Ohio Utility DPL swaps debt, will pay higher interest rate

26 March 2004 – DPL Inc. said it has completed a private placement of $175m worth of senior notes, that, together with other corporate funds, will be used to redeem $500m of senior notes on April 6.

DPL will be paying eight per cent interest on the new senior notes, versus 6.82 per cent on the old notes. Major corporate credit rating agencies, concerned about the company high debt load, have lowered DPL’s credit ratings in recent weeks, thus raising the company’s cost of borrowing.

One credit rating agency, Moody’s Investors Service, said that while DPL might be able to meet the debt payment without external financing by using its $338m of available cash, $140m of public securities in the portfolio and $150m of borrowing capacity, “this could constrain (DPL’s) liquidity going forward.”