2020, the $140.0 million variable rate OAQDA Revenue bonds are not treated as being outstanding in the Condensed Consolidated Balance Sheet.

Long-term debt covenants and restrictions
The AES Ohio Credit Agreement and Bond Purchase Agreement (financing document entered into in connection with the issuance of AES Ohio's First Mortgage Bonds, on July 31, 2020) has one financial covenant. The covenant measures Total Debt to Total Capitalization and is calculated, at the end of each fiscal quarter, by dividing total debt at the end of the quarter by total capitalization at the end of the quarter. AES Ohio’s Total Debt to Total Capitalization ratio shall not be greater than 0.67 to 1.00. As of September 30, 2021, AES Ohio was in compliance with this financial covenant.

As of September 30, 2021, AES Ohio was in compliance with all debt covenants, including the financial covenants described above.

AES Ohio does not have any meaningful restrictions in its debt financing documents prohibiting dividends and return of capital payments to its parent, DPL.

Substantially all property, plant & equipment of AES Ohio is subject to the lien of the mortgage securing AES Ohio’s First and Refunding Mortgage.