Summary
Atmos Energy Corporation (ATO) announced on October 28, 2009, that it has entered into a new $200 million Revolving Credit Agreement, a 364-day facility, effective October 22, 2009. This new credit facility replaces an expiring $212.5 million facility and will supplement the company's existing $566.7 million working capital facility. The agreement, which includes a syndicate of 20 lenders with SunTrust Bank as the Administrative Agent, is designed to provide additional working capital. The terms are largely consistent with previous agreements, with interest rates and commitment fees tied to the company's credit ratings.
Key Highlights
- 1Atmos Energy secured a new $200 million, 364-day revolving credit facility.
- 2The new facility became effective on October 22, 2009, and expires on October 20, 2010.
- 3This credit line is intended to provide additional working capital for the company.
- 4The facility replaces a previous $212.5 million 364-day credit agreement that was set to expire.
- 5Interest rates and commitment fees are variable, dependent on Atmos Energy's credit ratings.
- 6The agreement includes standard covenants regarding liens, asset sales, and mergers.
- 7A key financial covenant requires the company's debt to capitalization ratio to remain at or below 0.70 to 1.00.
Frequently Asked Questions
The primary purpose of this $200 million revolving credit facility is to provide Atmos Energy Corporation with additional working capital.
The new facility is for $200 million, slightly less than the previous $212.5 million facility. It has a similar 364-day term and is designed to supplement the company's longer-term working capital facility. The terms and conditions are substantially the same as the previous 364-day facility and the existing 5-year facility.
Interest rates will vary based on the company's credit ratings and can be based on a base rate or LIBOR, plus an applicable margin ranging from 0.75% to 3.00%. Commitment fees on the unused portion range from 0.250% to 0.750% annually, also dependent on credit ratings. Based on current conditions and ratings, the effective total interest rate could be around 4.25% for base rate borrowings or 2.24375% for LIBOR borrowings.
Yes, a significant financial covenant requires Atmos Energy's debt to capitalization ratio to be no more than 0.70 to 1.00 at the end of each fiscal quarter. Certain liabilities, such as pension adjustments and a portion of hybrid securities, are excluded from this calculation.