Short-Term and Long-Term Debt

9 Months Ended

Sep. 30, 2016

Short-Term and Long-Term Debt [Text Block]

SHORT-TERM AND LONG-TERM DEBT

The following tables present ALLETE’s short-term and long-term debt as of September 30, 2016 and December 31, 2015.



September 30, 2016	Principal		Unamortized Debt Issuance Costs	Total
Millions
Short-Term Debt (a)		$187.2	$(0.6)		$186.6
Long-Term Debt	1,369.7		(10.8)	1,358.9
Total Debt		$1,556.9	$(11.4)		$1,545.5


(a)	Consisted of long-term debt due within one year.



December 31, 2015	Principal		Unamortized Debt Issuance Costs	Total
Millions
Short-Term Debt (a)		$37.9	$(0.6)		$37.3
Long-Term Debt	1,568.7		(12.0)	1,556.7
Total Debt		$1,606.6	$(12.6)		$1,594.0


(a)	Consisted of long-term debt due within one year and notes payable.

No material long-term debt was issued in the first nine months of 2016.

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, 2016, our ratio was approximately 0.45 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. As of September 30, 2016, ALLETE was in compliance with its financial covenants.