Summary
Southern Company (SO) has filed an 8-K report detailing the completion of an optional remarketing for its Series 2019A and Series 2019B Junior Subordinated Notes. These notes, originally part of Corporate Units issued in 2019, were remarketed with updated interest rates: 4.475% for the Series 2019A notes due in 2024 and 5.113% for the Series 2019B notes due in 2027. Importantly, Southern Company did not receive any proceeds from this remarketing. Instead, the proceeds were used to purchase treasury securities, which are intended to fund the settlement of associated Purchase Contracts on August 1, 2022. This event is primarily a financial maneuver to reset the terms of these specific junior subordinated notes and facilitate the settlement of related financial instruments. Investors should note that this transaction did not directly inject new capital into the company, nor did it result in an immediate cash outlay beyond the administration of the remarketing and associated securities. The primary impact for investors is the change in the coupon rates for these particular notes and the upcoming settlement of the Purchase Contracts.
Key Highlights
- 1Southern Company completed the remarketing of $1.725 billion in aggregate principal amount of Series 2019A and 2019B Junior Subordinated Notes.
- 2The interest rate for Series 2019A Junior Subordinated Notes due August 1, 2024, was reset to 4.475% per annum.
- 3The interest rate for Series 2019B Junior Subordinated Notes due August 1, 2027, was reset to 5.113% per annum.
- 4The Company did not receive any proceeds from this remarketing transaction.
- 5Proceeds from the remarketing were used to purchase U.S. Treasury securities maturing on or before August 1, 2022.
- 6These treasury securities are intended to fund the settlement of associated Purchase Contracts on August 1, 2022.