Southern Company announces pricing of equity units
3 minute readPublished: Tuesday, November 4, 2025 at 4:21 am
Southern Company Announces Pricing of Equity Units
Southern Company has announced the pricing of its offering of 35 million 2025 Series A Equity Units. Each unit, with a stated amount of $50, will consist of a future stock purchase contract, and interests in remarketable senior notes due in 2030 and 2033. The total aggregate stated amount of the offering is $1.75 billion. The offering is expected to close on November 6, 2025, subject to standard closing conditions.
The annual distributions on these equity units will be 7.125 percent. The reference price for the units is $93.15 per share, with a threshold appreciation price of $116.44 per share. Holders of the units will be required to purchase Southern Company common stock no later than December 15, 2028.
Underwriters have an option to purchase up to 5 million additional equity units, potentially increasing the aggregate stated amount by $250 million. Southern Company estimates net proceeds from the offering to be approximately $1.719 billion, or $1.965 billion if the over-allotment option is fully exercised.
The company plans to use approximately $1.153 billion of the net proceeds to repurchase existing convertible notes. The remaining proceeds will be used to repay short-term debt, repay a portion of the remaining outstanding convertible notes, and satisfy a redemption price for junior subordinated notes. Any remaining funds will be used for general corporate purposes, including investments in Southern Company's subsidiaries.
Simultaneously, Southern Company entered into privately negotiated transactions to repurchase a portion of existing convertible notes. The terms of these transactions were individually negotiated. The company may also repurchase additional existing convertible notes after the equity unit offering.
BofA Securities, J.P. Morgan, and Mizuho are acting as joint book-running managers for the offering.
BNN's Perspective: This offering appears to be a strategic move by Southern Company to manage its debt and potentially capitalize on future stock appreciation. The repurchase of existing convertible notes suggests a proactive approach to managing its capital structure. However, investors should carefully review the prospectus supplement and accompanying prospectus for a complete understanding of the risks and potential rewards.
Keywords: Southern Company, equity units, offering, stock purchase contract, senior notes, convertible notes, debt, repurchase, financing, investment, BofA Securities, J.P. Morgan, Mizuho.