New Jersey Natural Gas changes interest mode for series 2011A-C bonds

By Angela McDaniels

Tacoma, Wash., Sept. 30 – New Jersey Resources Corp. subsidiary New Jersey Natural Gas Co. changed the interest rate mode for $97.05 million of series 2011A-C natural gas facilities refunding revenue bonds issued by the New Jersey Economic Development Authority, according to an 8-K filing with the Securities and Exchange Commission.

The mode was changed on Friday to a variable-rate mode from a daily rate.

The bonds are expected to accrue interest for five years at a variable rate determined monthly. The rate is initially 0.55% plus 70% of one-month Libor. The maximum interest rate is 12% per year.

In connection with the change in interest rate mode, New Jersey Natural Gas entered into a continuing covenant agreement under which Wells Fargo Municipal Capital Strategies, LLC will buy the series 2011A-C bonds.

As a result of the interest rate mode change, New Jersey Natural Gas terminated its $100 million four-year credit facility with JPMorgan Chase Bank, NA on Friday.

The credit facility had provided additional liquidity for the company’s obligations under a loan agreement between the bond issuer and the company. The bonds are payable solely from payments made by the bond issuer under the loan agreement.

Based in Wall, N.J., New Jersey Resources provides natural gas services and renewable energy to the New England area.

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