What is an "at-the-market" (ATM) program, and why is Dominion Energy using it?

An "at-the-market" (ATM) program is a way for a company to sell its shares of stock over time in the open market at prevailing market prices. Dominion Energy is likely using this program to gain flexibility in raising capital as needed, without the immediate need for a large, underwritten offering. This allows them to opportunistically sell shares when market conditions are favorable.

How does the forward sale agreement structure work, and when will Dominion Energy receive money?

Under the forward sale agreements, a financial institution (forward purchaser) borrows shares and sells them in the market. Dominion Energy does not immediately receive cash from these initial sales. Instead, the company receives proceeds upon the future settlement of the forward sale agreement, which is expected to be physical settlement (delivering shares). The company can choose the timing of settlement up to a specified maturity date.

What are the risks if Dominion Energy chooses cash or net share settlement instead of physical settlement?

If Dominion Energy elects cash settlement, it might not receive any proceeds and could potentially owe cash to the forward purchaser. In the case of net share settlement, Dominion Energy will not receive any proceeds and will be obligated to deliver shares to the forward purchaser. These alternative settlements reduce or eliminate the capital raised from the program and can introduce liabilities for the company.

What is the maximum amount of capital Dominion Energy can raise through this ATM program?

The aggregate offering amount of common stock that can be sold through this program by Dominion Energy and the forward sellers cannot exceed $1,200,000,000, or $1.2 billion.

D 8-K SEC Disclosure — Feb 27, 2025

Summary

Dominion Energy, Inc. (D) has entered into twelve separate sales agency agreements with various financial institutions, establishing an "at-the-market" (ATM) program. This program allows the company to issue and sell shares of its common stock from time to time through these sales agents. The aggregate offering amount under this program is capped at $1.2 billion. This ATM program is designed to provide Dominion Energy with flexibility in raising capital by allowing it to sell shares opportunistically in the open market. The structure involves forward sale agreements, where a forward purchaser borrows shares to sell them initially, and Dominion Energy receives proceeds later upon settlement. While the company expects physical settlement, alternative settlement methods (cash or net share) exist, which could result in no proceeds or even an obligation for Dominion Energy to pay cash or deliver shares.

Key Highlights

1Dominion Energy has established an "at-the-market" (ATM) equity offering program with twelve financial institutions.
2The program allows for the issuance and sale of up to $1.2 billion of the Company's common stock.
3Shares can be sold through various methods permitted by law, including ordinary brokers' transactions and on the New York Stock Exchange.
4The program utilizes forward sale agreements, where shares are initially borrowed and sold by a forward purchaser.
5Dominion Energy will receive proceeds from the sale of shares upon future settlement of the forward sale agreements.
6While physical settlement is expected, Dominion Energy may elect cash or net share settlement, impacting net proceeds.
7The offering is registered under a Form S-3 registration statement filed previously.

DOMINION ENERGY, INC 8-K Report, Corporate Update (Feb 27, 2025)

Summary

Key Highlights

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