ARTESIAN RESOURCES CORPARTNA
ARTESIAN RESOURCES CORP Debt Disclosure
NOTE 8 – DEBT
At December 31, 2025, 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, 2025, there was $34.3 million of available funds under this line of credit. The interest rate is a one-month Daily Secured Overnight Financing Rate, or SOFR, plus 10 basis points, or Term SOFR, plus an applicable margin of 1.10%. 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 18, 2026 or any date on which Citizens demands payment. The Company expects to renew this line of credit.
At December 31, 2025, 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, 2025, there was $20.0 million of available funds under this line of credit. The interest rate for borrowings under this line is either 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, 2026. 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 2025, 2024 and 2023 were $1.5 million, $1.6 million and $1.6 million, respectively.
The weighted average interest rate on the lines of credit discussed above paid by the Company was 5.56% for the year ended December 31, 2025. 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, 2025, we were in compliance with these financial covenants.
Long-term debt consists of:
| December 31, | |||||||
| In thousands | 2025 | 2024 | |||||
| First mortgage bonds | |||||||
| Series R, 5.96%, due December 31, 2028 | $ | 25,000 | $ | 25,000 | |||
| Series S, 4.45%, due December 31, 2033 | 4,800 | 5,400 | |||||
| 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 | |||||
| 154,800 | 155,400 | ||||||
| State revolving fund loans | |||||||
| 3.64%, due May 1, 2025 | - | 77 | |||||
| 3.41%, due February 1, 2031 | 1,072 | 1,246 | |||||
| 3.40%, due July 1, 2032 | 1,142 | 1,296 | |||||
| 1.187%, due November 1, 2041 | 529 | 559 | |||||
| 1.187%, due November 1, 2041 | 620 | 655 | |||||
| 1.187%, due November 1, 2041 | 966 | 1,021 | |||||
| 2.00%, due February 1, 2043 | 758 | 793 | |||||
| 2.00%, due February 1, 2043 | 1,045 | 1,095 | |||||
| 2.00%, due June 1, 2043 | 917 | 960 | |||||
| 2.00%, due June 1, 2043 | 934 | 978 | |||||
| 2.00%, due January 1, 2043 | 932 | 978 | |||||
| 2.00%, due February 1, 2044 | 2,954 | 3,086 | |||||
| 11,869 | 12,744 | ||||||
| Notes Payable | |||||||
| Promissory Note, 5.12%, due December 30, 2028 | 9,111 | 9,590 | |||||
| Asset Purchase, 2.00%, due May 26, 2027 | 628 | 942 | |||||
| 9,739 | 10,532 | ||||||
| Sub-total | 176,408 | 178,676 | |||||
| Less: current maturities (principal amount) | 2,132 | 2,167 | |||||
| Total long-term debt | $ | 174,276 | $ | 176,509 | |||
Payments of principal amounts due during the next five years and thereafter:
| In thousands | 2026 | 2027 | 2028 | 2029 | 2030 | Thereafter | |||||||||||||||||
| First Mortgage bonds | $ | 600 | $ | 600 | $ | 25,600 | $ | 600 | $ | 600 | $ | 126,800 | |||||||||||
| State revolving fund loans | 713 | 836 | 857 | 878 | 900 | 7,685 | |||||||||||||||||
| Asset Purchase-Contractual Obligation. | 314 | 314 | - | - | - | - | |||||||||||||||||
| Promissory note | 505 | 532 | 559 | 590 | 621 | 6,304 | |||||||||||||||||
| Total payments | $ | 2,132 | $ | 2,282 | $ | 27,016 | $ | 2,068 | $ | 2,121 | $ | 140,789 |
Substantially all of Artesian Water's utility plant is pledged as security for our First Mortgage Bonds. As of December 31, 2025, 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.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 16, 2026 | Showing above |
| 2024 | Mar 26, 2025 | |
| 2023 | Mar 18, 2024 | |
| 2022 | Mar 10, 2023 | |
| 2021 | Mar 11, 2022 | |
| 2020 | Mar 12, 2021 | |
| 2019 | Mar 13, 2020 | |
| 2018 | Mar 15, 2019 | |
| 2017 | Mar 15, 2018 | |
| 2016 | Mar 10, 2017 | |
| 2015 | Mar 11, 2016 | |
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.