NOTE 6

DEBT

At December 31, 2013, Artesian Resources had a $40 million line of credit with Citizens Bank, or Citizens, which is available to all subsidiaries of Artesian Resources. As of December 31, 2013, there was $35.7 million of available funds under this line of credit. The interest rate for borrowings under this line is the London Interbank Offered Rate, or LIBOR, plus 1.00%. This is a demand line of credit and therefore the financial institution may demand payment for any outstanding amounts at any time. The term of this line of credit expires on the earlier of May 29, 2014 or any date on which Citizens demands payment.

At December 31, 2013, Artesian Water had a $20 million line of credit with CoBank, ACB, or CoBank, that allows for the financing of operations for Artesian Water, with up to $10 million of this line available for the operations of Artesian Water Maryland. As of December 31, 2013, there was $14.0 million of available funds under this line of credit. The interest rate for borrowings under this line is LIBOR plus 1.50%. The term of this line of credit expires on January 13, 2015.

These lines of credit, as well as both the long-term debt and the state revolving fund loans shown below, require us to abide by certain financial covenants and ratios. As of December 31, 2013, we were in compliance with these covenants.

Long-term debt consists of:

	December 31,
In thousands	2013		2012
First mortgage bonds

Series O, 8.17%, due December 29, 2020	$	20,000	$	20,000
Series P, 6.58%, due January 31, 2018		25,000		25,000
Series Q, 4.75%, due December 1, 2043		15,400		15,400
Series R, 5.96%, due December 31, 2028		25,000		25,000
Series S, 6.73%, due December 31, 2033		12,000		12,600
		97,400		98,000

State revolving fund loans

4.48%, due August 1, 2021		2,187		2,410
3.57%, due September 1, 2023		869		940
3.64%, due May 1, 2025		1,469		1,570
3.41%, due February 1, 2031		2,820		2,936
3.40%, due July 1, 2032		1,897		1,512
		9,242		9,368

Sub-total		106,642		107,368

Less: current maturities (principal amount)		1,132		1,111

Total long-term debt	$	105,510	$	106,257

Payments of principal amounts due during the next five years and thereafter:

In thousands	2014		2015		2016		2017		2018		Thereafter
First Mortgage bonds	$	600	$	600	$	600	$	600	$	25,600	$	69,400
State revolving fund loans		532		622		646		671		698		6,073
Total payments	$	1,132	$	1,222	$	1,246	$	1,271	$	26,298	$	75,473