Summary
Atmos Energy Corporation (ATO) has announced the execution of a 364-Day Revolving Credit Agreement, dated September 24, 2004. This agreement provides a significant bridge financing facility of up to $1.7 billion, crucial for the upcoming acquisition of TXU Gas Company's natural gas distribution and pipeline operations, expected to close around October 1, 2004. The facility's terms include interest rates tied to the company's credit ratings and LIBOR, along with commitment and utilization fees. This demonstrates the company's proactive approach to securing funds for a major strategic acquisition that is poised to expand its operational footprint. Investors should note that the closing of the TXU Gas acquisition is a prerequisite for drawing funds under this credit facility. The agreement also includes standard covenants, such as limitations on debt to capitalization ratios and provisions for mandatory debt reduction from future financing activities. The credit facility will mature on September 23, 2005, with all outstanding amounts due at that time. This filing provides transparency on the financing arrangements for a key corporate development.
Key Highlights
- 1Atmos Energy Corp. entered into a $1.7 billion 364-Day Revolving Credit Agreement on September 24, 2004.
- 2The credit facility is intended to provide bridge financing for the acquisition of TXU Gas Company's operations.
- 3The acquisition of TXU Gas is expected to close on or about October 1, 2004, and is a condition for borrowing under the credit facility.
- 4Interest rates on borrowings will vary based on credit ratings and can be tied to LIBOR (ranging from LIBOR + 0.5% to 1.75%) or a base rate.
- 5The credit facility expires on September 23, 2005, with all borrowings due on that date.
- 6The agreement includes customary covenants, such as a debt to capitalization ratio not exceeding 0.70 to 1.0.
- 7The company may be required to reduce outstanding debt from proceeds of future debt or equity issuances post-acquisition.