CMS Energy completed a $1 billion debt offering on November 3, issuing 6.800% fixed-to-fixed reset-rate junior subordinated notes due 2057. The company plans to use the proceeds to repay two senior note issues coming due in 2027 and for general corporate purposes.
- Debt issued: $1 billion in notes with a stated 6.800% rate and a 2057 maturity. The notes are junior subordinated debt; their rate is designed to reset from its initial fixed rate, though the reset terms are not detailed here.
- Planned repayments: CMS Energy intends to repay $275 million of 2.95% senior notes due February 2027 and $350 million of 3.45% senior notes due August 2027, at or before their maturities.
- Remaining proceeds: After those $625 million of planned repayments, the balance of the net proceeds is intended for general corporate purposes.
The transaction replaces debt due in 2027 with a much longer-dated obligation, extending the maturity profile. The new notes’ stated rate is higher than the coupons on the two notes CMS Energy plans to repay, although the new debt also has a different, junior-subordinated ranking.