8-KMaterial AgreementsFinancial EventsExhibits & Filings

ATMOS ENERGY CORP 8-K Report, Material Agreement (Dec 16, 2009)

Filed December 16, 2009For Securities:ATO

Summary

Atmos Energy Corporation (ATO), through its wholly-owned subsidiary Atmos Energy Marketing, LLC (AEM), has entered into a Fourth Amended and Restated Credit Agreement. This agreement primarily extends the maturity date of AEM's existing credit facility by 12 months to December 9, 2010, and increases the threshold for physical and financial trades without requiring a letter of credit from $50 million to $100 million. The facility will continue to be used for working capital for AEM's natural gas marketing business, with borrowings available at either a base rate or offshore rate plus an applicable margin. Key modifications include a reduction in the commitment fee from 50 to 45 basis points and the addition of Natixis as an issuing bank for letters of credit. The agreement also allows for greater flexibility in AEM's leadership decisions. The credit facility is secured by AEM's assets and guaranteed by its parent company, Atmos Energy Holdings, Inc., and contains standard covenants regarding debt levels and financial ratios.

Key Highlights

  • 1Extended the credit facility maturity date by 12 months to December 9, 2010.
  • 2Increased the dollar threshold for physical and financial trades from $50 million to $100 million, reducing the need for letters of credit.
  • 3Reduced the commitment fee on the credit facility from 50 basis points to 45 basis points.
  • 4Added Natixis as an issuing bank for letters of credit.
  • 5Revised management change clauses to allow for greater leadership flexibility at Atmos Energy Marketing, LLC.
  • 6The credit facility will continue to support working capital for the natural gas marketing business.
  • 7The facility is secured by AEM's assets and guaranteed by its parent company, Atmos Energy Holdings, Inc.

Frequently Asked Questions

The primary purpose is to extend the maturity of Atmos Energy Marketing, LLC's (AEM) credit facility by 12 months to December 9, 2010, and to enhance its utility by increasing the threshold for transactions that do not require a letter of credit, thereby providing continued working capital for AEM's natural gas marketing business.

Yes, the commitment fee on the credit facility has been reduced from 50 basis points to 45 basis points. Interest rates will vary based on the base rate or offshore rate plus an applicable margin, which depends on AEM's excess tangible net worth.

The credit facility includes standard covenants limiting liens and additional indebtedness. AEM must adhere to a maximum total liabilities to tangible net worth ratio of 5.00 to 1.00 and maintain minimum levels of net working capital and net worth, which vary based on borrowing amounts.

While the exact total size of the credit facility is not explicitly stated, the document indicates that AEM may use the facility for physical and financial trades up to a $100 million threshold without a letter of credit requirement. The facility is secured by substantially all of AEM's assets and guaranteed by its parent company.