Connecticut Water Service, Inc. (NASDAQ:CTWS) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01Entry into a Material Definitive Agreement
Entry into New Term Loan for Maine Water Company
As previously reported, on December 1, 2012, the Maine Water Company, a Maine corporation (“Maine Water”), and CoBank, ACB, a federally chartered instrumentality of the United States (“CoBank”) entered into that certain Amended and Restated Master Loan Agreement, as amended on December 22, 2014 (the “Agreement”). Maine Water is an operating water utility subsidiary of Connecticut Water Service, Inc., a Connecticut corporation (the “Company”), the registrant.
to the Agreement, Maine Water has previously delivered to CoBank two separate Promissory Note and Single Advance Term Loan Supplements, dated December 22, 2014 and January 10, 2017, respectively, as follows:
|
Promissory Note |
Principal Amount |
Maturity Date |
|
Second Promissory Note and Single Advance Term Loan Supplement No. RI0042T03 |
$4,500,000 |
Dec. 20, 2024 |
|
Third Promissory Note and Single Advance Term Loan Supplement No. RI0042T04 |
$5,000,000 |
Dec. 30, 2026 |
On December 13, 2018, Maine Water executed and delivered to CoBank a new Promissory Note and Single Advance Term Loan Supplement, dated October 30, 2018 (the “Fourth Promissory Note”). On the terms and subject to the conditions set forth in the Fourth Promissory Note issued to the Agreement, CoBank agreed to make an unsecured loan (the “Loan”) to Maine Water in the principal amount of $8,000,000, as follows:
|
Promissory Note |
Principal Amount |
Maturity Date |
|
Fourth Promissory Note and Single Advance Term Loan Supplement No. RI0042T05 |
$8,000,000 |
Dec. 30, 2043 |
Under the Fourth Promissory Note, Maine Water will pay interest on the Loan in accordance with either of the following interest rate options, as selected periodically by Maine Water: (1) at a weekly quoted variable rate, a rate per annum equal to the rate of interest established by CoBank on the first business day of each week; or (2) at a fixed rate per annum to be quoted by CoBank in its sole discretion in each instance for periods of 365 days or more. Interest shall be calculated on the actual number of days
the Loan is outstanding on the basis of a year consisting of 360 days. Maine Water has selected a fixed rate of 5.51% per year through the maturity date of the Loan.
Maine Water intends to use the proceeds of the above described Loan from CoBank to refinance existing debt and to finance certain capital expenditures.
The above summary of the material terms of the Agreement and the Fourth Promissory Note is qualified in its entirety by reference to: (1) the Agreement, dated as of December 1, 2012 and amended as of December 22, 2014, and (2) the Fourth Promissory Note dated as of December 13, 2018. The Agreement, as amended, has previously been filed. The Fourth Promissory Note is filed herewith as Exhibit 10.3 is hereby incorporated herein by reference.
Modification of Revolving Credit Facility
As previously reported, the Company has maintained a revolving line of credit, currently in the amount of $45,000,000 (the “Line of Credit”) with Citizens Bank, N.A. n (“Citizens”) since 2002. The Line of Credit currently has an expiration date of April25, 2021.
On December 14, 2018, the Company and Citizens agreed to increase the amount of the Line of Credit from $45,000,000 to $75,000,000 and to extend the maturity date of the Line of Credit until December 14, 2023. The Company has delivered to Citizens an Amended and Restated Promissory Note, dated Dec. 14, 2018, evidencing the debt payable to the Line of Credit.
Copies of the Dec. 14, 2018 Letter Agreement and the Amended and Restated Promissory Note dated Dec. 14, 2018 are filed herewith as Exhibit 10.4 and Exhibit 10.5 and are hereby incorporated herein by reference.
|
Item 1.01 |
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information set forth in Item 1.01 is incorporated herein by reference in response to this Item 1.01.
Item 1.01 Financial Statements and Exhibits:
The following documents are filed herewith as exhibits:
|
10.1 |
|
10.2 |
|
10.3 |
|
10.4 |
|
10.5 |
CONNECTICUT WATER SERVICE INC / CT Exhibit
EX-10.3 2 exhibit103-cobankpromissor.htm EXHIBIT 10.3 – COBANK PROMISSORY NOTE Exhibit Exhibit 10.3Loan No. RI0042T05SINGLE ADVANCE TERM PROMISSORY NOTE AND SUPPLEMENTTHIS SINGLE ADVANCE TERM PROMISSORY NOTE AND SUPPLEMENT (“Supplement”) to the Amended and Restated Master Loan Agreement dated December 1,…
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About Connecticut Water Service, Inc. (NASDAQ:CTWS)
Connecticut Water Service, Inc. is a non-operating holding company. The Company’s income is derived from the earnings of its subsidiary companies, including The Connecticut Water Company (Connecticut Water), The Maine Water Company (Maine Water), New England Water Utility Services, Inc. (NEWUS) and Chester Realty Company (Chester Realty). It operates through three segments: Water Operations, Real Estate Transactions, and Services and Rentals. The Water Operations segment consists of its regulated water activities to supply public drinking water to customers. The Real Estate Transactions segment involves the sale or donation for income tax benefits of its real estate holdings. The Services and Rentals segment provides contracted services to water and wastewater utilities and other clients, and also leases certain of the Company’s properties to third parties through unregulated companies in the State of Connecticut and through Maine Water in the State of Maine.
