Question-and-Answer Session
Operator
(Operator Instructions). And your first question comes from the line of Sharon Lui of Wachovia. Please proceed.
Sharon Lui - Wachovia
Hi, good morning.
Barry Davis
Hi, Sharon.
Sharon Lui - Wachovia
Just a quick question on, where are your, I guess volume assumptions baked into the midpoint of your guidance?
William Davis
Well, that's a region-by-region set of assumptions, and as we say, we have tried to bake in, particularly the North Texas, the slowdown and drilling that a number of producers have announced. But we still continue to project some level of growth in North Texas.
Sharon Lui - Wachovia
Okay. And what about, I guess for south of Louisiana, the processing volumes there?
Robert Purgason
Yes, Sharon, basically we've got forecast for the Pelican volumes to come up slightly under our historical, but up significantly when the Anaconda system moves forward. And our other processing plants at about 80% of last year's volumes overall, just kind of relatively speaking.
Sharon Lui - Wachovia
Okay. Well, I was wondering if you could may be just provide some more color on how the paid-in-kind notes work?
William Davis
Yeah, they are simply part of the interest that we'll be paying to the senior notes which have principal amount outstanding of about $480 million. We'll be paying half of the increase in the interest cost, then in the form of additional debt securities. As so there won't be a cash impact currently on those.
There are I think five series of senior notes outstanding, each one will get additional paid-in-kind interest or PIK interest at an equivalent interest rate to the rate that note bares. So the blended average rate on the PIK notes will be approximately that 9.25% or so on the PIKs. And then the PIKs will be due and payable six months after the refinancing of our revolving credit agreement.
Sharon Lui - Wachovia
Okay. So the paid-in-kind in terms of the actual additional principal is it just the 125 basis points off of that 480, so 6 million or how should we think about that?
William Davis
Yes, about 6 million a year.
Sharon Lui - Wachovia
Okay.
William Davis
6.5 years, roughly.
Sharon Lui - Wachovia
Okay. And I guess in terms of some other relief on the debt covenant ratio. I know that your old ratio was 4.5 times by the end of '09.
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