Southern Co. talks $1.5 billion equity units to yield 6.625%-7.125%, up 17.5%-22.5%

By Abigail W. Adams

Portland, Me., Aug. 12 – Southern Co. plans to price $1.5 billion, or 30 million par of $50 series A equity units, after the market close on Tuesday with price talk for a dividend of 6.625% to 7.125% and a threshold appreciation premium of 17.5% to 22.5%, according to a market source.

Goldman Sachs & Co. LLC, Barclays, Citigroup Global Markets Inc., Morgan Stanley & Co. LLC, BNP Paribas Securities Corp., BofA Securities Inc., J.P. Morgan Securities LLC, Scotia Howard Weil, and Wells Fargo Securities LLC are the bookrunners for the registered offering, which carries a greenshoe of $225 million, or 4.5 million equity units.

The units will consist of a purchase contract for common stock, a beneficial ownership interests in 1/40th of the company’s par of $1,000 junior subordinated notes due 2024 and a beneficial ownership interest in 1/40th of the company’s par of $1,000 junior subordinated notes due 2027.

Proceeds will be used to repay the company’s short-term debt and for general corporate purposes.

Southern Co. is an Atlanta-based energy company.

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