Long-Term Debt

12 Months Ended

Dec. 31, 2019

LONG-TERM DEBT

Our outstanding long-term debt is shown below:



	As of December 31,
(in thousands)	2019			2018
FPU secured first mortgage bonds:
9.08% bond, due June 1, 2022	$	7,990		$	7,986
Uncollateralized Senior Notes:
5.50% note, due October 12, 2020	2,000			4,000
5.93% note, due October 31, 2023	12,000			15,000
5.68% note, due June 30, 2026	20,300			23,200
6.43% note, due May 2, 2028	6,300			7,000
3.73% note, due December 16, 2028	18,000			20,000
3.88% note, due May 15, 2029	50,000			50,000
3.25% note, due April 30, 2032	70,000			70,000
3.48% note, due May 31, 2038	50,000			50,000
3.58% note, due November 30, 2038	50,000			50,000
3.98% note, due August 20, 2039	100,000			—
2.98% note, due December 20, 2034	70,000			—
Term Note due January 21, 2020	—			30,000
Term Note due February 28, 2020	30,000			—
Promissory notes	—			26
Finance lease obligations	—			1,310
Less: debt issuance costs	(822		)	(567		)
Total long-term debt	485,768			327,955
Less: current maturities	(45,600		)	(11,935		)
Total long-term debt, net of current maturities	$	440,168		$	316,020

Annual maturities

Annual maturities and principal repayments of long-term debt are as follows:



Year	2020		2021		2022		2023		2024		Thereafter		Total
(in thousands)
Payments	$	45,600	$	13,600	$	25,100	$	20,600	$	17,600	$	364,100	$	486,600

Shelf Agreements

We have entered into Shelf Agreements with Prudential, MetLife and NYL who are under no obligation to purchase any unsecured debt. The Prudential Shelf Agreement totaling $150.0 million was entered into in October 2015 and we issued $70.0 million of 3.25% unsecured debt in April 2017. The Prudential Shelf Agreement was amended in September 2018 to increase the borrowing capacity back to $150.0 million, and in August 2019, we issued $100.0 million of 3.98% unsecured debt. In January 2020, we submitted a request for Prudential to purchase $50 million of our unsecured debt which was accepted and confirmed by Prudential. The Shelf notes will bear interest at the rate of 3.00% per annum and the proceeds received from the issuance will be used to reduce short-term borrowings under our revolving credit facility, lines of credit and/or to fund capital expenditures. The closing of the issuance of the Shelf Notes is expected to occur on or before July 15, 2020.

The NYL Shelf Agreement totaling $100.0 million was entered into in March 2017 and we issued unsecured debt totaling $100.0 million during 2018. The NYL Shelf Agreement was amended in November 2018 to provide additional borrowing capacity of $50.0 million. As of December 31, 2019, we had not requested that MetLife purchase unsecured senior debt under the MetLife Shelf Agreement, which we entered into in March 2017. In February 2020, we submitted a request for NYL to purchase $40.0 million of our unsecured debt which was accepted and confirmed by NYL. The Shelf notes will bear interest at the rate of 2.96% per annum and the proceeds received from the issuance will be used to reduce short-term borrowings under our revolving credit facility, lines of credit and/or to fund capital expenditures. The closing of the issuance of the Shelf Notes is expected to occur on or before August 14, 2020.

The following table summarizes our shelf agreements at December 31, 2019:



(in thousands)	Total Borrowing Capacity		Less Amount of Debt Issued			Less Unfunded Commitments		Remaining Borrowing Capacity
Shelf Agreement
Prudential Shelf Agreement ⁽¹⁾	$	220,000	$	(170,000	)	$	—	$	50,000
MetLife Shelf Agreement	150,000		—			—		150,000
NYL Shelf Agreement ⁽²⁾	150,000		(100,000		)	—		50,000
Total	$	520,000	$	(270,000	)	$	—	$	250,000

⁽¹⁾ As described above, in January 2020, we requested and Prudential accepted our request to purchase $50.0 million of our unsecured debt.

⁽²⁾ As described above, in February 2020, we requested and NYL accepted our request to purchase $40.0 million of our unsecured debt.

The Uncollateralized Senior Notes, Shelf Agreements or Shelf Notes 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.

Term Notes

In December 2018, we issued a $30 million unsecured term note through PNC Bank N.A. with a maturity date of January 21, 2020. This note was paid off in December 2019 utilizing the proceeds from the issuance of uncollateralized senior notes discussed below. In January 2019, we issued a $30.0 million unsecured term note through Branch Banking and Trust Company, with a maturity date of February 28, 2020. The interest rate, at December 31, 2019, was 2.46%, which equals the one-month LIBOR rate plus 75 basis points. As of December 31, 2019, this term note is included in the current maturities of long-term debt.

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 to an amount less than the sum of $2.5 million plus FPU’s consolidated net income accrued on and after January 1, 1992. As of December 31, 2019, FPU’s cumulative net income base was $168.1 million, offset by restricted payments of $37.6 million, leaving $130.5 million of available dividend capacity.

The dividend restrictions in FPU’s first mortgage bonds resulted in approximately $38.8 million of the net assets of our consolidated subsidiaries being restricted at December 31, 2019. This represents approximately 6.92% of our consolidated net assets. Other than the dividend restrictions associated with FPU’s first mortgage bonds, there are no legal, contractual or regulatory restrictions on the net assets of our subsidiaries.

Uncollateralized Senior Notes

In December 2019, we issued $70.0 million of 2.98% uncollateralized senior notes to four financial institutions. We used the proceeds to pay off the $30 million PNC Term Note described above, reduce our short-term borrowing amount and to finance our purchase of certain propane operating assets of Boulden.

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 40.0 percent of total capitalization, and the fixed charge coverage ratio must be at least 1.2 times. The most recent Senior Notes issued since September 2013 also contain a restriction that we must maintain an aggregate net book value in our regulated business assets of at least 50.0 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% 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, 2019, the cumulative consolidated net income base was $509.5 million, offset by restricted payments of $227.5 million, leaving $282.0 million of cumulative net income free of restrictions. As of December 31, 2019, we are in compliance with all of our debt covenants.