By Mary-Katherine Stinson
Lexington, Ky., May 3 – Alabama Power Co. priced $200 million series 2023A floating-rate senior notes due May 15, 2073 (A1/A-/A+) at par, according to an FWP filed with the Securities and Exchange Commission.
Interest will be SOFR minus 35 basis points, subject to a floor of 0%.
In addition to featuring call and put options, the maturity date itself may be shortened upon occurrence of a tax event, without soliciting noteholder consent.
Following a 30-year non-call period, the company can exercise a call option, in whole or in part, at any time. The redemption price starts at 105 for the 12-month period starting May 15, 2053, stepping down by 50 bps for each subsequent year until the redemption price reaches par on May 15, 2063.
Any early redemption will also include accrued and unpaid interest.
After the first year, noteholders can exercise put rights on a semiannual basis. The redemption price starts at 98 on May 15, 2024, plus accrued and unpaid interest, which steps up to 99 on the Nov. 15, 2028 put date and to par on the May 15, 2034 put date.
Upon reaching a redemption price of par, the interval where noteholders will be able to exercise put rights is extended from every six months to every second year. The final put date occurs in 2070, three years prior to maturity.
Morgan Stanley & Co. LLC is the sole bookrunner for the SEC-registered notes.
Proceeds will be used to repay all or a portion of the company’s outstanding commercial paper borrowings, which was approximately $115 million as of April 28. Any remaining net proceeds will be used for general corporate purposes, including the company’s continuous construction program.
The issuer is an electric utility based in Birmingham, Ala., and a wholly owned subsidiary of Southern Co.
| Issuer: | Alabama Power Co.
|
| Amount: | $200 million
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| Issue: | Floating-rate senior notes, series 2023A
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| Maturity: | May 15, 2073
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| Bookrunner: | Morgan Stanley & Co. LLC
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| Trustee: | Regions Bank
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| Counsel to the issuer: | Balch & Bingham LLP and Troutman Pepper Hamilton Sanders LLP
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| Counsel to the bookrunner: | Hunton Andrews Kurth LLP
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| Coupon: | SOFR minus 35 basis points subject to a 0% floor
|
| Price: | Par
|
| Call features: | Starting May 15, 2053 at 105; stepping down by 50 bps each year until May 15, 2063; after at par
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| Puts: | Semiannually starting May 15, 2024 at 98; steps up to 99 on Nov. 15, 2028 and to par on May 15, 2034; then at par every second year with a final put date in 2070
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| Trade date: | May 3
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| Settlement date: | May 8
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| Ratings: | Moody’s: A1
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| S&P: A-
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| Fitch: A+
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| Distribution: | SEC registered
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| Cusip: | 010392GA0
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