CenterPoint talks $750 million mandatory convertible preferreds at 6.75%-7.25%, up 17.5%-22.5%

By Abigail W. Adams

Portland, Me., Sept. 24 – CenterPoint Energy Inc. plans to price $750 million of three-year series B mandatory convertible preferred stock after the market close on Tuesday.

Price talk is for a dividend of 6.75% to 7.25% and an initial conversion premium of 17.5% to 22.5%, according to a market source.

Morgan Stanley & Co. LLC, Goldman Sachs & Co. LLC, Citigroup Global Markets Inc. and Wells Fargo Securities LLC are joint bookrunners for the registered offering, which carries a greenshoe of $112.5 million.

The offering consists of 15 million $50-par depositary shares representing a 1/20th interest in the series B preferreds.

The company may redeem the depositary shares if its acquisition of Vectren Corp. is not completed by April 21, 2019 or upon an acquisition termination event. There is takeover and dividend protection.

The mandatory convertible preferred stock is being offered concurrently with a $1.5 billion offering of common stock.

The depositary shares will be listed for trade on the New York Stock Exchange under the ticker “CNPPrB.”

Proceeds will be used to fund the acquisition of Vectren.

CenterPoint is a Houston-based energy delivery company.

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