Atlas Pipeline Gains Flexibility

Atlas Pipeline Partners enters an amendment to its credit and loan agreement that governs a $380 million revolving credit facility and a $463 million term loan facility.
Although compliant with all covenants under the facility, and expected to remain compliant, the amendment significantly increases operating liquidity and relaxed EBITDA and total debt covenants, said Gene Dubay, Atlas Pipeline CEO.
“This provides Atlas Pipeline with substantially increased cushions against possible future negative developments. Together with expanding hedge protection, these improved credit terms augur well for our future success,” he said.
The amendment to the credit facility includes the following key terms:
– Certain financial covenants of the credit facility have been eased through the period ending Dec. 31, 2010, creating greater financial flexibility for Atlas Pipeline. In addition, a Senior Secured Leverage to EBITDA covenant has been added to the credit facility.
– The “reinvestment basket” pursuant to which Atlas Pipeline is permitted to use cash proceeds from asset sales for a period of up to 12 months before reinvestment has been increased by 170% to $135 million, providing substantially increased liquidity to Atlas Pipeline.
– APL may make capital expenditures up to $95 million for the remainder of 2009 (beginning April 1, 2009), in addition to any investments made to its joint venture (“Laurel Mountain”) with Williams (NYSE: WMB) targeting the Marcellus Shale in the Appalachia region.
– Beginning with the first quarter 2010, Atlas Pipeline may pay distributions if its Senior Secured Leverage to EBITDA ratio is less than or equal to 2.75x and minimum liquidity levels are satisfied. Atlas Pipeline will not pay any further distributions for the remainder of 2009.
Outstanding borrowings under the revolving credit facility and term loan will accrue interest at LIBOR plus 475 bps, with a LIBOR floor rate of 2%.

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