MGE ENERGY INC Debt Disclosure
Long-Term Debt - MGE Energy and MGE.
a.Long-Term Debt.
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| December 31, |
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| (In thousands) |
| 2019 |
| 2018 |
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| First Mortgage Bonds:(a) |
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|
|
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| $ | 1,200 | $ | 1,200 |
| |
| Tax Exempt Debt: |
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|
|
|
|
|
|
|
| |
| Industrial Development Revenue Bonds |
| 19,300 |
| 19,300 |
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| Medium-Term Notes:(b) |
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|
|
|
|
|
| 20,000 |
| 20,000 |
| |
|
| 25,000 |
| 25,000 |
| |
|
| 25,000 |
| 25,000 |
| |
| Total Medium-Term Notes |
| 70,000 |
| 70,000 |
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| Other Long-Term Debt:(d) |
|
|
|
|
|
|
| 15,000 |
| 15,000 |
| |
|
| 30,000 |
| 30,000 |
| |
|
| 15,000 |
| 15,000 |
| |
|
| 30,000 |
| 30,000 |
| |
|
| 50,000 |
| - |
| |
|
| 23,946 |
| 25,064 |
| |
|
| 15,794 |
| 16,561 |
| |
|
| 15,000 |
| 15,000 |
| |
|
| 33,472 |
| 35,139 |
| |
|
| 21,167 |
| 22,167 |
| |
|
| 28,000 |
| 28,000 |
| |
|
| 20,000 |
| 20,000 |
| |
|
| 20,000 |
| 20,000 |
| |
|
| 40,000 |
| 40,000 |
| |
|
| 60,000 |
| 60,000 |
| |
|
| 20,000 |
| 20,000 |
| |
|
| 20,000 |
| 20,000 |
| |
| Total Other Long-Term Debt |
| 457,379 |
| 411,931 |
|
| Long-term debt due within one year |
| (19,659) |
| (4,553) |
|
| Unamortized discount and debt issuance costs |
| (4,479) |
| (4,535) |
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| Total Long-Term Debt | $ | 523,741 | $ | 493,343 |
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(a)MGE's utility plant is subject to the lien of its Indenture of Mortgage and Deed of Trust, under which its first mortgage bonds are issued. The Mortgage Indenture provides that dividends or any other distribution or purchase of MGE shares may not be made if the aggregate amount thereof since December 31, 1945, would exceed the earned surplus (retained earnings) accumulated subsequent to December 31, 1945. As of December 31, 2019, approximately $ million was available for the payment of dividends under this covenant.
(b)The indenture under which MGE's Medium-Term notes are issued provides that those notes will be entitled to be equally and ratably secured in the event that MGE issues any additional first mortgage bonds.
(c)In November 2019, MGE issued $50 million of new long-term unsecured debt. The proceeds of the debt financing were used to assist with capital expenditures, maturing short-term debt, and other corporate obligations.
(d)Unsecured notes issued pursuant to various Note Purchase Agreements with one or more purchasers. The notes are not issued under, or governed by, MGE's Indenture dated as of September 1, 1998, which governs MGE's Medium-Term Notes.
(e)Issued by MGE. Under that Note Purchase Agreement: (i) note holders have the right to require MGE to repurchase their notes at par in the event of an acquisition of beneficial ownership of 30% or more of the outstanding voting stock of MGE Energy, (ii) MGE must maintain a ratio of its consolidated indebtedness to consolidated total capitalization not to exceed a maximum of 65%, and (iii) MGE cannot issue "Priority Debt" in an amount exceeding 20% of its consolidated assets. Priority Debt is defined as any indebtedness of MGE secured by liens other than specified liens permitted by the Note Purchase Agreement and certain unsecured indebtedness of certain subsidiaries. As of December 31, 2019, MGE was in compliance with the covenant requirements.
(f)Issued by MGE Power West Campus. The Note Purchase Agreements require MGE Power West Campus to maintain a projected debt service coverage ratio of not less than 1.25 to 1.00, and debt to total capitalization ratio of not more than 0.65 to 1.00. The notes are secured by a collateral assignment of lease payments that MGE is making to MGE Power West Campus for use of the WCCF pursuant to a long-term lease. As of December 31, 2019, MGE Power West Campus was in compliance with the covenant requirements.
(g)Issued by MGE Power Elm Road. The Note Purchase Agreement requires MGE Power Elm Road to maintain a projected and actual debt service coverage ratio at the end of any calendar quarter of not less than 1.25 to 1.00 for the trailing 12-month period. The notes are secured by a collateral assignment of lease payments that MGE is making to MGE Power Elm Road for use of the Elm Road Units pursuant to long-term leases. As of December 31, 2019, MGE Power Elm Road was in compliance with the covenant requirements.
b.Long-Term Debt Maturities.
Below is MGE Energy's and MGE's aggregate maturities for all long-term debt for years following December 31, 2019.
| (In thousands) |
| 2020 |
| 2021 |
| 2022 |
| 2023 |
| 2024 |
| Thereafter |
|
| Long-term debt maturities | $ | 19,659 | $ | 4,771 | $ | 4,889 | $ | 35,014 | $ | 5,146 | $ | 478,400 |
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2019 | Feb 27, 2020 | Showing above |
| 2018 | Feb 22, 2019 | |
| 2017 | Feb 23, 2018 | |
| 2016 | Feb 24, 2017 | |
| 2015 | Feb 25, 2016 | |
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.