SOUTH JERSEY INDUSTRIES, INC. (NYSE:SJI) Files An 8-K Entry into a Material Definitive Agreement

The information set forth in Item 2.03 below of this Current Report on Form 8-K is incorporated herein by reference.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

On October 29, 2019, Elizabethtown Gas Company (the “Company”), an indirect wholly-owned subsidiary of South Jersey Industries, Inc.) issued $35,000,000 aggregate principal amount of 2.84% First Mortgage Bonds, Series 2019A-2, due October 29, 2029 (the “Series 2019A-2 Bonds”). The Series 2019A-2 Bonds were issued to that Bond Purchase Agreement dated as of September 27, 2019 between the Company and the purchasers named therein (the “Bond Purchase Agreement”), which provides for the Company to issue first mortgage bonds in an aggregate principal amount of $145,000,000 (the “Series 2019A Bonds”), in four Tranches, as follows: (a) 2.84% First Mortgage Bonds, Series 2019A-1, due September 27, 2029 in the aggregate principal amount of $40,000,000 (the “Series 2019A-1 Bonds”), which were issued on September 27, 2019; (b) the Series 2019A-2 Bonds that were issued on October 29, 2019; (c) 2.94% First Mortgage Bonds, Series 2019A-3, due November 26, 2031 in the aggregate principal amount of $25,000,000 (the “Series 2019A-3 Bonds”); and (d) 2.94% First Mortgage Bonds, Series 2019A-4, due December 27, 2031 in the aggregate principal amount of $45,000,000 (the “Series 2019A-4 Bonds”).

The Series 2019A Bonds, including the Series 2019A-2 Bonds, are being issued under that First Mortgage Indenture dated as of July 2, 2018 (as previously supplemented and amended, the “Indenture”) between the Company and Wilmington Trust, National Association, as Trustee (the “Trustee”), as supplemented by that Second Supplemental Indenture dated as of September 27, 2019 between the Company and the Trustee (the “Second Supplement).

The Series 2019A-2 Bonds are due and payable on October 29, 2029 and bear interest at the rate of 2.84% per annum, payable semiannually on April 29 and October 29 of each year, commencing on April 29, 2020. The proceeds from the sale of the Series 2019A-2 Bonds will be used for general corporate purposes. The Company expects to issue the remaining Series 2019A Bonds as follows: (a) the Series 2019A-3 on November 26, 2019; and (b) the Series 2019A-4 Bonds on December 27, 2019.

The Company may prepay, at any time or from time to time, all or any portion of the Series 2019A Bonds, in an amount not less than 5% of the aggregate principal amount of all Series 2019A Bonds then outstanding 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 be calculated as provided in the Bond Purchase Agreement; provided, however, that the Company may prepay the Series 2019A-2 Bonds without paying the make-whole amount beginning on July 29, 2029.

The Indenture provides for customary events of default, which include (subject in certain cases to customary grace and cure periods), among others, nonpayment of principal or interest and the breach of other agreements in the Indenture. Generally, if an event of default occurs and is not cured within the time period specified, the Trustee or the holders of at least 25% in principal amount of the first mortgage bonds then outstanding under the Indenture (including the Series 2019A Bonds, the “Bonds”) may declare all the outstanding Bonds to be due and payable immediately. The Second Supplement also made certain changes to the Indenture regarding events of default and amounts payable in the event the Bonds become due and payable by acceleration prior to their scheduled payment dates.