The aggregate principal payment requirements subsequent to December 31, 2018 are as
follows:
(in thousands) Amount
2019 $ 6,019
2020 6,372
2021 8,660
2022 6,561
2023 7,859
2024 and thereafter 175,117
Total $ 210,588
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, 2018 and 2017, Pennichuck Water’s net worth was
$112.4 million and $118.0 million, respectively.
The 2014A, 2014B, 2015A, 2015B, 2018A and 2018B 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, 2018 and 2017, 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 1 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, 2018 and 2017, 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, 2018 and 2017, this ratio was 1.6 and 1.5,
respectively.
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