UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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): September 15, 2015


ARTESIAN RESOURCES CORPORATION
(Exact name of registrant as specified in its charter)


Delaware
 
000-18516
 
51-0002090
(State or other jurisdiction of
incorporation)
 
(Commission File Number)
 
(IRS Employer Identification No.)


 
664 Churchmans Road, Newark, Delaware
 
19702
 
 
(Address of principal executive offices)
 
(Zip Code)
 


Registrant's telephone number, including area code:
 
302-453-6900
 


Not Applicable
¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾
(Former name or former address, 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):

☐ Written communications pursuant to Rule 425 under the Securities Act

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act




Item 1.01 Entry Into a Material Definitive Agreement

On September 15, 2015, Artesian Water Company, Inc. (the "Company"), the principal subsidiary of Artesian Resources Corporation, and CoBank, ACB ("CoBank"), entered into a letter agreement (the "Letter Agreement") confirming the forward setting of a fixed interest rate under that certain Bond Purchase Agreement (the "Bond Purchase Agreement") dated December 1, 2008, by and between the Company and CoBank, which Bond Purchase Agreement was previously disclosed and filed by the Company on its Current Report on Form 8-K filed with the Securities and Exchange Commission on December 4, 2008.  The Bond Purchase Agreement relates to the issue and sale by the Company to CoBank of a $15 million principal amount First Mortgage Bond (the "Bond"), Series S, due December 31, 2033 (the "Maturity Date").  The Bond was issued pursuant to the Company's Indenture of Mortgage dated as of July 1, 1961, as amended and supplemented by supplemental indentures, including the Twentieth Supplemental Indenture, dated as of December 1, 2008 (the "Supplemental Indenture") from the Company to Wilmington Trust Company, as Trustee (the "Indenture").  The Letter Agreement amends the terms of the Supplemental Indenture

The Bond carries an annual interest rate of 6.73% through March 1, 2016.  The terms of the Bond Purchase Agreement state that after March 1, 2016, the Company may request that the annual interest rate be fixed by CoBank in its sole and absolute discretion for a period through the Maturity Date or for such shorter periods as mutually agreed by the Company and CoBank.  The Letter Agreement sets the fixed annual interest rate, to be effective March 1, 2016 through the Maturity Date, at an annual interest rate of 4.45%.  The Bond is subject to redemption in a principal amount equal to $150,000 per calendar quarter, payable on the first business day of January, April, July and October each year.  The principal amount of the Bond at March 1, 2016 will be $10,650,000.  Interest on the outstanding principal balance is payable on the first business day of March, June, September and December in each year.

The foregoing description of the Letter Agreement does not purport to be complete and is qualified in its entirety by reference to the Letter Agreement, which is filed as Exhibit 4.1 to this Current Report on Form 8-K.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.

Item 9.01. Financial Statements and Exhibits.

Exhibit Number
Description


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.

   
ARTESIAN RESOURCES CORPORATION
 
Date:  September 18, 2015
 
By:    /s/ David B. Spacht
 
   
David B. Spacht
 
   
Chief Financial Officer
 



September 15, 2015

Mr. David Spacht, CFO
Artesian Water Company
664 Churchman's Road
Newark, DE 19702

Dear Mr. Spacht:

The purpose of this letter is to confirm the agreement between CoBANK, ACB ("CoBank") and Artesian Water Company (the "Company") regarding the forward setting of a fixed rate. The terms of our agreement are as follows:
1.
Amount to be fixed: $10,650,000
2.     
Fixed Rate: 4.45% per annum.
3.
Date fixed rate period commences: September 15, 2015
4.
Date forward fixed rate expires: March 01, 2016
5.
Date fixed rate period ends: December 01, 2033
6.
Fixed amount amortizes: Yes
a.
Amortization maturity date: December 01, 2033
b.
Fixed amount amortizes as follows:

i.
Quarterly principal payments of $150,000 plus interest due on the first business day of each March, June, September and December.

7.
Broken Funding Charge: The Company agrees to pay to CoBank, on demand, a broken funding charge in the amount specified below if the Company does not, for any reason whatsoever (including, without limitation, the Company's failure to satisfy applicable conditions precedent or the underlying loan commitment having been suspended or canceled), borrow all of the amount to be fixed hereunder on or before the date the forward fixed rate expires. The broken funding charge shall be in an amount (calculated in accordance with methodology established by CoBank) equal to the present value of the sum of: (1) all losses and expenses incurred by CoBank in retiring, liquidating, or reallocating any debt, obligation, or cost incurred or allocated by CoBank to fund or hedge the forward fixed rate.
For our records, please acknowledge our agreement by signing in the space provided below and by returning this confirmation to my attention prior to the close of the business day.



                                                           

 
  AGREED AND ACCEPTED as of the   date shown above:    
 
 CoBANK, ACB  
ARTESIAN RESOURCES CORPORATION
 
By:  /s/Bryan Ervin
 
By:    /s/ David B. Spacht
 
 Bryan Ervin  
David B. Spacht
 
 Vice President  
Chief Financial Officer