ARTESIAN RESOURCES CORP (Form: 8-K, Received: 02/10/2022 12:35:50)

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): February 7, 2022

ARTESIAN RESOURCES CORP

(Exact Name of Registrant as Specified in Its Charter)

000-18516

(Commission File Number)

Delaware	51-0002090
(State or Other Jurisdiction of Incorporation)	(I.R.S. Employer Identification No.)

664 Churchmans Road

Newark, Delaware 19702

(Address of principal executive offices, including zip code)

(302) 453-6900

(Registrant’s telephone number, including area code)

NOT APPLICABLE

(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:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock		ARTNA		The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter):

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 1.01 Entry Into a Material Definitive Agreement

On February 7, 2022, Artesian Water Company, Inc. (the “Company” or “Artesian Water”), a subsidiary of Artesian Resources Corporation, entered into an interest rate lock agreement (the “Agreement”) with CoBank, ACB (“CoBank”). The Company is seeking to finance a $30 million principal amount First Mortgage Bond (the “Bond”). The Agreement allows for a maturity period of 25 years and a fixed interest rate of 4.43% per annum (“Fixed Rate”) for the Bond. The Agreement is effective through May 7, 2022 (the “Settlement Date”). Pursuant to the Agreement, the Bond is not subject to redemption based on mortgage style amortization. Interest on the outstanding principal balance will be payable quarterly on the 30^th day of June, September, December and March each year. The proceeds from the sale of the Bond shall be used to pay down outstanding lines of credit of Artesian Water, with any additional proceeds used to fund future capital investments in Artesian Water. Closing on the debt financing is subject to approval by the Delaware Public Service Commission.

Also pursuant to the Agreement, the Company agrees to pay to CoBank, on demand, a broken funding charge if the Company does not, for any reason whatsoever, borrow the entire $30 million principal amount on or before the Settlement Date. The broken funding charge shall be in an amount equal to the present value of the sum of 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 Fixed Rate.

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

Forward Looking Statement

The statements in this Current Report on Form 8-K regarding the nature of the Company’s First Mortgage Bond financing are forward-looking statements within the meaning of Section 27A of the Securities Act, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements involve risks and uncertainties that could impact our ability to refinance our debt as it comes due, our ability to adjust our debt level, interest rate, maturity schedule and structure, or cause our financing terms to differ materially from those projected, including without limitation, certain factors disclosed under Item 1A, “Risk factors” in our Annual Report on Form 10-K for the year ended December 31, 2020. The forward-looking statements are based on our beliefs as of the date on which the statements were made and we undertake no obligation to update the forward-looking statements except as required by law.

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
4.1	Interest Rate Lock Agreement, dated as of February 7, 2022, by and between Artesian Water Company, Inc. and CoBank, ACB.

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: February 10, 2022		By: /s/ David B. Spacht
		David B. Spacht
		Chief Financial Officer

1.	Amount to be fixed: $30,000,000 ("Fixed Amount")
2.	Fixed Rate: 4.43% per annum ("Fixed Rate")
3.	Date fixed rate locks: February 7, 2022
4.	Last date the Fixed Rate is available to the Company: May 7, 2022 ("Settlement Date")
5.	Date Fixed Rate matures: April 30, 2047
6.	Fixed amount amortizes: No
a.		Amortization maturity date: NA
b.		Fixed amount amortizes as follows: NA
7.	Interest is payable quarterly on the 30^th day of each June, September, December and March with the final payment of interest and principal on April 30, 2047.
8.	Broken Funding Charge: The Company agrees to pay to CoBank, on demand, a broken funding charge (the "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 (or otherwise enter into a separate agreement to fix) the entire Fixed Amount on or before the Settlement Date. 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: (a) 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 Fixed Rate.