LONG-TERM DEBT

Our outstanding long-term debt is shown below:



	As of December 31,
(in thousands)	2017			2016
FPU secured first mortgage bonds:
9.08% bond, due June 1, 2022	$	7,982		$	7,978
Uncollateralized Senior Notes:
6.64% note, due October 31, 2017	—			2,727
5.50% note, due October 12, 2020	6,000			8,000
5.93% note, due October 31, 2023	18,000			21,000
5.68% note, due June 30, 2026	26,100			29,000
6.43% note, due May 2, 2028	7,000			7,000
3.73% note, due December 16, 2028	20,000			20,000
3.88% note, due May 15, 2029	50,000			50,000
3.25% note, due April 30, 2032	70,000			—
Promissory notes	97			168
Capital lease obligation	2,070			3,471
Less: debt issuance costs	(433		)	(291		)
Total long-term debt	206,816			149,053
Less: current maturities	(9,421		)	(12,099		)
Total long-term debt, net of current maturities	$	197,395		$	136,954

Annual maturities and principal repayments of long-term debt, excluding the capital lease obligation, are as follows: $8.0 million for 2018; $10.6 million for 2019; $15.6 million for 2020; $13.6 million for 2021; $25.1 million for 2022 and $132.3 million thereafter. See Note 14, Lease Obligations, for future payments related to the capital lease obligation.

Shelf Agreements

In October 2015, we entered into the Prudential Shelf Agreement, under which we may request that Prudential purchase, through October 8, 2018, up to $150.0 million of Prudential Shelf Notes. The Prudential Shelf Notes have a fixed interest rate and a maturity date not to exceed twenty years from the date of issuance. Prudential is under no obligation to purchase any of the Prudential Shelf Notes. The interest rate and terms of payment of any series of the Prudential Shelf Notes will be determined at the time of purchase.

In May 2016, Prudential agreed to purchase $70.0 million of 3.25 percent Prudential Shelf Notes, which were issued on April 21, 2017. The proceeds received from this issuance of Prudential Shelf Notes were used to reduce short-term borrowings under the Revolver. The balance under the Revolver had accumulated over time as capital expenditures were temporarily financed. As of December 31, 2017, $80 million remains available for issuance under the Prudential Shelf Agreement.

In March 2017, we entered into the MetLife Shelf Agreement and the NYL Shelf Agreement, under which we may request that MetLife and NYL, through March 2, 2020, purchase up to $150.0 million and $100.0 million, respectively, of our unsecured senior debt. The unsecured senior debt would have a fixed interest rate and a maturity date not to exceed twenty years from the date of issuance. MetLife and NYL are under no obligation to purchase any unsecured senior debt. The interest rate and terms of payment of any series of unsecured senior debt will be determined at the time of purchase.

In November 2017, NYL agreed to purchase $50.0 million of 3.48% Series A notes and $50.0 million of 3.58% Series B notes. The Series A notes and Series B notes will be issued on or before May 21, 2018 and November 20, 2018, respectively. The proceeds received from the issuances of these shelf notes will be used to reduce short-term borrowings under the Revolver and/or lines of credit and/or to fund capital expenditures. The NYL Shelf Agreement has been fully utilized.

As of December 31, 2017, we had not requested that MetLife purchase unsecured senior debt under the MetLife Shelf Agreement.

The Prudential Shelf Agreement, the MetLife Shelf Agreement, and the NYL Shelf Agreement set forth certain business covenants to which we are subject when any Note is outstanding, including covenants that limit or restrict our ability, and the ability of our subsidiaries, to incur indebtedness, or place or permit liens and encumbrances on any of our property or the property of our subsidiaries.

Secured First Mortgage Bonds

We guaranteed FPU’s first mortgage bonds, which are secured by a lien covering all of FPU’s property. FPU’s first mortgage bonds contain a restriction that limits the payment of dividends by FPU. It provides that FPU cannot make dividends or other restricted payments in excess of the sum of $2.5 million plus FPU’s consolidated net income accrued on and after January 1, 1992. As of December 31, 2017, FPU’s cumulative net income base was $142.6 million, offset by restricted payments of $37.6 million, leaving $104.9 million of cumulative net income for FPU free of restrictions pursuant to this covenant.

The dividend restrictions in FPU’s first mortgage bonds resulted in approximately $43.0 million of the net assets of our consolidated subsidiaries being restricted at December 31, 2017. This represents approximately 9 percent of our consolidated net assets. Other than the dividend restrictions in FPU’s first mortgage bonds, there are no legal, contractual or regulatory restrictions on the net assets of our subsidiaries.

Uncollateralized Senior Notes

All of our uncollateralized Senior Notes require periodic principal and interest payments as specified in each note. They also contain various restrictions. The most stringent restrictions state that we must maintain equity of at least 40 percent of total capitalization, and the fixed charge coverage ratio must be at least 1.2 times. The most recent Senior Notes issued in December 2013 also contain a restriction that we must maintain an aggregate net book value in our regulated business assets of at least 50 percent of our consolidated total assets. Failure to comply with those covenants could result in accelerated due dates and/or termination of the Senior Note agreements.

Certain uncollateralized Senior Notes contain a “restricted payments” covenant as defined in the respective note agreements. The most restrictive covenants of this type are included within the 5.93 percent Senior Note, due October 31, 2023. The covenant provides that we cannot pay or declare any dividends or make any other restricted payments in excess of the sum of $10.0 million, plus our consolidated net income accrued on and after January 1, 2003. As of December 31, 2017, the cumulative consolidated net income base was $387.7 million, offset by restricted payments of $178.0 million), leaving $209.7 million of cumulative net income free of restrictions.

As of December 31, 2017, we are in compliance with all of our debt covenants.