Mizuho, Your Leading Bank for Convertible Bond Transactions

The convertible bond market is proving to be an attractive source of capital in a rising interest environment. And, Mizuho is at the forefront of leading this year’s transactions. Now sitting at 4th on the Bloomberg 2023 YTD Equity-Linked League Table, Mizuho has been a bookrunner on five of the six jumbo ($1Bn+) convertible bonds issued this year-to-date. We have also re-introduced investment grade issuers in the Power & Utilities sector back to the market following of period of no activity for more than decade. To that end, Mizuho has been a bookrunner on the first three investment grade convertible bonds in the utilities sector seen in 14 years. All three utility issuers benefitted from a lack of utility paper in the market as well as strong appetite for their investment grade ratings.

Why should companies consider the convertible bond market? Convertible bonds offers issuers a lower coupon versus straight debt, while signaling a bullish view from management as to their share price. Additionally, using the convertible bond product allows issuers to tap into a complementary group of investors beyond their equity and straight debt.

If you are looking for alternative financing option with attractive terms, we invite you to speak to our convertible bond experts. Mizuho’s deep investor relationships and top secondary trading desk provide us with insights to investor appetite and market sentiment that inform our advice on optimal structure, timing and price. We will formulate the best financing option to support our client goals while minimizing debt service and protecting stock price. At Mizuho, we take a customized view and differentiated approach with each client we work with, not the path that is easiest or most convenient. We think beyond the obvious and act boldly for the benefit of our clients.

For more information on whether convertible bonds are right for you, please contact our Equity Capital Markets team at [email protected]

Mizuho Acted as a Bookrunner on the First 3 IG Utility Sector Convertibles in 14 Years

Mizuho has helped its clients navigate the current rising interest rate environment, serving as bookrunner on all 3 recent Investment Grade Convertible Bond Offerings from Utility Issuers

Transaction Highlights

PPL Corporation, the ~$21Bn investor-owned utility company, raised $1.0Bn through a 144A offering of exchangeable senior notes due 2028
- Transaction proceeds: repaying short-term debt and other general corporate purposes
Priced at a 2.875% coupon, up 22.5% conversion premium
- Launched with initial price talk of 3-3.5% coupon, up 20-25% conversion premium
- Based on strong investor demand, price talk was revised intraday to 2.875-3.125% coupon, up 22.5% (fixed)
PPL shares fell -3.40% during marketing (file-to-offer), or -1.45% relative to the benchmark PHLX Utility Sector Index
PPL elected net share settlement to benefit from recent favorable accounting changes
This offering represents the first investment grade convertible bond in the utilities sector in 14 years

Transaction Highlights

The Southern Company, the third-largest U.S. investor-owned utility by market cap, raised $1.725Bn through a Rule 144A offering of convertible senior notes due 2025
- Transaction proceeds: repaying commercial paper and other general corporate purposes
Priced at a 3.875% coupon, up 30.0% conversion premium
- Launched with initial price talk of 3.625-4.125% coupon, up 27.5-32.5% conversion premium
- The notably high conversion price of $84.16 was struck at a level well above SO’s all-time high and in-line with future growth expectations for Southern shares
SO shares fell -0.77% during marketing (file-to-offer), or just -0.19% relative to the benchmark PHLX Utility Sector Index
Southern converted orders from 100% of its 10 investor 1x1 calls with management
Southern elected net share settlement to benefit from recent favorable accounting changes

Transaction Highlights

Alliant Energy, the ~$13Bn investor-owned utility company raised $500MM through a Rule 144A offering of convertible senior notes due 2026
- Transaction proceeds: general corporate purposes, which may include repayment or refinancing of debt
Priced at a 3.875% coupon, up 25.0% conversion premium
- Launched with initial price talk of 3.375-3.875% coupon, up 25-30% conversion premium
The offering was executed on a one-day marketed basis, launching before market open and pricing after market close
- LNT shares fell -2.39% during marketing (file-to-offer), or -1.62% relative to the benchmark PHLX Utility Sector Index
Aliant elected net share settlement to benefit from recent favorable accounting changes

Mizuho, your leading bank for convertible bond transactions

Mizuho Acted as a Bookrunner on the First 3 IG Utility Sector Convertibles in 14 Years

PPL Corporation, the ~$21Bn investor-owned utility company, raised $1.0Bn through a 144A offering of exchangeable senior notes due 2028

Transaction proceeds: repaying short-term debt and other general corporate purposes

Priced at a 2.875% coupon, up 22.5% conversion premium

Launched with initial price talk of 3-3.5% coupon, up 20-25% conversion premium

Based on strong investor demand, price talk was revised intraday to 2.875-3.125% coupon, up 22.5% (fixed)

PPL shares fell -3.40% during marketing (file-to-offer), or -1.45% relative to the benchmark PHLX Utility Sector Index

PPL elected net share settlement to benefit from recent favorable accounting changes

This offering represents the first investment grade convertible bond in the utilities sector in 14 years

The Southern Company, the third-largest U.S. investor-owned utility by market cap, raised $1.725Bn through a Rule 144A offering of convertible senior notes due 2025

Transaction proceeds: repaying commercial paper and other general corporate purposes

Priced at a 3.875% coupon, up 30.0% conversion premium

Launched with initial price talk of 3.625-4.125% coupon, up 27.5-32.5% conversion premium

The notably high conversion price of $84.16 was struck at a level well above SO’s all-time high and in-line with future growth expectations for Southern shares

SO shares fell -0.77% during marketing (file-to-offer), or just -0.19% relative to the benchmark PHLX Utility Sector Index

Southern converted orders from 100% of its 10 investor 1x1 calls with management

Southern elected net share settlement to benefit from recent favorable accounting changes

Alliant Energy, the ~$13Bn investor-owned utility company raised $500MM through a Rule 144A offering of convertible senior notes due 2026

Transaction proceeds: general corporate purposes, which may include repayment or refinancing of debt

Priced at a 3.875% coupon, up 25.0% conversion premium

Launched with initial price talk of 3.375-3.875% coupon, up 25-30% conversion premium

The offering was executed on a one-day marketed basis, launching before market open and pricing after market close

LNT shares fell -2.39% during marketing (file-to-offer), or -1.62% relative to the benchmark PHLX Utility Sector Index

Aliant elected net share settlement to benefit from recent favorable accounting changes

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