The aggregate principal payment requirements subsequent to December 31, 2017 are as
follows:
(in thousands) Amount
2018 $ 5,576
2019 5,911
2020 6,169
2021 8,450
2022 6,343
2023 and thereafter 175,260
Total $ 207,709
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, 2017 and 2016, Pennichuck Water’s net worth
was $118.0 million and $122.1 million, respectively.
The 2014A, 2014B, 2015A and 2015B 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, 2017 and 2016,
Pennichuck Water Works has a Debt to Capital Coverage ratio of 0.5 and 0.5,
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 11 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, 2017 and 2016, this coverage
ratio was 0.4 and 0.4, respectively. Also, the ratio of EBITDA to the Max Amount
Due must be equal to or greater than 1.1; as of December 31, 2017 and 2016, this
ratio was 1.5 and 1.8, respectively.
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