Alabama Power to price series 2023A 50-year floaters

By William Gullotti

Buffalo, N.Y., May 1 – Alabama Power Co. is preparing to price series 2023A floating-rate senior notes due May 15, 2073, according to a 424B5 filing with the Securities and Exchange Commission.

Interest will be SOFR minus 35 basis points and subject to a floor of 0%.

In addition to featuring call and put options, the maturity date itself may be shortened upon occurrence of a tax event, without soliciting noteholder consent.

Following a 30-year non-call period, the company may will be able to exercise a call option, in whole or in part, at any time. The redemption price starts at 105 for the 12-month period starting May 15, 2053, stepping down by 50 basis points for each subsequent year until the redemption price reaches par on May 15, 2063. Any early redemption will also include accrued and unpaid interest.

After the first year, noteholders will be able to exercise put rights on a semiannual basis. The redemption price starts at 98, plus accrued and unpaid interest, which steps up to 99 on the Nov. 15, 2028 put date and to par on the May 15, 2034 put date. Upon reaching a redemption price of par, the interval where noteholders will be able to exercise put rights will be extended from every six months to every second year. The final put date will occur in 2070, three years prior to maturity.

Morgan Stanley & Co. LLC is the sole bookrunning manager.

Balch & Bingham LLP and Troutman Pepper Hamilton Sanders LLP are working as counsel to the issuer.

Hunton Andrews Kurth LLP is advising the underwriter.

Proceeds will be used to repay all or a portion of the company’s outstanding commercial paper borrowings, which was approximately $115 million as of April 28. Any remaining net proceeds will be used for general corporate purposes, including the company’s continuous construction program.

The issuer is an electric utility based in Birmingham, Ala., and a wholly owned subsidiary of Southern Co.

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