SO · 8-K · 20260804PR000060
Issuance of Convertible Notes
SOUTHERN CO · 2026-08-04 · Importance 64 · Surprise 42 · No source text
Southern Company priced $725 million of Series 2026A 2.125% convertible senior notes due December 15, 2027, and $1.65 billion of Series 2026B 3.50% convertible senior notes due September 15, 2029. The offerings were upsized by $75 million and $150 million, respectively, and initial purchasers received options for an additional $108.75 million of Series 2026A notes and $247.5 million of Series 2026B notes. Estimated net proceeds are approximately $721 million for Series 2026A and $1.63 billion for Series 2026B, excluding any option exercises. Southern Company expects to use the proceeds to repurchase approximately $369 million of Series 2024A convertible notes, repay short-term debt, and fund general corporate purposes including potential subsidiary investment.
Key facts
- Southern Company priced $725 million in aggregate principal amount of Series 2026A 2.125% Convertible Senior Notes due December 15, 2027. source
- Southern Company priced $1.65 billion in aggregate principal amount of Series 2026B 3.50% Convertible Senior Notes due September 15, 2029. source
- Southern Company granted initial purchasers options to purchase up to an additional $247.5 million in aggregate principal amount of the Series 2026B Convertible Notes for settlement within 13 days of issuance. source
- Southern Company granted initial purchasers options to purchase up to an additional $108.75 million in aggregate principal amount of the Series 2026A Convertible Notes for settlement within 13 days of issuance. source
- The offerings reflect upsizes of $75 million for the Series 2026A Convertible Notes and $150 million for the Series 2026B Convertible Notes over the previously announced offering sizes. source
- Interest on the Series 2026A Convertible Notes will be paid semiannually at a rate of 2.125% per annum. source
- Interest on the Series 2026B Convertible Notes will be paid semiannually at a rate of 3.50% per annum. source
- The Series 2026A Convertible Notes have an initial conversion rate of 9.5641 shares per $1,000 principal amount, equal to an initial conversion price of approximately $104.56 per share. source
Impact estimates
| metric | direction | stage | expected | basis |
|---|---|---|---|---|
| net_income | negative | committed | -0.7% | Interest on the Series 2026B Convertible Notes will be paid semiannually at a rate of 3.50% per annum. |
| net_income | negative | committed | -0.2% | Interest on the Series 2026A Convertible Notes will be paid semiannually at a rate of 2.125% per annum. |
| liability | negative | committed | — | Southern Company priced $725 million in aggregate principal amount of Series 2026A 2.125% Convertible Senior Notes due December 15, 2027. |
| liability | negative | committed | — | Southern Company priced $1.65 billion in aggregate principal amount of Series 2026B 3.50% Convertible Senior Notes due September 15, 2029. |
| cash | positive | contingent | — | Southern Company granted initial purchasers options to purchase up to an additional $247.5 million in aggregate principal amount of the… |
| liability | negative | contingent | — | Southern Company granted initial purchasers options to purchase up to an additional $247.5 million in aggregate principal amount of the… |
| cash | positive | contingent | — | Southern Company granted initial purchasers options to purchase up to an additional $108.75 million in aggregate principal amount of the… |
| liability | negative | contingent | — | Southern Company granted initial purchasers options to purchase up to an additional $108.75 million in aggregate principal amount of the… |
| cash | negative | contingent | — | Upon conversion, Southern Company will pay cash up to the aggregate principal amount of the Convertible Notes being converted and pay or… |
| liability | positive | contingent | — | Upon conversion, Southern Company will pay cash up to the aggregate principal amount of the Convertible Notes being converted and pay or… |