Debt

3 Months Ended

Mar. 31, 2015

Long-term Debt, Unclassified [Abstract]

Note 7—Debt

A summary of our long-term debt is as follows:



(amounts in millions)	March 31, 2015			December 31, 2014
Unsecured notes:
7.95% Senior Notes Series F, due 2032	$	275		$	275
7.00% Senior Notes Series H, due 2018	300			300
6.30% Senior Notes Series I, due 2020	250			250
	825			825
Unamortized discount	(1		)	(1		)
Total Long-term debt	$	824		$	824

Indenture Provisions and Other Covenants

Certain of our financial obligations and all of our senior notes include provisions which, if not met, could require early payment, additional collateral support or similar actions. The trigger events include the violation of covenants, defaults on scheduled principal or interest payments, including any indebtedness to the extent linked to it by reason of cross-default or cross-acceleration provisions, insolvency events and acceleration of other financial obligations. At March 31, 2015, we were in compliance with the provisions and covenants contained within our indenture. Our indenture also includes provisions that require us to maintain certain interest coverage and debt-to-capital ratios in order for us to pay dividends, to make principal or interest payments on subordinated borrowings, to make loans to or investments in affiliates, or to incur additional external, third-party indebtedness. The following table summarizes these required ratios:



		Required Ratio
Restricted payment interest coverage ratio (1)		≥1.75
Additional indebtedness interest coverage ratio (2)		≥2.50
Additional indebtedness debt-to-capital ratio (2)		≤60%

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(1)	As of the date of a restricted payment, as defined, the minimum ratio must have been achieved for the most recently ended four fiscal quarters and projected by management to be achieved for each of the subsequent four six-month periods.


(2)	Ratios must be computed on a pro forma basis considering the additional indebtedness to be incurred and the related interest expense. Other borrowings from third-party external sources are included in the definition of indebtedness and are subject to these incurrence tests.

Our debt incurrence-related ratio restrictions under the indenture may be disregarded if both Moody’s and S&P reaffirm the ratings in place at the time of the debt incurrence after considering the additional indebtedness.

Our indenture provides that dividends cannot be paid unless the actual interest coverage ratio for our most recently ended four fiscal quarters and the interest coverage ratios projected by management for each of the subsequent four six-month periods are greater than a specified minimum level. Based on March 31, 2015 calculations, our interest coverage ratios are less than the minimum ratios required to pay dividends and borrow additional funds from external, third-party sources. As a result, we were restricted from paying dividends as of March 31, 2015.

In order for us to issue securities in the future, we will have to comply with all applicable indenture requirements in effect at the time of any such issuances.

Illinois Power Generating Co 10-Q