Otter Tail Corporation Enters into A Fourth Amended and Restated Credit Agreement
October 04, 2021 at 03:05 pm EDT
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On September 30, 2021, Otter Tail Corporation entered into a Fourth Amended and Restated Credit Agreement with certain banks as named therein, and led by U.S. Bank National Association, as administrative agent. The agreement continues to provide for an unsecured revolving credit facility with a $170 million line of credit the Company can draw on to refinance certain indebtedness, fund capital expenditures and support the operations of the Company and its subsidiaries, including letters of credit in an aggregate amount not to exceed $40 million outstanding at any time. The line of credit may be increased to $290 million on the terms and subject to the conditions described in the agreement. The agreement expires on September 30, 2026. The terms of the credit facility dictate a variable rate of interest to be charged on outstanding balances and impose a commitment fee based on the average unused amount available to be drawn under the facility. The variable rate of interest to be charged is based on a benchmark interest rate as selected by the borrower at the time of an advance, plus an applicable credit spread as defined in the agreement, which varies 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, $36.6 million was outstanding under the Otter Tail Credit Agreement, which was also outstanding under the Prior Otter Tail Credit Agreement immediately prior to the effectiveness of the Otter Tail Credit Agreement. As of September 30, 2021, $61.2 million was outstanding under the OTP Credit Agreement, in addition to $13.2 million of outstanding letters of credit, all of which were outstanding under the Prior OTP Credit Agreement immediately prior to the effectiveness of the OTP Credit Agreement.
Otter Tail Corporation is a holding company. The Company operates through three segments: Electric, Manufacturing and Plastics. The Electric segment includes the generation, purchase, transmission, distribution and sale of electric energy in western Minnesota, eastern North Dakota and northeastern South Dakota. The Manufacturing segment consists of businesses engaged in manufacturing activities: contract machining; metal parts stamping; fabrication and painting; and production of plastic thermoformed horticultural containers, life science and industrial packaging, material handling components and extruded raw material stock. These businesses have manufacturing facilities in Georgia, Illinois and Minnesota and sell products primarily in the United States. The Plastics segment consists of businesses producing polyvinyl chloride (PVC) pipe at plants in North Dakota and Arizona. The PVC pipe is sold primarily in the western half of the United States and Canada.