SHORT-TERM BORROWINGS

12 Months Ended

Dec. 31, 2015

SHORT-TERM BORROWINGS

SHORT-TERM BORROWINGS

6.     SHORT-TERM BORROWINGS

        At December 31, 2015, total short-term borrowings consisted of $25.0 million in commercial paper and no borrowings under our line of credit. During 2015 and 2014 our short-term borrowings outstanding averaged (in millions)

	2015		2014
Average borrowings outstanding	$	48.9	$	30.0
Highest month end balance	$	97.0	$	77.0

        The weighted average interest rates and the weighted average interest rate of borrowings outstanding at December 31, 2015 and 2014 were:.

	2015			2014
Weighted average interest rate		0.54	%		0.38	%
Weighted average interest rate of borrowings outstanding		0.84	%		0.44	%

        We have in place a $200 million 5-year Credit Agreement which expires in October 2019. This agreement replaced the former $150 million Third Amended and Restated Unsecured Credit Agreement that had a January 2017 expiration date. This agreement may be used for working capital, commercial paper back-up and general corporate purposes. The credit facility includes a $20 million swingline loan sublimit, a $20 million sublimit for letters of credit issuance and, subject to bank approval, a $75 million accordion feature and two one-year extensions of the credit facility's maturity date.

        Interest on borrowings under the new facility accrues at a rate equal to, at our option, (i) the highest of (A) the agent prime rate, (B) the federal funds effective rate plus 0.5% or (C) one month LIBOR plus 1.0%, in each case, plus a margin or (ii) one month, two month, three month or six month LIBOR, in each case, plus a margin. Each margin is based on our current credit ratings and the pricing schedule in the facility. As of the date hereof, and based on our current credit ratings, the LIBOR margin under the facility is 1.025%. A facility fee is payable quarterly on the full amount of the commitments under the facility based on our current credit ratings, which is currently 0.175%. In addition, upon entering into the new credit facility, we paid upfront fees to the revolving credit banks of $0.3 million in the aggregate.

        The new credit facility requires our total indebtedness to be less than 65.0% of our total capitalization at the end of each fiscal quarter and a failure to maintain this ratio will result in an event of default under the credit facility and will prohibit us from borrowing funds thereunder. As of December 31, 2015, we were in compliance with this covenant as our ratio of total indebtedness to total capitalization was 0.53 to 1.0. The new credit facility is also subject to cross-default if we default on more than $25 million in the aggregate on our other indebtedness. As of December 31, 2015, we were not in default under any of our debt obligations.

        The new credit agreement does not legally restrict the use of our cash in the normal course of operations. There were no outstanding borrowings under the agreement at December 31, 2015; however, $25.0 million was used to back up our outstanding commercial paper.