Gas Natural Inc. Announces Pricing of Long-Term Financing Agreement
GREAT FALLS, Mont., May 2, 2011 /PRNewswire/ -- Gas Natural Inc. (NYSE Amex: EGAS) (the "Company" or "Gas Natural"), a natural gas utility company serving approximately 63,500 customers in six states, today announced that its Ohio subsidiaries, Northeast Ohio Natural Gas Corp, Orwell Natural Gas Corp. and Brainard Gas Corp. (together "the Issuers"), priced $15.334 million of 5.38% Senior Secured Guaranteed Fixed Rate Notes due June 1, 2017. Additionally, Great Plains Natural Gas, the parent of Northeast Ohio Natural Gas and a subsidiary of Gas Natural Inc., priced $3.0 million of 4.12% Senior Secured Guaranteed Floating Rate Notes due May 3, 2014. Both notes were placed with SunLife Assurance Company of Canada.
The first tranche, a $15.334 million note, is a joint obligation of the Issuers, and is being guaranteed by Gas Natural, Lightning Pipeline Company (parent of Orwell Natural Gas and subsidiary of Gas Natural), and Great Plains Natural Gas Company (together with the Issuers, "the Fixed Rate Obligors"). This note received approval from the Public Utility Commission of Ohio ("PUCO") on March 30, 2011. The note is governed by a Note Purchase Agreement ("NPA") as filed on Securities Exchange Commission ("SEC") Form 8-K on November 2, 2010. Concurrent with the funding and closing of this transaction, which is expected to occur on May 3, 2011, the Fixed Rate Obligors will sign an amended Note Purchase Agreement that is substantially the same as the NPA released on November 2, 2010. Prepayment of this note prior to maturity is subject to a 50 basis point make- whole premium.
The second tranche, a $3.0 million note, is an obligation of Great Plains Natural Gas Company and is guaranteed by Gas Natural (together, "the Floating Rate Obligors"). The note is priced at a fixed spread of 385 basis points over three month Libor. Pricing for this note will reset on a quarterly basis to the then current yield of three month Libor. The note is governed by a Note Purchase Agreement as filed on SEC Form 8-K on November 2, 2010. Concurrent with the funding of this transaction, which is expected to occur on May 3, 2011, the Floating Rate Obligors will sign an amended Note Purchase Agreement that is substantially the same as the NPA released on November 2, 2010. Prepayment of this note prior to maturity is at par.
Payments for both notes prior to maturity are interest-only.
The Notes carry a 60% debt-to-capitalization financial covenant on an Ohio Consolidated basis, as well as, a 2.0x Interest Coverage test based on a trailing twelve-month basis. Additional covenants customary for asset sales and purchases, additional indebtedness, dividends, change of control and other matters are also included.
The use of proceeds for both notes are to repay and extinguish existing amortizing bank debt and other existing indebtedness, fund $3.4 million for the 2011 capital program for Orwell Natural Gas and Northeast Ohio Natural Gas, establish two debt service reserve accounts, replenish Gas Natural treasuries for the previously announced repayment of maturing bank debt for the Issuers in late 2010, and transaction expenses.
The placement agent for the transaction was Parkland Financial Advisors of Mayfield, OH.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Notes in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
About Gas Natural Inc.
Gas Natural Inc. distributes and sells natural gas to end-use residential, commercial, and industrial customers. It distributes approximately 30 billion cubic feet of natural gas to approximately 63,500 customers through regulated utilities operating in Montana, Wyoming, Ohio, Pennsylvania, Maine and North Carolina. The Company markets approximately 1.3 billion cubic feet of natural gas to commercial and industrial customers in Montana and Wyoming on an unregulated basis. The Company also has ownership interests in 160 natural gas producing wells and gas gathering assets. In addition, the Company owns the Shoshone interstate and the Glacier gathering pipelines located in Montana and Wyoming. The Company's Montana public utility was originally incorporated in 1909 and is headquartered in Great Falls, Montana.
The Company's toll-free number is 800-570-5688. The Company's address is 1 First Avenue South, Great Falls, Montana 59401 and its website is www.ewst.com.
Safe Harbor Regarding Forward-Looking Statements
The Company is including the following cautionary statement in this release to make applicable and to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for any forward-looking statements made by, or on behalf of, Gas Natural Inc. Forward-looking statements are all statements other than statements of historical fact, including, without limitation, those that are identified by the use of the words "anticipates," "estimates," "expects," "intends," "plans," "predicts," "believes" and similar expressions. Such statements are inherently subject to a variety of risks and uncertainties that could cause actual results to differ materially from those expressed. Factors that may affect forward-looking statements and the Company's business generally include but are not limited to the Company's ability to successfully integrate the operations of the companies it has recently acquired and consummate additional acquisitions, the Company's continued ability to make dividend payments, the Company's ability to implement its business plan, fluctuating energy commodity prices, the possibility that regulators may not permit the Company to pass through all of its increased costs to its customers, changes in the utility regulatory environment, wholesale and retail competition, the Company's ability to satisfy its debt obligations, including compliance with financial covenants, weather conditions, litigation risks, and various other matters, many of which are beyond the Company's control, the risk factors and cautionary statements made in the Company's public filings with the Securities and Exchange Commission, and other factors that the Company is currently unable to identify or quantify, but may exist in the future. Gas Natural Inc. expressly undertakes no obligation to update or revise any forward-looking statement contained herein to reflect any change in Gas Natural Inc.'s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
For more information contact:
Glenn Hemminger, Director of Finance |
Bronwyn ("BG") Davis |
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Phone: (440) 974-3770 |
Phone: (440) 974-3770 |
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Email: [email protected] |
Email: [email protected] |
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SOURCE Gas Natural Inc.
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