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Short-Term and Long-Term Debt | 12 Months Ended
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Dec. 31, 2015
Debt Disclosure [Abstract] |
Short-Term and Long-Term Debt [Text Block] | SHORT-TERM AND LONG-TERM DEBT Short-Term Debt. As of December 31, 2015, total short-term debt outstanding was $37.9 million ($104.4 million as of December 31, 2014) and consisted of long-term debt due within one year and notes payable. As of December 31, 2015, we had bank lines of credit aggregating $408.4 million ($408.4 million as of December 31, 2014), the majority of which expire in November 2018. We had $12.4 million outstanding in standby letters of credit and $1.6 million outstanding in draws under our lines of credit as of December 31, 2015 ($47.5 million in standby letters of credit and $3.7 million in draws outstanding as of December 31, 2014). Long-Term Debt. As of December 31, 2015, total long-term debt outstanding was $1,568.7 million ($1,272.8 million as of December 31, 2014). The aggregate amount of long-term debt maturing in 2016 is $36.3 million ($193.6 million in 2017; $64.1 million in 2018; $56.5 million in 2019; $103.0 million in 2020; and $1,151.5 million thereafter). Substantially all of our regulated electric plant is subject to the lien of the mortgage collateralizing outstanding first mortgage bonds. The mortgages contain non-financial covenants customary in utility mortgages, including restrictions on our ability to incur liens, dispose of assets, and merge with other entities. On July 1, 2015, ALLETE Clean Energy assumed $60.9 million of long-term debt at fair value, including $5.9 million due within one year, in conjunction with ALLETE Clean Energy’s acquisition of Armenia Mountain. (See Note 7. Acquisitions.) On November 5, 2015, the assumed debt was refinanced when Armenia Mountain Wind, LLC (Armenia Mountain) entered into a Note Purchase and Guarantee Agreement (NPA) with AMW I Holding, LLC (Guarantor) and the purchasers named therein. Both Armenia Mountain and the Guarantor are wholly owned subsidiaries of ALLETE Clean Energy. Under the NPA, Armenia Mountain issued and sold $84.5 million of its 3.26 percent Senior Secured Notes (Notes) due December 31, 2024, to certain institutional accredited investors in the private placement market. The Notes were issued and sold in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended, to institutional accredited investors. Interest on the Notes is payable semi-annually on June 30 and December 31 of each year, commencing on December 31, 2015. Armenia Mountain has the option to prepay all or a portion of the Notes at its discretion, subject to a make-whole provision; however, the Notes are redeemable at par, including accrued and unpaid interest, three months prior to the maturity date. The Notes are subject to additional terms and conditions which are customary for these types of transactions. Armenia Mountain used a portion of the proceeds to refinance the debt assumed in the Armenia Mountain acquisition and plans to use the remaining proceeds for general corporate purposes. Armenia Mountain’s obligations under the Notes are secured by its assets and a pledge by the Guarantor of its equity interests in Armenia Mountain. There is no recourse to ALLETE or any other subsidiary of ALLETE with respect to the Armenia Mountain’s obligations under the Notes other than to itself and its direct owner, the Guarantor, which guarantees payment under the Notes. NOTE 11. SHORT-TERM AND LONG-TERM DEBT (Continued) On August 25, 2015, the Company entered into a $125.0 million Term Loan Agreement with JPMorgan Chase Bank, N.A., as a lender and administrative agent, and Bank of America, N.A., as a lender (Term Loan). The Term Loan is an unsecured, single-draw loan that is due on August 25, 2017. The interest rate on the Term Loan is equal to LIBOR plus 0.625 percent. Proceeds from the Term Loan will be used for general corporate purposes, including the refinancing of the $75.0 million Term Loan Agreement due August 25, 2015. The Term Loan contains customary conditions of borrowing, events of default and affirmative and negative covenants. The Term Loan includes a financial covenant to maintain a ratio of total indebtedness to total capitalization (as defined therein) equal to or less than 65 percent. Indebtedness under the Term Loan may be accelerated upon the occurrence of an event of default, including cross-default to other indebtedness in excess of $35.0 million. On September 24, 2015, we issued $100.0 million of ALLETE first mortgage bonds (Bonds) in the private placement market as shown below:
Maturity Date | Principal Amount | Interest Rate
September 15, 2020 | $40 Million | 2.80%
September 16, 2030 | $60 Million | 3.86%
Interest on the Bonds is payable semi-annually on March 15 and September 15 of each year, commencing on March 15, 2016. The Company has the option to prepay all or a portion of the Bonds at its discretion, subject to a make-whole provision; however, the September 16, 2030, series of bonds is redeemable at par, including accrued and unpaid interest, six months prior to the maturity date. The Bonds are subject to additional terms and conditions which are customary for these types of transactions. The Company intends to use the proceeds from the sale of the Bonds to fund utility capital expenditures and/or for general corporate purposes. The Bonds were sold in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended, to institutional accredited investors. NOTE 11. SHORT-TERM AND LONG-TERM DEBT (Continued)
Long-Term Debt |  |
As of December 31 | 2015 |  | 2014 |
Millions |  |
First Mortgage Bonds |  |
7.70% Series Due 2016 | $20.0 | $20.0
1.83% Series Due 2018 | 50.0 |  | 50.0 |
8.17% Series Due 2019 | 42.0 |  | 42.0 |
5.28% Series Due 2020 | 35.0 |  | 35.0 |
2.80% Series Due 2020 | 40.0 |  | — |
4.85% Series Due 2021 | 15.0 |  | 15.0 |
3.02% Series Due 2021 | 60.0 |  | 60.0 |
3.40% Series Due 2022 | 75.0 |  | 75.0 |
6.02% Series Due 2023 | 75.0 |  | 75.0 |
3.69% Series Due 2024 | 60.0 |  | 60.0 |
4.90% Series Due 2025 | 30.0 |  | 30.0 |
5.10% Series Due 2025 | 30.0 |  | 30.0 |
3.20% Series Due 2026 | 75.0 |  | 75.0 |
5.99% Series Due 2027 | 60.0 |  | 60.0 |
3.30% Series Due 2028 | 40.0 |  | 40.0 |
3.74% Series Due 2029 | 50.0 |  | 50.0 |
3.86% Series Due 2030 | 60.0 |  | — |
5.69% Series Due 2036 | 50.0 |  | 50.0 |
6.00% Series Due 2040 | 35.0 |  | 35.0 |
5.82% Series Due 2040 | 45.0 |  | 45.0 |
4.08% Series Due 2042 | 85.0 |  | 85.0 |
4.21% Series Due 2043 | 60.0 |  | 60.0 |
4.95% Series Due 2044 | 40.0 |  | 40.0 |
5.05% Series Due 2044 | 40.0 |  | 40.0 |
4.39% Series Due 2044 | 50.0 |  | 50.0 |
Unsecured Term Loan Variable Rate Due 2015 | — |  | 75.0 |
Unsecured Term Loan Variable Rate Due 2017 | 125.0 |  | — |
Senior Unsecured Notes 5.99% Due 2017 | 50.0 |  | 50.0 |
Variable Demand Revenue Refunding Bonds Series 1997 A Due 2015 – 2020 | 13.5 |  | 24.6 |
Industrial Development Variable Rate Demand Refunding Revenue Bonds Series 2006, Due 2025 | 27.8 |  | 27.8 |
Armenia Mountain Senior Secured Notes 3.26% Due 2024 | 83.3 |  | — |
SWL&P First Mortgage Bonds 4.15% Series Due 2028 | 15.0 |  | 15.0 |
Other Long-Term Debt, 0.08% – 7.45% Due 2016 – 2037 | 68.4 |  | 59.1 |
Total Long-Term Debt | 1,605.0 |  | 1,373.5 |
Less: Due Within One Year | 36.3 |  | 100.7 |
Net Long-Term Debt |  | $1,568.7 |  |  | $1,272.8 |
NOTE 11. SHORT-TERM AND LONG-TERM DEBT (Continued) Financial Covenants. Our long-term debt arrangements contain customary covenants. In addition, our lines of credit and letters of credit supporting certain long-term debt arrangements contain financial covenants. Our compliance with financial covenants is not dependent on debt ratings. The most restrictive covenant requires ALLETE to maintain a ratio of indebtedness to total capitalization (as the amounts are calculated in accordance with the respective long-term debt arrangements) of less than or equal to 0.65 to 1.00, measured quarterly. As of December 31, 2015, our ratio was approximately 0.47 to 1.00. Failure to meet this covenant would give rise to an event of default if not cured after notice from the lender, in which event ALLETE may need to pursue alternative sources of funding. Some of ALLETE’s debt arrangements contain “cross-default” provisions that would result in an event of default if there is a failure under other financing arrangements to meet payment terms or to observe other covenants that would result in an acceleration of payments due. As of December 31, 2015, ALLETE was in compliance with its financial covenants.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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