Southern Company prices $2.4B in convertible notes after upsizing offering
What's the deal? Southern CompanyDealroom has a profile for this one. Try Dealroom → (NYSE: SO) has priced $2.375 billion in convertible senior notes across two series, the Atlanta-based energy utility announced on August 3. The deal splits into $725 million of 2.125% notes due December 15, 2027 and $1.65 billion of 3.50% notes due September 15, 2029.
Why now? The company upsized the offering from earlier plans, adding $75 million to the first series and $150 million to the second. Initial purchasers also hold options to buy up to $356.25 million more in aggregate across both series within 13 days of issuance.
The details: The notes were sold in private placements to qualified institutional buyers under Rule 144A. The 2027 notes carry an initial conversion price of roughly $104.56 per share — a 12.5% premium — while the 2029 notes convert at about $118.50, a 27.5% premium, both based on the August 3 closing price.
The offerings are expected to close on August 6, subject to customary conditions. On conversion, Southern Company will pay cash up to the principal amount and may settle the remainder in cash, stock, or a mix, at its election.
The signal: At $2.375 billion, this ranks among the largest post-IPO convertible raises in the energy sector, sitting in the top percentile of 130 comparable deals. Convertible debt lets established utilities tap capital at lower coupons than straight bonds, a route more issuers are using as they fund heavy infrastructure spending.
Read more: idc.chase.com
Image credit: Chris Hunkeler
