ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On December 6, 2019, Roanoke Gas Company ("Roanoke"), the utility subsidiary of
RGC Resources, Inc. ("Resources") entered into unsecured notes ("Notes") with
Prudential Arizona Reinsurance Universal Company under a Note Commitment with
Prudential Investment Management ("Prudential") executed on June 5, 2019. These
Notes in the aggregate principal amount of $10,000,000 bear an interest rate of
3.60% per annum with interest payable semi-annually in June and December of each
year, commencing June 6, 2020. The principal balances of the Notes are due on
December 6, 2029. The proceeds from these notes will be used fund Roanoke's
capital expenditures.
The Notes were issued under the provisions of the Private Shelf Facility
Agreement ("Shelf Agreement") Roanoke entered into with Prudential effective
September 30, 2015 as amended. On December 6, 2019, Roanoke entered into the
Second Amendment to Private Shelf Agreement ("Amendment"). This Amendment
increased the aggregate amount available for borrowing to $68,000,000 under the
Shelf Agreement. The Amendment also extended the provision for borrowing under
the Shelf Agreement for an additional three-year period through December 6,
2022, unless terminated by either party with 30 day written notice. The
Amendment maintains the same covenants as provided for in the Shelf Agreement
for all notes issued including the limitation on consolidated long-term
indebtedness to no more than 65% of consolidated total capitalization and
priority indebtedness to not more than 15% of consolidated total assets.
In addition and in connection with the above Notes, also on December 6, 2019,
Resources executed an Unconditional Guaranty in favor of Prudential and the
affiliates participating in the unsecured notes unconditionally guaranteeing
timely payment and performance of the obligations of Roanoke to Prudential.
ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN
OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.
The information required by this Item 2.03 is set forth in Item 1.01 above in
respect of the Notes, which is incorporated herein by reference.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits.
10.1 Unsecured Note in the original principal amount of $5,000,000 by and
between Roanoke Gas Company and Prudential Arizona Reinsurance Universal
Company, dated December 6, 2019.
10.2 Unsecured Note in the original principal amount of $5,000,000 by and
between Roanoke Gas Company and Prudential Arizona Reinsurance Universal
Company, dated December 6, 2019.
10.3 Unconditional Guaranty Agreement by and between RGC Resources, Inc. and
Prudential Investment Management and each Prudential Affiliate which is a
party to the borrowings.
10.4 Second Amendment to Private Shelf Agreement dated as of December 6,
2019.
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