Summary
Atmos Energy Corporation (ATO) has filed an 8-K report detailing the execution of a new $750 million Revolving Credit Agreement, effective May 2, 2011. This new facility replaces two previous credit agreements, one expiring in April 2011 and another set to expire in December 2011. The primary purpose of this credit facility is to backstop the company's commercial paper program and provide short-term working capital. Key features of the new agreement include a 364-day repayment term for all borrowings, a mandatory annual 30-day "clean-up period" during which no borrowings can be outstanding, and an accordion feature allowing for up to a $250 million increase in commitments. Interest rates and commitment fees will vary based on the company's credit ratings. The agreement also includes standard covenants, a debt-to-capitalization ratio limit of 0.70:1.00, and provisions for default, including cross-defaults. The company also announced its second-quarter 2011 financial results via a press release, which is furnished as an exhibit.
Key Highlights
- 1Atmos Energy entered into a new $750 million Revolving Credit Agreement on May 2, 2011.
- 2The new credit facility replaces two prior agreements, one short-term and one longer-term.
- 3The facility will primarily be used to support the company's commercial paper program and provide working capital.
- 4Borrowings under the new agreement are due within 364 days, and a 30-day annual 'clean-up period' is mandatory.
- 5The agreement includes an accordion feature allowing for an additional $250 million in commitments.
- 6Interest rates and commitment fees are variable, dependent on Atmos Energy's credit ratings.
- 7A debt-to-capitalization ratio covenant is set at a maximum of 0.70 to 1.00.