Atmos Energy gets $3 billion in revolving loan facilities

By Mary-Katherine Stinson

Lexington, Ky., April 1 – Atmos Energy Corp. on March 28 signed a $1.5 billion three-year revolving credit agreement and a $1.5 billion five-year revolving credit agreement, both with Credit Agricole CIB as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.

The three-year facility matures on March 28, 2027. The company has the option to twice extend the term for one additional year, subject to satisfaction of customary conditions, for a maximum term of up to five years.

The five-year facility will expire on March 28, 2029 with two one-year extension options for a maximum term of up to seven years.

Borrowings will bear interest at SOFR plus an applicable margin ranging from 75 to 125 basis points plus a term SOFR adjustment of 10 bps based on the company’s then-current credit ratings.

For the three-year facility, there are quarterly commitment fees on the average daily unused portion of the credit facility at rates ranging from 5 bps to 16.5 bps annually. Based upon Atmos’ current ratings, the commitment fee would be 9 bps.

For the five-year facility, there are quarterly commitment fees on the average daily unused portion of the credit facility at rates ranging from 6 bps to 17.5 bps annually. Based upon Atmos’ current ratings, the commitment fee would be 10 bps.

The facilities require that all borrowings be paid within 364 days and that no borrowings be outstanding under the facility for at least 30 consecutive days during each company fiscal year, with the timing of each clean-up period to be at the company’s discretion.

Each facility also contains an accordion feature, which allows the company to request up to a $250 million increase in the lenders’ commitments.

In addition, the facilities provide 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 0.7x, 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.

Proceeds will be used for working capital, capital expenditures and other general corporate purposes.

On March 28, concurrently with the execution of the three- and five-year facilities, Atmos terminated its $900 million senior revolving credit facility, which was due to expire on March 31, 2025, and terminated its $1.5 billion senior revolving credit facility, which was due to expire on March 31, 2027. There were no early termination penalties.

JP Morgan Chase Bank, NA and Mizuho Bank, Ltd. are the co-syndication agents.

BNP Paribas Securities Corp., Bank of America, NA, CoBank, ACB, U.S. Bank, NA, Wells Fargo Bank, NA and Toronto-Dominion Bank, New York Branch are the co-documentation agents.

Credit Agricole, Mizuho, JP Morgan Chase Bank, BNP Paribas, BofA Securities, Inc., CoBank, U.S. Bank, Wells Fargo and TD Securities (USA) LLC are the joint lead arrangers and joint bookrunners.

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

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