LINES OF CREDIT AND SHORT-TERM BORROWINGS

9 Months Ended

Sep. 30, 2020

LINES OF CREDIT AND SHORT-TERM BORROWINGS

LINES OF CREDIT & SHORT-TERM BORROWINGS:

Credit facilities and available liquidity as of September 30, 2020 were as follows (in thousands):


Company	Total Facility		Usage			Available Liquidity		Expiration Date
SJI:
SJI Syndicated Revolving Credit Facility	$	500,000	$	199,300	(A)	$	300,700	August 2022


Term Loan Credit Agreement	150,000		150,000			—		March 2021

Total SJI	650,000		349,300			300,700

SJG:
Commercial Paper Program/Revolving Credit Facility	200,000		108,700		(B)	91,300		August 2022
Uncommitted Bank Line	10,000		—			10,000		September 2021 (D)

Total SJG	210,000		108,700			101,300

ETG/SJIU:
ETG/SJIU Revolving Credit Facility	200,000		150,400		(C)	49,600		April 2022

Total	$	1,060,000	$	608,400		$	451,600

(A) Includes letters of credit outstanding in the amount of $9.6 million, which is used to enable SJE to market retail electricity as well as for various construction and operating activities.

(B) Includes letters of credit outstanding in the amount of $0.8 million, which supports the remediation of environmental conditions at certain locations in SJG's service territory.

(D) SJG renewed this facility during the third quarter of 2020.

For SJI and SJG, the amount of usage shown in the table above, less the letters of credit noted in (A)-(C) above, equals the amounts recorded as Notes Payable on the respective condensed consolidated balance sheets as of September 30, 2020.

On March 26, 2020, SJI entered into an unsecured $150.0 million term loan agreement, which bears interest at variable rates. The maturity date of the term loan is March 25, 2021, and the loan is recorded in Notes Payable on the condensed consolidated balance sheets as of September 30, 2020. The proceeds of the loan were used for general corporate purposes.

See Note 14 for information related to amounts previously outstanding under revolving credit facilities and short-term loan arrangements.

SJI's Five Year Revolving Credit Agreement ("Credit Agreement") allows SJI to borrow in the form of revolving loans a total aggregate amount of $500.0 million. In addition, as part of the total $500.0 million extension of credit, the Credit Agreement provides for swingline loans (in an amount not to exceed an aggregate of $50.0 million) and letters of credit (in an amount not to exceed an aggregate of $200.0 million), each at the applicable interest rates specified in the Credit Agreement. Subject to certain conditions set forth in the Credit Agreement, the Company may increase the revolving credit facility up to a maximum aggregate amount of $100.0 million (for a total facility of up to $600.0 million), although no lender is obligated to increase its commitment.

SJIU and ETG (as Borrowers) have a $200.0 million revolving credit agreement with several lenders. The revolving credit agreement provides for the extension of credit to the Borrowers in a total aggregate amount of $200.0 million, in the form of revolving loans up to a full amount of $200.0 million, swingline loans in an amount not to exceed an aggregate of $20.0 million and letters of credit in an amount not to exceed an aggregate of $50.0 million, each at the applicable interest rates specified in the revolving credit agreement. Subject to certain conditions set forth in the revolving credit agreement, the Borrowers may increase the revolving credit facility up to a maximum aggregate amount of $50.0 million (for a total revolving facility of up to $250.0 million). This facility contains one financial covenant, limiting the ratio of indebtedness to total capitalization (as defined in the credit agreement) of each Borrower to not more than 0.70 to 1, measured at the end of each fiscal quarter. SJIU and ETG were in compliance with this covenant at September 30, 2020.

The Utilities' (including SJG) facilities are restricted as to use and availability specifically to the respective Utilities; however, if necessary, the SJI facilities can also be used to support the liquidity needs of the Utilities. All committed facilities contain one financial covenant limiting the ratio of indebtedness to total capitalization of the applicable borrowers (as defined in the respective credit agreements), measured on a quarterly basis. SJI and the Utilities were in compliance with these covenants as of September 30, 2020. Borrowings under these credit facilities are at market rates.

The weighted average interest rate on these borrowings, which changes daily, were as follows:


	September 30, 2020		September 30, 2019
Weighted average interest rate on borrowings:
SJI (inclusive of SJG, ETG and SJIU)	1.26	%	3.00	%
SJG	0.23	%	2.39	%

Average borrowings and maximum amounts outstanding on these facilities were as follows (in thousands):


	Nine Months Ended September 30, 2020		Nine Months Ended September 30, 2019
Average borrowings outstanding, not including LOC:
SJI (inclusive of SJG, ETG and SJIU)	$	516.8	$	487.8
SJG	$	149.0	$	96.2

Maximum amounts outstanding:
SJI (inclusive of SJG, ETG and SJIU)	$	872.2	$	882.7
SJG	$	187.0	$	175.3

The SJI and the Utilities' (including SJG) principal credit facilities are provided by a syndicate of banks. The NPA for Senior Unsecured Notes issued by SJI, and the SJG credit facilities, contain a financial covenant limiting the ratio of indebtedness to total capitalization (as defined in the respective NPA or credit agreement) to not more than 0.70 to 1, measured at the end of each fiscal quarter. For SJI, the equity units are treated as equity (as opposed to how they are classified on the condensed consolidated balance sheet, as long-term debt) for purposes of the covenant calculation. SJI and the Utilities were in compliance with these covenants as of September 30, 2020.

SJG has a commercial paper program under which SJG may issue short-term, unsecured promissory notes to qualified investors up to a maximum aggregate amount outstanding at any time of $200.0 million. The notes have fixed maturities which vary by note, but may not exceed 270 days from the date of issue. Proceeds from the notes are used for general corporate purposes. SJG uses the commercial paper program in tandem with its $200.0 million revolving credit facility and does not expect the principal amount of borrowings outstanding under the commercial paper program and the credit facility at any time to exceed an aggregate of $200.0 million.