Published on 5/3/2021 in the Prospect News Investment Grade Daily.
New Issue: Southern Co. sells $1 billion 3.75% fixed-to-fixed junior subordinated notes due 2051
By Wendy Van Sickle and Cristal Cody
Columbus, Ohio, May 3 – Southern Co. priced $1 billion of series 2021A 3.75% fixed-to-fixed reset rate junior subordinated notes due Sept 15, 2051 (Baa3/BBB/BBB-) at par, according to a 424B5 filed with the Securities and Exchange Commission.
The notes were talked to yield in the 4.125% area, according to a market source.
The coupon will reset on Sept. 15, 2026 to a rate equal to Treasuries plus 291.5 basis points.
The notes are callable through June 15, 2026 at par plus interest. They are also callable in whole but not in part at 102 plus interest if a rating agency makes changes in the equity credit criteria for securities such as these notes.
Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Mizuho Securities USA Inc., MUFG, Scotia Capital USA Inc. and Trust Securities Inc. are the bookrunners.
The company intends to use the proceeds to redeem $1.5 billion of its 2.35% senior notes due July 1, 2021. It plans to use any remaining proceeds for other general corporate purposes.
Southern is an Atlanta-based gas and electric company.
| Issuer: | Southern Co.
|
| Issue: | Fixed-to-fixed reset rate junior subordinated notes
|
| Amount: | $1 billion
|
| Maturity: | Sept. 15, 2051
|
| Bookrunners: | Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Mizuho Securities USA Inc., MUFG, Scotia Capital USA Inc. and Trust Securities Inc.
|
| Co-managers: | CIBC World Markets Corp., Fifth Third Securities, Inc., Santander Investment Securities Inc., TD Securities (USA) LLC, Loop Capital Markets LLC, Siebert Williams Shank & Co., LLC, Cabrera Capital Markets LLC, CastleOak Securities, LP, Drexel Hamilton, LLC, Penserra Securities LLC and R. Seelaus & Co., LLC
|
| Coupon: | 3.75% until Sept. 15, 2026, then fixed coupon equal Treasuries plus 291.5 bps
|
| Price: | Par
|
| Yield: | 3.75%
|
| Spread: | Treasuries plus 291.5 bps
|
| Call: | Callable through June 15, 2026 at par plus interest; also callable in whole at 102 plus interest upon a ratings event
|
| Trade date: | May 3
|
| Settlement date: | May 6
|
| Expected ratings: | Moody’s: Baa3
|
| S&P: BBB
|
| Fitch: BBB-
|
| Distribution: | SEC registered
|
| Talk: | 4.125% area
|
|
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
