6. DEBT

Lines of Credit

Chugach maintains a $50.0 million line of credit with National Rural Utilities Cooperative Finance Corporation (NRUCFC). Chugach did not utilize this line of credit in the six months ended June 30, 2018. In addition, Chugach did not utilize this line of credit during 2017 and had no outstanding balance at December 31, 2017. The borrowing rate is calculated using the total rate per annum and may be fixed by NRUCFC. The borrowing rate was 3.50% at June 30, 2018, and 3.00% at December 31, 2017. The NRUCFC Revolving Line Of Credit Agreement requires that Chugach, for each 12-month period, for a period of at least five consecutive days, pay down the entire outstanding principal balance. The NRUCFC line of credit was renewed September 29, 2017, and expires September 29, 2022. This line of credit is immediately available for unconditional borrowing.

Commercial Paper

On June 13, 2016, Chugach entered into a $150.0 million senior unsecured credit facility, the Credit Agreement, which is used to back Chugach’s commercial paper program. The pricing includes an all-in drawn spread of one month London Interbank Offered Rate (LIBOR) plus 90.0 basis points, along with a 10.0 basis points facility fee (based on an A/A2/A unsecured debt rating). The Credit Agreement will expire on June 13, 2021. The participating banks include NRUCFC, KeyBank National Association, Bank of America, N.A., and CoBank, ACB. The commercial paper can be repriced between one day and 270 days.

Chugach expects to continue issuing commercial paper in 2018, as needed. Chugach had $53.0 million and $50.0 million of commercial paper outstanding at June 30, 2018, and December 31, 2017, respectively.

The following table provides information regarding average commercial paper balances outstanding for the quarters ended June 30, 2018, and 2017 (dollars in millions), as well as corresponding weighted average interest rates:



2018				2017
Average Balance		Weighted Average Interest Rate		Average Balance		Weighted Average Interest Rate
$	56.4	2.26	%	$	42.3	1.19	%

Term Loans

Chugach has a term loan facility with CoBank. Loans made under this facility are evidenced by the 2016 CoBank Note, which is governed by the Amended and Restated Master Loan Agreement dated June 30, 2016, and secured by the Second Amended and Restated Indenture of Trust (Indenture). At June 30, 2018, Chugach had $38.8 million outstanding with CoBank.

Financing

On March 17, 2017, Chugach issued $40,000,000 of First Mortgage Bonds, 2017 Series A, due March 15, 2037. The bonds were issued for general corporate purposes. The 2017 Series A Bonds will mature on March 15, 2037, and bear interest at 3.43%. Interest will be paid each March 15 and September 15, commencing on September 15, 2017. The 2017 Series A Bonds require principal payments in equal installments on an annual basis beginning March 15, 2018, resulting in an average life of approximately 10.0 years. The bonds are secured, ranking equally with all other long-term obligations, by a first lien on substantially all of Chugach’s assets, pursuant to the Sixth Supplemental Indenture to the Second Amended and Restated Indenture of Trust, which initially became effective on January 20, 2011, as previously amended and supplemented.

Debt Issuance Costs

The following table outlines debt issuance costs associated with long-term obligations, excluding current installments, at June 30, 2018.



	Long-term Obligations		Unamortized Debt Issuance Costs
2011 Series A Bonds	$	189,666,664	$	1,157,389
2012 Series A Bonds		172,750,000		978,270
2017 Series A Bonds		36,000,000		194,152
2016 CoBank Note		35,568,000		216,665
	$	433,984,664	$	2,546,476

The following table outlines debt issuance costs associated with long-term obligations, excluding current installments, at December 31, 2017.



	Long-term Obligations		Unamortized Debt Issuance Costs
2011 Series A Bonds	$	200,333,331	$	1,218,687
2012 Series A Bonds		183,500,000		1,019,582
2017 Series A Bonds		38,000,000		199,399
2016 CoBank Note		37,164,000		231,817
	$	458,997,331	$	2,669,485