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Short-Term and Long-Term Debt | 3 Months Ended
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Mar. 31, 2021
Debt Disclosure [Abstract] |
Short-Term and Long-Term Debt [Text Block] | SHORT-TERM AND LONG-TERM DEBT The following tables present the Company’s short-term and long-term debt as of March 31, 2021, and December 31, 2020:
March 31, 2021 | Principal |  | Unamortized Debt Issuance Costs |  | Total
Millions |  |  |  |  |
Short-Term Debt | $298.8 |  |  | $(0.3) |  | $298.5 |
Long-Term Debt | 1,661.3 |  |  | (8.9) |  | 1,652.4 |
Total Debt | $1,960.1 |  |  | $(9.2) |  | $1,950.9 |
December 31, 2020 | Principal |  | Unamortized Debt Issuance Costs |  | Total
Millions |  |  |  |  |
Short-Term Debt | $204.0 |  |  | $(0.3) |  | $203.7 |
Long-Term Debt | 1,602.4 |  |  | (9.2) |  | 1,593.2 |
Total Debt | $1,806.4 |  |  | $(9.5) |  | $1,796.9 |
We had $24.3 million outstanding in standby letters of credit and $60.0 million outstanding draws under our lines of credit as of March 31, 2021 ($22.3 million in standby letters of credit and no outstanding draws as of December 31, 2020). On March 25, 2021, ALLETE entered into a $150 million unsecured term loan agreement (Term Loan) and borrowed $100 million upon execution. The Term Loan provides for an additional draw of $50 million on or before May 29, 2021. The Term Loan is due March 24, 2022, and may be repaid at any time. Interest is payable monthly at a rate per annum equal to LIBOR plus 0.75 percent. Proceeds from the Term Loan were used for general corporate purposes. On April 21, 2021, ALLETE agreed to sell $100 million of its First Mortgage Bonds (Bonds) to certain institutional buyers in the private placement market. The Bonds, which will be issued on or before September 1, 2021, will bear interest at 2.79 percent. The Bonds will mature in September 2031 and pay interest semi-annually in March and September of each year, commencing on March 1, 2022. ALLETE has the option to prepay all or a portion of the Bonds at its discretion, subject to a make-whole provision. The Bonds are subject to additional terms and conditions which are customary for these types of transactions. ALLETE intends to use the proceeds from the sale of the Bonds to fund utility capital investment and 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. 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 financial 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 March 31, 2021, our ratio was approximately 0.42 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. ALLETE has no significant restrictions on its ability to pay dividends from retained earnings or net income. As of March 31, 2021, 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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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