Short-term borrowing activity under Pennichuck East’s FALOC for the years ended
December 31, 2021 and 2020 was:
2021 2020
Established line as of December 31, 5 3,000 S 3,000
Maximum amount outstanding during period 1,171 1,106
Average amount outstanding during period 909 1,022
Amount outstanding as of December 31, 757 306
Weighted average interest rate during period 2.13% 2.80%
Interest rate as of December 31, 2.09% 2.15%
The Company’s revolving credit loan facilities with TD Bank contain certain covenant
obligations upon Pennichuck Water, which are as follows:
Debt to Capital Covenant - Pennichuck Water cannot create, issue, incur, assume or
guarantee any short-term debt if (1) the sum of the short-term debt plus its funded debt
(“Debt”) shall exceed 85% of the sum of its short-term debt, funded debt and capital stock
plus surplus accounts (“Capital”), unless the short-term debt issued in excess of the 85%
is subordinated to the loan facility. Thereby, the ratio of Debt to Capital must be equal to
or less than 1.0. As of December 31, 2021 and 2020, Pennichuck Water has a Debt to
Capital Coverage ratio of 0.7 and 0.6, respectively.
All Bonds Test - Additionally, Pennichuck Water cannot create, issue, incur, assume or
guarantee any new funded debt, if the total outstanding funded debt (“Total Funded
Debt”) will exceed the sum of MARA (as defined in Note 14 of these consolidated financial
statements) and 85% of its Net Capital Properties (“MARA and Capital Properties”), and
unless net revenues or EBITDA (earnings before interest, taxes, depreciation and
amortization) shall equal or exceed for at least 12 consecutive months out of the 15
months preceding the issuance of the new funded debt by 1.1 times the maximum
amount for which Pennichuck Water will be obligated to pay in any future year (“Max
Amount Due”), as a result of the new funded debt being incurred. Thereby, the ratio of
Total Funded Debt to MARA and Capital Properties must be equal to or less than 1.0; as
of December 31, 2021 and 2020, this coverage ratio was 0.6 and 0.6, respectively. Also,
the ratio of EBITDA to the Max Amount Due must be equal to or greater than 1.1; as of
December 31, 2021 and 2020 this ratio was 2.3 and 2.6, respectively.
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