Short-Term Debt and Credit Facilities

3 Months Ended

Mar. 31, 2021

The Registrants borrow on a short-term basis, as necessary, by the issuance of commercial paper and by borrowings under their revolving credit agreements. OGE Energy also borrows under term credit agreements maturing in one year or less, as necessary. As of March 31, 2021, OGE Energy had $1.3 billion of short-term debt as compared to $95.0 million of short-

term debt at December 31, 2020. At March 31, 2021, OG&E had $297.1 million in advances from OGE Energy compared to $272.0 million advances to OGE Energy at December 31, 2020.

In March 2021, OGE Energy entered into a $1.0 billion unsecured 364-day term loan agreement and borrowed the full $1.0 billion to help cover the increased fuel and purchased power costs incurred by OG&E during the February 2021 extreme cold weather event. The term loan contains substantially the same covenants as OGE Energy's $450.0 million revolving credit agreement, including various financial ratio covenants. The term loan will bear interest at rates equal to either a LIBOR rate specified in the term loan agreement, plus a margin of 0.75, or an alternate base rate specified in the term loan agreement, subject in each case to floor of zero percent. An alternative rate of interest will be established upon the occurrence of certain events related to the phase out of LIBOR. During the three months ended March 31, 2021, OGE Energy loaned $470.0 million of the term loan proceeds to OG&E pursuant to an intercompany note issued by OG&E to OGE Energy, contemporaneously with the closing of the term loan agreement. Advances under the intercompany note will bear interest at the same rates as are in effect under the term loan agreement. During the three months ended March 31, 2021, OGE Energy also made a capital contribution of $530.0 million to OG&E. OG&E used these proceeds to pay fuel and purchased power costs incurred during the February 2021 extreme cold weather event. OGE Energy and OG&E intend to refinance the $1.0 billion term loan by issuing long-term debt in 2021.

The following table presents information regarding the Registrants' revolving credit agreements at March 31, 2021.


	Aggregate		Amount		Weighted-Average
Entity	Commitment		Outstanding (A)		Interest Rate			Expiration
	(In millions)
OGE Energy (B)	$	450.0	$	278.0	0.33	%	(D)	March 8, 2024	(F)
OG&E (C)(E)	450.0		0.4		1.00	%	(D)	March 8, 2024	(F)
Total	$	900.0	$	278.4	0.33	%

(A)Includes direct borrowings under the revolving credit agreements, commercial paper borrowings and letters of credit at March 31, 2021.

(B)This bank facility is available to back up OGE Energy's commercial paper borrowings and to provide revolving credit borrowings. This bank facility can also be used as a letter of credit facility.

(C)This bank facility is available to back up OG&E's commercial paper borrowings and to provide revolving credit borrowings. This bank facility can also be used as a letter of credit facility.

(D)Represents the weighted-average interest rate for the outstanding borrowings under the revolving credit agreements, commercial paper borrowings and letters of credit.

(E)OG&E has an intercompany borrowing agreement with OGE Energy whereby OG&E has access to up to $350.0 million of OGE Energy's revolving credit amount. This agreement has a termination date of March 8, 2024. At March 31, 2021, there were no intercompany borrowings under this agreement.

(F)In March 2017, the Registrants entered into unsecured five-year revolving credit agreements totaling $900.0 million ($450.0 million for OGE Energy and $450.0 million for OG&E). Each of the revolving credit facilities contained an option, which could be exercised up to two times, to extend the term of the respective facility for an additional year. In March 2018, the Registrants each utilized one of those extensions to extend the maturity of their respective credit facility from March 8, 2022 to March 8, 2023. In January 2021, the Registrants each utilized the second of those extensions to extend the maturity of their respective credit facility from March 8, 2023 to March 8, 2024. Commitments of a single existing lender with respect to $50.0 million of OGE Energy's credit facility, however, were not extended and, unless the non-extending lender is replaced in accordance with the terms of the credit facility, such commitments will expire March 8, 2023. The non-extending lender is not party to the OG&E facility.

In January 2021, the Registrants each entered into an amendment to their revolving credit facilities which gives each of the Registrants the option of extending such commitments for up to two additional one-year periods. In addition, the amendment addresses the establishment of an alternative rate of interest upon the occurrence of certain events related to the phase out of LIBOR.

The Registrants' ability to access the commercial paper market could be adversely impacted by a credit ratings downgrade or major market disruptions. Pricing grids associated with the Registrants' credit facilities could cause annual fees and borrowing rates to increase if an adverse rating impact occurs. The impact of any future downgrade could include an increase in the costs of the Registrants' short-term borrowings, but a reduction in the Registrants' credit ratings would not result in any defaults or accelerations. Any future downgrade could also lead to higher long-term borrowing costs and, if below investment grade, would require the Registrants to post collateral or letters of credit.

OG&E must obtain regulatory approval from the FERC in order to borrow on a short-term basis. OG&E has the necessary regulatory approvals to incur up to $800.0 million in short-term borrowings at any one time for a two-year period beginning January 1, 2021 and ending December 31, 2022.