
5.	Long-Term Debt

Long-Term Debt at June 30, 2012 (including the debt assumed with the acquisition of The Maine Water Company effective January 1, 2012) and December 31, 2011 consisted of the following (in thousands):



		2012			2011
Connecticut Water Service, Inc.:
4.09%	Term Loan Note and Supplement A	$	17,781		$	—
Var.	Term Loan Note and Supplement B	18,088			—
Total Connecticut Water Service, Inc.		35,869			—
The Connecticut Water Company:
Unsecured Water Facilities Revenue Bonds
5.05%	1998 Series A, Due 2028	9,550			9,550
5.125%	1998 Series B, Due 2028	7,495			7,495
4.40%	2003A Series, Due 2020	8,000			8,000
5.00%	2003C Series, Due 2022	14,795			14,795
Var.	2004 Series Variable Rate, Due 2029	12,500			12,500
Var.	2004 Series A, Due 2028	5,000			5,000
Var.	2004 Series B, Due 2028	4,550			4,550
5.00%	2005 A Series, Due 2040	14,795			14,805
5.00%	2007 A Series, Due 2037	14,560			14,570
5.10%	2009 A Series, Due 2039	19,950			20,000
5.00%	2011 A Series, Due 2021	23,991			23,991
Total The Connecticut Water Company		135,186			135,256
The Maine Water Company:
8.95%	1994 Series G, Due 2024	9,000			—
5.05%	1999 Series H, Due 2024	1,965			—
2.68%	1999 Series J, Due 2019	524			—
0.00%	2001 Series K, Due 2031	780			—
2.58%	2002 Series L, Due 2022	98			—
1.53%	2003 Series M, Due 2023	421			—
1.73%	2004 Series N, Due 2024	491			—
0.00%	2004 Series O, Due 2034	147			—
1.76%	2006 Series P, Due 2026	471			—
1.57%	2009 Series R, Due 2029	247			—
0.00%	2009 Series S, Due 2029	785			—
0.00%	2009 Series T, Due 2029	2,200			—
Total The Maine Water Company		17,129			—
Add: Maine Acquisition Fair Value Adjustment		896			—
Less: Current Portion		(1,239		)	—
Total Long-Term Debt		$	187,841		$	135,256

As of June 30, 2012, the Company and its subsidiaries will make principal payments of approximately of $1,239,000 over the next twelve months.

In December 2011, Connecticut Water borrowed $22.05 million through the issuance of Water Facilities Revenue Bonds by the Connecticut Development Authority ("Authority"). Connecticut Water received approximately $24,000,000 in cash in exchange for the issuance of bonds with an aggregate principal amount of $22,050,000 with a maturity date of December 20, 2021 and a 5% coupon. Connecticut Water recorded a bond premium in connection with this transaction and will amortize that premium over the life of the bond. The proceeds from the sale of the bonds are being used to finance construction and installation of various capital improvements to Connecticut Water’s existing water system.

There are no mandatory sinking fund payments required on Connecticut Water’s outstanding Unsecured Water Facilities Revenue Refinancing Bonds. However, certain fixed rate Unsecured Water Facilities Revenue Refinancing Bonds provide for an estate redemption right whereby the estate of deceased bondholders or surviving joint owners may submit bonds to the Trustee for redemption at par, subject to a $25,000 per individual holder and a 3% annual aggregate limitation.

On January 1, 2012, the Company and CoBank entered into an amendment to the CoBank Agreement (the “Amendment”) and two additional Promissory Note and Single Advance Term Loan Supplements providing for two additional Term Loans to the Company (the “Term Loan Notes and Supplements”). Under the terms of the Amendment and the Term Loan Notes and Supplements, on January 3, 2012 the Company borrowed from CoBank, in the aggregate, an additional $36.1 million of an available $40 million to be applied to the Company’s acquisition of the issued and outstanding capital stock of Aqua Maine, Inc. from Aqua America, Inc., as more fully described in Note 10 below.

Under one Term Loan Note and Supplement, CoBank loaned the Company $18.0 million, which Term Loan shall be repaid by the Company in 60 equal quarterly installments of principal and interest over a 15-year amortizing term, with the first installment paid on April 20, 2012 and the last installment due on January 20, 2027. Under the other Term Loan Note and Supplement, CoBank loaned the Company $18.1 million, which Term Loan shall be repaid by the Company in quarterly interest payments and repayment of the principal balance in full on the earlier of July 30, 2013 or upon the Company raising equity capital, in the aggregate, up to the outstanding amount owed under the second Term Note and Supplement.

Under the initial Promissory Note and each of the Term Loan Notes and Supplements, the Company will pay interest on any Loans made by CoBank in accordance with one or more of the following interest rate options, as selected periodically by the Company: (1) at a weekly quoted variable rate, a rate per annum equal to the rate of interest established by CoBank on the first business day of each week; (2) at a fixed rate per annum to be quoted by CoBank in its sole discretion in each instance for periods of 180 days or more; or (3) at a fixed rate per annum equal to LIBOR plus 1.75% for 1, 2, 3, 6, 9 or 12 month interest periods. Interest shall be calculated on the actual number of days each Loan is outstanding on the basis of a year consisting of 360 days.

Financial Covenants – The Company and its subsidiaries are required to comply with certain covenants in connection with various long term loan agreements. The Company and its subsidiaries were in compliance with all covenants at June 30, 2012.