Southern Company filed an 8-K announcing the pricing of 35 million 2026 Series A Equity Units at a stated amount of $50 per unit, totaling $1.75 billion in aggregate stated amount, with the offering expected to close on November 17, 2026.

Key Highlights

  • Offering size: 35 million 2026 Series A Equity Units priced at $50 each, for an aggregate stated amount of $1.75 billion.
  • Annual distribution rate: 8.625 percent per year, combining interest on two series of remarketable senior notes and stock purchase contract payments.
  • Reference and threshold prices: The reference price is $92.47 per share; the threshold appreciation price is $115.58 per share, a premium of approximately 25.0 percent over the reference price.
  • Over-allotment option: Underwriters may purchase up to 5 million additional units (an additional $250 million aggregate stated amount) during the 13-day period beginning on the initial issuance date.
  • Estimated net proceeds: Approximately $1.724 billion, or approximately $1.970 billion if the over-allotment option is exercised in full, after underwriting discounts and commissions.
  • Use of proceeds: Approximately $135.3 million will be used to repurchase approximately $125.8 million aggregate principal of Series 2024A 4.50% Convertible Senior Notes due June 15, 2027; the remainder will repay short-term indebtedness and fund general corporate purposes.
  • Stock purchase settlement: Holders are required to purchase a variable number of Southern Company common shares no later than December 15, 2029.

Southern Company's 2026 Series A Equity Units: Structure, Pricing, and Proceeds Plan

According to the filing, Southern Company (NYSE:SO) priced 35 million 2026 Series A Equity Units on November 12, 2026. Each unit carries a stated amount of $50 and consists of three components: a stock purchase contract, a 1/40 undivided beneficial ownership interest in Series 2026C Remarketable Senior Notes due 2031 (principal amount of $1,000 each), and a 1/40 undivided beneficial ownership interest in Series 2026D Remarketable Senior Notes due 2034 (principal amount of $1,000 each). The company disclosed that each of the remarketable senior notes is subject to remarketing to commence no earlier than June 13, 2029. BofA Securities and Barclays are acting as joint book-running managers, according to the filing.

The company reported that total annual distributions will be at a rate of 8.625 percent, drawn from interest on both note series and payments under the stock purchase contracts. The reference price for the equity units is $92.47 per share, with a threshold appreciation price of $115.58 per share, described in the filing as representing 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, 2029.

The company disclosed that approximately $135.3 million of net proceeds will be used to repurchase approximately $125.8 million aggregate principal amount of its Series 2024A 4.50% Convertible Senior Notes due June 15, 2027, through individually negotiated transactions effected through one of the underwriters or its affiliate. The filing noted that Southern Company expects holders selling those notes may enter into or unwind derivatives or purchase or sell shares of Southern Company common stock to hedge their exposure, activity that "could increase (or reduce the size of any decrease in) the market price of Southern Company's common stock." The remaining proceeds are intended to repay short-term indebtedness and for general corporate purposes, including investments in Southern Company's subsidiaries. The offering is being made under an effective shelf registration statement filed with the SEC.

What Was Disclosed

Southern Company announced the pricing of 35 million 2026 Series A Equity Units at $50 each, totaling $1.75 billion, with an 8.625 percent annual distribution rate, a reference price of $92.47 per share, and expected closing on November 17, 2026. Net proceeds are planned for convertible note repurchases and general corporate purposes.