On April 29, 2020, Elizabethtown Gas Company (“ETG”), SJI Utilities, Inc. (“SJIU” and together with ETG, each a “Borrower” and, collectively, the “Borrowers”), Elkton Gas Company (“Elkton”), and South Jersey Industries, Inc. (“SJI”) entered into a third amendment with JPMorgan Chase Bank, N.A., as administrative agent (the “Administrative Agent”), and the several lenders party thereto (the “Amendment”) to that Two-Year
Revolving Credit Agreement dated as of June 29, 2018 (as previously amended, the “Existing Credit Agreement” and the Existing Credit Agreement, as amended by the
Amendment, the “Credit Agreement”), among ETG, SJIU, Elkton, SJI, the Administrative Agent and the several lenders from time to time party thereto.
SJIU is a wholly-owned subsidiary of SJI, and each of ETG and Elkton are wholly-owned subsidiaries of SJIU. The principal purposes of the Amendment
were to extend the termination date of the Credit Agreement from June 7, 2021 to April 29, 2022 and to remove Elkton as a borrower under the Credit Agreement. SJI is in the process of selling Elkton and, in anticipation of such transaction, Elkton
was removed as a borrower under the Credit Agreement. SJI had entered into the Credit Agreement for the purpose of acting as a guarantor to Elkton’s obligations under the Credit Agreement. As a result of Elkton’s being removed as a borrower, SJI
was also removed as a guarantor.
Except as set forth above, the Amendment does not materially alter the Credit Agreement. Proceeds from borrowings under the Credit Agreement may be
used for general corporate purposes.
The Credit Agreement provides for the extension of credit to the Borrowers by the lenders thereunder in an aggregate amount of $200 million in the form
of revolving loans up to the full $200 million amount of the facility. In addition, as part of the total $200 million extension of credit, the Credit Agreement provides for swingline loans (in an amount not to exceed an aggregate of $20 million)
and letters of credit (in an amount not to exceed an aggregate of $50 million), each at the applicable interest rates specified in the Credit Agreement. Subject to certain conditions set forth in the Credit Agreement, the Borrowers may increase
the revolving credit facility up to a maximum aggregate amount of $50 million (for a total facility of up to $250 million), although no lender is obligated to increase its commitment.
At the election of the applicable Borrower, the revolving loans will bear interest at a variable base rate or a variable LIBOR. Interest per annum on
base rate loans will be equal to the highest of (i) the NYFRB Rate (as defined in the Credit Agreement) plus 0.50%, (ii) the Administrative Agent’s daily “prime rate” and (iii) the one-month LIBOR Rate (but in any event not less than 1.5%) plus 1%,
plus in each case, an applicable margin that may range from zero to 0.625%, depending on the applicable Borrower’s Debt Rating (as defined in the Credit Agreement). Interest on LIBOR loans will be determined by reference to LIBOR plus an
applicable margin that may range from 0.950% to 1.625% depending on the applicable Borrower’s Debt Rating.
The Credit Agreement contains customary representations, warranties and covenants, including a financial covenant limiting the ratio of Indebtedness of
each Borrower and its subsidiaries on a consolidated basis to Consolidated Total Capitalization of not more than 0.70 to 1.0 (as such terms are defined in the Credit Agreement). The Credit Agreement also contains customary events of default.
Many of the lenders under the Credit Agreement have in the past performed, and may in the future from time to time perform, investment banking,
financial advisory, lending and/or commercial banking services or other services for SJI or its affiliates, and affiliates of certain of these lenders have served in the past as underwriters in public offerings of securities by the Company or its
affiliates, for which they have received, and may in the future receive, customary compensation and expense reimbursement.
A copy of the Amendment, including as Annex A thereto a conformed copy of
the Credit Agreement reflecting all changes through the Amendment, is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated by reference into this Item 1.01. The foregoing summaries of the Amendment and the Credit Agreement
are qualified in their entirety by reference to the text of the Amendment and the Credit Agreement filed herewith.