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CONSOLIDATED EDISON INC 8-K Report, Material Agreement (Feb 25, 2026)

Filed February 25, 2026For Securities:ED

Summary

Consolidated Edison, Inc. (Con Edison) announced on February 23, 2026, its entry into a forward sale agreement with JPMorgan Chase Bank, National Association, for 7,000,000 shares of its common stock. This agreement is expected to settle by December 31, 2026, with options for earlier settlement or cash/net share settlement under certain conditions. The initial forward price is set at $110.81 per share, subject to daily adjustments based on the overnight bank funding rate and potential decreases related to expected dividends. This transaction effectively allows Con Edison to secure a future sale price for a significant block of its shares. While the primary settlement method is physical issuance of shares, the company retains the flexibility for cash or net share settlement. However, investors should note that the forward purchaser has the right to accelerate settlement under various conditions, which could lead to an earlier issuance of shares and potential dilution to existing shareholders. The filing also references an underwriting agreement for the sale of these same shares.

Key Highlights

  • 1Con Edison entered into a forward sale agreement for 7,000,000 common shares with JPMorgan Chase Bank, N.A.
  • 2The agreement is set to settle by December 31, 2026, with potential for earlier settlement at Con Edison's option.
  • 3The initial forward price is $110.81 per share, with adjustments for interest rates and expected dividends.
  • 4Con Edison has the option to settle the agreement physically (issuing shares), via cash, or through net share settlement.
  • 5The forward purchaser can accelerate settlement under specific conditions, potentially leading to earlier share issuance and dilution.
  • 6An associated underwriting agreement with J.P. Morgan Securities LLC for the sale of these 7,000,000 shares is also disclosed.
  • 7The transaction is registered under the Securities Act of 1933 via a Form S-3.

Frequently Asked Questions

The forward sale agreement allows Con Edison to effectively lock in a future sale price for 7,000,000 shares of its common stock. This provides a mechanism to raise capital in the future at a predetermined price, subject to adjustments, while also offering flexibility in settlement methods.

The primary risk is the potential for dilution to existing shareholders if Con Edison is required to physically issue shares earlier than anticipated due to the forward purchaser's right to accelerate settlement. This acceleration can be triggered by various events, including the forward purchaser's inability to borrow shares or changes in regulatory ownership positions. Additionally, certain events like bankruptcy or insolvency would terminate the agreement without Con Edison receiving proceeds.

The forward price is initially set at $110.81 per share. This price is subject to daily adjustments based on a floating interest rate factor linked to the overnight bank funding rate minus a spread. It can also be decreased on certain dates by amounts related to expected dividends on Con Edison's common shares during the term of the agreement.

Yes, Con Edison generally has the right to elect cash settlement or net share settlement, in addition to the default physical settlement (issuing shares). However, this right is subject to certain conditions outlined in the agreement, and the forward purchaser also has significant rights regarding settlement acceleration.