Atmos Energy gets $2.02 billion term loan facility to repay notes

By Mary-Katherine Stinson

Lexington, Ky., March 6 – Atmos Energy Corp. on March 3 signed a $2.02 billion senior term loan facility, the proceeds of which will be used to repay Atmos’ outstanding senior notes that mature on March 9, according to an 8-K filing with the Securities and Exchange Commission.

The term loan facility matures Dec. 31, 2023 and bears interest at SOFR plus an applicable margin of 95 basis points. The initial rate works out to 5.9556%.

The company may prepay the facility at any time but prepayments are required upon receiving proceeds from the issuance of certain securities that are part of a utility recovery securitization transaction authorized by the applicable regulatory authorities of Texas and Kansas.

In addition, the facility provides that during its term, the company’s debt to capitalization ratio as of the last day of each of its fiscal quarters must be less than or equal to 0.7 to 1, excluding from the calculation of debt any pension and other post-retirement benefits liability adjustments and an amount of hybrid securities as defined in the credit facility not to exceed a total of 15% of total capitalization.

U.S. Bank NA is the administrative agent, Mizuho Bank, Ltd. is the syndication agent and CoBank, ACB is the documentation agent. U.S. Bank, Mizuho and CoBank are joint lead arrangers and joint-bookrunners.

Atmos Energy is a natural gas distributor and pipeline company based in Dallas.

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