MADISON, WI – MGE Power Inc.’s subsidiary, Madison Fuel and Electrical Firm (MGE), has entered right into a Be aware Buy Settlement to concern $50 million in senior notes, in line with a current SEC submitting.
The settlement, dated October 31, 2024, includes the issuance of $25 million in 5.30% senior notes, Sequence A, due December 1, 2039, and $25 million in 5.59% senior notes, Sequence B, due December 1, 2054. The notes are anticipated to be issued on December 4, 2024, contingent upon customary closing circumstances.
The proceeds from the sale of the notes will probably be utilized by MGE to finance capital expenditures and meet different company obligations. The notes won’t be secured beneath MGE’s current Indenture, which governs its Medium-Time period Notes. They are going to be unsecured and can bear curiosity payable semi-annually, with the primary fee due on June 1, 2025.
MGE reserves the proper to redeem the notes at any time at par worth plus accrued curiosity and a make-whole premium, with sure circumstances making use of because the maturity date approaches. Moreover, within the occasion of a change in management, MGE should supply to prepay the notes at par worth plus accrued curiosity.
The settlement stipulates that MGE should keep a debt-to-total capitalization ratio not exceeding 65%, calculated beneath usually accepted accounting rules, excluding sure variables. It additionally limits the corporate’s potential to concern Precedence Debt, outlined as secured indebtedness, past 20% of its consolidated property.
The Be aware Buy Settlement consists of provisions for occasions of default, which may set off reimbursement obligations, and restricts MGE from granting liens to safe its principal credit score facility indebtedness with out guaranteeing that the notes are equally and ratably secured.
The knowledge relies on a press release assertion filed with the SEC.
In different current information, MGE Power, Inc. has made vital strides in its monetary operations.
MGE Power introduced a 5.3% enhance in its quarterly dividend fee, elevating it from $0.4275 to $0.45 per share. This adjustment escalates the annualized dividend from $1.71 to $1.80 per share, demonstrating MGE Power’s dedication to delivering worth to its shareholders. The brand new dividend will probably be distributed to shareholders on report as of September 1, 2024.
These current developments replicate the corporate’s strategic monetary administration. They spotlight MGE Power’s long-term enterprise technique and monetary resilience, as evidenced by its constant money dividends for over 110 years and annual dividend development for the final 49 years.
InvestingPro Insights
MGE Power’s current $50 million senior notes issuance aligns with its prudent monetary administration technique, as mirrored in a number of key InvestingPro metrics. The corporate’s market capitalization stands at $3.24 billion, indicating a considerable market presence. MGE Power has demonstrated a robust dedication to shareholder returns, with InvestingPro Suggestions highlighting that it has raised its dividend for 32 consecutive years and maintained dividend funds for 54 consecutive years. This constant dividend coverage is additional supported by a present dividend yield of two.02% and a notable dividend development of 10.43% over the past twelve months.
The corporate’s monetary stability is underscored by its potential to function with a average stage of debt, and its liquid property exceeding short-term obligations. These elements recommend that MGE Power is well-positioned to handle the brand new debt issuance successfully. Moreover, with a P/E ratio of 28.04, the inventory is buying and selling at a premium, which can replicate investor confidence within the firm’s future prospects.
For buyers searching for extra complete analysis, InvestingPro presents 8 further ideas for MGE Power, offering deeper insights into the corporate’s monetary well being and market place.
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