Heat oven to 350. Cut bacon in half lengthwise and once widthwise, making 4 pieces. Set aside. Mix first 3 ingredients in sauce pan. Bring just to a boil. Cut each water chestnut in half. Wrap bacon around chestnuts and secure with toothpick. Place in baking dish and pour prepared sauce over evenly. Be careful not to get too much sauce on toothpicks. Bake at least 45 minutes or until bacon is cooked completely.