By Stephanie N. Rotondo
Portland, Ore., Dec. 4 - Artesian Water Co., Inc. entered into a bond purchase agreement with CoBank for $15 million principal amount of first mortgage bonds, according to a filing with the Securities and Exchange Commission Thursday.
The series S notes mature Dec. 31, 2033.
The bonds carry an interest rate of 6.73% through March 1, 2016, at which time Artesian can request the rate be fixed through the maturity date or through a shorter period, as agreed by both parties. If no request is made, the bonds will pay interest at the greater rate of Prime or the Federal Funds rate plus 50 basis points. Interest is payable the first business day of January, April, July and October, beginning January 2009.
The notes amortize by $150,000 per quarter beginning January 2009.
The bonds are secured by a first mortgage lien against substantially all of Artesian's utility plant.
Proceeds from the transaction will be used to repay short-term debt used to finance the expansion of the company's headquarters in New Castle County, Del.
Artesian Water is a subsidiary of Artesian Resources Corp. and is the largest public water utility in Delaware.
| Issuer: | Artesian Water Co., Inc.
|
| Security description: | First mortgage bonds, Series S
|
| Maturity: | Dec. 31, 2033
|
| Amortization: | $150,000 per quarter
|
| Amount: | $15 million
|
| Coupon: | 6.73% through March 1, 2016
|
| Investor: | CoBank
|
| Distribution: | Private placement
|
| Settlement date: | Dec. 1
|
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