credit_facility.htm
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported) – May 27, 2011 (May 25, 2011)
ALLETE, Inc.
(Exact name of registrant as specified in its charter)
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Minnesota
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1-3548
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41-0418150
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(State or other jurisdiction of
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(Commission File Number)
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(IRS Employer
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incorporation or organization)
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Identification No.)
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30 West Superior Street
Duluth, Minnesota 55802-2093
(Address of principal executive offices, including zip code)
(218) 279-5000
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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SECTION 1 – REGISTRANT’S BUSINESS AND OPERATIONS
SECTION 2 – FINANCIAL INFORMATION
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Item 1.01
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Entry into a Material Definitive Agreement.
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Item 1.02
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Termination of a Material Definitive Agreement.
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Item 2.03
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Creation of a Direct Financial Obligation under an Off-Balance Sheet Arrangement of a Registrant.
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On May 25, 2011, ALLETE, Inc. (ALLETE) entered into a new $250 million credit agreement with JPMorgan Chase Bank, N.A. as Administrative Agent, J.P. Morgan Securities LLC as Sole Lead Arranger and Sole Book Runner, and the several lenders party thereto (Credit Agreement). Effective July 1, 2011, the Credit Agreement will replace ALLETE’s $150 million credit facility dated as of January 11, 2006, among ALLETE, Inc., Bank of America Corporation (formerly LaSalle Bank National Association), as Agent, and the several lenders party thereto. Originally scheduled to expire on January 11, 2012, this facility will now terminate on July 1, 2011. As of May 25, 2011, the Company had availability under this facility of $150 million.
The Credit Agreement is unsecured and has a maturity date of June 30, 2015. At ALLETE’s request and subject to certain conditions, the Credit Agreement may be increased by up to $100 million and extended for a one-year period. Advances may be used by ALLETE for general corporate purposes, to provide liquidity in support of ALLETE's commercial paper program and to issue up to $40 million in letters of credit.
ALLETE has the option to borrow funds under the Credit Agreement at an interest rate equal to the Eurodollar rate plus a margin of 0.85% to 1.75%, or an alternate base rate. In addition, ALLETE will pay annual facility fees ranging from 0.15% to 0.25%. Such interest rates and annual fees are based on ALLETE’s then-current senior unsecured credit ratings.
The Credit Agreement contains customary conditions of borrowing, customary events of default and customary affirmative and negative covenants. The Credit Agreement includes only one financial covenant to maintain a ratio of Total Indebtedness to Total Capitalization (as defined in the Credit Agreement) equal to or less than 65%. Indebtedness under the Credit Agreement may be accelerated upon the occurrence of an event of default, including cross-default to other indebtedness in excess of $35 million.
A copy of the Credit Agreement is filed as Exhibit 99 hereto and is incorporated by reference herein. The description of the Credit Agreement above is qualified in its entirety by reference to the full text of the Credit Agreement.
SECTION 9 – FINANCIAL STATEMENTS AND EXHIBITS
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit Number
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99
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Credit Agreement dated as of May 25, 2011 among ALLETE, Inc., as Borrower, the lenders party hereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and JPMorgan Securities LLC, as Sole Lead Arranger and Sole Book Runner.
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Readers are cautioned that forward-looking statements should be read in conjunction with ALLETE’s disclosures under the heading: “SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995” located on page 3 of this Form 8-K.
ALLETE Form 8-K dated May 27, 2011
Safe Harbor Statement
Under the Private Securities Litigation Reform Act of 1995
Statements in this report that are not statements of historical facts may be considered “forward-looking” and, accordingly, involve risks and uncertainties that could cause actual results to differ materially from those discussed. Although such forward-looking statements have been made in good faith and are based on reasonable assumptions, there is no assurance that the expected results will be achieved. Any statements that express, or involve discussions as to, future expectations, risks, beliefs, plans, objectives, assumptions, events, uncertainties, financial performance, or growth strategies (often, but not always, through the use of words or phrases such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “projects,” “will likely result,” “will continue,” “could,” “may,” “potential,” “target,” “outlook” or words of similar meaning) are not statements of historical facts and may be forward-looking.
In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, we are hereby filing cautionary statements identifying important factors that could cause our actual results to differ materially from those projected, or expectations suggested, in forward-looking statements made by or on behalf of ALLETE in this Current Report on Form 8-K, in presentations, on our website, in response to questions or otherwise. These statements are qualified in their entirety by reference to, and are accompanied by, the following important factors, in addition to any assumptions and other factors referred to specifically in connection with such forward-looking statements:
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our ability to successfully implement our strategic objectives;
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prevailing governmental policies, regulatory actions, and legislation including those of the United States Congress, state legislatures, the FERC, the MPUC, the PSCW, the NDPSC, the EPA and other various state, local, and county regulators, and city administrators, about allowed rates of return, financings, industry and rate structure, acquisition and disposal of assets and facilities, real estate development, operation and construction of plant facilities, recovery of purchased power, capital investments and other expenses, present or prospective wholesale and retail competition (including but not limited to transmission costs), zoning and permitting of land held for resale and environmental matters;
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our ability to manage expansion and integrate acquisitions;
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the potential impacts of climate change and future regulation to restrict the emissions of GHG on our Regulated Operations;
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effects of restructuring initiatives in the electric industry;
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economic and geographic factors, including political and economic risks;
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changes in and compliance with laws and regulations;
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weather conditions;
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natural disasters and pandemic diseases;
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war and acts of terrorism;
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wholesale power market conditions;
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population growth rates and demographic patterns;
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effects of competition, including competition for retail and wholesale customers;
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changes in the real estate market;
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pricing and transportation of commodities;
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changes in tax rates or policies or in rates of inflation;
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project delays or changes in project costs;
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availability and management of construction materials and skilled construction labor for capital projects;
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changes in operating expenses and capital expenditures;
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global and domestic economic conditions affecting us or our customers;
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our ability to access capital markets and bank financing;
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changes in interest rates and the performance of the financial markets;
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our ability to replace a mature workforce and retain qualified, skilled and experienced personnel; and
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the outcome of legal and administrative proceedings (whether civil or criminal) and settlements that affect the business and profitability of ALLETE.
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Additional disclosures regarding factors that could cause our results and performance to differ from results or performance anticipated by this report are discussed in Item 1A under the heading “Risk Factors” beginning on page 22 of our 2010 Form 10-K. Any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which that statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for management to predict all of these factors, nor can it assess the impact of each of these factors on the businesses of ALLETE or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement. Readers are urged to carefully review and consider the various disclosures made by us in this Form 8-K and in our other reports filed with the SEC that attempt to advise interested parties of the factors that may affect our business.
ALLETE Form 8-K dated May 27, 2011
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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ALLETE, Inc.
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May 27, 2011
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/s/ Donald W. Stellmaker
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Donald W. Stellmaker
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Treasurer
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ALLETE Form 8-K dated May 27, 2011