Debt

3 Months Ended

Mar. 31, 2022

Debt Disclosure [Abstract]

Debt

DEBT

Short-Term Debt

At March 31, 2022, NW Holdings and NW Natural had short-term debt outstanding of $332.5 million and $188.5 million, respectively. NW Holdings' short-term debt consisted of $144.0 million in revolving credit agreement loans at NW Holdings and $188.5 million of commercial paper outstanding at NW Natural. The weighted average interest rate on the revolving credit agreement at March 31, 2022 was 1.5% at NW Holdings. The weighted average interest rate of commercial paper at March 31, 2022 was 0.8% at NW Natural. At March 31, 2022, NW Natural's commercial paper had a maximum remaining maturity of 39 days and an average remaining maturity of 17 days.

In June 2021, NW Natural entered into a $100.0 million 364-Day Term Loan Credit Agreement (Term Loan) and borrowed the full amount. All principal and interest under the Term Loan was repaid in December 2021.

Long-Term Debt

At March 31, 2022, NW Holdings and NW Natural had long-term debt outstanding of $1,045.0 million and $986.6 million, respectively, which included $8.2 million and $8.1 million of unamortized debt issuance costs at NW Holdings and NW Natural, respectively. NW Natural's long-term debt consists of first mortgage bonds (FMBs) with maturity dates ranging from 2023 through 2051, interest rates ranging from 2.8% to 7.9%, and a weighted average interest rate of 4.4%.

No long-term debt is scheduled to mature over the next twelve months following March 31, 2022 at NW Natural.

In June 2019, NW Natural Water, a wholly-owned subsidiary of NW Holdings, entered into a two-year term loan agreement for $35.0 million. The loan was repaid in June 2021 upon its maturity date.

In June 2021, NW Natural Water entered into a five-year term loan credit agreement for $55.0 million and borrowed the full amount. The loan carried an interest rate of 1.2% at March 31, 2022, which is based upon the one-month LIBOR rate. The loan is guaranteed by NW Holdings and requires NW Holdings to maintain a consolidated indebtedness to total capitalization ratio of 70% or less. Failure to comply with this covenant would entitle the lenders to terminate their lending commitments and accelerate the maturity of all amounts outstanding. NW Holdings was in compliance with this covenant at March 31, 2022, with a consolidated indebtedness to total capitalization ratio of 58.2%.

Fair Value of Long-Term Debt

NW Holdings' and NW Natural's outstanding debt does not trade in active markets. The fair value of debt is estimated using the value of outstanding debt at natural gas distribution companies with similar credit ratings, terms, and remaining maturities to NW Holdings' and NW Natural's debt that actively trade in public markets. Substantially all outstanding debt at NW Holdings is comprised of NW Natural debt. These valuations are based on Level 2 inputs as defined in the fair value hierarchy. See Note 2 in the 2021 Form 10-K for a description of the fair value hierarchy.

The following table provides an estimate of the fair value of long-term debt, including current maturities of long-term debt, using market prices in effect on the valuation date:

	March 31,				December 31,
In thousands	2022		2021		2021
NW Natural:
Gross long-term debt	$	994,700	$	924,700	$	994,700
Unamortized debt issuance costs	(8,073)		(7,364)		(8,205)
Carrying amount	$	986,627	$	917,336	$	986,495
Estimated fair value(1)	$	997,196	$	1,014,527	$	1,110,741
NW Holdings:
Gross long-term debt	$	1,053,177	$	963,283	$	1,053,241
Unamortized debt issuance costs	(8,171)		(7,364)		(8,309)
Carrying amount	$	1,045,006	$	955,919	$	1,044,932
Estimated fair value(1)	$	1,059,629	$	1,053,036	$	1,174,500

(1) Estimated fair value does not include unamortized debt issuance costs.