Short-term and Long-term Borrowings

9 Months Ended

Sep. 30, 2016

Debt Disclosure [Abstract]

Short-term and Long-term Borrowings

Short-term and Long-term Borrowings

On October 13, 2015, Cal Water agreed to sell $150.0 million in aggregate principal amount of First Mortgage Bonds in a private placement. Pursuant to the agreement, Cal Water issued $100.0 million of First Mortgage Bonds on October 13, 2015, consisting of $50.0 million of 3.33% series QQQ maturing October 15, 2025 and $50.0 million of 4.31% series RRR maturing October 16, 2045.

In March 2016, Cal Water issued the remaining $50.0 million of First Mortgage Bonds, consisting of $40.0 million of 4.41% series SSS maturing April 16, 2046 and $10.0 million of 4.61% series TTT maturing April 14, 2056. Cash proceeds of approximately $49.7 million, net of $0.3 million debt issuance costs, were received. Cal Water used a portion of the net proceeds from the offering to repay outstanding borrowings on the Company and Cal Water lines of credit of $48.6 million.

Both short-term unsecured credit agreements contain affirmative and negative covenants and events of default customary for credit facilities of this type including, among other things, limitations and prohibitions relating to additional indebtedness, liens, mergers, and asset sales. Also, these unsecured credit agreements contain financial covenants governing the Company and its subsidiaries’ consolidated total capitalization ratio and interest coverage ratio.

The outstanding borrowings on the Company lines of credit were $57.1 million and $33.6 million as of September 30, 2016 and December 31, 2015, respectively. There were no borrowings on the Cal Water lines of credit as September 30, 2016 and December 31, 2015.  The average borrowing rate for borrowings on the Company and Cal Water lines of credit during the nine months ended September 30, 2016 was 1.30% compared to 1.05% for the same period last year.