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On April 25, 2018, South Jersey Industries, Inc. (the “Company”) entered into a Note Purchase Agreement with the purchasers named therein (the “Note Purchase Agreement”) that provides for the issuance by the Company of an aggregate of $250 million of senior unsecured notes. to the Note Purchase Agreement, on April 25, 2018, the Company issued $90 million aggregate principal amount of 3.18% Senior Notes, Series 2018A, due April 25, 2021 (the “Series 2018A Notes”). The Note Purchase Agreement also provides for the issuance of (a) $80 million aggregate principal amount of the Company’s 3.78% Senior Notes, Series 2018B, due 2028, on the ten-year anniversary of the date of initial issuance (the “Series 2018B Notes”) and (b) $80 million aggregate principal amount of the Company’s 3.88% Senior Notes, Series 2018C, due 2030, on the twelve-year anniversary of the date of initial issuance (the “Series 2018C Notes” and together with the Series 2018B Notes, the “Second Closing Notes”, and with the Series 2018A Notes, the “Notes”). The Company anticipates issuing the Second Closing Notes at future dates to be determined.

The Notes are unsecured. The Series 2018A Notes bear interest at the annual rate of 3.18%, with interest payable semiannually on April 25 and October 25 in each year, commencing on October 25, 2018. Subject to certain accelerating events, principal on the Series 2018A Notes, plus any accrued but unpaid interest, is payable on April 25, 2021.

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 of the Company and/or its subsidiaries, 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 Notes of a Series, 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 certain other amounts 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 fund a portion of the acquisition of the Elizabethtown Gas Company and Elkton Gas Company, including fees and expenses.

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), subject to increase, as detailed in the Note Purchase Agreement, upon certain step-up conditions, 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 summary of the Note Purchase Agreement and the Notes are qualified in their entirety by reference to the full text of such documents.

The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.

SOUTH JERSEY INDUSTRIES INC Exhibit
EX-10.10 2 ex10_1.htm EXHIBIT 10.1 Execution Version Exhibit 10.1   South Jersey Industries,…
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About SOUTH JERSEY INDUSTRIES, INC. (NYSE:SJI)

South Jersey Industries, Inc. (SJI) is an energy services holding company. The Company provides a range of energy-related products and services, primarily through its subsidiaries. Its subsidiaries include South Jersey Gas Company (SJG), South Jersey Energy Company (SJE), South Jersey Resources Group, LLC (SJRG), South Jersey Exploration, LLC (SJEX), Marina Energy, LLC (Marina), South Jersey Energy Service Plus, LLC (SJESP) and SJI Midstream, LLC. The Company operates through various segments, including Gas utility operations (SJG), Wholesale energy operations, SJE, On-Site energy production, Appliance service operations and Corporate & Services. The Company groups its nonutility operations into over two categories: Energy Group and Energy Services. Energy Group includes wholesale energy, retail gas and other, and retail electric operations. Energy Services include on-site energy production and appliance service operations.