UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8‑K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): January 11, 2017 (January 10, 2017)
Commission File Number 0-8084
Connecticut Water Service, Inc.
(Exact name of registrant as specified in its charter)
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Connecticut
(State or other jurisdiction of
incorporation or organization)
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06-0739839
(I.R.S. Employer Identification No.)
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93 West Main Street, Clinton, CT
(Address of principal executive office)
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06413
(Zip Code)
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(860) 669-8636
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, address and former fiscal year, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (
see
General Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01
Entry into a Material Definitive Agreement
Entry into New Term Loan for Maine Water Company
As previously reported, on December 1, 2012, the Maine Water Company, a Maine corporation (“Maine Water”), and CoBank, ACB, a federally chartered instrumentality of the United States (“CoBank”) entered into that certain Amended and Restated Master Loan Agreement, as amended on December 22, 2014 (the “Agreement”). Maine Water is an operating water utility subsidiary of Connecticut Water Service, Inc., a Connecticut corporation (“CWS”), the registrant.
Pursuant to the Agreement, Maine Water has previously delivered to CoBank two separate Promissory Note and Single Advance Term Loan Supplements, dated December 1, 2012 and December 22, 2014 (the “First” and “Second” “Promissory Notes”), respectively, as follows:
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Promissory Note
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Principal Amount
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Maturity Date
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First Promissory Note and Single Advance Term Loan Supplement No. RI0042T02
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$1,965,000
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Dec. 15, 2017
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Second Promissory Note and Single Advance Term Loan Supplement No. RI0042T03
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$4,500,000
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Dec. 20, 2024
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On January 10, 2017, Maine Water executed and delivered to CoBank a new Promissory Note and Single Advance Term Loan Supplement, dated January 10, 2017 (the “Third Promissory Note”). On the terms and subject to the conditions set forth in the Third Promissory Note issued pursuant to the Agreement, CoBank agreed to make an unsecured loan (the “Loan”) to Maine Water in the principal amount of $5,000,000, as follows:
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Promissory Note
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Principal Amount
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Maturity Date
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Third Promissory Note and Single Advance Term Loan Supplement No. RI0042T04
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$5,000,000
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Dec. 30, 2026
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Under the Third Promissory Note, Maine Water will pay interest on the Loan in accordance with either of the following interest rate options, as selected periodically by Maine Water: (1) at a weekly quoted variable rate, a rate per annum equal to the rate of interest established by CoBank on the first business day of each week; or (2) at a fixed rate per annum to be quoted by CoBank in its sole discretion in each instance for periods of 180 days or more. Interest shall be calculated on the actual number of days the Loan is outstanding on the basis of a
year consisting of 360 days. Maine Water has selected a fixed rate of 4.180% per year through the maturity date of the Loan.
Maine Water intends to use the proceeds of the above described Loan from CoBank to refinance existing debt and to finance certain capital expenditures.
The above summary of the material terms of the Agreement and the Third Promissory Note is qualified in its entirety by reference to: (1) the Agreement, dated as of December 1, 2012 and amended as of December 22, 2014, and (2) the Third Promissory Note dated as of January 10, 2017. The Agreement, as amended, has previously been filed. The Third Promissory Note is attached hereto as
Exhibit 10.3
and is hereby incorporated herein by reference.
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Item 2.03
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Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
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The information set forth in Item 1.01 is incorporated herein by reference in response to this Item 2.03.
Item 9.01
Financial Statements and Exhibits
The following documents are filed herewith as exhibits hereto:
(d) Exhibits
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10.1
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Amended and Restated Master Loan Agreement between the Maine Water Company and CoBank, ACB, dated December 1, 2012 and effective as of December 6, 2012, incorporated by reference from
Exhibit 10.1
to CWS’s Current Report on Form 8-K filed on December 7, 2012.
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10.2
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Amendment to Amended and Restated Master Loan Agreement by and between the Maine Water Company and CoBank, ACB, dated as of December 22, 2014, incorporated by reference from
Exhibit 10.2
to CWS’s Current Report on Form 8-K filed on December 30, 2014.
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10.3
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Promissory Note and Single Advance Term Loan Supplement between the Maine Water Company and CoBank, ACB, dated as of January 10, 2017, is filed herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
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Connecticut Water Service, Inc.
(Registrant)
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Date: January 11, 2017
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By:
/s/ David C. Benoit
David C. Benoit
Senior Vice President – Finance and
Chief Financial Officer
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EXHIBIT INDEX
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Exhibit No.
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Description
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10.1
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Amended and Restated Master Loan Agreement between the Maine Water Company and CoBank, ACB, dated December 1, 2012 and effective as of December 6, 2012, incorporated by reference from Exhibit 10.1 to CWS’s Current Report on Form 8-K filed on December 7, 2012.
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10.2
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Amendment to Amended and Restated Master Loan Agreement by and between the Maine Water Company and CoBank, ACB, dated as of December 22, 2014, incorporated by reference from Exhibit 10.2 to CWS’s Current Report on Form 8-K filed on December 30, 2014.
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10.3
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Promissory Note and Single Advance Term Loan Supplement between the Maine Water Company and CoBank, ACB, dated as of January 10, 2017, is filed herewith.
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Exhibit 10.3
Loan No. RI0042T04
PROMISSORY NOTE AND SINGLE ADVANCE TERM LOAN SUPPLEMENT
THIS SINGLE ADVANCE TERM SUPPLEMENT
(“
Promissory Note and Supplement
”) to the Amended and Restated Master Loan Agreement dated December 1, 2012
(
as amended, the
“MLA”)
, is entered into as of January 10, 2017 between
COBANK, ACB,
a federally-chartered instrumentality of the United States (“
CoBank
”), and
THE MAINE WATER COMPANY
,
Saco, Maine,
a Maine corporation (together with its permitted successors and assigns, the “
Company
”). Capitalized terms not otherwise defined in this Supplement will have the meanings set forth in the MLA.
SECTION 1.
SINGLE ADVANCE TERM COMMITMENT
. On the terms and conditions set forth in the MLA and this Supplement, CoBank agrees to make a single advance loan to the Company in an amount not to exceed $5,000,000.00 (the “
Commitment
”).
SECTION 2.
PURPOSE
. The purpose of the Commitment is to finance new capital expenditures and refinance existing debt owed to Connecticut Water Services, Inc., incurred in connection with general water system improvements.
SECTION 3.
TERM
. The Commitment will expire at 12:00 p.m. Denver, Colorado time on January 17, 2017 (the “
Term Expiration Date
”), or on such later date as CoBank may, in its sole discretion, authorize in writing.
SECTION 4.
LIMITS ON ADVANCES, AVAILABILITY, ETC.
The loans will be made available as provided in Section 2 of the MLA.
SECTION 5.
INTEREST.
The Company agrees to pay interest on the unpaid balance of the loan(s) in accordance with the following interest rate option(s):
(A)
Weekly Quoted Variable Rate.
At a rate per annum equal at all times to the rate of interest established by CoBank on the first Business Day of each week. The rate established by CoBank will be effective until the first Business Day of the next week. Each change in the rate will be applicable to all balances subject to this option and information about the then current rate will be made available upon telephonic request.
(B)
Quoted Rate.
At a fixed rate per annum to be quoted by CoBank in its sole discretion in each instance. Under this option, rates may be fixed on such balances and for such periods, as may be agreeable to CoBank in its sole discretion in each instance, provided that: (1) the minimum fixed period will be 180 days; (2) amounts may be fixed in an amount not less than $100,000.00; and (3) the maximum number of fixes in place at any one time will be five. The Company has selected a fixed rate of 4.180% per annum through the maturity date of the loan.
THE MAINE WATER COMPANY
Saco, Maine
Promissory Note and Supplement No. RI0042T04
The Company will select the applicable rate option at the time it requests a loan hereunder and may, subject to the limitations set forth above, elect to convert balances bearing interest at the variable rate option to one of the fixed rate options. If the Company fails to elect an interest rate option, interest will accrue at the variable interest rate option. Upon the expiration of any fixed rate period, interest will automatically accrue at the variable rate option unless the amount fixed is repaid or fixed for an additional period in accordance with the terms hereof. Notwithstanding the foregoing, rates may not be fixed for periods expiring after the maturity date of the loans and rates may not be fixed in such a manner as to cause the Company to have to break any fixed rate balance in order to pay any installment of principal. All elections provided for herein will be made telephonically or in writing and must be received by 12:00 p.m. Denver, Colorado time. Interest will be calculated on the actual number of days each loan is outstanding on the basis of a year consisting of 360 days and will be payable quarterly in arrears by the 20th day of each January, April, July and October or on such other day as CoBank will require in a written notice to the Company (“
Interest Payment Date
”).
SECTION 6.
PROMISSORY NOTE
. The Company promises to repay the unpaid principal balance of the loan on December 30, 2026, or such date as CoBank may, in its sole discretion, authorize in writing.
In addition to the above, the Company promises to pay interest on the unpaid principal balance of the loan at the times and in accordance with the provisions set forth herein.
SECTION 7.
PREPAYMENT
. Subject to the broken funding surcharge provision of the MLA, the Company may prepay all or any portion of the loan(s). Unless otherwise agreed by CoBank, all prepayments will be applied to principal installments in the inverse order of their maturity and to such balances, fixed or variable, as CoBank will specify.
SECTION 8.
SECURITY
. Except for CoBank’s lien on the Company’s equity in CoBank, the Company’s obligations hereunder and, to the extent related hereto, under the MLA, will be unsecured.
SECTION 9.
FEES. INTENTIONALLY OMITTED.
SIGNATURE PAGE FOLLOWS
THE MAINE WATER COMPANY
Saco, Maine
Promissory Note and Supplement No. RI0042T04
SIGNATURE PAGE TO SUPPLEMENT
IN WITNESS WHEREOF,
the parties have caused this Supplement to the MLA to be executed by their duly authorized officer(s).
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COBANK, ACB
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By:
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/s/ Christen Spencer
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Name:
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Christen Spencer
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Title:
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Assistant Corporate Secretary
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THE MAINE WATER COMPANY
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By:
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/s/ Judy E. Wallingford
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Name:
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Judy E. Wallingford
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Title:
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Division President – The Maine Water Company
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