Duke Energy Corporation announced on Mar. 9 its intention to offer $1 billion in aggregate principal amount of convertible senior notes due 2029 in a private placement under the Securities Act of 1933. The company also plans to grant initial purchasers an option to buy up to an additional $150 million of these notes within a 13-day period from the issuance date.
The proposed offering is intended to help Duke Energy repay at maturity $1.725 billion in outstanding 4.125% Convertible Senior Notes due April 15, 2026, as well as for general corporate purposes. The new convertible notes will be direct, unsecured, and unsubordinated obligations of Duke Energy and can be converted by holders under certain conditions and during specific periods. Interest on the notes will be paid semiannually.
Conversions will be settled by paying cash up to the principal amount being converted, with any excess conversion obligation settled at Duke Energy’s election in cash, shares of common stock, or a combination thereof. The company noted that many holders of its existing convertible notes use arbitrage strategies involving short positions in Duke Energy’s common stock, which could affect the market price during the observation period tied to note conversions.
The offering is limited to qualified institutional buyers under Rule 144A and will not be registered under U.S. securities laws unless otherwise required. The company emphasized that this announcement does not constitute an offer or solicitation for sale where such actions would be unlawful.
Duke Energy is one of America’s largest energy holding companies, serving electric customers across six states and natural gas customers in five states from its headquarters in Charlotte, North Carolina. The company reminded investors that forward-looking statements are subject to risks and uncertainties detailed in filings with the Securities and Exchange Commission.
Additional information about risks related to this offering and other business matters can be found in Duke Energy’s reports filed with the SEC.
