Southern Company announces pricing of equity units

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Aug 13, 2019, 20:00 ET

ATLANTA, Aug. 13, 2019 /PRNewswire/ -- Southern Company (NYSE: SO) today announced it has priced its offering of 30 million 2019 Series A Equity Units. Each 2019 Series A Equity Unit will be issued in a stated amount of $50 ($1.50 billion aggregate stated amount) and will consist of a contract to purchase Southern Company common stock in the future, a 1/40 undivided beneficial ownership interest in the company's Series 2019A Remarketable Junior Subordinated Notes due 2024 having a principal amount of $1,000 and a 1/40 undivided beneficial ownership interest in the company's Series 2019B Remarketable Junior Subordinated Notes due 2027 having a principal amount of $1,000. Each of the remarketable junior subordinated notes is subject to remarketing to commence no earlier than April 28, 2022. The offering is expected to close on August 16, 2019, subject to customary closing conditions.

Total annual distributions on the 2019 Series A Equity Units will be at the rate of 6.75 percent, consisting of interest on the Series 2019A Remarketable Junior Subordinated Notes due 2024, interest on the Series 2019B Remarketable Junior Subordinated Notes due 2027 and payments under the related stock purchase contracts. The reference price for the 2019 Series A Equity Units is $57.20 per share. The threshold appreciation price for the 2019 Series A Equity Units is $68.64 per share, which represents a premium of approximately 20 percent over the reference price. Under the purchase contract, holders are required to purchase a variable number of shares of Southern Company common stock no later than August 1, 2022.

The company has granted the underwriters an option to purchase during the 13-day period beginning on, and including, the initial issuance date of the 2019 Series A Equity Units up to 4.5 million additional 2019 Series A Equity Units (an additional aggregate stated amount of $225 million), solely for the purpose of covering over-allotments.

The company expects to use the net proceeds from this offering, which are expected to be approximately $1.46 billion (or approximately $1.68 billion if the over-allotment option is exercised in full), after deducting the underwriting discounts and commissions but before deducting other offering expenses, to repay all or a portion of the company's short-term indebtedness and for general corporate purposes, including investments in the company's subsidiaries.

Goldman Sachs & Co. LLC, Barclays, Citigroup, Morgan Stanley, BNP PARIBAS, BofA Merrill Lynch, J.P. Morgan, Scotia Howard Weil and Wells Fargo Securities are acting as joint book-running managers for the offering.

The offering is being made under an effective shelf registration statement filed with the U.S. Securities and Exchange Commission. This news release does not constitute an offer to sell or a solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities law of any such jurisdiction. Any offers of the securities will be made exclusively by means of a prospectus supplement and accompanying prospectus. Copies of these documents may be obtained by contacting Goldman Sachs & Co. LLC, Prospectus Department, 200 West Street, New York, NY 10282, at telephone: 1-866-471-2526, facsimile: 212-902-9316 or by e-mailing [email protected], Barclays, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, Email: [email protected], Phone: (888) 603-5847, Citigroup, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717 Phone: (800) 831-9146 or Morgan Stanley at 180 Varick Street, 2^nd Floor, New York, NY 10014.

Southern Company is an energy company serving 9 million customers through its subsidiaries. The company owns electric operating companies in three states, natural gas distribution companies in four states, a competitive generation company serving wholesale customers across America, a distributed energy infrastructure company, and a fiber optics network and telecommunications services provider.

Cautionary Note Regarding Forward-Looking Statements:

Certain information contained in this release is forward-looking information based on current expectations and plans that involve risks and uncertainties. Forward-looking information includes, among other things, statements concerning the planned equity units offering and the use of proceeds from the offering. Southern Company cautions that there are certain factors that can cause actual results to differ materially from the forward-looking information that has been provided. The reader is cautioned not to put undue reliance on this forward-looking information, which is not a guarantee of future performance and is subject to a number of uncertainties and other factors, many of which are outside the control of Southern Company; accordingly, there can be no assurance that such suggested results will be realized. The following factors, in addition to those discussed in Southern Company's Annual Report on Form 10-K for the year ended December 31, 2018 and subsequent securities filings, could cause actual results to differ materially from management expectations as suggested by such forward-looking information: interest rate fluctuations and financial market conditions and the results of financing efforts; access to capital markets and other financing sources; changes in Southern Company's credit ratings; and catastrophic events such as fires, earthquakes, explosions, floods, tornadoes, hurricanes and other storms, droughts, pandemic health events or other similar occurrences. Southern Company expressly disclaims any obligation to update any forward‐looking information.

SOURCE Southern Company