Notes Payable to Banks, Commercial Paper, and Lines of Credit

12 Months Ended

Dec. 31, 2015

Notes Payable to Banks, Commercial Paper, and Lines of Credit

Notes Payable to Banks, Commercial Paper, and Lines of Credit.

a. MGE Energy.

At December 31, 2015, MGE Energy had an unsecured, committed revolving line of credit of $50 million expiring June 1, 2020. At December 31, 2015, no borrowings were outstanding under this facility.

The agreement requires MGE Energy to maintain a ratio of its consolidated indebtedness to consolidated total capitalization not to exceed a maximum of 65%. A change in control constitutes a default under the agreement. Change in control events are defined as (i) a failure by MGE Energy to hold 100% of the outstanding voting equity interest in MGE or (ii) the acquisition of beneficial ownership of 30% or more of the outstanding voting stock of MGE Energy by one person or two or more persons acting in concert. As of December 31, 2015, MGE Energy was in compliance with the covenant requirements.

b. MGE.

For short-term borrowings, MGE generally issues commercial paper (issued at the prevailing discount rate at the time of issuance), which is supported by unused committed bank lines of credit. At December 31, 2015, MGE had two unsecured, committed revolving lines of credit for a total of $100 million expiring June 1, 2020. At December 31, 2015, no borrowings were outstanding under these facilities, and MGE had no commercial paper outstanding.

The agreements require MGE to maintain a ratio of consolidated debt to consolidated total capitalization not to exceed a maximum of 65%. The ratio calculation excludes assets, liabilities, revenues, and expenses included in MGE's financial statements as the result of the consolidation of VIEs, such as MGE Power West Campus and MGE Power Elm Road. A change in control constitutes a default under the agreement. Change in control events are defined as (i) a failure by MGE Energy to hold 100% of the outstanding voting equity interest in MGE or (ii) the acquisition of beneficial ownership of 30% or more of the outstanding voting stock of MGE Energy by one person or two or more persons acting in concert. As of December 31, 2015, MGE was in compliance with the covenant requirements.

c. MGE Energy and MGE.

Information concerning short-term borrowings for the past three years is shown below:

		As of December 31,
(In thousands)		2015		2014		2013
MGE Energy^(a)
Available lines of credit	$	150,000	$	150,000	$	150,000
Short-term debt outstanding	$	-	$	7,000	$	-
Weighted-average interest rate		-%		0.20%		-%
During the year:
Maximum short-term borrowings	$	17,500	$	9,000	$	32,000
Average short-term borrowings	$	1,511	$	182	$	6,992
Weighted-average interest rate		0.17%		0.24%		0.18%

MGE
Available lines of credit	$	100,000	$	100,000	$	100,000
Commercial paper outstanding	$	-	$	7,000	$	-
Weighted-average interest rate		-%		0.20%		-%
During the year:
Maximum short-term borrowings	$	17,500	$	9,000	$	32,000
Average short-term borrowings	$	1,511	$	182	$	6,992
Weighted-average interest rate		0.17%		0.24%		0.18%

(a) MGE Energy short-term borrowings include MGE Energy and MGE lines of credit and MGE commercial paper.