Southern Company announces pricing of equity units

Core Viewpoint - Southern Company has announced the pricing of its offering of 35 million 2025 Series A Equity Units, aiming to raise approximately $1.75 billion in total stated amount, with the offering expected to close on November 6, 2025 [1][4]. Summary by Sections Offering Details - Each 2025 Series A Equity Unit is priced at $50, aggregating to a total of $1.75 billion [1]. - The offering includes a contract to purchase Southern Company common stock in the future and beneficial ownership interests in two series of Remarketable Senior Notes [1]. - The total annual distributions on the equity units will be at a rate of 7.125%, which includes interest from the Remarketable Senior Notes and payments under the stock purchase contracts [2]. Financial Proceeds and Use - 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 [4]. - Approximately $1.153 billion of the net proceeds will be used to repurchase existing convertible senior notes, including $674.4 million of Series 2023A Convertible Senior Notes and $342.0 million of Series 2024A Convertible Senior Notes [4]. - Remaining proceeds will be allocated to repay short-term debt, redeem outstanding notes, and for general corporate purposes [4]. Underwriting and Management - BofA Securities, J.P. Morgan, and Mizuho are acting as joint book-running managers for the offering [7]. - The offering is made under an effective shelf registration statement filed with the U.S. Securities and Exchange Commission [8]. Market Impact and Strategy - The company has engaged in privately negotiated transactions to repurchase existing convertible notes, which may influence the market price of Southern Company's common stock [5][6]. - The repurchase strategy may involve holders of the existing notes engaging in derivative transactions to hedge their exposure, potentially affecting stock prices [6].