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borrowers. In addition to the lower rates, CoBank loans generally have fewer covenants or
restrictions as compared to loans from commercial banks and other financial institutions.
Approval by Pennichuck and PEU. The CoBank loan and guaranty have been approved by the
Board of Directors of Pennichuck and PEU. Pennichuck recommends that the City authorize
(i) PEU to enter into the loan with CoBank; and (ii) Pennichuck to guaranty the loan.
Lower Costs Are Good for Customers. Pennichuck and its Board of Directors have
determined that the capital projects to be refinanced by the CoBank loan will allow PEU to
continue to provide safe, adequate and reliable water service to their customers on a cost-
effective basis. The terms of the loan are very favorable compared to other alternatives and will
result in lower financing costs than would be available under other debt options. These lower
financing costs will be passed on to customers.
Other Approvals. As a regulated public utility, PEU must obtain approval of the term loan from
the New Hampshire Public Utilities Commission (“NHPUC”), which will approve the term loan
if it finds the loan to be consistent with the public good. PEU will be filing a petition for approval
with the NHPUC in early March 2019 and expects the NHPUC to consider the petition promptly.
Requested Approvals. For the reasons described above, Pennichuck respectfully requests that
the City, acting in its capacity as sole shareholder of Pennichuck and pursuant to Article [X(3) of
Pennichuck’s Articles of Incorporation, authorize the following actions:
RESOLVED, that the City hereby approves the term loan to Pennichuck East Utility,
Inc. from CoBank, ACB, in an amount up to $1,450,000, with an amortization period of
up to 25 years; and
FURTHER RESOLVED, that the City hereby approves the guaranty by Pennichuck
Corporation of the payment by Pennichuck East Utility, Inc. of the term loan authorized
in the prior resolution; and
FURTHER RESOLVED, that the City hereby authorizes Pennichuck Corporation and
Pennichuck East Utility, Inc., their Boards of Directors, and their Officers, to take any
and all actions required to obtain all necessary approvals with respect to the actions
described in these resolutions and to execute and deliver such documents as are necessary
to effect the CoBank term loan and the guaranty described in these resolutions.
Respectfully submitted,
PENNICHUCK CORPORATION
, SLAL
Larrg D. Goodhue
Chief Executive Officer
cc. Mayor James Donchess
