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): July 30, 2008
OTTER TAIL CORPORATION
(Exact name of registrant as specified in its charter)
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| Minnesota
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0-00368
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41-0462685 |
(State or other jurisdiction
of incorporation)
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(Commission
File Number)
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(I.R.S. Employer
Identification No.) |
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| 215 South Cascade Street, P.O. Box 496, Fergus Falls, MN
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56538-0496 |
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(Zip Code) |
Registrant’s telephone number, including area code: (866) 410-8780
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)) |
Item 1.01 Entry into a Material Definitive Agreement
Credit Agreement
On July 30, 2008, Otter Tail Corporation, dba Otter Tail Power Company (the “Company”),
entered into a $170 million Credit Agreement (the “Credit Agreement”) with the Banks named therein,
U.S. Bank National Association, a national banking association, as agent for the Banks, Bank of
America, N.A., as Syndication Agent JPMorgan Chase Bank, N.A., Wells Fargo Bank, National
Association, and Merrill Lynch Bank USA. The Credit Agreement creates an unsecured revolving
credit facility that the Company can draw on to support the working capital needs and other capital
requirements of the Company’s electric operations. The Credit Agreement replaces an existing $75
million Credit Agreement with U.S. Bank National Association that would have terminated on
September 1, 2008. Borrowings under the line of credit bear interest at LIBOR plus 0.4%, subject to
adjustment based on the ratings of the Company’s senior unsecured debt
The Credit Agreement, which is filed as Exhibit 4.1 to this Form 8-K, contains certain
financial covenants. Specifically, the Company must maintain an “Interest and Dividend Coverage
Ratio” (as defined in the Credit Agreement) of not less than 1.50 to 1.00 and must not permit its
“Interest-bearing Debt to Total Capitalization” (as defined in the Credit Agreement) to exceed 0.60
to 1.00.
If the Company forms a holding company and Otter Tail Power Company becomes a separate
subsidiary of the newly formed holding company, the Credit Agreement will become an obligation of
the newly formed subsidiary, Otter Tail Power Company, provided certain conditions are met.
The description of the terms of the Credit Agreement in this Item 1.01 is qualified in its
entirety by reference to Exhibit 4.1 to this
Form 8-K.
U.S. Bank, Bank of America, JPMorgan Chase Bank, and Wells Fargo Bank are also a party to the
Credit Agreement dated October 2, 2007 with Varistar Corporation, which creates an unsecured
revolving credit facility that Varistar can draw on to support its operations.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement of a Registrant
The information contained in Item 1.01 above is incorporated herein by reference. As of July
31, 2008, $48.1 million was borrowed under the Credit Agreement.
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