8-KMaterial AgreementsFinancial EventsExhibits & Filings

ATMOS ENERGY CORP 8-K Report, Material Agreement (Apr 3, 2007)

Filed April 3, 2007For Securities:ATO

Summary

Atmos Energy Corporation, through its wholly-owned subsidiary Atmos Energy Marketing, LLC (AEM), has executed a Third Amendment to its Uncommitted Second Amended and Restated Credit Agreement. The primary purpose of this amendment is to extend the maturity date of the existing credit facility by an additional 12 months, now maturing on March 31, 2008. This extension is crucial for ensuring continued working capital availability for AEM's natural gas marketing operations. The amendment maintains the uncommitted and discretionary nature of the credit facility, which supports AEM's borrowing needs and letter of credit requirements. Interest rates on borrowings remain variable, tied to base rates and LIBOR, with specified margins. Key financial covenants, including limits on debt-to-tangible net worth, cumulative losses, and working capital, have been maintained, indicating a continued focus on financial health within the established parameters. The credit facility is secured by AEM's assets and guaranteed by its parent, Atmos Energy Holdings, Inc., providing a layer of security for the lenders.

Key Highlights

  • 1Extension of the credit facility's maturity date by 12 months to March 31, 2008.
  • 2The credit facility remains 'uncommitted' and 'fully discretionary', meaning AEM is not guaranteed access to funds.
  • 3Purpose of the facility is to provide working capital for Atmos Energy Marketing, LLC's (AEM) natural gas marketing business.
  • 4Interest rates on borrowings are floating, based on prime rate or LIBOR, plus applicable margins.
  • 5Key financial covenants such as debt-to-tangible net worth ratio, cumulative loss limitations, and minimum net working capital/tangible net worth are maintained.
  • 6The credit facility is secured by substantially all of AEM's assets and guaranteed by Atmos Energy Holdings, Inc.
  • 7Default provisions include the potential termination of loan and letter of credit obligations upon AEM defaulting on specified other indebtedness.

Frequently Asked Questions

The primary purpose of the Third Amendment is to extend the term of the existing credit facility for an additional 12 months, moving the maturity date to March 31, 2008. This ensures continued access to working capital for Atmos Energy Marketing, LLC's (AEM) natural gas marketing business.

No, the amendment's main substantive change is the extension of the facility's term. Other terms of the facility, including interest rate structures, covenants, collateral, and guarantees, remain largely unchanged.

This means that AEM is not guaranteed to receive loans or letters of credit under this agreement. The banks participating in the facility have the discretion to decide whether or not to provide funds or issue letters of credit based on AEM's financial condition and other factors at the time of the request.

AEM must maintain certain financial ratios and levels, including a maximum ratio of total liabilities to tangible net worth (5.00 to 1.00), limitations on cumulative losses, minimum net working capital, and minimum tangible net worth. These specific thresholds depend on the amount of borrowing elected by AEM.