8-KMaterial AgreementsFinancial EventsExhibits & Filings

ATMOS ENERGY CORP 8-K Report, Material Agreement (Dec 2, 2005)

Filed December 2, 2005For Securities:ATO

Summary

This Form 8-K filing by Atmos Energy Corporation reports a significant amendment to its subsidiary Atmos Energy Marketing, LLC's (AEM) credit facility. The amendment, dated November 28, 2005, substantially increases the credit available from $250 million to $580 million. This expansion is intended to support AEM's growing natural gas marketing business, primarily for working capital purposes. While the credit limit has more than doubled, the core terms of the credit agreement remain largely unchanged. The facility continues to be uncommitted and discretionary, allowing AEM flexibility in its borrowing. The interest rates for revolving loans and offshore rate loans are based on floating rates (Federal Funds Rate or Prime Rate, and LIBOR, respectively), with applicable margins. The credit facility is secured by AEM's assets and guaranteed by its parent, Atmos Energy Holdings, Inc., and includes standard covenants limiting liens, additional debt, and mergers, along with financial covenants such as minimum working capital and tangible net worth requirements.

Key Highlights

  • 1Atmos Energy Marketing, LLC (AEM), a subsidiary, amended its credit agreement.
  • 2The credit facility amount was significantly increased from $250 million to $580 million.
  • 3The primary purpose of the increased credit is to support AEM's expanding natural gas marketing business and working capital needs.
  • 4The credit facility remains uncommitted and fully discretionary.
  • 5Interest rates are floating, based on either the federal funds rate/prime rate or LIBOR, plus an applicable margin.
  • 6The facility is secured by AEM's assets and guaranteed by Atmos Energy Holdings, Inc.
  • 7The amended credit facility expires on March 31, 2006, with provisions for outstanding letters of credit until June 30, 2006.

Frequently Asked Questions

The main purpose of this filing is to report a material amendment to the credit agreement for Atmos Energy Marketing, LLC (AEM), a subsidiary of Atmos Energy Corporation. The amendment significantly increases the available credit to support AEM's business operations.

The credit facility was increased from $250 million to $580 million. This expanded credit line is primarily intended to provide working capital for Atmos Energy Marketing, LLC's growing natural gas marketing business.

While the credit amount has substantially increased, the core terms of the credit agreement remain largely the same. The credit facility continues to be uncommitted and discretionary. Proportional increases were made to financial covenants, such as minimum net working capital and tangible net worth, to reflect the larger credit amount.

The facility includes covenants limiting liens, additional indebtedness, and mergers. AEM must maintain specific minimum levels for net working capital and tangible net worth, and not exceed a maximum cumulative loss, with these thresholds adjusting based on borrowing levels. The credit facility expires on March 31, 2006.