CPK Chesapeake Utilities Corporation

On May 29, 2020, Chesapeake Utilities Corporation (“Chesapeake Utilities” or “the Company”) entered into a Credit Agreement (the “Credit Agreement”) with Citizens Bank, National Association (“Citizens Bank”), which provides for a revolving line of credit in the maximum principal amount of $25 million, or such lesser amount as may be advanced to or for the benefit of Chesapeake Utilities, as evidenced by a Revolving Loan Note (the “Note”) issued in favor of Citizens Bank.

The revolving line of credit terminates on October 31, 2020. Borrowings under the Credit Agreement will bear interest at a rate equal to the daily LIBOR rate plus 175 basis points (1.75%) unless an alternate rate is required under the applicable Credit Agreement. Pursuant to the Credit Agreement, Chesapeake Utilities paid an upfront fee of 15 basis points (0.15%) of the maximum principal amount of the revolving line of credit, or $37,500, to Citizens Bank. In addition, beginning on the date of the Credit Agreement and continuing until the Credit Agreement terminates, Chesapeake Utilities must pay an unused fee of 35 basis points (0.35%). The unused fee is calculated on the basis of a 365-day year and the actual number of days elapsed on the daily unused and undisbursed portion of the maximum committed amount under the Note in effect from time to time. The accrued unused fee shall be payable in arrears on the last day of June, September and December.

The Credit Agreement sets forth certain business and financial covenants to which Chesapeake Utilities is subject, including covenants that restrict Chesapeake Utilities and its subsidiaries from incurring indebtedness. These covenants are similar to those included in Chesapeake Utilities’ other lines of credit. The Company has availability capacity under its existing bilateral facilities (aggregating $315 million including this Credit Agreement) and the Company’s syndicated revolving credit facility (representing $150 million). In an abundance of caution, Chesapeake Utilities obtained this additional revolving line of credit, in addition to $70 million of other short-term capacity, to provide incremental liquidity given the current economic environment. At the present time, the Company does not expect to draw under the Credit Agreement. The foregoing descriptions of the Credit Agreement and Note do not purport to be complete and are qualified in their entirety by the full text of such Credit Agreement and Note, which Chesapeake Utilities will file as exhibits to its Quarterly Report on Form 10-Q for the quarter ended June 30, 2020.