8-KMaterial AgreementsRegulation FDExhibits & Filings

ATMOS ENERGY CORP 8-K Report, Material Agreement (Mar 31, 2023)

Filed March 31, 2023For Securities:ATO

Summary

Atmos Energy Corporation (ATO) has entered into an Equity Distribution Agreement with various managers and forward purchasers, allowing for the offering and sale of up to $1 billion of its common stock. This agreement includes provisions for selling shares directly through managers as sales agents at market prices, as well as utilizing forward sale agreements. The forward sale component allows ATO to receive proceeds at a future date upon settlement, with potential implications for cash or share payouts if the agreement is settled differently. This offering is being conducted under an existing automatic shelf registration statement filed on March 31, 2023. In a separate development disclosed on March 24, 2023, Atmos Energy fully prepaid a $2.02 billion senior unsecured term loan facility prior to its maturity. This prepayment was made possible by proceeds from a utility recovery securitization transaction authorized by Texas regulatory authorities. The termination of this term loan facility signifies a deleveraging event for the company.

Key Highlights

  • 1Atmos Energy entered into an Equity Distribution Agreement to sell up to $1 billion of its common stock.
  • 2The agreement allows for sales through brokers at market prices or via block transactions.
  • 3Forward sale agreements are included, enabling future settlement of stock sales with potential proceeds received later.
  • 4The company has the flexibility to suspend or terminate sales under the agreement at any time.
  • 5Sales will be made under an automatic shelf registration statement filed on March 31, 2023.
  • 6Atmos Energy fully prepaid its $2.02 billion senior unsecured term loan facility on March 24, 2023.
  • 7The term loan prepayment was funded by proceeds from a Texas utility recovery securitization transaction.

Frequently Asked Questions

The Equity Distribution Agreement allows Atmos Energy to offer and sell shares of its common stock, with an aggregate offering price of up to $1 billion. This provides the company with a flexible way to access capital through the issuance of new shares, either directly or indirectly through forward sale arrangements.

Forward sale agreements involve Atmos Energy entering into arrangements with forward purchasers. In essence, the forward purchaser will borrow and sell shares of Atmos Energy's stock now, with Atmos Energy expecting to receive proceeds upon future physical settlement of these agreements. This can defer the actual receipt of capital while allowing for immediate sale of shares into the market.

If Atmos Energy settles the forward sale agreement physically, it will receive proceeds. However, if it opts for cash settlement or net share settlement, it may not receive any proceeds and could potentially owe cash or shares to the forward purchaser, depending on the settlement method chosen.

Yes, on March 24, 2023, Atmos Energy fully prepaid its $2.02 billion senior unsecured term loan facility. This prepayment was made using funds from a utility recovery securitization transaction authorized in Texas and resulted in the termination of the entire term loan facility.