SJW Group, subsidiaries enter $300 million five-year credit agreement

By Marisa Wong

Los Angeles, Aug. 5 – SJW Group, wholly owned subsidiaries San Jose Water Co. and SJWTX, Inc. and indirect wholly owned subsidiary Connecticut Water Services Inc. entered into a $300 million credit agreement on Aug. 2 with JPMorgan Chase Bank, NA as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.

JPMorgan and Wells Fargo Bank, NA are the joint bookrunners and joint lead arrangers. Wells Fargo Bank, NA is documentation agent.

Each borrower has an initial borrowing sublimit that can be periodically adjusted from time to time. The initial sublimit of each borrower is as follows: $50 million for SJW, $140 million for San Jose Water, $90 million for Connecticut Water Services and $20 million for SJWTX.

The credit agreement matures on Aug. 2, 2027.

Borrowings bear interest at adjusted term SOFR plus an applicable rate that varies depending on ratings. The applicable rate ranges from 75 basis points to 137.5 bps.

The company must pay a commitment fee that ranges from 7.5 bps to 22.5 bps, also based on ratings.

In addition, the credit agreement includes a financial covenant that requires each of the borrowers to maintain its funded debt to capitalization ratio at or below 70%.

Loan proceeds will be used only for refinancing existing debt, working capital and general corporate purposes.

The credit agreement replaces San Jose Water’s existing $140 million credit agreement dated April 23, 2021 and SJWTX’s existing $5 million credit agreement dated April 23, 2021, both of which were terminated upon entering into the credit agreement. The prior agreements with JPMorgan had been set to mature on Dec. 31, 2023.

In addition, on Aug. 2, Connecticut Water Services and Citizens Bank, NA entered into a fourth amendment to the amended and restated revolving credit facility dated Dec. 18, 2019 to reduce the credit commitment to $10 million from $75 million.

SJW is San Jose, Calif.-based water supply company.

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