South Jersey secures $530 million term loan, $200 million revolver

By Sarah Lizee

Olympia, Wash., July 2 – South Jersey Industries, Inc. and Elizabethtown Gas Co. entered into a $530 million 364-day term loan credit agreement on June 26 with Bank of America, NA as lender and administrative agent, according to an 8-K filing with the Securities and Exchange Commission.

Additionally, South Jersey Industries, Elizabethtown Gas and Elkton Acquisition Corp. entered into a $200 million two-year revolving credit agreement with JPMorgan Chase Bank, NA as lender and administrative agent on June 26.

Term loan borrowings bear interest at Libor plus a margin that ranges from 75 basis points to 135 bps, depending on the unsecured credit ratings of South Jersey Industries and Elizabethtown Gas.

Revolving loans bear interest at Libor plus a margin that ranges from 69 bps to 137.5 bps, depending on Elizabethtown Gas’ and Elkton’s unsecured credit ratings.

The revolving credit agreement provides for swingline loans for up to $20 million and letters of credit for up to $50 million.

The company may increase the revolver by up to $50 million.

Both agreements limit the ratio of debt of Elizabethtown Gas and its subsidiaries on a consolidated basis to consolidated total capitalization of not more than 0.7 to 1.

Lenders funded the term loan credit agreement on June 28 and were expected to fund the revolving facility on Monday.

South Jersey Industries is acquiring from Pivotal Holdings, Inc. the assets of Elizabethtown Gas for a total purchase price of about $1.69 billion in cash. The term loans under the credit agreement will be used to fund a portion of the acquisition. South Jersey is also acquiring from Pivotal Holdings the assets of Elkton Gas for about $10 million in cash, which will be partially funded with revolver borrowings.

Merrill Lynch, Pierce, Fenner & Smith Inc. and TD Securities (USA) LLC are joint lead arrangers and joint bookrunners on the term loan agreement. Citizens Bank, NA and JPMorgan Chase Bank are joint lead arrangers on the revolving agreement, with Citizens Bank as syndication agent.

Hammonton, N.J.-based South Jersey is a publicly held energy services holding company for a natural gas utility and other non-regulated companies.

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