Southern Company Plans $2.15B Raise via Convertible Bond
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Key Takeaways
- The offering consists of $650 million in notes due 2027 and $1.5 billion in notes due 2029, with options for an additional $322.5 million.
- Net proceeds will be used to repurchase existing convertible notes due in 2027 and 2028 and to reduce short-term debt.
Southern Co. plans to raise $2.15 billion through two convertible senior-note offerings, turning again to equity-linked debt as the utility finances an expanding investment program across the US Southeast.
The Atlanta-based company is offering $650 million of notes due Dec. 15, 2027, and $1.5 billion of notes due Sept. 15, 2029, according to a company announcement.
The securities are being marketed in separate private placements to qualified institutional buyers. Interest rates, conversion prices and other final terms will be established when the offerings are priced.
Convertible bonds can reduce a company’s cash borrowing costs by giving investors the right to convert the securities into stock under specified conditions. They can also dilute existing shareholders if the shares appreciate enough to make conversion attractive.
