Spire Inc. Issues $200M Junior Subordinated Notes to Redeem $250M Preferred Stock
Summary
Spire Inc. issued $200 million in 6.375% Junior Subordinated Notes due 2086 to redeem $250 million of its 5.90% Series A Cumulative Redeemable Perpetual Preferred Stock, optimizing its capital structure.
Key Events
-
Issuance of Junior Subordinated Notes
Spire Inc. completed the offering of $200 million aggregate principal amount of 6.375% Junior Subordinated Notes due 2086.
-
Redemption of Preferred Stock
Proceeds from the notes, along with other funds, will be used to redeem $250 million of 5.90% Series A Cumulative Redeemable Perpetual Preferred Stock.
-
Interest Deferral Option
The new notes include an option for the company to defer interest payments for up to 40 consecutive quarterly periods.
-
NYSE Listing
Spire Inc. has applied for listing of the new notes on the New York Stock Exchange.
Analysis
This transaction represents a significant capital structure optimization for Spire Inc. By issuing junior subordinated notes to redeem preferred stock, the company is managing its hybrid capital. While the new notes carry a slightly higher coupon, their junior subordinated nature and the option to defer interest payments may provide financial flexibility and potential equity credit from rating agencies, which is crucial for a utility company. This move aims to enhance the company's financial profile and manage its cost of capital.
At the time of this filing, SR was trading at $82.32 on NYSE in the Energy & Transportation sector, with a market capitalization of approximately $4.9B. The 52-week trading range was $65.15 to $91.11. This filing was assessed with neutral market sentiment and an importance score of 8 out of 10.