SO · 8-K · 20260804PR000060

Convertible Note Repurchase

SOUTHERN CO · 2026-08-04 · Importance 58 · Surprise 42 · In source text

Southern Company intends to use approximately $403 million of offering proceeds to repurchase approximately $369 million aggregate principal amount of its Series 2024A 4.50% convertible senior notes due June 15, 2027. The repurchases are being conducted through individually negotiated transactions with a limited number of holders and are expected to occur through an initial purchaser or its affiliate. The company may repurchase additional Series 2024A notes after the new offerings close, but disclosed no committed amount or terms for those transactions. Holders selling notes may unwind stock-hedging derivatives or purchase Southern Company shares, potentially affecting the stock price and effective conversion prices of the new notes.

Key facts

• Southern Company intends to use approximately $403 million of the net proceeds to repurchase approximately $369 million aggregate principal amount of its Series 2024A 4.50% Convertible Senior Notes due June 15, 2027. source
• Contemporaneously with pricing, Southern Company entered into separate and privately negotiated transactions with a limited number of holders of the Series 2024A Convertible Notes to repurchase a portion of those notes using a portion of the offerings' proceeds. source
• Southern Company may also repurchase outstanding Series 2024A Convertible Notes following the completion of the offerings of the Convertible Notes. source
• No assurance can be given as to how much, if any, of the Series 2024A Convertible Notes will be repurchased following the completion of the offerings or the terms on which they will be repurchased. source
• Southern Company expects holders who sell Series 2024A Convertible Notes to it may enter into or unwind derivatives or purchase or sell shares to hedge, and that many holders employ a convertible arbitrage strategy with a short position in Southern Company's common stock. source
• Southern Company warns that hedging activity by repurchase sellers could increase or reduce the size of any decrease in the market price of Southern Company's common stock or the Convertible Notes and could result in higher effective conversion prices for the Convertible Notes. source
• The terms of each note repurchase transaction were individually negotiated and depended on factors including the market price of Southern Company's common stock and the trading price of the Series 2024A Convertible Notes at the time. source

Impact estimates