Gas Natural Inc. (NYSEMKT:EGAS), a holding company operating local natural gas utilities serving approximately 68,000 customers in four states, today announced that it has closed a $92 million debt refinancing following receipt of regulatory approvals to reorganize its utilities within a wholly-owned subsidiary.
James E. Sprague, Chief Financial Officer of Gas Natural, commented, “The completion of the refinancing is a major milestone in our strategy to improve the operational and financial structure of the Company. It provides for greater financial flexibility, access to capital for all of our utilities and simplifies our lending agreements.”
The changes to the Company’s corporate structure facilitated the financing and provide greater transparency for the regulators of the natural gas utility operations in its four regulatory jurisdictions. A new wholly-owned subsidiary now holds its eight regulated entities, separating them from the Company’s non-regulated operations.
The financing consists of two components:
| · | A $50 million, 4.23% fixed-rate senior, unsecured, twelve-year term note due October 2028, held by TIAA-CREF. |
| · | A $42 million unsecured revolving credit facility held by Bank of America, N.A., with a five year maturity due October 2021. This facility incurs variable interest on a grid structure, based on the Company’s leverage ratio. |
The new financing facilities allowed the Company to retire its debt with Allstate/CUNA, Sun Life and NIL Funding, as well as provide additional capital to support continued execution of its growth strategy.
About Gas Natural Inc.
Gas Natural Inc., a holding company, distributes and sells natural gas to residential, commercial, and industrial customers. It distributes approximately 21 billion cubic feet of natural gas to roughly 68,000 customers through regulated utilities operating in Montana, Ohio, Maine and North Carolina. The Company’s other operations include intrastate pipeline, natural gas production and natural gas marketing. The Company’s Montana public utility was originally incorporated in 1909. Its strategy for growth is to expand throughput in its markets, while looking for acquisitions that are either adjacent to its existing utilities or in underserved markets. Gas Natural Inc. regularly posts information on its website at www.egas.net.
