Southern Co. Announces Pricing Of $1.45 Bln Of 3.25% Convertible Senior Notes Due June 15, 2028

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(RTTNews) - Southern Co. (SO) announced the pricing of $1.45 billion in aggregate principal amount of its Series 2025A 3.25% Convertible Senior Notes due June 15, 2028 in a private placement to qualified institutional buyers, reflecting an upsize of $200 million over the previously announced offering size.

In addition, Southern Company granted the initial purchasers of the Convertible Notes an option to purchase, for settlement within a period of 13 days from, and including, the date the Convertible Notes are first issued, up to an additional $200 million in aggregate principal amount of the Convertible Notes.

The offering is expected to close on May 23, 2025.

Interest on the Convertible Notes will be paid semiannually at a rate of 3.25% per annum. The Convertible Notes will have an initial conversion rate of 8.8077 shares of Southern Company's common stock per $1,000 principal amount of the Convertible Notes, representing an initial conversion premium of approximately 25% above the last reported sale price of Southern company's common stock on May 20, 2025. The Convertible Notes will mature on June 15, 2028, unless repurchased or converted in accordance with their terms prior to such date.

Prior to March 15, 2028, the Convertible Notes will be convertible only upon the occurrence of certain events and during certain periods.

Southern Company estimates that the net proceeds from this offering will be approximately $1.44 billion, after deducting estimated initial purchasers' discounts and estimated offering expenses payable by Southern Company or approximately $1.63 billion if the initial purchasers exercise their option to purchase additional Series 2025A Convertible Senior Notes in full.

Southern Company intends to use approximately $1.25 billion of the net proceeds from this offering to repurchase approximately $781.6 million aggregate principal amount of its Series 2023A 3.875% Convertible Senior Notes due December 15, 2025 and approximately $328.1 million aggregate principal amount of its Series 2024A 4.50% Convertible Senior Notes due June 15, 2027.

Southern Company intends to use the remaining net proceeds to repay all or a portion of its outstanding commercial paper borrowings and for other general corporate purposes, which may include investment in its subsidiaries.