01—Abstract
Summary
Summary of the 8-K filed May 9, 2024. Cited figures are marked; the original filing is the authoritative source.
Southern Company (SO) announced on May 9, 2024, the issuance of $1.5 billiona in aggregate principal amount of Series 2024A 4.50% Convertible Senior Notes due June 15, 2027.
These unsecured notes bear a 4.50%b annual interest rate, payable semiannually. The issuance, which included an over-allotment option exercise, was conducted under exemptions from registration for qualified institutional buyers. Investors should note that these notes are convertible into SO common stock under specific conditions related to the stock's trading price or upon certain corporate events.
The initial conversion price is approximately $92.45c per share. In the event of a Fundamental Change, noteholders have the right to require the company to repurchase their notes at par value plus accrued interest. The company has the option to settle conversions with cash, shares, or a combination thereof.
02—Key points
Key Highlights
- Issued $1.5 billion in Series 2024A 4.50% Convertible Senior Notes due June 15, 2027.
- Notes carry a 4.50% annual interest rate, payable semi-annually.
- The notes are direct, unsecured, and unsubordinated obligations of Southern Company.
- Holders can convert notes into SO common stock if the stock price meets certain thresholds or upon specified corporate events.
- Initial conversion price is approximately $92.45 per share, with an initial maximum of 19,875,300 shares potentially issuable.
- Southern Company may settle conversions with cash, shares of common stock, or a combination.
- Holders may require repurchase of notes at 100% of principal plus accrued interest upon a Fundamental Change.
03—Questions
Frequently Asked Questions
What is the principal amount and interest rate of the new convertible notes?
Southern Company issued $1,500,000,000 (principal amount) of Series 2024A Convertible Senior Notes with a 4.50% annual interest rate.
When do these convertible notes mature?
The Series 2024A Convertible Senior Notes mature on June 15, 2027, unless earlier converted or repurchased.
Under what conditions can I convert these notes into Southern Company stock?
You can convert the notes if the Common Stock's last reported sale price is at least 130% of the conversion price for 20 trading days in a 30-day period, or if the trading price per $1,000 note is less than 98% of the stock price times the conversion rate over a 10-day period, or upon specified corporate events. Conversion is also permitted without these conditions after March 15, 2027.
What is the initial conversion price?
The initial conversion price is approximately $92.45 per share of Common Stock, based on an initial conversion rate of 10.8166 shares per $1,000 principal amount of notes.
What happens if there is a 'Fundamental Change'?
Upon the occurrence of a Fundamental Change, holders have the right to require Southern Company to purchase all or a portion of their notes for cash at 100% of the principal amount plus any accrued and unpaid interest.
04—Continue