On May 27, 2020, South Jersey Industries, Inc. (the “Company”) entered into a Note Purchase Agreement between the Company and the purchasers named therein (the “Note
Purchase Agreement”) that provides for the Company to issue an aggregate of $200 million of senior unsecured notes in two tranches, as follows: (a) Senior Notes, Series 2020A due July 30, 2027, in the aggregate principal amount of
$75,000,000 (the “Series 2020A Notes”); and (b) Senior Notes, Series 2020B due July 30, 2030, in the aggregate principal amount of $125,000,000 (the “Series 2020B Notes” and, together with the Series 2020A Notes, the “Notes”). The Company expects
to issue the Notes on July 30, 2020.
The Notes are unsecured. The Series 2020A Notes bear interest at the annual rate of 3.71%, with interest payable semiannually on January 30 and July
30 in each year, commencing on January 30, 2021. Subject to certain accelerating events, principal on the Series 2020A Notes, plus any accrued but unpaid interest, is payable on July 30, 2027.
The Series 2020B Notes bear interest at the annual rate of 3.91%, with interest payable semiannually on January 30 and July 30 in each year, commencing
on January 30, 2021. Subject to certain accelerating events, principal on the Series 2020B Notes, plus any accrued but unpaid interest, is payable on July 30, 2030.
In the event of a Change in Control (as defined in the Note Purchase Agreement), the Company is required to offer to prepay the Notes at their face
amount together with interest accrued thereon to the date of such prepayment. In addition, in the event of the sale of a Substantial Part (as defined in the Note Purchase Agreement) of the assets of the Company and its subsidiaries, the Company
may be required to use a portion of such proceeds to prepay or retire Senior Indebtedness, which term is defined in the Note Purchase Agreement and includes, among other things, the Notes.
The Company may prepay, at any time or from time to time, all or any portion of the Series 2020A Notes or the Series 2020B Notes in an amount not less
than an aggregate of $1,000,000 in the case of a partial prepayment, together with interest accrued thereon to the date of such prepayment as well as a “make-whole amount” to the extent set forth below; provided that if a Default or an Event of
Default (as such terms are defined in the Note Purchase Agreement) has occurred and is continuing at the time such notice is provided or on the prepayment date or if a Default or an Event of Default would result from the making of such prepayment,
such prepayment shall be pro rata to the holders of all Notes then outstanding. In connection with the prepayment of a Note more than one month prior to its stated maturity, the Company must also pay a “make-whole amount,” to be calculated as
provided in the Note Purchase Agreement.
The Company expects to use the proceeds from the sale of the Notes to refinance existing indebtedness and for general corporate purposes.
The Note Purchase Agreement contains customary representations, warranties and covenants, including a financial covenant limiting the ratio of
Indebtedness of the Company 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 Note Purchase Agreement), and customary events of default and acceleration
of amounts payable upon an event of default.
The Note Purchase Agreement, including the forms of Notes, is attached as Exhibit 10.1 hereto and is incorporated by reference into this Item 1.01. The
foregoing summaries of the Note Purchase Agreement and the Notes are qualified in their entirety by reference to the full text of such documents.