Spire Announces Launch of $300 Million Debt Offering

Rhea-AI Summary

Spire Inc. (SR) has announced a registered underwritten public offering of $300 million of its Senior Notes due 2026, with $125 million offered by Spire and $175 million offered by certain selling securityholders. The company intends to use the net proceeds to repay existing debt and for general corporate purposes. Wells Fargo Securities, Mizuho, and Morgan Stanley are acting as joint book running managers of the Offering.

Financial Analyst

The announcement by Spire Inc. regarding the commencement of a public offering of Senior Notes is a strategic financial maneuver that merits close examination. The decision to issue $300 million in Senior Notes due 2026, split between the company and certain selling securityholders, indicates a move to restructure existing debt obligations. The use of $125 million to repay existing debt could potentially improve Spire's debt profile by extending maturities or reducing interest expenses, assuming the new notes carry favorable terms.

Investors should consider the impact of such an offering on the company's leverage ratios and interest coverage, which are critical indicators of financial health. The fact that Spire will not benefit from the portion of the sale by securityholders suggests a dilution of proceeds, which could affect the valuation of the notes and the company's stock. The involvement of major financial institutions as joint book running managers may lend credibility to the offering and possibly facilitate a favorable reception in the market.

Debt Capital Markets Expert

In the context of debt capital markets, Spire's decision to remarket $175 million principal amount of its 2021 Series A 0.75% Remarketable Senior Notes indicates a refinancing strategy. Remarketing these notes, which were initially part of a corporate units offering, could be a tactic to attract interest from a broader investor base. The remarketing process allows for the resale of previously issued debt, potentially at different interest rates, depending on current market conditions.

Stakeholders should pay attention to the yield of these notes compared to prevailing market rates to assess their attractiveness. The original low coupon rate of 0.75% may suggest that the company is betting on a stable or declining interest rate environment, which would make these notes more competitive. It is also essential to analyze the terms of the shelf registration statement and the prospectus supplement, as they contain critical information on the securities' rights, risks and conditions.

Market Research Analyst

From a market perspective, the timing and size of the offering may reflect Spire's assessment of investor appetite for corporate debt, particularly in the utility sector. The energy industry, where Spire operates, often requires substantial capital for infrastructure and operations, making debt offerings a common practice for financing. However, the market's response to such an offering will hinge on factors such as current interest rates, investor confidence in the sector and Spire's creditworthiness.

Analysts should evaluate Spire's competitive position within the industry and its historical financial performance to gauge the potential success of the offering. Furthermore, the use of proceeds for general corporate purposes suggests an allocation towards growth or operational efficiency initiatives, which could have long-term benefits for the company's profitability and stock performance.

ST. LOUIS, Feb. 5, 2024 /PRNewswire/ -- Spire Inc. (NYSE: SR) announced today that it has commenced a registered underwritten public offering (the "Offering") of an aggregate principal amount of $300 million of its Senior Notes due 2026 (the "2026 Notes"), of which $125 million are being offered by Spire and $175 million are being offered by certain selling securityholders. Spire is concurrently remarketing $175 million principal amount of its 2021 Series A 0.75% Remarketable Senior Notes due 2026, which were originally issued as part of an offering of corporate units in February 2021.

Spire intends to use the net proceeds from its sale of the $125 million of 2026 Notes to repay existing debt and for general corporate purposes. Spire will not receive any proceeds from the sale of the 2026 Notes by the selling securityholders.

Wells Fargo Securities, Mizuho, and Morgan Stanley are acting as joint book running managers of the Offering.

The Offering will be made only by means of a prospectus supplement and an accompanying prospectus, copies of which may be obtained from:

Wells Fargo Securities, LLC
608 2nd Avenue South, Suite 1000
Minneapolis, Minnesota 55402
Attn: WFS Customer Service
1-800-645-3751
wfscustomerservice@wellsfargo.com

or

Mizuho Securities USA LLC
1271 Avenue of the Americas
New York, New York 10020
Attn: Debt Capital Markets
1-866-271-7403

or

Morgan Stanley & Co. LLC
180 Varick Street
New York, New York 10014
Attn: Prospectus Department

A shelf registration statement relating to the securities in the Offering has been filed previously with the Securities and Exchange Commission and is effective.

This news release does not constitute an offer to sell or the solicitation of an offer to buy any securities in any state or jurisdiction to any person to whom it is unlawful to make an offer, solicitation or sale in such state or jurisdiction.

About Spire

At Spire Inc. (NYSE: SR) we believe energy exists to help make people's lives better. It's a simple idea, but one that's at the heart of our company. Every day we serve 1.7 million homes and businesses making us one of the largest publicly traded natural gas companies in the country. We help families and business owners fuel their daily lives through our gas utilities serving Alabama, Mississippi and Missouri. Our natural gas-related businesses include Spire Marketing and Spire Midstream. We are committed to transforming our business through growing organically, investing in infrastructure, and advancing through innovation.

Forward-Looking and Cautionary Statements

This news release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Spire's future operating results may be affected by various uncertainties and risk factors, many of which are beyond the Company's control, including weather conditions, economic factors, the competitive environment, governmental and regulatory policy and action, and risks associated with acquisitions. For a more complete description of these uncertainties and risk factors, see the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2023 and the Company's Quarterly Report on Form 10-Q for the quarter ended December 31, 2023, each as filed with the Securities and Exchange Commission.

Investor Contact: 
Megan L. McPhail
314-309-6563
Megan.McPhail@SpireEnergy.com 

Media Contact: 
Jason Merrill
314-342-3300
Jason.Merrill@SpireEnergy.com 

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SOURCE Spire Inc.

FAQ

What is the purpose of Spire Inc.'s (SR) public offering of Senior Notes due 2026?

The purpose of the public offering is to raise $300 million, with $125 million offered by Spire and $175 million offered by certain selling securityholders. The net proceeds will be used to repay existing debt and for general corporate purposes.

Who are the joint book running managers of the Offering for Spire Inc. (SR)?

Wells Fargo Securities, Mizuho, and Morgan Stanley are acting as joint book running managers of the Offering.

Where can copies of the prospectus supplement and accompanying prospectus be obtained for Spire Inc.'s (SR) Offering?

Copies of the prospectus supplement and accompanying prospectus may be obtained from Wells Fargo Securities, Mizuho Securities USA LLC, and Morgan Stanley & Co. LLC.

Has a shelf registration statement been filed with the Securities and Exchange Commission for Spire Inc.'s (SR) Offering?

Yes, a shelf registration statement relating to the securities in the Offering has been filed previously with the Securities and Exchange Commission and is effective.

Does the news release constitute an offer to sell or the solicitation of an offer to buy securities for Spire Inc.'s (SR) Offering?

No, the news release does not constitute an offer to sell or the solicitation of an offer to buy any securities in any state or jurisdiction to any person to whom it is unlawful to make an offer, solicitation or sale in such state or jurisdiction.