ATLANTA, Nov. 3, 2025 /PRNewswire/ -- Southern Company (NYSE:SO) today announced it has priced its offering of 35 million 2025 Series A Equity Units. Each 2025 Series A Equity Unit will be issued in a stated amount of $50 ($1.75 billion aggregate stated amount) and will consist of a contract to purchase Southern Company common stock in the future, a 1/40 undivided beneficial ownership interest in Southern Company's Series 2025B Remarketable Senior Notes due 2030 having a principal amount of $1,000 and a 1/40 undivided beneficial ownership interest in Southern Company's Series 2025C Remarketable Senior Notes due 2033 having a principal amount of $1,000. Each of the remarketable senior notes is subject to remarketing to commence no earlier than June 13, 2028. The offering is expected to close on November 6, 2025, subject to customary closing conditions.
Total annual distributions on the 2025 Series A Equity Units will be at the rate of 7.125 percent, consisting of interest on the Series 2025 Remarketable Senior Notes due 2030, interest on the Series 2025B Remarketable Senior Notes due 2033 and payments under the related stock purchase contracts. The reference price for the 2025 Series A Equity Units is $93.15 per share. The threshold appreciation price for the 2025 Series A Equity Units is $116.44 per share, which represents a premium of approximately 25.0 percent over the reference price. Under the purchase contract, holders are required to purchase a variable number of shares of Southern Company common stock no later than December 15, 2028.
Southern Company has granted the underwriters an option to purchase during the 13-day period beginning on, and including, the initial issuance date of the 2025 Series A Equity Units up to 5 million additional 2025 Series A Equity Units (an additional aggregate stated amount of $250 million), solely for the purpose of covering over-allotments.
Southern Company estimates that the net proceeds from this offering will be approximately $1.719 billion (or $1.965 billion if the over-allotment option is exercised in full), after deducting the underwriting discounts and commissions but before deducting other offering expenses. Southern Company intends to use approximately $1.153 billion of the net proceeds from this offering to repurchase (i) approximately $674.4 million aggregate principal amount of its Series 2023A 3.875% Convertible Senior Notes due December 15, 2025 (the "Series 2023A Convertible Notes") and (ii) approximately $342.0 million aggregate principal amount of its Series 2024A 4.50% Convertible Senior Notes due June 15, 2027 (together with the Series 2023A Convertible Notes, the "Existing Convertible Notes"), in each case through individually negotiated transactions with a limited number of holders thereof (each, a "note repurchase transaction"), effected through one of the underwriters for the equity units or its affiliate. Southern Company intends to use the remaining net proceeds from this offering (i) to repay all or a portion of Southern Company's short-term indebtedness, (ii) to repay at maturity all or a portion of the remaining outstanding Series 2023A Convertible Notes and (iii) to satisfy all or a portion of the redemption price in connection with the proposed redemption at par of the $1.25 billion aggregate principal amount of its Series 2020B 4.00% Fixed-to-Fixed Reset Rate Junior Subordinated Notes due January 15, 2051. Any remaining net proceeds will be used for general corporate purposes, including investments in Southern Company's subsidiaries.
Contemporaneously with the pricing of the equity units, Southern Company entered into separate and privately negotiated transactions with a limited number of holders of the Existing Convertible Notes to use a portion of the proceeds of the offering to repurchase a portion of the Existing Convertible Notes, as described above, on terms negotiated with each such holder. The terms of each note repurchase transaction were individually negotiated with each such holder of the Existing Convertible Notes and depended on several factors, including the market price of Southern Company's common stock and the trading price of the applicable Existing Convertible Notes at the time of each such note repurchase. Southern Company may also repurchase outstanding Existing Convertible Notes following the completion of the offering of the equity units. No assurance can be given as to how much, if any, of the Existing Convertible Notes will be repurchased following the completion of the offering or the terms on which they will be repurchased.
Southern Company expects that holders of the Existing Convertible Notes that sell their Existing Convertible Notes to Southern Company in any note repurchase transaction may enter into or unwind various derivatives with respect to Southern Company's common stock and/or purchase or sell shares of Southern Company's common stock in the market to hedge their exposure in connection with these transactions. In particular, Southern Company expects that many holders of the Existing Convertible Notes employ a convertible arbitrage strategy with respect to the Existing Convertible Notes and have a short position with respect to Southern Company's common stock that they would close, through purchases of Southern Company's common stock and/or the entry into or unwind of economically equivalent derivatives transactions with respect to Southern Company's common stock, in connection with Southern Company's repurchase of their Existing Convertible Notes for cash. This activity could increase (or reduce the size of any decrease in) the market price of Southern Company's common stock or the equity units at that time and could result in a higher effective reference price for the stock purchase contract component of the equity units.
BofA Securities, J.P. Morgan and Mizuho are acting as joint book-running managers for the offering.
The offering is being made under an effective shelf registration statement filed with the U.S. Securities and Exchange Commission. This news release does not constitute an offer to sell or a solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities law of any such jurisdiction. Any offers of the securities will be made exclusively by means of a prospectus supplement and accompanying prospectus. Copies of these documents may be obtained by contacting BofA Securities, Inc. by email at [email protected], J.P. Morgan Securities LLC collect at 1-212-834-4533 or Mizuho Securities USA LLC by email at US‑[email protected].
Southern Company is an energy provider serving 9 million customers across the Southeast and beyond through its family of companies. The company owns electric operating companies in three states, natural gas distribution companies in four states, a competitive generation company, a distributed energy distribution company, a fiber optics network and a telecommunications services provider.
Cautionary Note Regarding Forward-Looking Statements:
Certain information contained in this release is forward-looking information based on current expectations and plans that involve risks and uncertainties. Forward-looking information includes, among other things, statements concerning the equity units offering, the use of proceeds from the offering and the note repurchase transactions. Southern Company cautions that there are certain factors that can cause actual results to differ materially from the forward-looking information that has been provided. The reader is cautioned not to put undue reliance on this forward-looking information, which is not a guarantee of future performance and is subject to a number of uncertainties and other factors, many of which are outside the control of Southern Company; accordingly, there can be no assurance that such suggested results will be realized. The following factors, in addition to those discussed in Southern Company's Annual Report on Form 10-K for the year ended December 31, 2024, Quarterly Reports on Form 10-Q for the quarters ended March 31, 2025, June 30, 2025 and September 30, 2025 and subsequent securities filings, could cause actual results to differ materially from management expectations as suggested by such forward-looking information: global and U.S. economic conditions, including impacts from geopolitical conflicts, recession, inflation, changes in trade policies (including tariffs and other trade measures) of the United States and other countries, interest rate fluctuations and financial market conditions and the results of financing efforts; access to capital markets and other financing sources; changes in Southern Company's credit ratings; and catastrophic events such as fires, earthquakes, explosions, floods, tornadoes, hurricanes and other storms, droughts, pandemic health events, political unrest, wars or other similar occurrences. Southern Company expressly disclaims any obligation to update any forward‐looking information.
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SOURCE Southern Company