FirstEnergy, CMS slip after pricing upsized convertible debt offerings

Alliant Energy

02/05/2023 19:33

** FirstEnergy Corp  FE.N  shares down 2.0% at $38.23 amid
broader market tumble on Tues after co raises more capital than
targeted
    ** Ohio-headquartered utility priced $1.3 bln 4.00% 3-yr
convertible bonds (CB)
    ** Offering size boosted from $1 bln; initial conversion
price of $46.81 represents 20% premium to stock's Mon close
    ** FirstEnergy intends to use net offering proceeds to
refinance debt, finance pension plan
    ** FE shares, which had ~$22 bln market cap through Mon, per
Refinitiv, down 9% YTD including move on the session
    ** Also, Michigan-based utility firm CMS Energy Corp  CMS.N 
priced $700 mln 3.375% 5-yr CB deal for debt reduction, general
purposes
    ** Deal size boosted from $650 mln; conversion price of
$73.97 also represents 20% premium to its stock's last close
    ** CMS shares on Tues down 0.5% at $61.34 for roughly $18
bln market value. Stock now off ~3% in 2023
    ** S&P 500 Utilities index  .SPLRCU  off 1.4% on Tues,
extending YTD loss to 3.5% vs S&P 500's  .SPX  7% advance
    ** FirstEnergy and CMS join other highly rated peers Alliant
Energy Corp  LNT.O , PPL Corp  PPL.N  and Southern Co  SO.N  in
raising capital via CB offerings this year

 (Lance Tupper is a Reuters market analyst. The views expressed
are his own)
 ((lance.tupper@thomsonreuters.com
lance.tupper@tr.com 1-646-279-6380))