OTTER TAIL CORPORATION (NASDAQ:OTTR) Files An 8-K Results of Operations and Financial Condition

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OTTER TAIL CORPORATION (NASDAQ:OTTR) Files An 8-K Results of Operations and Financial Condition
Item 2.02

Results of Operations and Financial Condition

On February 12, 2018 Otter Tail Corporation (the “Company”) issued a press release announcing 2017 earnings and 2018 earnings guidance, a copy of which is furnished herewith as Exhibit99.1.

Item 2.03

Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

As previously reported in a Form 8-K filed by Otter Tail Corporation on November 16, 2017 (the “November 8-K”), on November 14, 2017, Otter Tail Power Company (“OTP”), a wholly owned subsidiary of Otter Tail Corporation (“OTC”), entered into a Note Purchase Agreement (the “Note Purchase Agreement”) with the purchasers named therein, to which OTP agreed to issue to the purchasers, in a private placement transaction, $100 million aggregate principal amount of OTP’s 4.07% Series 2018A Senior Unsecured Notes due February 7, 2048 (the “Notes”). OTP issued the Notes on February 7, 2018 and used the proceeds of the Notes to repay existing indebtedness under OTP’s revolving credit facility.

As reported in the November 8-K, the Note Purchase Agreement states that OTP may prepay all or any part of the Notes (in an amount not less than 10% of the aggregate principal amount of the Notes then outstanding in the case of a partial prepayment) at 50% of the principal amount so prepaid, together with unpaid accrued interest and a make-whole amount; provided that if no default or event of default exists under the Note Purchase Agreement, any prepayment made by OTP of all of the Notes then outstanding on or after August 7, 2047 will be made without any make-whole amount. The Note Purchase Agreement also requires OTP to offer to prepay all outstanding Notes at 50% of the principal amount together with unpaid accrued interest in the event of a Change of Control (as defined in the Note Purchase Agreement) of OTP.

As reported in the November 8-K, the Note Purchase Agreement contains a number of restrictions on the business of OTP that became effective upon execution of the Note Purchase Agreement. These include restrictions on OTP’s abilities to merge, sell assets, create or incur liens on assets, guarantee the obligations of any other party, and engage in transactions with related parties. The Note Purchase Agreement also contains other negative covenants and events of default, as well as certain financial covenants. Specifically, OTP may not permit its Interest-bearing Debt (as defined in the Note Purchase Agreement) to exceed 60% of Total Capitalization (as defined in the Note Purchase Agreement), determined as of the end of each fiscal quarter. OTP is also restricted from allowing its Priority Indebtedness (as defined in the Note Purchase Agreement) to exceed 20% of Total Capitalization, determined as of the end of each fiscal quarter. The Note Purchase Agreement does not include provisions for the termination of the agreement or the acceleration of repayment of amounts outstanding due to changes in OTP’s credit ratings. The Note Purchase Agreement includes a “most favored lender” provision generally requiring that in the event OTP’s existing credit agreement or any renewal, extension or replacement thereof, at any time contains any financial covenant or other provision providing for limitations on interest expense and such a covenant is not contained in the Note Purchase Agreement under substantially similar terms or would be more beneficial to the holders of the Notes than any analogous provision contained in the Note Purchase Agreement (an “Additional Covenant”), then unless waived by the Required Holders (as defined in the Note Purchase Agreement), the Additional Covenant will be deemed to be incorporated into the Note Purchase Agreement. The Note Purchase Agreement also provides for the amendment, modification or deletion of an Additional Covenant if such Additional Covenant is amended or modified under or deleted from the credit agreement, provided that no default or event of default has occurred and is continuing.

The foregoing summary of the material terms of the Note Purchase Agreement is qualified in its entirety by reference to the full text of the Note Purchase Agreement, a copy of which was filed as Exhibit 4.1 to the November 8-K and is incorporated herein by reference.

Item 9.01

Financial Statements and Exhibits

99.1

Press Release issued February 12, 2018.


Otter Tail Corp Exhibit
EX-99.1 2 ex_104975.htm EXHIBIT 99.1 ex_104975.htm     Exhibit 99.1   NEWS RELEASE     Media contact: Cris Oehler,…
To view the full exhibit click here

About OTTER TAIL CORPORATION (NASDAQ:OTTR)

Otter Tail Corporation is a holding company. The Company, through its subsidiaries, operates through three segments: Electric, Manufacturing and Plastics. The Company’s subsidiaries own facilities and equipment used in the manufacture of producing polyvinyl chloride (PVC) pipe, thermoformed products, heavy metal fabricated products, metal parts stamping, fabricating, painting and contract machining. The Company, through its Electric segment, is engaged in the production, transmission, distribution and sale of electric energy in Minnesota, North Dakota and South Dakota by its subsidiary, Otter Tail Power Company (OTP). Its Manufacturing segment consists of businesses engaged in the activities, including contract machining, metal parts stamping, fabrication and painting, and production of material and handling trays and horticultural containers. The Company’s Plastics segment consists of businesses producing PVC pipe at plants in North Dakota and Arizona.

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