8-KMaterial AgreementsFinancial EventsExhibits & Filings

ATMOS ENERGY CORP 8-K Report, Material Agreement (Apr 4, 2008)

Filed April 4, 2008For Securities:ATO

Summary

Atmos Energy Corp. (ATO) announced via an 8-K filing on April 4, 2008, that its wholly-owned subsidiary, Atmos Energy Marketing, LLC (AEM), has entered into the Fourth Amendment to its Uncommitted Second Amended and Restated Credit Agreement. This amendment, dated March 31, 2008, primarily extends the maturity date of the credit facility by one year to March 31, 2009, providing continued working capital for AEM's natural gas marketing business. A significant change in the amendment is the removal of a specific financial covenant related to AEM's cumulative losses. Additionally, the amendment introduces provisions allowing participating banks or their affiliates to engage in commodity transactions with AEM, including the use of collateral to offset obligations. While the facility is uncommitted and discretionary, it remains secured by AEM's assets and guaranteed by its parent company. Investors should note the continued access to credit lines and letters of credit, critical for supporting AEM's operations.

Key Highlights

  • 1Atmos Energy Marketing, LLC (AEM), a subsidiary of Atmos Energy Corp., amended its credit agreement.
  • 2The Fourth Amendment extends the credit facility's term by 12 months to March 31, 2009.
  • 3A specific financial covenant limiting AEM's cumulative losses has been removed.
  • 4New provisions allow banks or their affiliates to engage in physical commodity transactions with AEM.
  • 5The credit facility will continue to provide working capital for AEM's natural gas marketing business.
  • 6The facility is secured by AEM's assets and guaranteed by Atmos Energy Holdings, Inc.
  • 7Interest rates for revolving loans are tied to a base rate (prime rate + 0.25%) or offshore rates (LIBOR + 1.250% to 1.625%).

Frequently Asked Questions

This filing reports on the Fourth Amendment to the credit agreement for Atmos Energy Marketing, LLC (AEM), a subsidiary of Atmos Energy Corp. The amendment primarily extends the credit facility's term and modifies certain provisions.

The amendment extends the credit facility's maturity by one year to March 31, 2009. It also removes a specific financial covenant related to cumulative losses and permits banks or their affiliates to engage in commodity transactions with AEM.

The amendment ensures continued access to the credit facility for working capital needs in AEM's natural gas marketing business by extending its term. However, it is important to note that the facility is 'uncommitted,' meaning the banks have discretion over lending.

While a specific cumulative loss covenant was removed, AEM must still adhere to covenants limiting liens and additional indebtedness, and maintaining certain ratios such as total liabilities to tangible net worth (max 5.00:1.00), net working capital, and tangible net worth.