Summary
CMS Energy Corporation, through its principal subsidiary Consumers Energy Company, announced on August 17, 2004, the issuance of $800 million in first mortgage bonds in a private placement. These bonds are structured in three series with varying maturities and interest rates: $150 million maturing in 2009 at 4.40%, $300 million maturing in 2012 at 5.00%, and $350 million maturing in 2016 at 5.50%. This debt issuance is primarily intended to refinance existing debt obligations.
Key Highlights
- 1Consumers Energy issued $800 million in first mortgage bonds across three series.
- 2The bond issuance includes maturities in 2009, 2012, and 2016.
- 3Interest rates for the new bonds range from 4.40% to 5.50%.
- 4Proceeds will be used to redeem $300 million of 6% Senior Notes due 2005.
- 5Proceeds will also be used to redeem $141 million of Senior Remarketed Secured Notes due 2018.
- 6A portion of the proceeds will redeem a $140 million Term Loan Agreement with Beal Bank.
- 7Consumers Energy will file an exchange offer registration statement for the bonds.
Frequently Asked Questions
The primary purpose of this $800 million bond issuance by Consumers Energy is to refinance and redeem existing debt obligations, including Senior Notes and a Term Loan Agreement. This aims to manage the company's debt structure and potentially lower interest expenses.
The bonds are issued in three series: $150 million maturing August 15, 2009, at 4.40% interest; $300 million maturing February 15, 2012, at 5.00% interest; and $350 million maturing August 15, 2016, at 5.50% interest. Interest payments are semi-annual.
The proceeds are designated to redeem the entire $300 million outstanding balance of 6% Senior Notes due March 15, 2005, the $141 million outstanding balance of Senior Remarketed Secured Notes due 2018, and the $140 million outstanding balance of a Term Loan Agreement with Beal Bank.
The filing indicates that the bonds were issued in a private placement to institutional investors. Consumers Energy has agreed to file an exchange offer registration statement, suggesting that an exchange of these privately placed bonds for registered securities might occur later.