8-KShareholder MattersCorporate ChangesOther Events+1

CMS ENERGY CORP 8-K Report, Rights Modification (Jul 1, 2021)

Filed July 1, 2021For Securities:CMSCMS-PCCMSACMSCCMSD

Summary

CMS Energy Corporation (CMS) announced on July 1, 2021, the successful issuance and sale of 9,200,000 depositary shares, each representing a 1/1,000th interest in its 4.200% Cumulative Redeemable Perpetual Preferred Stock, Series C. The company raised approximately $224.5 million in net proceeds from this offering, after accounting for underwriting discounts but before other expenses. These funds are earmarked for general corporate purposes, including bolstering working capital and reducing existing indebtedness. The issuance of this preferred stock introduces certain restrictions. Specifically, CMS Energy and its subsidiaries are prohibited from declaring or paying dividends on, or repurchasing, common stock or any junior capital stock, unless all cumulative dividends on the Series C Preferred Stock have been paid for all preceding periods or funds are set aside for such payment. This filing details the Certificate of Designation establishing the preferred stock and the related Deposit Agreement.

Key Highlights

  • 1CMS Energy issued 9.2 million depositary shares representing Series C Perpetual Preferred Stock.
  • 2The offering generated net proceeds of approximately $224.5 million.
  • 3Proceeds will be used for general corporate purposes, including working capital and debt repayment.
  • 4The preferred stock carries a 4.200% cumulative dividend rate.
  • 5Restrictions are in place regarding common stock dividends and repurchases if preferred stock dividends are not current.
  • 6The issuance was conducted under a Form S-3 shelf registration statement.
  • 7The filing includes various exhibits detailing the underwriting agreement, certificate of designation, and deposit agreement.

Frequently Asked Questions

This 8-K filing primarily announces the completion of CMS Energy's offering of 9,200,000 depositary shares of its 4.200% Cumulative Redeemable Perpetual Preferred Stock, Series C, and includes details about the terms of the offering, the use of proceeds, and related legal documentation.

CMS Energy raised approximately $224,498,112.50 in net proceeds from the sale of these depositary shares, after deducting underwriting discounts but before considering other expenses.

The Series C Preferred Stock imposes restrictions on CMS Energy's ability to pay dividends on or repurchase its common stock or any junior securities if it has not paid all cumulative dividends on the preferred stock for all preceding periods, or set aside sufficient funds to do so.

CMS Energy intends to use the net proceeds from this offering for general corporate purposes, which include strengthening its working capital position and repaying outstanding indebtedness.