8-KMaterial AgreementsFinancial EventsExhibits & Filings

ATMOS ENERGY CORP 8-K Report, Material Agreement (Oct 1, 2015)

Filed October 1, 2015For Securities:ATO

Summary

Atmos Energy Corporation (ATO) has entered into a new $1.25 billion Revolving Credit Agreement, replacing its previous facility. This new credit line, effective September 25, 2015, will mature on September 25, 2020, with an option for the company to extend the term for an additional year, twice. This facility is primarily for working capital, capital expenditures, and general corporate purposes, providing continued financial flexibility. The terms are largely similar to the prior agreement, including a 364-day repayment requirement and a mandatory 30-day 'clean-up' period annually where no borrowings can be outstanding. A key feature is the accordion option, allowing for a potential increase of up to $250 million in lender commitments. Interest rates are variable, based on the company's credit ratings and either a base rate or LIBOR, with associated applicable margins and commitment fees.

Key Highlights

  • 1New $1.25 billion Revolving Credit Agreement entered into on September 25, 2015, replacing a prior facility.
  • 2Credit Facility matures on September 25, 2020, with potential for two one-year extensions.
  • 3Funds are designated for working capital, capital expenditures, and general corporate purposes.
  • 4Features an accordion option allowing for up to a $250 million increase in commitments.
  • 5Borrowing costs are variable, tied to credit ratings, base rate or LIBOR, plus applicable margins.
  • 6Mandatory annual 30-day 'clean-up' period for borrowings, at the company's discretion for timing.
  • 7Debt-to-capitalization ratio covenant set at a maximum of 0.70 to 1.00.

Frequently Asked Questions

The new $1.25 billion Revolving Credit Agreement is intended to provide Atmos Energy Corporation with financial flexibility for working capital needs, capital expenditures, and other general corporate purposes.

The credit facility has a principal amount of $1.25 billion and matures on September 25, 2020. Atmos Energy has the option to extend the term twice, each for an additional year. A unique requirement is the 'clean-up period,' where no borrowings can be outstanding for 30 consecutive days each fiscal year.

Interest rates will vary based on Atmos Energy's credit ratings at the time of borrowing. Borrowings can be based on either a prime base rate or LIBOR, with an applicable margin added. Additionally, commitment fees will be paid quarterly on the unused portion of the facility, also dependent on credit ratings.

Yes, the agreement includes standard covenants limiting liens, substantial asset sales, and mergers. A key financial covenant requires Atmos Energy's debt to capitalization ratio to be less than or equal to 0.70 to 1.00 at the end of each fiscal quarter, with specific exclusions for pension liabilities and certain hybrid securities.