ATLANTA, GA – Southern Company (NYSE:SO), a utility giant with an $88.5 billion market capitalization and a strong track record of 23 consecutive years of dividend increases, has finalized the sale of $565 million in junior subordinated notes, according to a recent SEC filing.
The energy company, which according to InvestingPro maintains a "GOOD" overall financial health rating, entered into an underwriting agreement on January 8, 2025, with a syndicate of banks including BofA Securities, J.P. Morgan Securities, Morgan Stanley (NYSE:MS), RBC Capital Markets, and Wells Fargo (NYSE:WFC) Securities.
The offering consists of Series 2025A 6.50% Junior Subordinated Notes due March 15, 2085. Initially, the company agreed to issue $500 million aggregate principal amount of these notes. Following an additional option exercised by the underwriters on January 10, 2025, for $65 million, the total issuance reached $565 million.
This financial move comes as part of Southern Company's broader strategy to raise capital, with the company currently maintaining a debt-to-equity ratio of 1.95. The notes were offered under the company's shelf registration statement, which allows for the issuance of securities over time. Based on InvestingPro's Fair Value analysis, Southern Company appears to be trading near its Fair Value, making this capital raise particularly timely. The notes are registered under the Securities Act of 1933, as amended.
The proceeds from the sale of the Series 2025A Junior Subordinated Notes are not specified in the SEC filing. However, such financial instruments are typically used by companies to secure capital for various corporate purposes, including refinancing existing debt, funding capital expenditures, or investing in growth opportunities.
Southern Company is an energy provider headquartered in Atlanta, Georgia, operating primarily in the electric utility sector, offering investors a solid 3.54% dividend yield and maintaining dividend payments for 54 consecutive years. The issuance of these junior subordinated notes is part of the company's financial management practices, aiming to optimize its capital structure and maintain financial flexibility. InvestingPro subscribers can access 6 additional key insights and a comprehensive Pro Research Report, which provides deep-dive analysis of the company's financial health and growth prospects.
In other recent news, Southern Company announced a change in its executive leadership, with Stanley W. Connally Jr. set to become the new Executive Vice President and Chief Operating Officer starting January 1, 2025. Connally, a seasoned executive with Southern Company, will take up this new role, according to the company's recent SEC filing.
Alongside this, Southern Company's subsidiary, Southern Power, revealed the final expansion phase of its Millers Branch Solar Facility in Texas, which will increase the facility's capacity by 132 megawatts, making it the company's largest solar project to date.
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