01—Abstract
Summary
Summary of the 8-K filed May 28, 2024. Cited figures are marked; the original filing is the authoritative source.
WEC Energy Group, Inc. issued $825,000,000a aggregate principal amount of 4.375% Convertible Senior Notes due 2027 and $825,000,000 aggregate principal amount of 4.375% Convertible Senior Notes due 2029 on May 28, 2024, under separate indentures with The Bank of New York Mellon Trust Company, N.A., as trustee.
Each series includes $75,000,000b issued upon partial exercise of the initial purchasers' over-allotment option. The initial purchasers hold a remaining option, exercisable within a 13-day period, to buy up to an additional $37,500,000 of each series. The notes were sold under a Purchase Agreement dated May 22, 2024, in a private placement to qualified institutional buyers under Rule 144A.
Both series are senior unsecured obligations that are structurally junior to all liabilities of the company's subsidiaries and bear interest at 4.375%c per year, payable semiannually on June 1 and December 1, beginning December 1, 2024. The 2027 Notes mature June 1, 2027, and cannot be redeemed by the company before maturity. The 2029 Notes mature June 1, 2029, and cannot be redeemed before June 1, 2027.
Conversion is initially at 10.1243 shares per $1,000d principal amount, equivalent to about $98.77 per share. The company may settle conversions in cash, shares, or a combination, with cash required at least up to principal.
For investors, the key terms are the conversion price, the conversion-triggered cash settlement election, and holder put rights on a fundamental change at 100% of principal plus accrued interest. The filing also discloses that up to 10,478,599 shares of common stock may be issued on conversion of each series at the initial maximum conversion rate of 12.1491 shares per $1,000 principal, subject to anti-dilution adjustments.
02—Key points
Key Highlights
- Issued $825 million of 4.375% Convertible Senior Notes due 2027 and $825 million of 4.375% Convertible Senior Notes due 2029 on May 28, 2024, each including $75 million from partial over-allotment exercise
- Initial conversion price of approximately $98.77 per share of common stock (conversion rate of 10.1243 shares per $1,000 principal amount) for both series
- Initial purchasers hold a 13-day option to buy up to an additional $37.5 million of each series
- 2027 Notes mature June 1, 2027 and are not redeemable by the company before maturity; 2029 Notes mature June 1, 2029 and are not redeemable before June 1, 2027
- Company may settle conversions in cash, shares, or a combination, with cash up to the aggregate principal amount required
- Both series are senior unsecured and structurally junior to all liabilities of subsidiaries; holders may require repurchase at 100% of principal plus accrued interest upon a Fundamental Change
- Up to 10,478,599 shares of common stock may be issued on conversion of each series at the initial maximum conversion rate of 12.1491 shares per $1,000 principal, subject to anti-dilution adjustments
03—Questions
Frequently Asked Questions
What did WEC Energy Group issue on May 28, 2024?
The company issued $825,000,000 aggregate principal amount of 4.375% Convertible Senior Notes due 2027 and $825,000,000 aggregate principal amount of 4.375% Convertible Senior Notes due 2029, sold under a Purchase Agreement dated May 22, 2024.
What is the conversion price of the notes?
The initial conversion rate is 10.1243 shares of common stock per $1,000 principal amount, equivalent to an initial conversion price of approximately $98.77 per share, for both series.
When can holders convert the notes?
Holders may convert during any calendar quarter after the quarter ending September 30, 2024, if the stock trades at or above 130% of the conversion price for at least 20 of 30 consecutive trading days, or if the trading price condition is met. Holders may also convert upon specified corporate events, and at any time from March 1, 2027 for the 2027 Notes or March 1, 2029 for the 2029 Notes until the second scheduled trading day before maturity. For the 2029 Notes, holders may also convert if the company calls notes for redemption.
When can WEC redeem the 2029 Notes?
The company may not redeem the 2029 Notes before June 1, 2027. On or after that date and before the 41st scheduled trading day before maturity, it may redeem all or part for cash at 100% of principal plus accrued interest, if the stock has traded at or above 130% of the conversion price for at least 20 of 30 consecutive trading days. The 2027 Notes cannot be redeemed before maturity.
How will conversions be settled, and how many shares could be issued?
The company will pay cash up to the aggregate principal amount of notes converted and may pay the excess in cash, common stock, or a combination, at its election. Initially, a maximum of 10,478,599 shares may be issued upon conversion of each series, based on a maximum conversion rate of 12.1491 shares per $1,000 principal amount, subject to anti-dilution adjustments.
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