Otter Tail Power issues $70M 6.04% notes

Otter Tail Power Company, a wholly owned subsidiary of Otter Tail Corporation, has completed the issuance of its 6.04% Series 2026B Senior Unsecured Notes for aggregate proceeds of $70,000,000.

Rhea-AI Filing Summary

Otter Tail Power Company, a wholly owned subsidiary of Otter Tail Corporation, has completed the issuance of its 6.04% Series 2026B Senior Unsecured Notes for aggregate proceeds of $70,000,000. These notes bear interest at 6.04% and are due on June 4, 2056.

The Series 2026B Notes are part of a previously agreed private placement totaling $170,000,000, which also includes 5.33% Series 2026A Notes due March 19, 2036. OTP plans to use the new funds to support capital expenditures, refinance existing debt, and for general corporate purposes.

The Note Purchase Agreement includes financial covenants limiting OTP’s Interest-bearing Debt to no more than 65% of Total Capitalization and Priority Indebtedness to no more than 20% of Total Capitalization, each tested at quarter-end. It also provides change of control prepayment rights and structured prepayment terms, including specified dates after which certain prepayments avoid a make-whole amount.

Insights

Utility credit analyst

Otter Tail Power adds $70M long-dated fixed-rate debt with leverage covenants.

Otter Tail Power Company issued $70,000,000 of 6.04% Series 2026B Senior Unsecured Notes due 2056 as part of a $170,000,000 private placement. The proceeds are earmarked for capital spending, debt refinancing, and general corporate purposes, which aligns with typical utility financing needs.

The Note Purchase Agreement embeds leverage controls, including a cap on Interest-bearing Debt at 65% of Total Capitalization and on Priority Indebtedness at 20%, measured quarterly. These covenants, along with change of control and prepayment provisions, are designed to maintain balance sheet discipline while providing long-term funding stability.

Overall, this looks like a standard utility private placement rather than a transformative capital event. The long maturity profile and fixed coupon help lock in funding terms, while the covenants constrain excessive leverage but still permit ongoing capital investment activity disclosed in company plans.

8-K Event Classification

Item 2.03 — Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement

1 item

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement Financial

The company incurred a new significant debt or off-balance-sheet obligation.

Key Figures

Total private placement notes: $170,000,000 aggregate principal Series 2026A notes: $100,000,000 at 5.33% Series 2026B notes issued: $70,000,000 at 6.04% +4 more

7 metrics

Total private placement notes $170,000,000 aggregate principal Senior unsecured notes under Note Purchase Agreement

Series 2026A notes $100,000,000 at 5.33% Senior Unsecured Notes due March 19, 2036

Series 2026B notes issued $70,000,000 at 6.04% Senior Unsecured Notes due June 4, 2056

Interest-bearing debt cap 65% of Total Capitalization Maximum allowed under financial covenant each quarter-end

Priority Indebtedness cap 20% of Total Capitalization Maximum allowed under financial covenant each quarter-end

Prepayment date Series 2026A On or after December 19, 2035 Prepayment without make-whole if no default

Prepayment date Series 2026B On or after December 4, 2055 Prepayment without make-whole if no default

Key Terms

Senior Unsecured Notes, Note Purchase Agreement, Interest-bearing Debt, Total Capitalization, +2 more

6 terms

Senior Unsecured Notes financial

"aggregate principal amount of the Company’s senior unsecured notes consisting of $100,000,000"

Senior unsecured notes are a type of loan a company borrows from investors, promising to pay back with interest. They are called "unsecured" because they aren’t backed by specific assets like buildings or equipment, but "senior" because they are paid back before other debts if the company gets into trouble. Investors see them as a relatively safer way for companies to raise money.

Note Purchase Agreement financial

"entered into a Note Purchase Agreement (the “Note Purchase Agreement”) on March 19, 2026"

A note purchase agreement is a contract where an investor buys a company’s promissory note — essentially an IOU promising repayment with interest — instead of buying equity. It matters to investors because it defines the borrower’s repayment schedule, interest rate and legal protections, so it affects expected returns, risk of loss, and where the investor stands compared with shareholders or other creditors if the company runs into trouble.

Interest-bearing Debt financial

"OTP may not permit its Interest-bearing Debt (as defined in the Note Purchase Agreement) to exceed 65% of Total Capitalization"

Total Capitalization financial

"to exceed 65% of Total Capitalization (as defined in the Note Purchase Agreement), determined as of the end of each fiscal quarter"

Priority Indebtedness financial

"OTP is also restricted from allowing its Priority Indebtedness (as defined in the Note Purchase Agreement) to exceed 20% of Total Capitalization"

Change of Control financial

"requires OTP to offer to prepay all outstanding Notes at 100% of the principal amount together with unpaid accrued interest in the event of a Change of Control"

A change of control occurs when the ownership or management of a company shifts significantly, such as through a sale, merger, or acquisition, resulting in new leadership or ownership structure. This change can impact the company's direction and decision-making, which is important for investors because it may affect the company's stability, strategy, and future prospects.

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What debt did Otter Tail Power Company (OTTR) issue in June 2026?

Otter Tail Power Company issued 6.04% Series 2026B Senior Unsecured Notes totaling $70,000,000, maturing on June 4, 2056. The issuance is part of a larger $170,000,000 private placement previously agreed under a Note Purchase Agreement.

How will Otter Tail Power (OTTR) use the $70 million Series 2026B note proceeds?

The $70,000,000 proceeds from the Series 2026B Notes will fund capital expenditures, refinance existing indebtedness, and support general corporate purposes. This mix supports ongoing investment needs while also allowing management to optimize the current debt portfolio.

What interest rate and maturity apply to Otter Tail Power’s Series 2026B Notes?

The Series 2026B Senior Unsecured Notes carry a fixed interest rate of 6.04% and mature on June 4, 2056. This long-dated structure provides stable funding over three decades under the existing Note Purchase Agreement framework.

What financial covenants apply to Otter Tail Power (OTTR) under the Note Purchase Agreement?

Key covenants limit Interest-bearing Debt to no more than 65% of Total Capitalization and Priority Indebtedness to no more than 20% of Total Capitalization, each measured at quarter-end. These constraints help maintain leverage within defined parameters for creditors.

Can Otter Tail Power prepay the Series 2026A and 2026B Notes without a make-whole amount?

Yes. If no default exists, all Series 2026A Notes prepaid on or after December 19, 2035, and all Series 2026B Notes prepaid on or after December 4, 2055, may be repaid at 100% of principal plus interest, without a make-whole amount.

What happens to Otter Tail Power’s notes in a Change of Control event?

In a Change of Control, Otter Tail Power must offer to prepay all outstanding Notes at 100% of principal plus unpaid accrued interest. This provision gives noteholders a defined exit option if control of the company changes as specified in the agreement.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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Accepted by SEC EDGAR 06/05/2026 - 09:52 AM Learn about SEC filing dates

0001466593false00014665932026-06-042026-06-04

UNITED STATES

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): June 4, 2026

OTTER TAIL CORPORATION

(Exact name of registrant as specified in its charter)

Minnesota (State or other jurisdiction of incorporation or organization) 0-53713 (Commission File Number) 27-0383995 (I.R.S. Employer Identification No.)

215 South Cascade Street, P.O. Box 496, Fergus Falls, MN 56538-0496

(Address of principal executive offices, including zip code)

(866) 410-8780

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

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:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

Title of each class			Trading Symbol(s)			Name of each exchange on which registered
Common Shares, par value $5.00 per share			OTTR			The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

As previously reported in a Form 8-K filed by Otter Tail Corporation on March 23, 2026 (the “March 8-K”), Otter Tail Power Company ("OTP”), a wholly owned subsidiary of Otter Tail Corporation, entered into a Note Purchase Agreement (the “Note Purchase Agreement”) on March 19, 2026, with the purchasers named therein (the “Purchasers”), pursuant to which OTP agreed to issue to the Purchasers, in a private placement transaction, $170,000,000 aggregate principal amount of the Company’s senior unsecured notes consisting of $100,000,000 in aggregate principal amount of its 5.33% Series 2026A Senior Unsecured Notes due March 19, 2036 (the “Series 2026A Notes”) and $70,000,000 in aggregate principal amount of its 6.04% Series 2026B Senior Unsecured Notes due June 4, 2056 (the “Series 2026B Notes”) (collectively, the “Notes”).

On June 4, 2026, OTP issued the Series 2026B Notes pursuant to the Note Purchase Agreement for aggregate proceeds of $70,000,000. OTP will use the proceeds from the issuance to fund capital expenditures, refinance existing indebtedness, and for general corporate purposes.

As reported in the March 8-K, the Note Purchase Agreement contains a number of restrictions on the business of OTP that were effective upon execution of the Note Purchase Agreement. These include restrictions and limitations on OTP’s abilities to merge, sell substantially all assets, create or incur liens on assets, guarantee the obligations of any other party, and engage in transactions with affiliates. The Note Purchase Agreement also contains other negative covenants and events of default, as well as certain financial covenants. Specifically, OTP may not permit its Interest-bearing Debt (as defined in the Note Purchase Agreement) to exceed 65% of Total Capitalization (as defined in the Note Purchase Agreement), determined as of the end of each fiscal quarter. OTP is also restricted from allowing its Priority Indebtedness (as defined in the Note Purchase Agreement) to exceed 20% of Total Capitalization, determined as of the end of each fiscal quarter.

As reported in the March 8-K, the Note Purchase Agreement allows OTP to prepay all or any part of the Notes (in an amount not less than 10% of the aggregate principal amount of the Notes then outstanding in the case of a partial prepayment) at 100% of the principal amount so prepaid, together with unpaid accrued interest and a make-whole amount; provided that if no default or event of default exists under the Note Purchase Agreement, any prepayment made by OTP of all of the Series 2026A Notes then outstanding on or after December 19, 2035, or the Series 2026B Notes then outstanding on or after December 4, 2055, will be made without any make-whole amount. The Note Purchase Agreement also requires OTP to offer to prepay all outstanding Notes at 100% of the principal amount together with unpaid accrued interest in the event of a Change of Control (as defined in the Note Purchase Agreement).

The summary in this Item 2.03 of the material terms of the Note Purchase Agreement is qualified in its entirety by reference to the full text of the Note Purchase Agreement, a copy of which was filed as Exhibit 10.1 to the March 8-K and is incorporated herein by reference.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

			OTTER TAIL CORPORATION
Date: June 5, 2026			By:			/s/ Tyler J. Nelson
						Tyler J. Nelson
						Vice President and Chief Financial Officer

Filing Exhibits & Attachments

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Other Documents

• EX-101 XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT 1.7 KB
• EX-101 XBRL TAXONOMY EXTENSION LABEL LINKBASE DOCUMENT 21.1 KB
• EX-101 XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE DOCUMENT 12.2 KB