JACKSON, Mich., June 10 /PRNewswire-FirstCall/ -- CMS Energy (NYSE:CMS) announced today the pricing of $150 million principal amount of 5.50 percent Convertible Senior Notes due 2029 and $300 million principal amount of 8.75 percent Senior Notes due 2019. In addition, CMS Energy may issue up to an additional $22.5 million principal amount of convertible senior notes upon exercise of an option granted to the underwriters to cover over-allotments, if any.
The convertible senior notes will pay interest semi-annually at a rate of 5.50 percent per annum and will mature on June 15, 2029. The convertible senior notes will be convertible under certain circumstances and during certain periods at an initial conversion rate of 69.1443 shares of CMS Energy's common stock per $1,000 principal amount of convertible senior notes (representing an initial conversion price of approximately $14.46 per share of common stock), subject to adjustment in certain circumstances. The initial conversion price represents a conversion premium of 25 percent over the last reported sale price of the common stock on June 9, 2009 of $11.57 per share. The convertible senior notes will be convertible prior to June 30, 2027 only upon specified events and, thereafter, at any time. Upon conversion, holders will receive cash up to the principal amount of each convertible senior note, and any excess conversion value will be delivered, at CMS Energy's option, in cash or a combination of cash and shares of CMS Energy's common stock. CMS Energy may redeem some or all of the convertible senior notes for cash on or after June 20, 2014.
The senior notes will pay interest semi-annually at a rate of 8.75 percent per annum and will mature on June 15, 2019. CMS Energy may redeem, at a make-whole premium, some or all of the senior notes for cash at any time.
It is expected that the net proceeds from the offerings will be used for the retirement of existing indebtedness (including approximately $115 million of the net proceeds from the offering of convertible senior notes to repurchase, at a discount, a substantial portion of the outstanding principal amount of the convertible subordinated debentures underlying the 7.75 percent Convertible Quarterly Income Preferred Securities of CMS Energy Trust I) and for general corporate purposes.
The closings of both offerings are expected to occur on June 15, 2009, subject to satisfaction of customary market and other closing conditions.
Barclays Capital Inc. is acting as sole book-running manager for the convertible senior notes offering. Barclays Capital Inc., Deutsche Bank Securities Inc., Banc of America Securities LLC, Citigroup Global Markets Inc. and UBS Securities LLC are acting as joint book-running managers for the senior notes offering.
Each offering is being made only by means of a prospectus, forming a part of CMS Energy's shelf registration statement, a related prospectus supplement and other related documents. Before investing, an investor should read the prospectus supplement and accompanying prospectus and other documents that CMS Energy has filed with the Securities and Exchange Commission for more complete information about CMS Energy and the offering(s).
An investor may obtain these documents for free by visiting the Securities and Exchange Commission's website at http://www.sec.gov/. Alternatively, an investor may obtain a copy of the relevant prospectus supplement and accompanying prospectus from (i) in the case of the convertible senior notes offering or the senior notes offering, Barclays Capital Inc., c/o Broadridge, Integrated Distribution Services, 1155 Long Island Avenue, Edgewood, NY 11717, email: or by calling toll-free 888-603-5847, or (ii) in the case of the senior notes offering, Deutsche Bank Securities Inc., 100 Plaza One, Second Floor, Jersey City, NJ 07311 or by calling toll-free 800-503-4611.
Today's announcement does not constitute an offer to sell or the solicitation of an offer to buy the convertible senior notes, the senior notes or any other securities, nor will there be any sale of convertible senior notes, senior notes or any other securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
CMS Energy is a Michigan-based company that has as its primary business operations an electric and natural gas utility, natural gas pipeline systems and independent power generation.
This news release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including whether or not CMS Energy will offer the convertible senior notes or the senior notes or consummate either offering, the anticipated terms of the convertible senior notes and the senior notes and the offerings and the anticipated uses of proceeds of the offerings. The forward-looking statements are subject to risks and uncertainties. They should be read in conjunction with "FORWARD-LOOKING STATEMENTS AND INFORMATION" and "RISK FACTORS", each found in CMS Energy's Form 10-K for the year ended December 31, 2008 and Form 10-Q for the quarter ended March 31, 2009. CMS Energy's "FORWARD-LOOKING STATEMENTS AND INFORMATION" and "RISK FACTORS" sections are incorporated herein by reference and discuss important factors that could cause CMS Energy's results to differ materially from those anticipated in such statements. DATASOURCE: CMS Energy CONTACT: Media Contacts: Jeff Holyfield, +1-517-788-2394 or Dan Bishop, +1-517-788-2395, Investment Analyst Contact: CMS Energy Investor Relations, +1-517-788-2590, all of CMS Energy Web Site: http://www.cmsenergy.com/
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