8-KMaterial AgreementsFinancial EventsExhibits & Filings

ATMOS ENERGY CORP 8-K Report, Material Agreement (Jan 5, 2009)

Filed January 5, 2009For Securities:ATO

Summary

Atmos Energy Corporation, through its subsidiary Atmos Energy Marketing, LLC (AEM), has entered into a Third Amended and Restated Credit Agreement. This agreement restructures AEM's existing credit facility, converting an uncommitted demand-based borrowing base of $580 million into a 364-day committed revolving credit facility of $375 million. The new facility is designed to provide working capital for AEM's natural gas marketing business and includes an "accordion feature" allowing for potential expansion up to $450 million with agent and lender approval. The amendment also introduces a swing line loan feature and adjusts interest rates and fees to reflect current market conditions and the committed nature of the facility. The credit facility is secured by AEM's assets and guaranteed by its parent company, Atmos Energy Holdings, Inc. This filing indicates a strategic move to secure and potentially increase revolving credit availability for its marketing operations during a period of economic uncertainty.

Key Highlights

  • 1Atmos Energy Marketing, LLC (AEM) entered into a Third Amended and Restated Credit Agreement on December 30, 2008.
  • 2The agreement converts a $580 million uncommitted, demand-based facility into a $375 million committed 364-day revolving credit facility.
  • 3An "accordion feature" allows for the potential to increase the borrowing base by up to an additional $50 million, reaching a maximum of $450 million.
  • 4The facility will be used primarily to provide working capital for AEM's natural gas marketing business.
  • 5A swing line loan feature has been added to the credit facility.
  • 6Interest rates on loans will be based on a base rate or an offshore rate (LIBOR) plus an applicable margin ranging from 2.250% to 2.625%.
  • 7The credit facility is secured by substantially all of AEM's assets and guaranteed by Atmos Energy Holdings, Inc.

Frequently Asked Questions

The primary purpose is to secure and restructure Atmos Energy Marketing, LLC's (AEM) credit facility, converting an uncommitted, demand-based arrangement into a committed 364-day revolving credit facility. This ensures access to working capital for AEM's natural gas marketing operations and allows for potential expansion of borrowing capacity.

The new facility is a $375 million committed revolving credit facility for 364 days, replacing the previous $580 million uncommitted, demand-payable facility. It also introduces an "accordion feature" for potential increases and a swing line loan option.

The committed revolving credit facility is for $375 million. However, it includes an "accordion feature" that allows for the borrowing base to be increased in increments of at least $15 million, up to an additional $50 million, bringing the total potential borrowing capacity to $450 million, subject to agent and lender approval.

The facility can be used for revolving credit loans, swing line loans, and letters of credit. Borrowings can be based on a floating base rate or an offshore rate (based on LIBOR), both plus an applicable margin. The margin depends on AEM's excess tangible net worth and can range from 2.250% to 2.625% for loans and up to 2.875% for drawings under letters of credit.