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SEC Filings

10-Q
SOUTHERN CO GAS filed this Form 10-Q on 11/04/2016
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)


(E) FINANCING
Bank Credit Arrangements
Bank credit arrangements under the Southern Company Gas Credit Facility and the Nicor Gas Credit Facility provide liquidity support to Southern Company Gas Capital's and Nicor Gas' commercial paper borrowings. The Nicor Gas Credit Facility is restricted for working capital needs of Nicor Gas. See Note 9 to the consolidated financial statements under "Short-term Debt" of Southern Company Gas in Item 8 of the Form 10-K and "Financing Activities" herein for additional information.
The following table outlines the committed credit arrangements by company as of September 30, 2016:
Successor
 
 
Expires
 
 
 
 
Company
 
2017
 
2018
 
Total
 
Unused
 
 
(in millions)
 
(in millions)
Southern Company Gas Capital
 
$
49

 
$
1,251

 
$
1,300

 
$
1,247

Nicor Gas
 
26

 
674

 
700

 
700

Total
 
$
75

 
$
1,925

 
$
2,000

 
$
1,947

Additionally, Pivotal Utility Holdings is party to a series of loan agreements with the New Jersey Economic Development Authority and Brevard County, Florida under which five series of gas facility revenue bonds have been issued totaling $200 million.
Subject to applicable market conditions, Southern Company Gas Capital and Nicor Gas expect to renew or replace their bank credit arrangements as needed, prior to expiration. In connection therewith, they may extend the maturity dates and/or increase or decrease the lending commitments thereunder.
Financing Activities
Southern Company Gas fully and unconditionally guarantees all debt issued by Southern Company Gas Capital and the gas facility revenue bonds issued by Pivotal Utility Holdings. Substantially all of Nicor Gas' properties are subject to the lien of the indenture securing its first mortgage bonds.
In February and May 2016, $75 million and $50 million, respectively, of Nicor Gas' first mortgage bonds matured and were repaid using the proceeds from commercial paper borrowings. In June 2016, Nicor Gas issued $250 million aggregate principal amount of first mortgage bonds with the following terms: $100 million at 2.66% due June 20, 2026, $100 million at 2.91% due June 20, 2031, and $50 million at 3.27% due June 20, 2036. The proceeds were used to repay short-term indebtedness incurred under the Nicor Gas commercial paper program and for other working capital needs.
In May 2016, Southern Company Gas Capital issued $350 million aggregate principal amount of 3.250% Senior Notes due June 15, 2026, which are guaranteed by Southern Company Gas. A portion of the proceeds were used to repay at maturity $300 million aggregate principal amount of 6.375% Senior Notes due July 15, 2016, and the remaining proceeds were used for general corporate purposes.
In September 2016, Southern Company Gas Capital issued $350 million aggregate principal amount of 2.45% Senior Notes due October 1, 2023 and $550 million aggregate principal amount of 3.95% Senior Notes due October 1, 2046, both of which are guaranteed by Southern Company Gas. The proceeds were used to repay a $360 million promissory note issued to Southern Company for the purpose of funding a portion of the purchase price for Southern Company Gas' 50% equity interest in SNG, to fund the purchase of Piedmont's interest in SouthStar, to make a voluntary pension contribution, to repay at maturity $120 million aggregate principal amount of Series A Floating Rate Senior Notes due October 27, 2016, and for general corporate purposes. See Note (I) under "Investment in SNG" for additional information on the SNG investment and Note (K) under "Subsequent Event" for additional information on GNG's acquisition of Piedmont's interest in SouthStar.
Certain of Southern Company Gas' senior notes with a principal amount of $275 million were subject to change in control provisions that were triggered by the Merger. Under the applicable Note Purchase Agreement, Southern Company Gas Capital was required to provide notice to the holders of these notes of the change in control and offer to prepay these notes in August 2016. None of the holders of these notes accepted the offer for prepayment. These senior notes, which were recorded as current portion of long-term debt as of June 30, 2016 and include $120 million due October 27, 2016 and $155 million due October 27, 2018, will remain on their original payment schedules and the portion related to the notes due in 2018 has been reclassified to long-term debt in the balance sheet as of September 30, 2016.
(F) RETIREMENT BENEFITS
Effective July 1, 2016, in connection with the Merger, Southern Company Services, Inc. became the sponsor of Southern Company Gas' pension and other postretirement benefit plans.
Southern Company Gas has a defined benefit, trusteed, pension plan – AGL Resources Inc. Retirement Plan – covering eligible employees. The qualified pension plan is funded in accordance with requirements of the Employee Retirement Income Security Act of 1974, as amended. Southern Company Gas made a $125 million voluntary contribution to the qualified pension plan in


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