8-KFinancial EventsExhibits & Filings

CMS ENERGY CORP 8-K Report, Financial Obligation (Oct 1, 2018)

Filed October 1, 2018For Securities:CMSCMS-PCCMSACMSCCMSD

Summary

CMS Energy Corporation (CMS), through its principal subsidiary Consumers Energy Company, announced the successful closing of a private placement for $500 million in First Mortgage Bonds (FMBs). The issuance, which occurred on October 1, 2018, comprised $100 million of 3.68% FMBs due 2027, $215 million of 4.01% FMBs due 2038, and $185 million of 4.28% FMBs due 2057. This financing activity provides Consumers Energy with long-term capital, impacting its debt structure and maturity profile. The bonds are secured under an existing indenture and the terms include provisions for redemption at Consumers Energy's discretion. Investors should note the different interest rates and maturity dates associated with each tranche of the bonds, which reflect current market conditions and the respective durations.

Key Highlights

  • 1Consumers Energy successfully issued $500 million in First Mortgage Bonds (FMBs) on October 1, 2018.
  • 2The issuance was split into three tranches: $100 million (3.68% due 2027), $215 million (4.01% due 2038), and $185 million (4.28% due 2057).
  • 3The bonds were issued through a private placement with named Purchasers.
  • 4The FMBs are secured under an existing indenture, as supplemented by the 133rd Supplemental Indenture dated October 1, 2018.
  • 5Consumers Energy retains the option to redeem the bonds at various times prior to maturity, subject to specified redemption prices and potential premiums.
  • 6The filing confirms the closing and funding of the bond issuance, as previously reported on July 24, 2018.
  • 7The Chief Financial Officer, Rejji P. Hayes, signed on behalf of both CMS Energy Corporation and Consumers Energy Company.

Frequently Asked Questions

This 8-K filing was made to report the creation of a direct financial obligation for CMS Energy Corporation's subsidiary, Consumers Energy Company. Specifically, it announced the closing and funding of a $500 million private placement of First Mortgage Bonds.

Consumers Energy issued a total of $500 million in First Mortgage Bonds. This was divided into $100 million of 3.68% bonds due in 2027, $215 million of 4.01% bonds due in 2038, and $185 million of 4.28% bonds due in 2057. Interest is payable semi-annually.

Yes, Consumers Energy has the option to redeem any or all of the issued bonds at any time prior to their respective maturity dates. The redemption price would be 100% of the principal amount plus any applicable premium and accrued interest.

The filing states that the bonds were sold to 'Purchasers in the private placement market.' This suggests that these are not publicly traded securities but were placed directly with a group of investors rather than being offered on public exchanges.