Summary
Duke Energy Corporation (DUK) filed an 8-K on September 12, 2019, to report the consummation of a public offering of 1,000,000 shares of its 4.875% Series B Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Stock. This issuance, with a liquidation preference of $1,000 per share, was effective on September 11, 2019, upon the filing of the Certificate of Designations with the Secretary of State of Delaware. The new Series B Preferred Stock ranks on par with existing preferred stock, such as the 5.75% Series A Cumulative Redeemable Perpetual Preferred Stock. This filing is significant for investors as it details the terms of a new preferred stock issuance. Importantly, the terms of the Series B Preferred Stock include restrictions on the company's ability to pay dividends on or repurchase its common stock or other junior securities if full cumulative dividends on the Series B Preferred Stock and any parity stock are not declared and paid. This aims to protect preferred shareholders and maintain their dividend priority, which is a key consideration for income-focused investors.
Key Highlights
- 1Duke Energy successfully closed a public offering of 1,000,000 shares of 4.875% Series B Cumulative Redeemable Perpetual Preferred Stock.
- 2The liquidation preference for the Series B Preferred Stock is $1,000 per share.
- 3The Certificate of Designations establishing the rights and preferences of the Series B Preferred Stock was filed on September 11, 2019.
- 4The issuance of the Series B Preferred Stock includes provisions that restrict dividends on junior securities if cumulative dividends on the Series B Preferred Stock and parity stock are not met.
- 5This preferred stock issuance is senior to common stock and ranks on par with other preferred stock, such as the 5.75% Series A Cumulative Redeemable Perpetual Preferred Stock.
- 6The underwriting agreement for this offering was with major financial institutions including Barclays, Credit Suisse, Goldman Sachs, and J.P. Morgan.