XML 25 R14.htm IDEA: XBRL DOCUMENT v3.21.2
Short-Term and Long-Term Borrowings
 9 Months Ended
Sep. 30, 2021
Debt Disclosure [Abstract]  
Short-Term and Long-Term Borrowings Short-Term and Long-Term Borrowings
The following is a summary of our outstanding short and long-term borrowings by borrower, Otter Tail Corporation (OTC) or Otter Tail Power Company (OTP), as of September 30, 2021 and December 31, 2020:
Short-Term Debt
The following is a summary of our lines of credit as of September 30, 2021 and December 31, 2020:
September 30, 2021December 31,
2020
(in thousands)Line LimitAmount OutstandingLetters
of Credit		Amount AvailableAmount Available
OTC Credit Agreement$170,000 $36,624 $— $133,376 $104,834 
OTP Credit Agreement170,000 61,233 13,159 95,608 140,068 
Total$340,000 $97,857 $13,159 $228,984 $244,902 
On September 30, 2021, OTC entered into a Fourth Amended and Restated Credit Agreement (the OTC Credit Agreement) and OTP entered into a Third Amended and Restated Credit Agreement (the OTP Credit Agreement) amending and restating the previously existing credit agreements to extend the maturity date of each agreement to September 30, 2026. The agreements both provide for $170 million revolving lines of credit to support operations, and borrowings which may be used for working capital needs and other capital requirements, to refinance certain indebtedness and for the issuance of letters of credit in an aggregate not to exceed $40 million for the OTC Credit Agreement and $50 million for the OTP Credit Agreement. Each credit facility includes an accordion provision allowing the borrower to increase the available borrowing capacity, subject to certain terms and conditions. The borrowing capacity of the OTC Credit Agreement can be increased to $290 million and the OTP Credit Agreement can be increased to $250 million. Borrowings under each credit facility are subject to a variable rate of interest on outstanding balances and a commitment fee is applied based on the average unused amount available to be drawn under the respective facility. The variable rate of interest to be charged is based on either LIBOR or a Base Rate, as defined in the agreement, selected by the borrower at the time of an advance, subject to the conditions of each agreement, plus an applicable credit spread. The credit spread ranges from 0.125% to 2.00% for the OTC Credit Agreement and from zero to 1.75% for the OTP Credit Agreement, depending on the benchmark interest rate selected and is subject to adjustment
based on the credit ratings of the borrower. As of September 30, 2021, the weighted-average LIBOR Rate based interest rate was 1.59% and 1.33% under the OTC Credit Agreement and OTP Credit Agreement, respectively.
Each credit facility contains a number of restrictions on the borrower, including restrictions on their ability to merge, sell assets, make investments, create or incur liens on assets, guarantee the obligations of any other party and engage in transactions with related parties. The agreements also contain certain financial and non-financial covenants and defined events of default, and include provisions for the replacement of the LIBOR benchmark rate in the event that LIBOR is no longer available.
Long-Term Debt
The following is a summary of outstanding long-term debt by borrower as of September 30, 2021 and December 31, 2020: 
(in thousands)
EntityDebt InstrumentRateMaturitySeptember 30,
2021		December 31,
2020
OTCGuaranteed Senior Notes3.55%12/15/26$80,000 $80,000 
OTPSeries 2011A Senior Unsecured Notes4.63%12/01/21140,000 140,000 
OTPSeries 2007B Senior Unsecured Notes6.15%08/20/2230,000 30,000 
OTPSeries 2007C Senior Unsecured Notes6.37%08/02/2742,000 42,000 
OTPSeries 2013A Senior Unsecured Notes4.68%02/27/2960,000 60,000 
OTPSeries 2019A Senior Unsecured Notes 3.07%10/10/2910,000 10,000 
OTPSeries 2020A Senior Unsecured Notes3.22%02/25/3010,000 10,000 
OTPSeries 2020B Senior Unsecured Notes3.22%08/20/3040,000 40,000 
OTPSeries 2007D Senior Unsecured Notes6.47%08/20/3750,000 50,000 
OTPSeries 2019B Senior Unsecured Notes3.52%10/10/3926,000 26,000 
OTPSeries 2020C Senior Unsecured Notes3.62%02/25/4010,000 10,000 
OTPSeries 2013B Senior Unsecured Notes5.47%02/27/4490,000 90,000 
OTPSeries 2018A Senior Unsecured Notes4.07%02/07/48100,000 100,000 
OTPSeries 2019C Senior Unsecured Notes3.82%10/10/4964,000 64,000 
OTPSeries 2020D Senior Unsecured Notes3.92%02/25/5015,000 15,000 
OTCPACE Note2.54%03/18/21— 169 
Total$767,000 $767,169 
Less:Current Maturities Net of Unamortized Debt Issuance Costs169,962 140,087 
Unamortized Long-Term Debt Issuance Costs2,419 2,650 
Total Long-Term Debt Net of Unamortized Debt Issuance Costs$594,619 $624,432 
On June 10, 2021, OTP entered into a Note Purchase Agreement pursuant to which OTP agreed to issue, in a private placement transaction, $230 million aggregate principal amount of senior unsecured notes consisting of (a) $40 million of 2.74% Series 2021A Senior Unsecured Notes due November 29, 2031, (b) $100 million of 3.69% Series 2021B Senior Unsecured Notes due November 29, 2051 and (c) $90 million of 3.77% Series 2022A Senior Unsecured Notes due May 20, 2052. As of September 30, 2021, there were no amounts outstanding. The funding of the notes will occur in two issuances, $140 million in November 2021 and $90 million in May 2022. The issuance of the notes is subject to the satisfaction of certain customary conditions to closing.
Financial Covenants
Certain of OTC's and OTP's short-term and long-term debt agreements require the borrower, whether OTC or OTP, to maintain certain financial covenants, including a maximum debt to total capitalization ratio of 0.60 to 1.00, a minimum interest and dividend coverage ratio of 1.50 to 1.00, and a maximum level of priority indebtedness. As of September 30, 2021, OTC and OTP were in compliance with these financial covenants.