What is the purpose of the newly created Convertible Preferred Stock?

The 1.75% Series A Cumulative Perpetual Convertible Preferred Stock was created to be a component of the 2019 Series A Corporate Units. It serves as collateral for the obligation to purchase common stock in the future and will pay dividends to the holders of the Corporate Units.

What are the 2019 Series A Corporate Units and how do they work?

The 2019 Series A Corporate Units are equity units offered to investors. Each unit includes a contract to buy Dominion Energy common stock by June 1, 2022, and a fractional ownership interest in the new Convertible Preferred Stock. The preferred stock acts as collateral for the stock purchase commitment.

What are the expected returns for investors in the 2019 Series A Corporate Units?

Investors in the 2019 Series A Corporate Units are entitled to receive quarterly dividends on the Convertible Preferred Stock at a rate of 1.75% per year (based on the $1,000 liquidation preference per share), and quarterly contract adjustment payments at a rate of 5.50% per year on the $100 stated amount per unit.

When will the common stock purchase obligation for the 2019 Series A Corporate Units be settled?

The purchase contract obligation for the 2019 Series A Corporate Units requires holders to purchase shares of Dominion Energy common stock no later than June 1, 2022.

D 8-K: Corporate Changes

Summary

Dominion Energy, Inc. (D) filed an 8-K on June 13, 2019, detailing significant corporate actions related to its capital structure and equity offerings. The company amended its Articles of Incorporation to create a new series of preferred stock: the 1.75% Series A Cumulative Perpetual Convertible Preferred Stock. This new class of stock is a key component of the company's recently offered 2019 Series A Corporate Units.

Key Highlights

1Creation of a new 1.75% Series A Cumulative Perpetual Convertible Preferred Stock.
2Issuance of up to 14,000,000 (plus an overallotment option of 2,100,000) 2019 Series A Corporate Units.
3Each Corporate Unit consists of a purchase contract for common stock (settlement by June 1, 2022) and beneficial ownership of 1/10th of a share of Convertible Preferred Stock.
4The Convertible Preferred Stock underlying the Corporate Units is pledged as collateral to secure the common stock purchase obligation.
5The Convertible Preferred Stock will receive quarterly dividends at a rate of 1.75% per year on its $1,000 liquidation preference.
6Holders of Corporate Units will also receive quarterly contract adjustment payments at a rate of 5.50% per year on the $100 stated amount per unit.

DOMINION ENERGY, INC 8-K Report, Bylaw Amendment (Jun 14, 2019)

Summary

Key Highlights

Frequently Asked Questions