The energy provider upsized its 2027 and 2029 convertible senior note offerings, set interest rates and conversion terms, and earmarked part of the proceeds to repurchase outstanding 2024A notes and reduce short-term debt.
Southern Company priced $725 million of Series 2026A 2.125% Convertible Senior Notes due December 15, 2027 and $1.65 billion of Series 2026B 3.50% Convertible Senior Notes due September 15, 2029 in Rule 144A private placements, increasing the deal sizes from the previously announced $650 million and $1.5 billion. The company also granted initial purchasers 13-day options to buy up to an additional $108.75 million of the 2027 notes and $247.5 million of the 2029 notes, and said the offerings are expected to close on August 6, 2026, subject to customary conditions. The 2027 notes carry an initial conversion rate of 9.5641 shares per $1,000 principal amount, equal to an initial conversion price of about $104.56 per share and a 12.5% premium to Southern Company's last reported stock price on August 3, 2026. The 2029 notes carry an initial conversion rate of 8.4389 shares per $1,000, equal to an initial conversion price of about $118.50 per share and a 27.5% premium. Southern Company expects net proceeds of about $721 million from the 2027 notes and about $1.63 billion from the 2029 notes, before any exercise of the additional purchase options. It plans to use about $403 million to repurchase roughly $369 million principal amount of its Series 2024A 4.50% Convertible Senior Notes due June 15, 2027 through privately negotiated transactions, with the balance intended for short-term debt repayment and other general corporate purposes, including possible investment in subsidiaries. The company said hedging activity tied to those repurchases could affect its share price or the new notes and potentially raise the effective conversion prices.