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Southern Company to Sell Baby Bonds

Giant utility Southern Company (SO) will be selling a new $25 baby bond. It is noted that the company will be selling a $1,000 series at the same time.

This baby bond will have a maturity in 2060 and proceeds will be used to redeem all or a portion of the 6.25% Junior Subordinated Notes (SOJA).

The issue will be investment grade.

The company has numerous issues outstanding which can be seen here.

The preliminary prospectus can be read here.

EarlyBird got the worm on this one and posits a coupon in the 4.375%-4.50%.

6 thoughts on “Southern Company to Sell Baby Bonds”

  1. A bit of cut and paste just In case your considering this offering: Georgia Vogtle nuclear report: more delays, $1B in extra costs, flaws. According to their recently submitted written testimony, even if Georgia Power does finish on its latest timeline, the nuclear project will be $1 billion over its current budget, which was already billions of dollars higher than when the project began. Meanwhile, government staff and monitors wrote that they were “shocked” by an “astounding 80%” failure rate for new components installed at the site. The results meant the components, when tested, “did not initially function properly and required some corrective action(s) to function as designed.”
    Could Georgia Power drag Southern down if this Nuclear Plant never goes online?. Supposedly there is a firewall between Southern and its Georgia Subsidiary. But it wouldn’t be the first time a Nuclear Power plant has bankrupted a major Utility in the US

    1. Richard, when its all said and done the ring fencing provisions protect more the subsidiary than hold co. And being Ga. Power and Southern are in bed together on this those provisions wont help each other if things go bad. Vogtle has been a disaster, but the regulatory recoveries for mismanagement have been incredibly generous so far. Who knows what lurks below and going forward….
      I prefer the Alabama Power preferred I bought 2 days ago that has a higher credit rating, higher present yield, higher YTC, and lower taxed QDI, over this lower rated quality hold co subordinated debt issuance.

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