UNITED STATES
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 4, 2010
OTTER TAIL CORPORATION
(Exact name of registrant as specified in its charter)
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| Minnesota
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0-53713
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27-0383995 |
| (State or other jurisdiction
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(Commission
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(I.R.S. Employer |
| of incorporation)
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File Number)
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Identification No.) |
215 South Cascade Street, P.O. Box 496, Fergus Falls, MN 56538-0496
(Address of principal executive offices, including zip code)
(866) 410-8780
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
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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| Item 1.01. |
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Entry into a Material Definitive Agreement. |
On May 4, 2010, Otter Tail Corporation (the “Company”) entered into a $200 million Second
Amended and Restated Credit Agreement (the “A&R Credit Agreement”) with the Banks named therein,
U.S. Bank National Association, a national banking association (“U.S. Bank”), as administrative
agent for the Banks (the “Agent”) and as Lead Arranger, Bank of America, N.A. (“Bank of America”)
and JPMorgan Chase Bank, National Association (“JPMorgan”), as Co-Syndication Agents, and
KeyBank National Association (“KeyBank”), as Documentation Agent. The A&R Credit Agreement amends
and restates the $200 million Credit Agreement, dated as of December 23, 2008 (the “Original Credit
Agreement”), between the Company (as assignee of Varistar Corporation, a wholly owned subsidiary of
the Company), the Banks named therein, U.S. Bank, as agent for the Banks and as Lead Arranger, and
Bank of America, KeyBank and Wells Fargo Bank, National Association (“Wells Fargo”), as
Co-Documentation Agents, and is an unsecured revolving credit facility that the Company can draw on
to support its nonelectric operations. The line of credit may be increased to $250 million on the
terms and subject to the conditions described in the A&R Credit Agreement, and will expire on May
4, 2013. Upon effectiveness of the A&R Credit Agreement, borrowings under the line of credit bear
interest at LIBOR plus 3.25%, subject to adjustment based on the senior unsecured credit ratings of
the Company.
The A&R Credit Agreement, which is filed as Exhibit 4.1 to this Form 8-K, contains a number of
restrictions on the businesses of the Company and its material subsidiaries, including restrictions
on their ability to merge, sell assets, make certain investments, create or incur liens on assets,
guarantee the obligations of any other party, and engage in transactions with related parties. The
A&R Credit Agreement also contains certain financial covenants. Specifically, the Company must not
permit the ratio of its “Interest-bearing Debt” to “Total Capitalization” (each as defined in the
A&R Credit Agreement) to be greater than 0.60 to 1.00, or permit its “Interest and Dividend
Coverage Ratio” (as defined in the A&R Credit Agreement) for any period of four consecutive fiscal
quarters to be less than 1.50 to 1.00. The A&R Credit Agreement also contains affirmative covenants
and events of default. The A&R Credit Agreement does not include provisions for the termination of
the agreement or the acceleration of repayment of amounts outstanding due to changes in the
Company’s credit ratings. The Company’s obligations under the A&R Credit Agreement are guaranteed
by each of its “Material Subsidiaries” (as defined in the A&R Credit Agreement, which definition
expressly excludes Otter Tail Power Company).
The description of the terms of the A&R Credit Agreement in this Item 1.01 is qualified in its
entirety by reference to Exhibit 4.1 to this Form 8-K.
Certain of the Banks party to the A&R Credit Agreement and their affiliates have had, and may
in the future have, investment banking and other commercial dealings with the Company and its
affiliates, for which such Banks or their affiliates have received and may in the future receive
customary compensation. Such dealings have included the following: (i) U.S. Bank, Bank of America,
Wells Fargo and JPMorgan are also parties to the Credit Agreement, dated as of July 30, 2008,
between the Company’s wholly owned subsidiary Otter Tail Power Company (formerly known as Otter
Tail Corporation, dba Otter Tail Power Company), the Banks named therein, Bank of America, as
Syndication Agent, and U.S. Bank, as agent for the Banks, which creates an unsecured revolving
credit facility that Otter Tail Power Company can draw on to support its electric operations; (ii)
J.P. Morgan Securities Inc. (“JPMS”), an affiliate of JPMorgan, entered into a Distribution
Agreement with the Company on March 17, 2010, pursuant to which the Company may offer and sell its
common shares, par value $5.00 per share, from time to time through JPMS, as the Company’s
distribution agent for the offer and sale of the shares, up to an aggregate sales price of
$75,000,000; and (iii) in connection with the offering and sale by the Company of $100,000,000
aggregate principal amount of its 9.000% Notes due 2016 in 2009, JPMS and an affiliate of Bank of
America acted as joint book-running managers, an affiliate of U.S. Bank acted as lead manager, and
affiliates of Bank of the West, KeyBank and Wells Fargo acted as co-managers.