Atmos Energy Prices $700 Million Of 10-Year Notes At A 6.000% Coupon, Led By Three Banks
The gas utility's senior notes due 2036 were priced to yield 6.047%, with the offering expected to close on or about Friday.
Atmos Energy entered an underwriting agreement on Tuesday to sell $700 million of 6.000% Senior Notes due 2036, according to an 8-K the company filed Friday. It expects net proceeds of about $691.4 million after the underwriting discount and estimated offering expenses.
What the filing says
The notes were priced at 99.638% of principal to yield 6.047%, which is 78 basis points (0.78 percentage points) over the 4.625% Treasury due August 15, 2036, according to the final term sheet.
The notes mature November 15, 2036. Interest is paid each May 15 and November 15, starting May 15, 2027.
Under the underwriting agreement, the banks agreed to buy the notes at 98.988% of principal. The offering is expected to close on or about Friday.
The 8-K says the notes are being sold under a Form S-3 registration statement that the agreement describes as an automatic shelf registration.
Who is buying the notes
BNP Paribas Securities, Credit Agricole Securities (USA) and U.S. Bancorp Investments are the representatives of the underwriters. Each took $154 million of the issue, according to Schedule I of the agreement.
CIBC World Markets, MUFG Securities Americas and TD Securities (USA) each took $73.5 million. Huntington Securities took $17.5 million, bringing the total to $700 million.
The agreement bars Atmos from selling other debt securities before delivery without the representatives' consent, apart from commercial paper backed by its existing revolving credit facility.
What it changes and what comes next
For holders, Atmos adds $700 million of senior debt maturing in 2036 at a 6.000% coupon. The filing does not carry a use-of-proceeds breakdown in the text reviewed.
The make-whole call spread over Treasuries is 15 basis points. That is the premium Atmos would pay to redeem the notes early before August 15, 2036.
Atmos shares closed at $160.66 at Thursday's close, up 0.91%, a session before the filing was made public.
At closing, Atmos will deliver an Officers' Certificate dated October 9 to the trustee, U.S. Bank Trust Company, setting the notes' terms under the March 26, 2009 indenture.
The delivery date in the agreement is 10:00 a.m. New York time on October 9, unless the banks and Atmos agree to another date.
Sources
- 8-K Filing — ATMOS ENERGY CORP (ATO) — SEC EDGAR
- Exhibit d174432dex11.htm — ATMOS ENERGY CORP 8-K exhibit — SEC EDGAR
- Atmos Energy (ATO) Bond Sale Puts Valuation Back In Focus — Yahoo Finance
