Debt and Credit Facilities:

12 Months Ended

Dec. 31, 2020

DEBT AND CREDIT FACILITIES

Short-term debt

We had the following Notes payable outstanding at the Consolidated Balance Sheets date (in thousands):


	December 31, 2020				December 31, 2019
	Balance Outstanding		Letters of Credit (a)		Balance Outstanding		Letters of Credit (a)
Revolving Credit Facility	$	—	$	24,730	$	—	$	30,274
CP Program	234,040		—		349,500		—
Total	$	234,040	$	24,730	$	349,500	$	30,274

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(a) Letters of credit are off-balance sheet commitments that reduce the borrowing capacity available on our corporate Revolving Credit Facility.

Revolving Credit Facility and CP Program

On July 30, 2018, we amended and restated our corporate Revolving Credit Facility, maintaining total commitments of $750 million and extending the term through July 30, 2023 with two one year extension options (subject to consent from lenders). This facility includes an accordion feature that allows us, with the consent of the administrative agent, the issuing agents and each bank increasing or providing a new commitment, to increase total commitments up to $1.0 billion. Borrowings continue to be available under a base rate or various Eurodollar rate options. The interest costs associated with the letters of credit or borrowings and the commitment fee under the Revolving Credit Facility are determined based upon our Corporate credit rating from S&P, Fitch and Moody's for our senior unsecured long-term debt. Based on our credit ratings, the margins for base rate borrowings, Eurodollar borrowings and letters of credit were 0.125%, 1.125% and 1.125%, respectively, at December 31, 2020. Based on our credit ratings, a 0.175% commitment fee was charged on the unused amount at December 31, 2020.

We have a $750 million, unsecured CP Program that is backstopped by the Revolving Credit Facility. Amounts outstanding under the Revolving Credit Facility and the CP Program, either individually or in the aggregate, cannot exceed $750 million. The notes issued under the CP Program may have maturities not to exceed 397 days from the date of issuance and bear interest (or are sold at par less a discount representing an interest factor) based on, among other things, the size and maturity date of the note, the frequency of the issuance and our credit ratings. Under the CP Program, any borrowings rank equally with our unsecured debt. Notes under the CP Program are not registered and are offered and issued pursuant to a registration exemption.

Our net short-term borrowings (payments) during 2020 were $(115) million. As of December 31, 2020, the weighted average interest rate on short-term borrowings was 0.27%.

Total accumulated deferred financing costs on the Revolving Credit Facility of $6.7 million are being amortized over its estimated useful life and were included in Interest expense on the accompanying Consolidated Statements of Income. See below for additional details.

Long-term debt

Long-term debt outstanding was as follows (dollars in thousands):


		Interest Rate at	Balance Outstanding
	Due Date	December 31, 2020	December 31, 2020		December 31, 2019
Corporate
Senior unsecured notes due 2023	November 30, 2023	4.25%	$	525,000	$	525,000
Senior unsecured notes due 2026	January 15, 2026	3.95%	300,000		300,000
Senior unsecured notes due 2027	January 15, 2027	3.15%	400,000		400,000
Senior unsecured notes, due 2029	October 15, 2029	3.05%	400,000		400,000
Senior unsecured notes, due 2030	June 15, 2030	2.50%	400,000		—
Senior unsecured notes due 2033	May 1, 2033	4.35%	400,000		400,000
Senior unsecured notes, due 2046	September 15, 2046	4.20%	300,000		300,000
Senior unsecured notes, due 2049	October 15, 2049	3.88%	300,000		300,000
Corporate term loan due 2021	June 7, 2021	2.32%	1,436		7,178
Total Corporate debt			3,026,436		2,632,178
Less unamortized debt discount			(7,013)		(6,462)
Total Corporate debt, net			3,019,423		2,625,716

South Dakota Electric
Series 94A Debt, variable rate (a)	June 1, 2024	N/A	—		2,855
First Mortgage Bonds due 2032	August 15, 2032	7.23%	75,000		75,000
First Mortgage Bonds due 2039	November 1, 2039	6.13%	180,000		180,000
First Mortgage Bonds due 2044	October 20, 2044	4.43%	85,000		85,000
Total South Dakota Electric debt			340,000		342,855
Less unamortized debt discount			(78)		(82)
Total South Dakota Electric debt, net			339,922		342,773

Wyoming Electric
Industrial development revenue bonds due 2021(a) (b)	September 1, 2021	0.12%	7,000		7,000
Industrial development revenue bonds due 2027(a) (b)	March 1, 2027	0.12%	10,000		10,000
First Mortgage Bonds due 2037	November 20, 2037	6.67%	110,000		110,000
First Mortgage Bonds due 2044	October 20, 2044	4.53%	75,000		75,000
Total Wyoming Electric debt			202,000		202,000
Less unamortized debt discount			—		—
Total Wyoming Electric debt, net			202,000		202,000

Total long-term debt			3,561,345		3,170,489
Less current maturities			8,436		5,743
Less unamortized deferred financing costs (c)			24,809		24,650
Long-term debt, net of current maturities and deferred financing costs			$	3,528,100	$	3,140,096

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(a) Variable interest rate.

(b) A reimbursement agreement is in place with Wells Fargo on behalf of Wyoming Electric for the 2009A bonds of $10 million due March 1, 2027 and the 2009B bonds of $7.0 million due September 1, 2021. In the case of default, we hold the assumption of liability for drawings on Wyoming Electric’s Letter of Credit attached to these bonds.

(c) Includes deferred financing costs associated with our Revolving Credit Facility of $1.0 million and $1.7 million as of December 31, 2020 and December 31, 2019, respectively.

Scheduled maturities of long-term debt, excluding amortization of premiums or discounts, for future years are (in thousands):


2021	$	8,436
2022	$	—
2023	$	525,000
2024	$	—
2025	$	—
Thereafter	$	3,035,000

Our debt securities contain certain restrictive financial covenants, all of which the Company and its subsidiaries were in compliance with at December 31, 2020. See below for additional information.

Substantially all of the tangible utility property of South Dakota Electric and Wyoming Electric is subject to the lien of indentures securing their first mortgage bonds. First mortgage bonds of South Dakota Electric and Wyoming Electric may be issued in amounts limited by property, earnings and other provisions of the mortgage indentures.

Amortization of Deferred Financing Costs

Our deferred financing costs and associated amortization expense included in Interest expense on the accompanying Consolidated Statements of Income were as follows (in thousands):


Deferred Financing Costs Remaining at		Amortization Expense for the years ended December 31,
December 31, 2020		2020		2019		2018
$	24,809	$	3,272	$	3,242	$	2,829

Debt Transactions

On June 17, 2020, we completed a public debt offering which consisted of $400 million of 2.50% 10-year senior unsecured notes due June 15, 2030. The proceeds were used to repay short-term debt and for working capital and general corporate purposes.

On March 24, 2020, South Dakota Electric paid off its $2.9 million, Series 94A variable rate notes due June 1, 2024. These notes were tendered by the sole investor on March 17, 2020.

On October 3, 2019, we completed a public debt offering of $700 million principal amount in senior unsecured notes. The debt offering consisted of $400 million of 3.05% 10-year senior notes due October 15, 2029 and $300 million of 3.875% 30-year senior notes due October 15, 2049 (together the “Notes”). The proceeds of the Notes were used for the following:

• Repay the $400 million Corporate term loan under the Amended and Restated Credit Agreement due June 17, 2021;

• Retire the $200 million 5.875% senior notes due July 15, 2020; and

• Repay a portion of short-term debt.

On June 17, 2019, we amended our Corporate term loan due July 30, 2020. This amendment increased total commitments to $400 million from $300 million, extended the term through June 17, 2021, and had substantially similar terms and covenants as the amended and restated Revolving Credit Facility. The net proceeds from the increase in total commitments were used to pay down short-term debt. Proceeds from the October 3, 2019 public debt offering were used to repay this term loan.

Debt Covenants

Revolving Credit Facility

Under our Revolving Credit Facility and term loan agreements we are required to maintain a Consolidated Indebtedness to Capitalization Ratio not to exceed 0.65 to 1.00. Our Consolidated Indebtedness to Capitalization Ratio is calculated by dividing (i) Consolidated Indebtedness, which includes letters of credit and certain guarantees issued by (ii) Capital, which includes Consolidated Indebtedness plus Net Worth, which excludes noncontrolling interest in subsidiaries. Subject to applicable cure periods, a violation of any of these covenants would constitute an event of default that entitles the lenders to terminate their remaining commitments and accelerate all principal and interest outstanding.

We were in compliance with our covenants at December 31, 2020 as shown below:

As of December 31, 2020

Covenant Requirement

Consolidated Indebtedness to Capitalization Ratio

59.9%

Less than

65%

Wyoming Electric

Covenants within Wyoming Electric's financing agreements require Wyoming Electric to maintain a debt to capitalization ratio of no more than 0.60 to 1.00. As of December 31, 2020, we were in compliance with these covenants.

Dividend Restrictions

Our credit facility and other debt obligations contain restrictions on the payment of cash dividends when a default or event of default occurs.

Due to our holding company structure, substantially all of our operating cash flows are provided by dividends paid or distributions made by our subsidiaries. The cash to pay dividends to our shareholders is derived from these cash flows. As a result, certain statutory limitations or regulatory or financing agreements could affect the levels of distributions allowed to be made by our subsidiaries. The following restrictions on distributions from our subsidiaries existed at December 31, 2020:

•Our utilities are generally limited to the amount of dividends allowed to be paid to our utility holding company under the Federal Power Act and settlement agreements with state regulatory jurisdictions. As of December 31, 2020, the restricted net assets at our Electric and Gas Utilities were approximately $155 million.

•South Dakota Electric and Wyoming Electric are generally limited to the amount of dividends allowed to be paid to our utility holding company under certain financing agreements.