8-KMaterial AgreementsFinancial EventsExhibits & Filings

ATMOS ENERGY CORP 8-K Report, Material Agreement (Oct 21, 2005)

Filed October 21, 2005For Securities:ATO

Summary

Atmos Energy Corporation (ATO) announced on October 18, 2005, the execution of a new three-year revolving credit facility totaling $600 million. This facility replaces a previous working capital facility and is designed to provide ongoing liquidity for the company's operational needs, including backing the issuance of commercial paper. The agreement includes a syndicate of 15 lenders, with SunTrust Bank serving as the Administrative Agent. The terms of the credit facility are tied to Atmos Energy's credit ratings, influencing both interest rates on borrowings and commitment fees on the unused portion. Interest rates for LIBOR-based borrowings are structured to range from LIBOR plus 0.40% to 1.00%, with a current rate of LIBOR plus 0.55% based on existing ratings. Commitment fees for unused portions are set at 0.100% currently. The facility mandates a debt to capitalization ratio not exceeding 0.70 to 1.00 and contains standard covenants regarding liens, asset sales, and mergers, with provisions for default and early termination.

Key Highlights

  • 1Atmos Energy entered into a new $600 million, 3-year revolving credit facility on October 18, 2005.
  • 2The new credit facility replaces a previous $600 million working capital facility.
  • 3The facility will be used to provide working capital and backstop commercial paper issuances.
  • 4Interest rates are variable, dependent on credit ratings and based on either a base rate or LIBOR.
  • 5Current LIBOR-based borrowings are priced at LIBOR plus 0.55%.
  • 6Commitment fees on the unused portion are currently 0.100%.
  • 7A key covenant requires the debt to capitalization ratio to remain at or below 0.70 to 1.00.

Frequently Asked Questions

The new revolving credit facility is primarily intended to provide Atmos Energy with up to $600 million in working capital and to backstop the issuance of commercial paper. This ensures the company has access to necessary funds for its ongoing operations and financial flexibility.

The interest rates are variable and depend on Atmos Energy's credit ratings at the time of borrowing. Borrowings can be based on a prime rate or LIBOR, with LIBOR-based borrowings currently priced at LIBOR plus 0.55%, with a range from LIBOR plus 0.40% to 1.00% depending on creditworthiness.

A significant financial covenant requires Atmos Energy to maintain a debt to capitalization ratio of no more than 0.70 to 1.00 as of the end of each fiscal quarter. The agreement also includes customary covenants limiting liens, substantial asset sales, and mergers.

The revolving credit facility has a term of three years and is set to expire on October 18, 2008, at which point all outstanding amounts will be due.