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Bank Debt | 12 Months Ended
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Dec. 31, 2023
Bank Debt |
Bank Debt | Bank Debts Registrant’s bank debts consist of outstanding borrowings made under three separate credit facilities at AWR (parent), GSWC and BVES. AWR (parent) and GSWC Credit Facilities: On June 28, 2023, AWR and GSWC, each entered into new credit agreements with a term of five years provided by a syndicate of banks and financial institutions. Both credit agreements will mature on June 28, 2028. In connection with the new credit agreements, AWR and GSWC incurred, legal and other fees totaling $632,000 and $802,000, respectively. The syndicated credit facilities replaced AWR’s previous credit agreement with a sole bank where AWR had a borrowing capacity of $280.0 million that supported GSWC and ASUS operations. Funds from the new facilities were used to pay-off in full all outstanding borrowings under AWR’s prior credit facility and GSWC’s outstanding intercompany borrowings from AWR. AWR’s credit agreement provided for a $150.0 million unsecured revolving credit facility to support AWR (parent) and ASUS. Under AWR’s credit agreement, the borrowing capacity may be expanded up to an additional amount of $75 million, subject to the lenders’ approval. On November 6, 2023, AWR’s credit facility was amended to increase the borrowing capacity from $150.0 million to $165.0 million to provide additional support to ASUS and AWR (parent). In connection with the increase in borrowing capacity, the amendment also provides for the addition of a new bank to the existing syndicate group participating in AWR’s credit facility. Furthermore, the aggregate amount that may be outstanding under letters of credit for AWR is $10.0 million. Loans may be obtained under the credit facilities at the option of AWR and bear interest at rates based on either a base rate plus an applicable margin or an adjusted term secured overnight financing rate (“SOFR”) determined by the SOFR administrator, currently the Federal Reserve Bank of New York, plus an applicable margin. The applicable margin depends upon AWR’s credit ratings. As of December 31, 2023, AWR’s outstanding borrowings under its credit facility of $141.5 million have been classified as non-current liabilities on AWR’s Consolidated Balance Sheet. AWR’s credit agreement contains affirmative and negative covenants and events of default customary for credit facilities of this type, including, among other things, affirmative covenants relating to compliance with law and material contracts, and negative covenants relating to additional indebtedness, liens, investments, restricted payments and asset sales by AWR and its subsidiaries, other than BVES. AWR is not permitted to have a consolidated total capitalization ratio (as defined in the credit agreement), excluding BVES, greater than 0.65 to 1.00 at the end of any quarter. Default under any indebtedness of any subsidiary of AWR, other than BVES, will result in a default under AWR’s credit agreement. As of December 31, 2023, AWR was in compliance with these requirements. As of December 31, 2023, AWR had a capitalization ratio of 0.54 to 1.00. GSWC’s credit agreement provides for a $200.0 million unsecured revolving credit facility to support its operations and capital expenditures. Under GSWC’s credit agreement, the borrowing capacity may be expanded up to an additional amount of $75.0 million, also as subject to the lenders’ approval. The aggregate amount that may be outstanding under letters of credit is $20.0 million. Loans may be obtained under this credit facility at the option of GSWC and bear interest at rates based on either a base rate plus an applicable margin or an adjusted term SOFR determined by the SOFR administrator plus an applicable margin. The applicable margin depends upon GSWC’s credit rating. GSWC’s credit facility is considered a short-term debt arrangement by the CPUC. GSWC has been authorized by the CPUC to borrow under the credit facility for a term of up to 24 months. Borrowings under this credit facility are, therefore, required to be fully paid off within a 24-month period. GSWC’s next pay-off period ends in June 2025. Accordingly, as of December 31, 2023, GSWC’s outstanding borrowings under its credit facility of $150.0 million has been classified as non-current liabilities on GSWC’s Balance Sheet. Similar to AWR’s credit agreement, GSWC’s credit agreement also contains affirmative and negative covenants and events of default customary for credit facilities of its type. GSWC is also not permitted to have a total capitalization ratio greater than 0.65 to 1.00 at the end of any quarter. Default under any indebtedness of any subsidiary of AWR will not result in a default under GSWC’s credit agreement. As of December 31, 2023, GSWC was in compliance with these requirements, with total funded debt ratio of 0.50 to 1.00. BVES Credit Facility: BVES has a separate revolving credit facility without a parent guaranty that supports its electric operations and capital expenditures. On June 16, 2023, BVES’s credit agreement was amended to increase the borrowing capacity from $35.0 million to $50.0 million. In addition, the amendment to the credit agreement also (i) extended the credit facility to July 1, 2026, (ii) converted the interest rate on new borrowings to the benchmark rate of SOFR, plus a margin, and (iii) provides an option to increase the facility by an additional $25.0 million, subject to lender approval. On February 15, 2024, BVES, through its fourth amendment, increased the borrowing capacity from $50.0 million to $65.0 million. BVES’s revolving credit facility is considered a short-term debt arrangement by the CPUC. BVES has been authorized by the CPUC to borrow under this credit facility for a term of up to 24 months. Borrowings under this credit facility are, therefore, required to be fully paid off within a 24-month period. BVES’s next pay-off period for its credit facility ends in August 2024. Accordingly, the $42.0 million outstanding under BVES’s credit facility has been classified as a current liability in AWR’s Consolidated Balance Sheet as of December 31, 2023. Pursuant to BVES’s amended credit facility agreement, effective December 20, 2023 and throughout 2024, BVES must maintain a minimum interest coverage ratio of 3.0 times interest expense, and 4.5 times interest expense thereafter. BVES is also required to maintain a maximum consolidated total debt to consolidated total capitalization ratio of 0.65 to 1.00. As of December 31, 2023, BVES was in compliance with these requirements, with an actual interest coverage ratio of 4.51 times interest expense and a total funded debt ratio of 0.52 to 1.00 as of December 31, 2023. In addition, BVES is required to have a current safety certification issued by the CPUC, which it currently has. Registrant’s borrowing activities (excluding letters of credit) for the years ended December 31, 2023 and 2022 were as follows:
|  | December 31,
(in thousands, except percent) |  | 2023 |  | 2022
Balance Outstanding at December 31, |  | $ | 333,500 |  |  | $ | 277,500 |
Interest Rate at December 31, |  | 6.33% ~ 6.96% |  | 5.07% ~ 5.89%
Average Amount Outstanding |  | $ | 243,355 |  |  | $ | 226,556 |
Weighted Average Annual Interest Rate |  | 6.11 | % |  | 2.55 | %
Maximum Amount Outstanding |  | $ | 333,500 |  |  | $ | 277,500 |

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