Southern Company announces upsize and pricing of $1.45 billion in aggregate principal amount of Series 2025A 3.25% Convertible Senior Notes due June 15, 2028

Core Viewpoint - Southern Company has announced the pricing of $1.45 billion in Convertible Senior Notes, reflecting an increase of$200 million from the previously announced offering size, with an expected closing date of May 23, 2025 [1][4]. Group 1: Offering Details - The Convertible Notes have a 3.25% interest rate, payable semiannually, and will mature on June 15, 2028 [2][3]. - The initial conversion rate is set at 8.8077 shares per $1,000 principal amount, equating to a conversion price of approximately$113.54 per share, representing a 25% premium over the last reported sale price [2][3]. - An option for initial purchasers to buy an additional $200 million in Convertible Notes is available within 13 days of issuance [1]. Group 2: Use of Proceeds - Southern Company estimates net proceeds of approximately$1.44 billion, or $1.63 billion if the additional option is fully exercised, which will primarily be used to repurchase existing Convertible Notes and for general corporate purposes [4]. - Approximately$1.25 billion of the net proceeds will be allocated to repurchase about $781.6 million of Series 2023A Convertible Notes and$328.1 million of Series 2024A Convertible Notes [4]. Group 3: Repurchase Transactions - The company has entered into privately negotiated transactions to repurchase portions of the Existing Convertible Notes, with terms dependent on various market factors [5]. - There is an expectation that holders of the Existing Convertible Notes may engage in derivative transactions or stock trades to hedge their exposure related to these repurchase transactions [6][7].