QUANTUMONLINE.COM SECURITY DESCRIPTION: South Jersey Industries, Inc. 8.75% Equity Units, stated amount $50 per unit, initially consisting of Corporate Units which include a stock purchase contract and, initially, a 1/20, or 5%, undivided beneficial ownership interest in $1,000 principal amount of 2021 Series B 1.65% Remarketable Junior Subordinated Notes due 04/01/2029. The stock purchase contract requires the holder to purchase for $50 a variable number of shares of South Jersey Industries, Inc. (NYSE: SJI) common stock no later than 4/01/2024 and pays a contract adjustment rate of 7.10% per annum. The stock purchase settlement rate will be 1.9125 shares per unit if the then current market price is equal to or greater than $26.14375 and 2.2472 shares per unit if the market price is equal to or less than $22.25. For market prices between those values the settlement rate will be $50 divided by the market value. Prior to the IPO of this security, the last reported sale price of the common stock on 03/17/2021 was $22.50 per share. The stock purchase contract may be settled any time at the holder’s option and the company will deliver 1.9125 shares of common stock for each purchase contract.
The 2021 Series B 1.65% Remarketable Junior Subordinated Notes are due 4/01/2029 and is subject to reset and remarketing between 12/28/2023 and 03/28/2024.
The Corporate Units pay quarterly distributions of 8.75% ($4.375 per annum on 1/1, 4/1, 7/1 & 10/1 to holders of record on the record date that will be the 15th day of the calendar month prior to the payment date (NOTE: the ex-dividend date is at least one business day prior to the record date).
Distributions paid by these securities are derived from interest paid on the underlying debt securities and therefore are NOT eligible for the preferential 15% to 20% tax rate on dividends and are also NOT eligible for the dividend received deduction for corporate holders.
The Issuer will have the right to defer interest payments on the Notes one or more times for one or more consecutive interest periods without giving rise to an event of default (see the prospectus for further information). The notes are pledged as collateral to secure the holder's obligations under the stock purchase contract.
The holder has the right at any time to convert the Corporate Units to Treasury Units by the substitution of a specified zero-coupon U.S. Treasury security for the units and to later recreate Corporate Units.
The units are unsecured subordinated debt and rank equally with the company's other unsecured subordinated notes. See the IPO prospectus for extensive additional information on the equity units and their mandatory conversion provisions by clicking on the ‘Link to IPO Prospectus’ provided below.
