DEBT

12 Months Ended

Dec. 31, 2023

DEBT [Abstract]

DEBT

NOTE 8 – DEBT

At December 31, 2023, 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, 2023, there was $40.0 million of available funds under this line of credit.   The previous interest rate for borrowings under this line was the London Interbank Offered Rate, or LIBOR, plus 1.00%. The LIBOR rate for USD currency was discontinued as of June 30, 2023.  As a result, effective May 20, 2022, this line of credit agreement was amended to replace LIBOR with the Daily Secured Overnight Financing Rate, or SOFR.  The interest rate is a one month SOFR plus 10 basis points, or Term SOFR, plus an applicable margin of 0.85%, which was increased to 1.10% effective August 3, 2023.  Term SOFR cannot be less than 0.00%. 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 20, 2024 or any date on which Citizens demands payment.  The Company expects to renew this line of credit.

At December 31, 2023, 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, 2023, there was $20.0 million of available funds under this line of credit.  The previous interest rate for borrowings under this line allowed the Company to select either LIBOR plus 1.50% or a weekly variable rate established by CoBank; the Company historically used the weekly variable interest rate.  In October 2022, this line of credit was amended to replace the previous interest rate options with a daily SOFR rate plus 1.45% option or a term SOFR rate plus 1.45% option that is locked in for either one or three months. The term of this line of credit expires on October 31, 2024. Artesian Water expects to renew this line of credit.

CoBank may make an annual patronage refund based on the average line of credit and loan volume outstanding in the prior year. The $20 million line of credit, the First Mortgage Bonds and the promissory note are with CoBank.  Patronage refunds earned by Artesian in 2023 and 2022 were $1.6 million and $1.5 million, respectively.

The weighted average interest rate on the lines of credit discussed above paid by the Company was 6.27% for the year ended December 31, 2023.  These lines of credit, as well as the long-term debt obligations shown below, require us to abide by certain financial covenants and ratios.  As of December 31, 2023, we were in compliance with these  financial covenants.

Long-term debt consists of:

	December 31,
In thousands	2023		2022
First mortgage bonds
Series R, 5.96%, due December 31, 2028	$	25,000	$	25,000
Series S, 4.45%, due December 31, 2033		6,000		6,600
Series T, 4.24%, due December 20, 2036		40,000		40,000
Series U, 4.71%, due January 31, 2038		25,000		25,000
Series V, 4.42%, due October 31, 2049		30,000		30,000
Series W, 4.43%, due April 30, 2047		30,000		30,000
		156,000		156,600
State revolving fund loans
3.57%, due September 1, 2023		—		102
3.64%, due May 1, 2025		228		373
3.41%, due February 1, 2031		1,415		1,577
3.40%, due July 1, 2032		1,445		1,590
1.187%, due November 1, 2041		588		617
1.187%, due November 1, 2041		690		724
1.187%, due November 1, 2041		1,075		1,128
2.00%, due February 1, 2043		828		846
2.00%, due February 1, 2043		1,143		974
2.00%, due June 1, 2043		1,002		1,044
2.00%, due June 1, 2043		1,022		—
2.00%, due February 1, 2044		2,696		—
2.00%, due January 1, 2043		1,000		—
		13,132		8,975
Notes Payable
Promissory Note, 5.12%, due December 30, 2028	$	10,155	$	10,478
Asset Purchase, 2.00%, due May 26, 2027		1,255		1,569
		11,410		12,047
Sub-total		180,542		177,622
Less: current maturities (principal amount)		2,235		2,003
Total long-term debt	$	178,307	$	175,619

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

In thousands	2024		2025		2026		2027		2028		Thereafter
First Mortgage bonds	$	600	$	600	$	600	$	600	$	25,600	$	128,000
State revolving fund loans		756		852		794		813		834		9,083
Asset Purchase-Contractual Obligation		314		314		314		313		—		—
Promissory note		565		480		505		532		559		7,514
Total payments	$	2,235	$	2,246	$	2,213	$	2,258	$	26,993	$	144,597

Substantially all of Artesian Water’s utility plant is pledged as security for our First Mortgage Bonds.  As of December 31, 2023, no other water utility plant has been pledged as security for loans.  Two parcels of land in Artesian Wastewater are pledged as security for the promissory note.