1. Southern Company plans to sell 35 million equity units worth $1.75 billion. 2. Proceeds will help repurchase convertible senior notes and reduce debt. 3. The offering aims at refinancing and strengthening financial position. 4. Market actions may be influenced by repurchases of outstanding notes. 5. Convertible notes strategy could affect Southern Company's stock price.
Selling equity units indicates confidence in future growth and stability.
The equity offering could enhance capital structure, positively impacting SO's price.
Immediate market reactions expected due to the equity offering announcement.
ATLANTA, Nov. 3, 2025 /PRNewswire/ -- Southern Company (NYSE:SO) today announced it plans to sell 35 million equity units in a public offering. Each 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 and two 1/40 undivided beneficial ownership interests in remarketable senior notes each having a principal amount of $1,000. Southern Company expects to grant to the underwriters an option to purchase an additional 5 million equity units ($250 million aggregate stated amount) solely for the purpose of covering over-allotments.
Southern Company intends to use a portion of the net proceeds from this offering to repurchase a portion of its Series 2023A 3.875% Convertible Senior Notes due December 15, 2025 (the "Series 2023A Convertible Notes") and 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 expects to enter into one or more 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 on terms to be negotiated with each such holder. The terms of each note repurchase transaction are anticipated to be individually negotiated with each such holder of the Existing Convertible Notes and will depend 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 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 will be joint book-running managers for the offering.
The offering will be 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 dg.prospectus_requests@bofa.com, J.P. Morgan Securities LLC collect at 1-212-834-4533 or Mizuho Securities USA LLC by email at US‑ECM@mizuhogroup.com.
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 planned 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