Summary
Exelon Corporation (EXC) announced the successful closing of a public offering and sale of $1 billion in aggregate principal amount of its 6.500% Fixed-to-Fixed Reset Rate Junior Subordinated Notes due 2055 on February 19, 2025. The net proceeds, approximately $990 million after underwriting discounts, will be used by the company. These notes carry a fixed interest rate of 6.500% until March 15, 2035, after which the rate will reset every five years based on the Five-year U.S. Treasury Rate plus a spread of 1.975%. Key features of these junior subordinated notes include the company's option to defer interest payments under certain conditions and the possibility of redemption by Exelon. This issuance represents a significant financing event for Exelon, aimed at funding its operations or strategic initiatives. Investors should note the subordinated nature of these notes, their long maturity, and the variable interest rate component after the initial fixed period.
Key Highlights
- 1Exelon Corp. successfully closed a $1 billion public offering of 6.500% Junior Subordinated Notes due 2055.
- 2Net proceeds from the offering are approximately $990 million.
- 3The notes feature a fixed interest rate of 6.500% for the first approximately 10 years (until March 15, 2035).
- 4After March 15, 2035, the interest rate will reset every five years based on the Five-year U.S. Treasury Rate plus a spread of 1.975%.
- 5Exelon has the option to defer interest payments on the notes under specified conditions.
- 6The company also retains the option to redeem the notes, in whole or in part, under certain circumstances.
- 7These notes are junior subordinated debt, indicating a lower priority in claim on assets compared to senior debt.