Aqua America obtains up to $700 million five-year credit agreement

By Sarah Lizee

Olympia, Wash., Dec. 10 – Aqua America, Inc. entered into a five-year unsecured credit agreement on Dec. 5 with PNC Bank, NA as administrative agent, providing for up to $550 million of tranche 1 commitments and up to $150 million of tranche 2 commitments, according to an 8-K filing with the Securities and Exchange Commission.

The tranche 1 commitments were used to repay all debt and fees under the company’s existing amended and restated credit agreement dated June 7 and for other general corporate purposes.

The tranche 2 commitments will be used, upon closing of the company’s acquisition of LDC Funding LLC, the parent of Peoples Natural Gas entities, to repay some outstanding debt and fees to close an existing credit facility of Peoples Natural Gas entities.

The credit agreement includes a commitment on the part of the lenders to provide a $300 million incremental facility under a separate agreement, which would increase to $450 million following the acquisition.

The five-year term of the credit agreement may be extended upon the agreement of the company, the administrative agent and the lenders.

The credit agreement also provides the mechanism by which the company may secure up to $5.1 billion of bridge loans under a separate agreement, if needed, to provide funding for the acquisition.

The borrower is a water utility company with headquarters in Bryn Mawr, Pa.

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