The aggregate principal payment requirements subsequent to December 31, 2020 are as
follows:
(in thousands) Amount
2021 § 6,018
2022 6,272
2023 7,508
2024 6,721
2025 7,013
2026 and thereafter 211,351
Total S 244,883
Several of Pennichuck Water’s loan agreements contain a covenant that prevents Pennichuck
Water from declaring dividends if Pennichuck Water does not maintain a minimum net
worth of $4.5 million. As of December 31, 2020 and 2019, Pennichuck Water’s net worth was
$103.6 million and $107.4 million, respectively.
The 2014A, 20148, 2015A, 2015B, 2018A, 2018B, 2019A, 2020A, 2020B and 2020C bonds
were issued under a new bond indenture and loan and trust agreement, established with the
issuance of the 2014 Series Bonds, which contains 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 Series 2014 bonds. Thereby, the ratio of Debt to Capital must be
equal to or less than 1.0. As of December 31, 2020 and 2019, Pennichuck Water has a
Debt to Capital Coverage ratio of 0.6 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 Jeast 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, 2020 and 2019, this coverage ratio was 0.6 and 0.5, respectively. Also,
the ratio of EBITDA to the Max Amount Due must be equal to or greater than 1.1; as of
December 31, 2020 and 20139, this ratio was 2.6 and 1.5, respectively.
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