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Debt And Financing Arrangements
 9 Months Ended
Sep. 30, 2025
Debt And Financing Arrangements

Note 4 - Debt AND FINANCING ARRANGEMENTS

Details on long-term debt at September 30, 2025, September 30, 2024 and December 31, 2024 are shown below.

 

(millions)

 

September 30,

 

 

December 31,

 

 

2025

 

 

2024

 

 

2024

 

Unitil Corporation:

 

 

 

 

 

 

 

 

 

3.70% Senior Notes, Due August 1, 2026

 

$

30.0

 

 

$

30.0

 

 

$

30.0

 

3.43% Senior Notes, Due December 18, 2029

 

 

30.0

 

 

 

30.0

 

 

 

30.0

 

5.99% Senior Notes, Due August 21, 2034

 

 

20.0

 

 

 

20.0

 

 

 

20.0

 

Unitil Energy First Mortgage Bonds:

 

 

 

 

 

 

 

 

 

6.96% Senior Secured Notes, Due September 1, 2028

 

 

6.0

 

 

 

8.0

 

 

 

8.0

 

8.00% Senior Secured Notes, Due May 1, 2031

 

 

9.0

 

 

 

10.5

 

 

 

10.5

 

6.32% Senior Secured Notes, Due September 15, 2036

 

 

15.0

 

 

 

15.0

 

 

 

15.0

 

3.58% Senior Secured Notes, Due September 15, 2040

 

 

27.5

 

 

 

27.5

 

 

 

27.5

 

4.18% Senior Secured Notes, Due November 30, 2048

 

 

30.0

 

 

 

30.0

 

 

 

30.0

 

5.69% Senior Secured Notes, Due August 21, 2054

 

 

40.0

 

 

 

40.0

 

 

 

40.0

 

Fitchburg:

 

 

 

 

 

 

 

 

 

3.52% Senior Notes, Due November 1, 2027

 

 

10.0

 

 

 

10.0

 

 

 

10.0

 

7.37% Senior Notes, Due January 15, 2029

 

 

4.8

 

 

 

6.0

 

 

 

6.0

 

5.90% Senior Notes, Due December 15, 2030

 

 

15.0

 

 

 

15.0

 

 

 

15.0

 

7.98% Senior Notes, Due June 1, 2031

 

 

14.0

 

 

 

14.0

 

 

 

14.0

 

5.70% Senior Notes, Due July 2, 2033

 

 

12.0

 

 

 

12.0

 

 

 

12.0

 

5.54% Senior Notes, Due August 21, 2034

 

 

12.5

 

 

 

12.5

 

 

 

12.5

 

3.78% Senior Notes, Due September 15, 2040

 

 

27.5

 

 

 

27.5

 

 

 

27.5

 

5.99% Senior Notes, Due August 21, 2044

 

 

12.5

 

 

 

12.5

 

 

 

12.5

 

4.32% Senior Notes, Due November 1, 2047

 

 

15.0

 

 

 

15.0

 

 

 

15.0

 

5.96% Senior Notes, Due July 2, 2053

 

 

13.0

 

 

 

13.0

 

 

 

13.0

 

Northern Utilities:

 

 

 

 

 

 

 

 

 

3.52% Senior Notes, Due November 1, 2027

 

 

20.0

 

 

 

20.0

 

 

 

20.0

 

5.54% Senior Notes, Due August 21, 2034

 

 

25.0

 

 

 

25.0

 

 

 

25.0

 

7.72% Senior Notes, Due December 3, 2038

 

 

50.0

 

 

 

50.0

 

 

 

50.0

 

5.74% Senior Notes, Due August 21, 2039

 

 

15.0

 

 

 

15.0

 

 

 

15.0

 

3.78% Senior Notes, Due September 15, 2040

 

 

40.0

 

 

 

40.0

 

 

 

40.0

 

4.42% Senior Notes, Due October 15, 2044

 

 

50.0

 

 

 

50.0

 

 

 

50.0

 

4.32% Senior Notes, Due November 1, 2047

 

 

30.0

 

 

 

30.0

 

 

 

30.0

 

4.04% Senior Notes, Due September 12, 2049

 

 

40.0

 

 

 

40.0

 

 

 

40.0

 

Bangor:

 

 

 

 

 

 

 

 

 

5.70% Senior Notes, Due July 8, 2030

 

 

14.0

 

 

 

—

 

 

 

—

 

6.31% Senior Notes, Due July 8, 2035

 

 

18.0

 

 

 

—

 

 

 

—

 

Granite State:

 

 

 

 

 

 

 

 

 

3.72% Senior Notes, Due November 1, 2027

 

 

15.0

 

 

 

15.0

 

 

 

15.0

 

5.74% Senior Notes, Due August 21, 2034

 

 

10.0

 

 

 

10.0

 

 

 

10.0

 

Unitil Realty Corp.:

 

 

 

 

 

 

 

 

 

2.64% Senior Secured Notes, Due December 18, 2030

 

 

3.6

 

 

 

3.8

 

 

 

3.8

 

Total Long-Term Debt

 

 

674.4

 

 

 

647.3

 

 

 

647.3

 

Less: Unamortized Debt Issuance Costs

 

 

3.9

 

 

 

4.0

 

 

 

4.0

 

Total Long-Term Debt, net of Unamortized Debt Issuance
   Costs

 

 

670.5

 

 

 

643.3

 

 

 

643.3

 

Less: Current Portion

 

 

34.9

 

 

 

4.9

 

 

 

4.9

 

Total Long-term Debt, Less Current Portion

 

$

635.6

 

 

$

638.4

 

 

$

638.4

 

 

Fair Value of Long-Term Debt - Currently, the Company believes there is no active market in the Company’s debt securities, which have all been sold through private placements. If there were an active market for the Company’s debt securities, the fair value of the

Company’s long-term debt would be estimated based on the quoted market prices for the same or similar issues, or on the current rates offered to the Company for debt of the same remaining maturities. The fair value of the Company’s long-term debt is estimated using Level 2 inputs (valuations based on quoted prices available in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, inputs other than quoted prices that are directly observable, and inputs derived principally from market data). In estimating the fair value of the Company’s long-term debt, the assumed market yield reflects the Moody’s Baa Utility Bond Average Yield. Costs, including prepayment costs, associated with the early settlement of long-term debt are not taken into consideration in determining fair value.

 

(millions)

 

September 30,

 

 

December 31,

 

 

2025

 

 

2024

 

 

2024

 

Estimated Fair Value of Long-Term Debt

 

$

626.3

 

 

$

617.9

 

 

$

598.9

 

 

On September 29, 2022, the Company entered into a Third Amended and Restated Credit Agreement with a syndicate of lenders (collectively, the "Credit Facility”), which amended and restated in its entirety the prior credit facility. On January 29, 2025, the Company entered into an amendment to the Credit Facility, which (among other things) increased the borrowing limit under the Credit Facility from $200 million to $275 million and extended the term of the Credit Facility from September 29, 2027 until September 29, 2028. Unitil may borrow under the Credit Facility until September 29, 2028, subject to two one-year extensions under certain circumstances.

The Credit Facility has a borrowing limit of $275 million ($200 million as of December 31, 2024), which includes a $25 million sublimit for the issuance of standby letters of credit. Unitil may increase the borrowing limit under the Credit Facility by up to $75 million under certain circumstances. The Credit Facility generally provides Unitil with the ability to elect that borrowings under the Credit Facility bear interest under several options, including a daily fluctuating rate equal to (a) the forward-looking secured overnight financing rate (SOFR) (as administered by the Federal Reserve Bank of New York) term rate with a term equivalent to one month beginning on that date, plus (b) 0.1000%, plus (c) a margin of 1.125% to 1.375% (based on Unitil’s credit rating).

 

The Company accesses the Credit Facility for cash management purposes related to its short-term operating activities. Total gross borrowings were $380.0 million for the nine months ended September 30, 2025. Total gross repayments were $368.3 million for the nine months ended September 30, 2025. The following table details the borrowing limits, amounts outstanding and amounts available under the Credit Facility as of September 30, 2025, September 30, 2024 and December 31, 2024:

 

 

Revolving Credit Facility (millions)

 

 

September 30,

 

 

December 31,

 

 

2025

 

 

2024

 

 

2024

 

Limit

 

$

275.0

 

 

$

200.0

 

 

$

200.0

 

Short-Term Borrowings Outstanding

 

 

117.5

 

 

 

64.3

 

 

 

105.8

 

Available

 

$

157.5

 

 

$

135.7

 

 

$

94.2

 

 

The Credit Facility contains customary terms and conditions for credit facilities of this type, including affirmative and negative covenants. There are restrictions on, among other things, Unitil’s and its subsidiaries’ ability to incur liens or incur indebtedness, and restrictions on Unitil’s ability to merge or consolidate with another entity or change its line of business. The affirmative and negative covenants under the Credit Facility shall apply to Unitil until the Credit Facility terminates and all amounts borrowed under Credit Facility are paid in full (or, with respect to letters of credit, they are cash-collateralized). The only financial covenant in the Credit Facility provides that Unitil’s Funded Debt to Capitalization (as each term is defined in the Credit Facility) cannot exceed 65%, tested on a quarterly basis. At September 30, 2025, September 30, 2024 and December 31, 2024, the Company was in compliance with the covenants contained in the Credit Facility in effect on those dates.

The average interest rates on all short-term borrowings and intercompany money pool transactions were 5.5% and 6.6% for the three months ended September 30, 2025 and September 30, 2024, respectively. The average interest rates on all short-term borrowings and intercompany money pool transactions were 5.5% and 6.6% for the nine months ended September 30, 2025 and September 30, 2024, respectively. The average interest rate on all short-term borrowings for the twelve months ended December 31, 2024 was 6.5%.

 

On July 8, 2025, Bangor issued $14.0 million of Notes due 2030 at 5.70% and $18.0 million of Notes due 2035 at 6.31%. Bangor used the net proceeds to refinance existing debt and for general corporate purposes. Approximately $0.2 million of costs associated with this issuance were recorded as a reduction of Long-Term Debt for presentation purposes on the Consolidated Balance Sheet in the third quarter of 2025.

 

On August 21, 2024, Unitil issued $20.0 million of Notes due 2034 at 5.99%; Fitchburg issued $12.5 million of Notes due 2034 at 5.54% and $12.5 million of Notes due 2044 at 5.99%; Unitil Energy issued $40.0 million of Bonds due 2054 at 5.69%; Northern Utilities issued $25.0 million of Notes due 2034 at 5.54% and $15.0 million of Notes due 2039 at 5.74%; and Granite State issued $10.0 million of Notes due 2034 at 5.74%. The Company used the net proceeds from these offerings to refinance existing debt and for general corporate purposes. Approximately $1.0 million of costs associated with this issuance were recorded as a reduction of Long-Term Debt for presentation purposes on the Consolidated Balance Sheet in the third quarter of 2024.

 

On October 31, 2025, the Company entered into a senior unsecured delayed-draw term loan facility with The Bank of Nova Scotia. The proceeds of the $86.0 million facility were used to fund the acquisition of Maine Natural on October 31, 2025. The facility provides that the Company has an option for determining whether interest on loans under the facility will bear interest based on a Base Rate plus an applicable margin of 0.25% or based on a one month Term SOFR plus a SOFR adjustment of 0.10% plus an applicable margin of 1.25%. The Base Rate is equal to the highest of the (a) Federal Funds Rate plus 0.50%, (b) the rate of interest in effect for such day as publicly announced from time to time by The Bank of Nova Scotia as its "prime rate", or (c) one month Term SOFR plus a SOFR adjustment of 0.10% plus 1.00%. The facility has a maturity date of October 31, 2026.

Northern Utilities and Bangor enter into asset management agreements under which Northern Utilities and Bangor release certain gas pipeline and storage assets, sell to an asset manager and subsequently repurchase the gas over the course of the gas heating season at the same price at which they sold the gas to the asset manager. There was $14.4 million of natural gas storage inventory and corresponding obligations at September 30, 2025 related to these asset management agreements.

Guarantees

 

The Company provides limited guarantees on certain energy and gas storage management contracts entered into by the distribution utilities. The Company’s policy is to limit the duration of these guarantees. As of September 30, 2025, there were no guarantees outstanding.

Leases

Unitil’s subsidiaries lease some of their vehicles, machinery and office equipment under both capital and operating lease arrangements.

Total rental expense under operating leases charged to operations for the three months ended September 30, 2025 and September 30, 2024 amounted to $0.6 million and $0.5 million, respectively. Total rental expense under operating leases charged to operations for the nine months ended September 30, 2025 and September 30, 2024 amounted to $1.7 million and $1.6 million, respectively.

 

The balance sheet classification of the Company’s lease obligations was as follows:

 

 

September 30,

 

 

December 31,

 

Lease Obligations (millions)

 

2025

 

 

2024

 

 

2024

 

Operating Lease Obligations:

 

 

 

 

 

 

 

 

 

Operating Lease Obligations (current portion)

 

$

1.9

 

 

$

1.6

 

 

$

1.8

 

Operating Lease Obligations (long-term portion)

 

 

4.9

 

 

 

3.0

 

 

 

4.9

 

Total Operating Lease Obligations

 

 

6.8

 

 

 

4.6

 

 

 

6.7

 

Capital Lease Obligations:

 

 

 

 

 

 

 

 

 

Other Current Liabilities (current portion)

 

 

0.2

 

 

 

0.1

 

 

 

0.1

 

Other Noncurrent Liabilities (long-term portion)

 

 

0.3

 

 

 

0.3

 

 

 

0.4

 

Total Capital Lease Obligations

 

 

0.5

 

 

 

0.4

 

 

 

0.5

 

Total Lease Obligations

 

$

7.3

 

 

$

5.0

 

 

$

7.2

 

 

Cash paid for amounts included in the measurement of operating lease obligations for the nine months ended September 30, 2025 and September 30, 2024 was $1.7 million and $1.6 million and was included in Cash Provided by Operating Activities on the Consolidated Statements of Cash Flows.

Assets under capital leases amounted to approximately $0.8 million, $0.7 million and $0.6 million as of September 30, 2025, September 30, 2024 and December 31, 2024, respectively, less accumulated amortization of $0.3 million, $0.3 million and $0.1 million, respectively and are included in Net Utility Plant on the Company’s Consolidated Balance Sheets.

The following table is a schedule of future operating lease payment obligations and future minimum lease payments under capital leases as of September 30, 2025. The payments for operating leases consist of $1.9 million of current Operating Lease Obligations and $4.9 million of noncurrent Operating Lease Obligations on the Company’s Consolidated Balance Sheets as of September 30, 2025. The payments for capital leases consist of $0.2 million of current capital lease obligations, which are included in Other Current Liabilities and $0.3 million of noncurrent capital lease obligations, which are included in Other Noncurrent Liabilities, on the Company’s Consolidated Balance Sheets as of September 30, 2025.

 

Lease Payments ($000’s)

 

Operating

 

 

Capital

 

Year Ending December 31,

 

Leases

 

 

Leases

 

Rest of 2025

 

$

588

 

 

$

45

 

2026

 

 

2,175

 

 

 

186

 

2027

 

 

1,891

 

 

 

163

 

2028

 

 

1,330

 

 

 

78

 

2029

 

 

1,000

 

 

 

54

 

2030 - 2034

 

 

588

 

 

 

16

 

Total Payments

 

 

7,572

 

 

 

542

 

Less: Interest

 

 

777

 

 

 

45

 

Amount of Lease Obligations Recorded on Consolidated
   Balance Sheets

 

$

6,795

 

 

$

497

 

 

Operating lease obligations are based on the net present value of the remaining lease payments over the remaining lease term. In determining the present value of lease payments, the Company used the interest rate stated in each lease agreement. As of September 30, 2025, the weighted average remaining lease term is 3.9 years and the weighted average operating discount rate used to determine the operating lease obligations was 5.3%. As of September 30, 2024, the weighted average remaining lease term was 3.5 years and the weighted average operating discount rate used to determine the operating lease obligations was 4.6%.