Dallas-based Atmos Energy Corp (NYSE:ATO) has entered into an underwriting agreement for a public offering of $650 million in senior notes, according to a recent 8-K filing with the Securities and Exchange Commission. The natural gas distribution company, which operates in the sector classified under SIC code 4924, announced on Monday that the offering involves 5.000% Senior Notes due in 2054.
The transaction was facilitated by Mizuho Securities USA LLC, TD Securities (USA) LLC, and U.S. Bancorp Investments, Inc., serving as representatives of the underwriters. The offering was made under a previously filed registration statement and a prospectus supplement dated September 17, 2024.
Atmos Energy expects to net approximately $638.1 million from the offering after underwriting discounts and estimated offering expenses. The closing of the offering is anticipated today, subject to the satisfaction of customary closing conditions.
The notes will be governed by an indenture dated March 26, 2009, between Atmos Energy and U.S. Bank Trust Company, National Association, as trustee. The terms of the notes are to be specified in an Officers’ Certificate to be dated today, in accordance with the indenture. Legal opinions related to the Registration Statement were also filed, offering further details on the transaction.
This financial move comes as Atmos Energy continues to operate within the energy and transportation sector, with its corporate headquarters located at 1800 Three Lincoln Centre, 5430 LBJ Freeway, Dallas, TX. The company, formerly known as Energas Co until a name change in 1988, is incorporated in Texas and Virginia and has a fiscal year-end of September 30. The information provided in this article is based on a press release statement.
In other recent news, Atmos Energy Corporation saw its third fiscal quarter 2024 earnings per share (EPS) rise from $5.33 to $6, a development driven by regulatory outcomes, customer expansion, and robust system revenues.
Mizuho has maintained its positive stance on the company, raising the price target from $138.00 to $148.00 and maintaining an Outperform rating. The firm's analysis highlighted Atmos Energy's sustained valuation premium compared to its gas utility peers, attributing this not to market volatility but to a strong investor preference for the company's standout position.
Atmos Energy's recent performance and forward-looking guidance were central to Mizuho's optimistic outlook. The company added 57,000 new customers, primarily in Texas, and welcomed 10 new industrial customers in the third quarter. In addition to performance highlights, Atmos Energy announced the appointment of Michelle H. Faulk as Vice President and Controller, and Telisa Toliver to its board of directors.
Edward Jones and Ladenburg Thalmann have maintained a Buy rating on the company, citing Atmos Energy's potential for above-average earnings growth and strong balance sheet. The company anticipates its fiscal '24 EPS to be at the higher end of the $6.70 to $6.80 range, projecting a 6% to 8% EPS growth through fiscal '28. These are some of the recent developments that have occurred for Atmos Energy.
InvestingPro Insights
Atmos Energy's recent $650 million senior notes offering aligns with its strong financial position and growth strategy. According to InvestingPro data, the company boasts a market capitalization of $21.53 billion and has demonstrated solid financial performance with a P/E ratio of 20.27. This valuation suggests investor confidence in the company's earnings potential.
InvestingPro Tips highlight Atmos Energy's commitment to shareholder returns, having raised its dividend for 31 consecutive years and maintained dividend payments for 42 years. This track record of consistent dividend growth, coupled with a current dividend yield of 2.32%, may appeal to income-focused investors.
The company's financial stability is further underscored by its liquid assets exceeding short-term obligations, indicating a strong balance sheet that supports its ability to manage the new debt issuance effectively. With a robust EBITDA growth of 23.58% in the last twelve months, Atmos Energy appears well-positioned to service its debt and continue its expansion plans.
For readers interested in a more comprehensive analysis, InvestingPro offers 11 additional tips on Atmos Energy, providing deeper insights into the company's financial health and market position.
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