8-KMaterial AgreementsFinancial EventsExhibits & Filings

ATMOS ENERGY CORP 8-K Report, Material Agreement (Dec 19, 2006)

Filed December 19, 2006For Securities:ATO

Summary

Atmos Energy Corporation (ATO) announced on December 15, 2006, the execution of a new $600 million five-year revolving credit facility, maturing on December 15, 2011. This facility replaces a prior $600 million three-year facility and supplements a $300 million 364-day facility, both with similar terms and lenders. The primary purpose of this credit facility is to provide working capital and backstop commercial paper issuances, offering financial flexibility and liquidity to the company. The new credit facility's interest rates are variable, dependent on Atmos Energy's credit ratings, and are based on either a base rate or LIBOR, plus a specified margin. Commitment and utilization fees are also applicable, with rates varying based on creditworthiness. Key covenants include limitations on liens, asset sales, and mergers, and a maximum debt-to-capitalization ratio of 0.70 to 1.00, with specific exclusions for pension liabilities and hybrid securities. The termination of the previous credit agreement incurred no early termination penalties.

Key Highlights

  • 1Execution of a new $600 million, 5-year revolving credit facility maturing on December 15, 2011.
  • 2The new facility replaces a $600 million 3-year revolving credit facility and operates alongside a $300 million 364-day facility.
  • 3Purpose of the facility is to provide working capital and backstop commercial paper issuances.
  • 4Interest rates are variable, based on credit ratings, and tied to LIBOR or a base rate.
  • 5Includes commitment fees (0.060% to 0.125%) and utilization fees (0.050% to 0.100%) based on credit ratings and borrowing levels.
  • 6Key financial covenant requires a debt-to-capitalization ratio not to exceed 0.70 to 1.00.
  • 7The prior $600 million credit agreement was terminated without incurring early termination penalties.

Frequently Asked Questions

The new $600 million revolving credit facility is primarily intended to provide working capital for Atmos Energy Corporation and to backstop the issuance of commercial paper, ensuring the company has access to liquidity.

The facility has a 5-year term, maturing on December 15, 2011. Interest rates are variable, based on the company's credit ratings and either a base rate or LIBOR. It also includes commitment and utilization fees. A significant covenant is the requirement to maintain a debt-to-capitalization ratio of 0.70 to 1.00 or less.

The execution of this new 5-year facility led to the termination of the company's previous $600 million 3-year revolving credit agreement. Atmos Energy incurred no early termination penalties as a result of this termination.

Interest rates depend on the company's credit ratings, with LIBOR-based borrowings ranging from LIBOR plus 0.300% to 0.750% (currently 0.450% based on ratings). Commitment fees on unused portions range from 0.060% to 0.125% (currently 0.090%), and utilization fees on outstanding loans above 50% of commitments range from 0.050% to 0.100% (currently 0.050%).