8-KOther EventsExhibits & Filings

CMS ENERGY CORP 8-K Report, Corporate Update (Apr 13, 2005)

Filed April 13, 2005For Securities:CMSCMS-PCCMSACMSCCMSD

Summary

CMS Energy Corporation, through its subsidiary Consumers Energy Company, announced on April 13, 2005, the issuance and sale of $150 million in principal amount of 5.65% Insured Quarterly Notes due 2035. This offering was conducted under an effective shelf registration statement and prospectus supplement. The primary purpose of this new debt issuance is to refinance existing debt. Specifically, Consumers Energy will use the proceeds to redeem its $140.7 million in outstanding 6.50% Senior Secured Insured Quarterly Notes due 2028 and to pay down a portion of its $332.25 million in outstanding 6.25% Senior Notes due 2006. This move suggests a strategy to lower borrowing costs by replacing higher-interest debt with newer, lower-interest notes.

Key Highlights

  • 1Consumers Energy Company issued $150 million in 5.65% Insured Quarterly Notes due 2035.
  • 2The issuance aims to refinance existing, higher-interest debt.
  • 3Proceeds will be used to redeem $140.7 million of 6.50% Senior Secured Insured Quarterly Notes due 2028.
  • 4A portion of $332.25 million of 6.25% Senior Notes due 2006 will also be redeemed.
  • 5The offering was made under an effective shelf registration statement (Form S-3).
  • 6The filing includes the 102nd Supplemental Indenture and a legal opinion regarding the IQ Notes.

Frequently Asked Questions

This Form 8-K is filed to report the issuance of $150 million of new debt (Insured Quarterly Notes) by Consumers Energy Company and to provide related documentation, such as the supplemental indenture and a legal opinion, as exhibits.

The $150 million raised will be used to redeem approximately $140.7 million of 6.50% Senior Secured Insured Quarterly Notes due 2028 and to redeem a portion of the outstanding 6.25% Senior Notes due 2006.

This issuance primarily represents a debt refinancing. Consumers Energy is replacing existing debt with notes carrying a lower interest rate (5.65% for the new notes compared to 6.50% and 6.25% for the notes being redeemed), indicating an effort to reduce interest expenses.

The term 'Insured' suggests that the principal and interest payments on these notes are likely guaranteed by a third-party insurance provider, which typically enhances the credit quality and marketability of the debt instrument. 'Quarterly Notes' indicates that interest payments are made on a quarterly basis.