Summary
Xcel Energy Inc. (XEL) filed an 8-K on January 16, 2008, to report the issuance of $400 million in aggregate principal amount of 7.60% Junior Subordinated Notes, Series due 2068. This issuance was made under a registration statement previously filed with the SEC and was accompanied by a prospectus supplement filed on January 14, 2008. The key takeaway for investors is the terms of a Replacement Capital Covenant entered into concurrently with the note issuance. This covenant restricts Xcel Energy's ability to redeem or purchase these junior subordinated notes before January 1, 2038. Such actions are permissible only if, in the 180 days prior, the company has raised a specified amount of capital from the sale of securities with equity-like characteristics, similar to or more equity-like than the junior subordinated notes themselves. This structure is designed to protect holders of the company's 6.50% Senior Notes due July 1, 2036.
Key Highlights
- 1Xcel Energy Inc. issued $400 million of 7.60% Junior Subordinated Notes due 2068.
- 2The notes were issued under an effective registration statement (Form S-3) and accompanied by a prospectus supplement.
- 3A Replacement Capital Covenant was established, impacting the ability to redeem or purchase the new notes.
- 4The covenant prohibits redemption or purchase of the junior subordinated notes before January 1, 2038, with certain exceptions.
- 5Exceptions to the redemption prohibition require the company to raise qualifying equity-like capital prior to such actions.
- 6The covenant's purpose is to protect holders of Xcel Energy's 6.50% Senior Notes due 2036.
- 7The filing includes various exhibits such as the indenture, supplemental indenture, replacement capital covenant, and legal opinions.