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SHORT-TERM AND LONG-TERM DEBT | 9 Months Ended
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Sep. 30, 2025
Debt Disclosure [Abstract] |
SHORT-TERM AND LONG-TERM DEBT | SHORT-TERM AND LONG-TERM DEBT The following tables present the Company’s short-term and long-term debt as of September 30, 2025, and December 31, 2024:
September 30, 2025 | Principal |  | Unamortized Debt Issuance Costs |  | Total
Millions |  |  |  |  |
Short-Term Debt | $138.1 |  |  | — |  | $138.1 |
Long-Term Debt | 2,109.4 |  |  | $(10.5) |  | 2,098.9 |
Total Debt | $2,247.5 |  |  | $(10.5) |  | $2,237.0 |
December 31, 2024 |  |  |  |  |
Millions |  |  |  |  |
Short-Term Debt | $94.7 |  |  | — |  | $94.7 |
Long-Term Debt | 1,713.3 |  |  | $(8.6) |  | 1,704.7 |
Total Debt | $1,808.0 |  |  | $(8.6) |  | $1,799.4 |
We had $16.2 million outstanding standby letters of credit and $95.0 million outstanding draws under our lines of credit as of September 30, 2025 ($16.2 million in standby letters of credit and $20.0 million outstanding draws on our lines of credit as of December 31, 2024). We also have standby letters of credit outstanding under other letter of credit facilities. (See Note 6. Commitments, Guarantees and Contingencies.) On March 25, 2025, ALLETE issued and sold $150 million of senior unsecured notes (“Notes”) to certain institutional buyers in the private placement market. The Notes 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. Of the Notes issued and sold, $120 million of the Notes bear interest at a rate of 5.38 percent and mature on March 25, 2030, and $30 million of the Notes bear interest at a rate of 5.82 percent and mature on March 25, 2035. Interest on the Notes will be payable semi-annually on April 1 and October 1 of each year, commencing on October 1, 2025. ALLETE has the option to prepay all or a portion of the Notes at its discretion, subject to a make-whole provision. The Notes are subject to additional terms and conditions which are customary for these types of transactions. Proceeds from the sale of the Notes were used for refinancing of debt and general corporate purposes. On July 9, 2025, ALLETE issued $250 million of first mortgage bonds ("Bonds") to certain institutional buyers in the private placement market. 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. The Bonds were issued in four series as follows:
Maturity Date | Principal Amount | Interest Rate
July 9, 2032 | $50 million | 5.37%
July 9, 2035 | $75 million | 5.69%
July 9, 2037 | $50 million | 5.79%
July 9, 2055 | $75 million | 6.34%
Interest on the Bonds is payable semi-annually on January 15 and July 15 of each year, commencing on January 15, 2026. ALLETE has the option to prepay all or a portion of the Bonds at its discretion, subject to a make-whole provision; however, each series of bonds is redeemable at par, including, in each case, accrued and unpaid interest, three months prior to the maturity date of the series maturing in 2032, 2035 and 2037, and six months prior to the maturity date of the series maturing in 2055. The Bonds will be subject to additional terms and conditions which are customary for these types of transactions. ALLETE plans to use the proceeds from the sale of the Bonds to fund utility capital expenditures. NOTE 5. 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 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 September 30, 2025, our ratio was approximately 0.41 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; however, under the Merger Agreement, the Company has agreed not to declare or pay dividends except for quarterly cash dividends payable by us in respect of shares of our common stock on a schedule consistent with our past practices in an amount not to exceed 5 percent per share more than the dividend payable during the prior 12-month period, subject to certain other exceptions. (See Note 11. Agreement and Plan of Merger.) As of September 30, 2025, 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/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 8A -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-8A Reference 2: http://www.xbrl.org/2003/role/disclosureRef 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