Spire Inc. Issues $200M Junior Subordinated Notes to Redeem $250M Preferred Stock

summarizeSummary

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.

check_boxKey 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.

auto_awesomeAnalysis

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.