Debt

Long-term debt

Long-term debt at September 30, 2013 and 2012 consisted of the following:



	2013		2012
	(In thousands)
Unsecured 4.95% Senior Notes, due October 2014	$	500,000	$	500,000
Unsecured 6.35% Senior Notes, due 2017	250,000		250,000
Unsecured 8.50% Senior Notes, due 2019	450,000		450,000
Unsecured 5.95% Senior Notes, due 2034	200,000		200,000
Unsecured 5.50% Senior Notes, due 2041	400,000		400,000
Unsecured 4.15% Senior Notes, due 2043	500,000		—
Medium term Series A notes, 1995-1, 6.67%, due 2025	10,000		10,000
Unsecured 6.75% Debentures, due 2028	150,000		150,000
Rental property term notes due in installments through 2013	—		131
Total long-term debt	2,460,000		1,960,131
Less:
Original issue discount on unsecured senior notes and debentures	4,329		3,695
Current maturities	—		131
	$	2,455,671	$	1,956,305

We issued $500 million Unsecured 4.15% Senior Notes on January 11, 2013. The effective rate of these notes is 4.67%, after giving effect to offering costs and the settlement of the associated Treasury lock agreements discussed in Note 12. Of the net proceeds of approximately $494 million, $234 million was used to partially repay our commercial paper borrowings and for general corporate purposes. The remaining $260 million was used to repay a short-term financing facility that was scheduled to mature on February 1, 2013. This facility was executed on September 27, 2012, with interest rates at a LIBOR based rate plus a company specific spread, to repay commercial paper borrowings that were used to redeem our $250 million Unsecured 5.125% Senior Notes were scheduled to mature in January 2013.

Short-term debt

Our short-term debt is utilized to fund ongoing working capital needs, such as our seasonal requirements for gas supply, general corporate liquidity and capital expenditures. Our short-term borrowings typically reach their highest levels in the winter months.

We currently finance our short-term borrowing requirements through a combination of a $950 million commercial paper program, four committed revolving credit facilities and one uncommitted revolving credit facility, with a total availability from third-party lenders of approximately $1 billion of working capital funding. At September 30, 2013 and 2012, there was $368.0 million and $310.9 million outstanding under our commercial paper program with weighted average interest rates of 0.25% and 0.48%, with average maturities of less than one month. We also use intercompany credit facilities to supplement the funding provided by these third-party committed credit facilities. These facilities are described in greater detail below.

Regulated Operations

We fund our regulated operations as needed, primarily through our commercial paper program and three committed revolving credit facilities with third-party lenders that provide approximately $985 million of working capital funding. The first facility is a five-year unsecured facility that was amended on December 7, 2012 to increase the borrowing capacity from $750 million to $950 million with an accordion feature, which, if utilized would increase the borrowing capacity to $1.2 billion. On August 22, 2013 the terms of the facility were amended to extend the expiration date from May 2016 to August 2018. The credit facility bears interest at a base rate or at a LIBOR-based rate for the applicable interest period, plus a spread ranging from zero percent to two percent, based on the Company’s credit ratings. This credit facility serves as a backup liquidity facility for our commercial paper program. At September 30, 2013, there were no borrowings under this facility, but we had $368.0 million of commercial paper outstanding leaving $582.0 million available.

The second facility is a $25 million unsecured facility that bears interest at a daily negotiated rate, generally based on the Federal Funds rate plus a variable margin. This facility was renewed on April 1, 2013. At September 30, 2013, there were no borrowings outstanding under this facility.

The third facility which was renewed on September 30, 2013 for $10 million is a committed revolving credit facility used primarily to issue letters of credit that bears interest at a LIBOR-based rate plus 1.5 percent. At September 30, 2013, there were no borrowings outstanding under this credit facility; however, letters of credit totaling $5.9 million had been issued under the facility at September 30, 2013, which reduced the amount available by a corresponding amount.

The availability of funds under these credit facilities is subject to conditions specified in the respective credit agreements, all of which we currently satisfy. These conditions include our compliance with financial covenants and the continued accuracy of representations and warranties contained in these agreements. We are required by the financial covenants in each of these facilities to maintain, at the end of each fiscal quarter, a ratio of total debt to total capitalization of no greater than 70 percent. At September 30, 2013, our total-debt-to-total-capitalization ratio, as defined, was 54 percent. In addition, both the interest margin over the Eurodollar rate and the fee that we pay on unused amounts under each of these facilities are subject to adjustment depending upon our credit ratings.

In addition to these third-party facilities, our regulated operations have a $500 million intercompany revolving credit facility with AEH. This facility bears interest at the lower of (i) the Eurodollar rate under the five-year revolving credit facility or (ii) the lowest rate outstanding under the commercial paper program. Applicable state regulatory commissions have approved our use of this facility through December 31, 2013. There was $278.0 million outstanding under this facility at September 30, 2013.

Nonregulated Operations

Prior to December 5, 2012, Atmos Energy Marketing, LLC (AEM), which is wholly-owned by AEH, had a three-year $200 million committed revolving credit facility, expiring in December 2014, with a syndicate of third-party lenders with an accordion feature that could increase AEM’s borrowing capacity to $500 million. The credit facility was primarily used to issue letters of credit and, on a less frequent basis, to borrow funds for gas purchases and other working capital needs. This facility

was collateralized by substantially all of the assets of AEM and was guaranteed by AEH. AEM terminated the committed

revolving credit facility on December 5, 2012, to reduce external credit expense. AEM incurred no penalties in connection with

the termination. This facility was replaced with two $25 million, 364-day bilateral credit facilities, one of which is a committed

facility. These facilities are used primarily to issue letters of credit. Due to outstanding letters of credit, the total amount

available to us under these bilateral credit facilities was $37.4 million at September 30, 2013.

AEH has a $500 million intercompany demand credit facility with AEC. This facility bears interest at a rate equal to the greater of (i) the one-month LIBOR rate plus 3.00 percent or (ii) the rate for AEM’s borrowings under its committed line of credit facility plus 0.75 percent. Applicable state regulatory commissions have approved our use of this facility through December 31, 2013. There were no borrowings outstanding under this facility at September 30, 2013.

Shelf Registration

On March 28, 2013, we filed a registration statement with the Securities and Exchange Commission (SEC) to issue, from time to time, up to $1.75 billion in common stock and/or debt securities available for issuance, which replaced our registration statement that expired on March 31, 2013. As of September 30, 2013, $1.75 billion was available under the shelf registration statement.

Debt Covenants

In addition to the financial covenants described above, our credit facilities and public indentures contain usual and customary covenants for our business, including covenants substantially limiting liens, substantial asset sales and mergers.

Additionally, our public debt indentures relating to our senior notes and debentures, as well as our revolving credit agreements, each contain a default provision that is triggered if outstanding indebtedness arising out of any other credit agreements in amounts ranging from in excess of $15 million to in excess of $100 million becomes due by acceleration or is not paid at maturity.

We were in compliance with all of our debt covenants as of September 30, 2013. If we were unable to comply with our debt covenants, we would likely be required to repay our outstanding balances on demand, provide additional collateral or take other corrective actions.

Maturities of long-term debt at September 30, 2013 were as follows (in thousands):



2014	$	—
2015	500,000
2016	—
2017	250,000
2018	—
Thereafter	1,710,000
	$	2,460,000