8-KMaterial AgreementsExhibits & Filings

ATMOS ENERGY CORP 8-K Report, Material Agreement (Mar 9, 2021)

Filed March 9, 2021For Securities:ATO

Summary

Atmos Energy Corporation (ATO) announced on March 9, 2021, the successful completion of a public offering that raised approximately $2.191 billion in net proceeds. This offering consisted of $1.1 billion in 0.625% Senior Notes due 2023 (Fixed Rate Notes) and $1.1 billion in Floating Rate Senior Notes due 2023. These notes are unsecured senior obligations and rank equally with other unsubordinated debt of Atmos Energy. The issuance of these notes, registered under the Securities Act of 1933, strengthens Atmos Energy's capital structure and provides significant liquidity. The company can redeem these notes under specific conditions, and the accompanying indenture includes standard covenants to restrict certain corporate actions such as liens, sale and leaseback transactions, mergers, and asset sales, while also outlining events of default.

Key Highlights

  • 1Atmos Energy completed a public offering raising approximately $2.191 billion in net proceeds.
  • 2The offering included $1.1 billion of 0.625% Senior Notes due 2023 and $1.1 billion of Floating Rate Senior Notes due 2023.
  • 3The notes are unsecured senior obligations, ranking equally with other unsubordinated debt.
  • 4The Fixed Rate Notes bear a fixed interest rate of 0.625% per annum.
  • 5The Floating Rate Notes bear interest at Three-Month LIBOR plus 38 basis points, reset quarterly.
  • 6Both series of notes mature on March 9, 2023.
  • 7Atmos Energy has the option to redeem the notes at par starting September 9, 2021.

Frequently Asked Questions

While the filing doesn't explicitly state the use of proceeds, the substantial amount raised suggests it was likely to fund general corporate purposes, capital expenditures, refinancing existing debt, or to strengthen the company's liquidity position.

The company issued two series of notes: $1.1 billion of 0.625% Senior Notes due 2023, which pay a fixed interest rate, and $1.1 billion of Floating Rate Senior Notes due 2023, which pay a variable rate tied to LIBOR plus 38 basis points. Both mature on March 9, 2023.

The notes are unsecured senior obligations, meaning they rank equally with other unsubordinated debt. The filing outlines covenants that restrict certain actions like taking on excessive liens or merging, and specifies events of default which, if triggered, could lead to the notes becoming immediately due and payable.

The Floating Rate Notes are tied to the London Interbank Offered Rate (LIBOR). As LIBOR is a benchmark interest rate that can fluctuate, the interest payments on these notes will change quarterly. Investors should monitor LIBOR trends as they will impact the cost of this debt for Atmos Energy.