CMS Energy to Sell Baby Bonds

In what has become a virtual rush to sell debt and preferreds electric and natural gas company CMS Energy (NYSE:CMS) has announced they will be selling a new baby bond issue.

Details have not been announced as of yet but the preliminary paperwork can be seen here.

The issue will have the ability to have deferred interest payments for up to 40 consecutive quarters without a default being declared.  This is fairly typical in baby bond issues from utility companies.

CMS has 1 other 5.625% baby bond outstanding (NYSE:CMSA) which is trading at $24.37 for a current yield of 5.77%.

One thought on “CMS Energy to Sell Baby Bonds”

  1. Tim,
    Any thoughts on why there seems to be a rush to sell these new issues? Maybe the companies think higher interest rates are coming and thus trying to lock in on minimal coupons while they can?

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