Allete inks $400 million unsecured credit agreement due 2018

By Toni Weeks

San Luis Obispo, Calif., Nov. 4 - Allete, Inc. entered into a $400 million unsecured credit agreement due Nov. 2, 2018 with JPMorgan Chase Bank, NA as administrative agent on Monday, according to an 8-K filing with the Securities and Exchange Commission.

The facility has an accordion feature to boost the total amount by up to $150 million and two one-year extension options.

Borrowings bear interest at Libor plus 90 basis points to 147.5 bps. Facility fees range from 10 bps to 27.5 bps. The margin is based on Allete's then-current senior unsecured credit ratings.

The credit agreement contains a financial covenant to maintain a ratio of total debt to total capitalization of no greater than 65%.

The new facility replaces the company's $250 million credit facility dated May 25, 2011 and $150 million credit facility dated Feb. 1, 2012, which were due June 30, 2015 and Jan. 31, 2014, respectively.

Advances may be used for general corporate purposes, to provide liquidity to Allete's commercial paper program and for up to $60 million in letters of credit.

The company had availability of $394.6 million under the facility at closing on Nov. 4, the filing stated.

J.P. Morgan Securities LLC is the lead arranger and bookrunner.

Allete, a Midwestern energy services provider, has headquarters in Duluth, Minn.

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